McGill v. Automobile Ass'n of Michigan, Docket No. 161583

• Citation: 526 N.W.2d 12,207 Mich.App. 402
• Decision Date: 07 November 1994
• Docket Number: Docket No. 161583
• Parties: Casseta McGILL, Robert Sloan, Mildred Carrico, Denise McMahon, Brian Robinson, and Pamela J. Belcher, Plaintiffs-Appellants, v. AUTOMOBILE ASSOCIATION OF MICHIGAN, State Farm Mutual Automobile Insurance Company, Allstate Insurance Company, and Citizens Insurance Company of America, Defendants-Appellees.
• Court: Court of Appeal of Michigan (US)

Page 12

526 N.W.2d 12

207 Mich.App. 402

Casseta McGILL, Robert Sloan, Mildred Carrico, Denise McMahon, Brian Robinson, and Pamela J. Belcher Plaintiffs-Appellants, v. AUTOMOBILE ASSOCIATION OF MICHIGAN, State Farm Mutual Automobile Insurance Company, Allstate Insurance Company, and Citizens Insurance Company of America, Defendants-Appellees.

Docket No. 161583.

Court of Appeals of Michigan.

Submitted April 14, 1994, at Detroit.

Decided Nov. 7, 1994, at 9:30 a.m.

Released for Publication Jan. 24, 1995.

Vestevich, Mallender, DuBois & Dritsas by William J. Lamping, Philip Vestevich, and David M. Gaskin, Bloomfield Hills, for plaintiffs.

Brandt, Hanlon, Becker, Lanctot, McCutcheon, Schoolmaster & Taylor by Clair W. Hoehn, Detroit, for Auto. Ass'n of Michigan.

Garan, Lucow, Miller, Seward, Cooper & Becker, P.C. by James L. Borin and Mark C. Smiley, Detroit, for Allstate Ins. Co.

Still, Nemier, Tolari & Landry, P.C. by David B. Landry and Michelle E. Mathieu, Farmington Hills, for Citizens Ins. Co. of America.

Bodman, Longley & Dahling by James A. Smith and Lisa M. Panourgias, Detroit, for State Farm Mut. Auto. Ins. Co.

Before SHEPHERD, P.J., and TAYLOR and GOTHAM, ^* JJ.

TAYLOR, Judge.

Plaintiffs appeal a circuit court order granting defendants' motions for summary disposition on the basis that plaintiffs had suffered no pecuniary injuries. Plaintiffs also appeal the court's denial of class certification. We affirm.

Plaintiffs are insureds under their respective policies of automobile no-fault insurance with the defendant automobile insurance carriers. As a result of separate automobile accidents, plaintiffs incurred hospitalization and medical treatment expenses. Plaintiffs' expenses were clearly of the type to be paid by their carriers. Defendants acknowledged their duty to pay but declined to pay the billed amounts, asserting the amounts billed were unreasonable. Defendants paid to plaintiffs' health care providers amounts that they considered reasonable. Plaintiffs, claiming to be a class, assert that they are at risk of being sued by their health care providers for the balance of their bills as a result of defendants' failure to pay the full amounts billed. However, the health care providers have not sued plaintiffs for the outstanding balance on their bills. Furthermore, defendants have repeatedly made assurances, both in their pleadings and in open court, that they will defend and indemnify plaintiffs if the providers sue, and that they will attempt to protect plaintiffs from bad credit ratings in the event the health care providers pursue collection directly from plaintiffs.

Plaintiffs argued below that defendants wrongfully utilized the worker's compensation payment schedules to determine a reasonable payment. They sought declaratory relief and an injunction precluding defendants from using the worker's compensation payment schedules to establish reasonable medical expenses and requested that the court order defendants to pay the amounts billed.

Plaintiffs' argument that defendants are required to pay the full amount of medical expenses billed is contrary to Michigan law. Section 3107 of the no-fault insurance act, MCL 500.3107; MSA 24.13107, states in pertinent part:

(1) Except as provided in subsection (2), personal protection insurance benefits are payable for the following:

(a) Allowable expenses consisting of all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person's care, recovery, or rehabilitation.

According to the plain and unambiguous language of § 3107, an insurer is liable only for those medical expenses that constitute a reasonable charge for a particular product or service. Nasser v. Auto Club Ins. Ass'n, 435 Mich. 33, 49, 457 N.W.2d 637 (1990). Unlike the situation in Nasser where the insurance carrier refused to pay any medical expenses whatsoever, in this case defendants have paid those parts of plaintiffs' bills they found to be reasonable.

Also, medical care providers are prohibited by law from charging more than a reasonable fee.

A physician, hospital, clinic or other person or institution lawfully rendering treatment to an injured person for an accidental bodily injury covered by personal protection insurance, and a person or institution providing rehabilitative occupational training following the injury, may charge a reasonable amount for the products, services and accommodations rendered. The charge shall not exceed the amount the person or institution customarily charges for like products, services and accommodations in cases not involving insurance. [M.C.L. § 500.3157; M.S.A. § 24.13157.]

When read in harmony, §§ 3107 and 3157 clearly indicate that an insurance carrier need pay no more than a reasonable charge and that a health care provider can charge no more than that. In theory, the insureds could be sued for the difference between what the carrier will pay and what the provider demands, but it is unlikely that the insureds would be liable for those expenses. As the Supreme Court noted in Nasser:

We question, in any event, the Court of Appeals apparent conclusion that if the insurer is not made liable for even unreasonable and unnecessary expenses it will inevitably fall to plaintiff to pay those expenses. To the extent that plaintiff has any liability for these expenses in the event his insurance does not pay, it is presumably contractual. It seems unlikely that plaintiff would have an express agreement with [the doctor] or the hospital to pay unreasonable and unnecessary medical expenses, and equally as unlikely that he would have an implied contractual duty to do so. See 61 Am Jur 2d, Physicians, Surgeons, and Other Healers, § 158, pp 290-291. And, while we need not resolve the issue in this case, it seems unlikely that medical expenses found to be unreasonable or unnecessary in a no-fault action would be found recoverable in a contract action against plaintiff. [Nasser at 55-56, n. 10, 457 N.W.2d 637.]

Furthermore, defendants have expressly stated that they will defend and indemnify plaintiffs in the event that plaintiffs are sued by their providers for the outstanding balance. Indeed they are directed to do so by a recent Interpretive Statement issued by the Commissioner of Insurance. ¹ It requires that no-fault insurers

provide insureds and claimants with complete protection from economic loss for benefits provided under personal protection insurance. Auto insurers must act at all times to assure that the insured or claimant is not exposed to harassment,...