Nasser v. Auto Club Ins. Ass'n

• Decision Date: 18 July 1988
• Docket Number: Docket No. 92840
• Citation: 425 N.W.2d 762,169 Mich.App. 182
• Parties: Nasr NASSER, Plaintiff-Appellee, Cross-Appellant, v. AUTO CLUB INSURANCE ASSOCIATION, Defendant-Appellant, Cross-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 762

425 N.W.2d 762

169 Mich.App. 182

Nasr NASSER, Plaintiff-Appellee, Cross-Appellant, v. AUTO CLUB INSURANCE ASSOCIATION, Defendant-Appellant, Cross-Appellee.

Docket No. 92840.

Court of Appeals of Michigan.

Submitted Jan. 14, 1988.

Decided June 7, 1988.

Released for Publication July 18, 1988.

Fieger & Fieger, P.C. by Geoffrey N. Fieger, Southfield, for plaintiff-appellee, cross-appellant.

Brandt, Hanlon, Becker, Lanctot, McCutcheon, Martin & Schoolmaster by Clifford Schiesel, and Gromek, Bendure & Thomas, by John A. Lydick, of counsel, Detroit, for defendant-appellant, cross-appellee.

Before J.H. GILLIS, P.J., and WEAVER and ALLEN, ^* JJ.

WEAVER, Judge.

Defendant appeals as of right from an order of summary disposition granted in favor of plaintiff pursuant to MCR 2.116(C)(9) and (10).

I

Plaintiff was involved in an automobile accident on April 13, 1982. Upon the recommendation of Dr. Roberto Williams, the internist who examined plaintiff on the day of the accident, plaintiff was hospitalized from April 14 through April 30, 1982, from May 4 through May 21, 1982, and again from June 1 through June 18, 1982. Plaintiff also received outpatient physical therapy from May 24 through May 28, 1982. Plaintiff's medical expenses amounted to $25,059.29.

Defendant, with whom plaintiff had contracted for full comprehensive medical expenses under a no-fault policy of insurance, received itemized billings for plaintiff's medical expenses by July 7, 1982, but refused to pay them. Defendant's refusal was based on a second examination, on July 10, 1982, performed by an orthopedic surgeon of defendant's choosing, Dr. Mitchell C. Pollak. From this second examination, plus Dr. Pollak's evaluation of Dr. Williams' report together with plaintiff's medical records submitted by November 18, 1982, Dr. Pollak opined that hospitalization and much of the testing performed on plaintiff had been unnecessary.

Plaintiff sued defendant on February 7, 1983, for failure to pay his medical expenses. The trial court granted summary disposition in favor of plaintiff pursuant to MCR 2.116(C)(9) and (10) as to defendant's claim that it should not have to pay the medical expenses because the treatment was unnecessary and the expenses therefore unreasonable, ruling that defendant's claim was not a valid defense to a contract action and that only damages were at issue. Defendant conditionally waived a jury trial. The trial court heard evidence on the issue of damages and awarded plaintiff $25,059.29 in medical expenses plus twelve percent judgment interest, but declined to award plaintiff penalty interest or attorney fees. Defendant appeals as of right. Plaintiff cross-appeals.

II

On appeal, defendant attacks the trial court's finding that defendant's failure to state a valid defense warranted a grant of summary disposition pursuant to MCR 2.116(C)(9). Defendant relies on M.C.L. § 500.3107; M.S.A. § 24.13107 to argue, based on Dr. Pollak's second evaluation, that defendant had stated a valid defense in its argument that services rendered to plaintiff were not "reasonably necessary" and hence could not have resulted in "reasonable charges" triggering its liability for payment of benefits under the no-fault act, M.C.L. § 500.3105; M.S.A. § 24.13105.

We disagree with this contention. The reasonableness of medical expenses cannot be used as a defense to liability in a no-fault accident case. Strong policy considerations support this position, since an accident victim would be held to an impossible standard of medical knowledge if required to determine that his or her doctor's orders were "reasonably necessary" before accepting treatment. Therefore the defense of reasonableness as to plaintiff's medical expenses was legally insufficient--so untenable that no factual development would have prevented plaintiff's right to recovery--and the trial court properly granted summary disposition pursuant to MCR 2.116(C)(9). Karaskiewicz v. Blue Cross & Blue Shield of Michigan, 126 Mich.App. 103, 110, 336 N.W.2d 757 (1983), lv. den. 418 Mich. 882 (1983).

Defendant also argues that summary disposition should not have been granted pursuant to MCR 2.116(C)(10) because the dispute over the reasonableness of plaintiff's medical expenses constituted a genuine issue of material fact.

The disagreement over the reasonableness of the medical expenses did not constitute a genuine issue of material fact. Defendant never disputed that plaintiff was treated by Dr. Williams for injuries arising from the accident of April 13, 1982, or that plaintiff was billed $25,059.29 for his medical care, and defendant never argued that the charges for these services were excessive. As plaintiff's no-fault insurer, defendant was liable for payment of benefits for plaintiff's injuries, because such injuries arose "out of the ownership, operation, maintenance or use of a motor vehicle," M.C.L. § 500.3105(1); M.S.A. § 24.13105(1). Defendant was required to pay such benefits within thirty days of receiving "reasonable proof" of injury and amount of loss, failure to pay giving rise to a rebuttable presumption of unreasonable refusal or undue delay. M.C.L. § 500.3142(2); M.S.A. § 24.13142(2); Bradley v. DAIIE, 130 Mich.App. 34, 46, 343 N.W.2d 506 (1983).

As there was no issue of liability, there were no genuine issues of material fact except as to the amount of damages, and the question of reasonableness went not to the issue of liability but to the issue of damages. However, defendant waived the right to a jury trial on the issue of damages, thereby precluding a jury factfinding as to the reasonableness of plaintiff's expenses. See Nelson v. DAIIE, 137 Mich.App. 226, 231, 359 N.W.2d 536 (1984). When considering the issue of damages, the court was permitted to rule as a matter of law that plaintiff's medical expenses in his no-fault case were necessary and allowable. See Manley v. DAIIE, 425 Mich. 140, 157, 388 N.W.2d 216 (1986). Consequently defendant's claim of unreasonable medical expenses was not an issue of material fact which defendant could have supported at trial, and the court properly granted summary disposition pursuant to MCR 2.116(C)(10). Tidwell v. Dasher, 152 Mich.App. 379, 383, 393 N.W.2d 644 (1986).

III

Defendant also argues that the trial court abused its discretion by excluding evidence that plaintiff's medical bills had already been paid by Blue Cross/Blue Shield. We disagree.

The evidence was barred by the collateral source rule. Blacha v. Gagnon, 47 Mich.App. 168, 171, 209 N.W.2d 292 (1973). Cf. Richards v. Pierce, 162 Mich.App. 308, 318-319, 412 N.W.2d 725 (1987). Further, plaintiff's contract with defendant did not contain a coordinated benefits clause. Plaintiff undoubtedly paid a higher premium for full benefits and defendant was accordingly required to make full payment for those injuries covered by the policy regardless of any payment received from additional policies. See Federal Kemper Ins. Co., Inc. v. Health Ins. Admin., Inc., 424 Mich. 537,...