REGENTS OF UNIVERSITY OF MI. v. State Farm Mutual Ins. Co.

• Decision Date: 29 January 2002
• Docket Number: Docket No. 224933.
• Citation: REGENTS OF UNIVERSITY OF MI. v. State Farm Mutual Ins. Co., 650 N.W.2d 129, 250 Mich. App. 719 (Mich. App. 2002)
• Parties: REGENTS OF THE UNIVERSITY OF MICHIGAN, Plaintiffs-Appellees/Cross-Appellants/Cross-Appellees, v. STATE FARM MUTUAL INSURANCE COMPANY, Defendant-Appellee/Cross-Appellee/Cross-Appellant, and Travelers Insurance Company, Defendant-Appellant/Cross-Appellee.
• Court: Court of Appeal of Michigan

650 N.W.2d 129

250 Mich. App. 719

REGENTS OF THE UNIVERSITY OF MICHIGAN, Plaintiffs-Appellees/Cross-Appellants/Cross-Appellees, v. STATE FARM MUTUAL INSURANCE COMPANY, Defendant-Appellee/Cross-Appellee/Cross-Appellant, and Travelers Insurance Company, Defendant-Appellant/Cross-Appellee.

Docket No. 224933.

Court of Appeals of Michigan.

Submitted November 8, 2001, at Lansing.

Decided January 29, 2002.

Approved for publication April 23, 2002, at 9:05 a.m.

Released for Publication July 30, 2002.

Miller, Shpiece & Tischler, P.C. (by Michael R. Shpiece), Southfield, for Regents of the University of Michigan.

Romain, Kuch & Egerer, P.C. (by Michael P. Daniels and Douglas J. Curlew), Southfield, for State Farm Mutual Insurance Company.

Law Offices of Catherine A. Gofrank (by Phillip G. Rosenberg), Southfield, for Travelers Insurance Company.

Before: FITZGERALD, P.J., and HOEKSTRA and MARKEY, JJ.

PER CURIAM.

Defendant Travelers Insurance Company appeals as of right the order granting summary disposition pursuant to MCR 2.116(C)(10) in favor of plaintiffs Regents of the University of Michigan and granting partial summary disposition in favor of defendant State Farm Mutual Insurance Company in this dispute over which of two no-fault automobile insurance companies are obligated to pay for the treatment of George Estes that was provided by plaintiffs through their University of Michigan Hospital and Health Center. State Farm cross appeals and challenges the order requiring State Farm to pay attorney fees and interest to plaintiffs. Plaintiffs also cross appeal and challenge the trial court's calculation of interest.

FACTS AND PROCEDURAL HISTORY

On November 30, 1990, George Estes, a passenger in an automobile driven by Bobby Gibson and insured by State Farm, was involved in an automobile accident in Michigan. Estes was not a policyholder of any automobile insurance policy. Estes suffered serious injuries and was hospitalized until he succumbed to his injuries on January 4, 1991. Estes' medical bills totaled $325,802.71.

State Farm's investigation revealed that Estes had been domiciled in the Tennessee home of his sister and brother-in-law, Lora Mae and Warren King. State Farm informed the Kings by letter in December 1991 that their automobile insurer was obligated to pay personal protection insurance benefits relating to Estes. The Kings forwarded the correspondence to Travelers in January 1992. On January 28, 1992, a Travelers claims representative forwarded correspondence to State Farm indicating that Estes resided with the Kings and qualified for Michigan no-fault benefits as a resident relative and that Travelers would assume responsibility of any first-party benefits available to Estes. In July 1992, Travelers changed its position and informed State Farm by letter that it was denying Estes' claim for personal protection insurance benefits.

State Farm communicated its denial of benefits to plaintiffs in September 1993, but continued discussions with plaintiffs in an attempt to resolve the claim. In 1994, plaintiffs brought suit on behalf of the hospital against State Farm. That suit was later dismissed without prejudice after plaintiffs and State Farm continued to pursue settlement options.

On April 15, 1998, plaintiffs filed the present suit against State Farm, Travelers, and the Assigned Claims Facility.¹ Plaintiffs alleged that Estes was not a policyholder of any automobile insurance policy. Plaintiffs alleged that Estes was a passenger in an automobile insured by State Farm at the time of the accident and that State Farm was obligated to reimburse plaintiffs for Estes' medical expenses pursuant to M.C.L. § 500.3114(4), subsection 3114(4) of the no-fault automobile insurance act, M.C.L. § 500.3101 et seq. In the alternative, plaintiffs alleged that Estes was domiciled with the Kings and Traveler's was obligated to reimburse plaintiffs for Estes' medical expenses pursuant to subsection 3114(1).

On December 21, 1998, Travelers moved for summary disposition under MCR 2.116(C)(8) and (10). Initially, Travelers argued that plaintiffs' claim was barred by the one-year statute of limitations contained in M.C.L. § 500.3145(1). In the alternative, Travelers argued that there was no question of fact that Estes was not domiciled with the Kings and had been living in Mississippi. Travelers attached an affidavit of Joann Willbanks, the Kings' daughter and a resident of Tennessee, which indicated that Estes had been living in Strickland, Mississippi. Travelers also attached a letter dated July 15, 1992, advising State Farm that it was not responsible for payment of benefits to plaintiffs.

On January 20, 1999, State Farm responded to Travelers' motion and filed a cross-motion for summary disposition under MCR 2.116(C)(5), (7), and (10). Initially, State Farm argued that Travelers was responsible for payment of benefits to plaintiff for two reasons. First, Travelers was the responsible insurer because Estes was domiciled with the Kings. State Farm attached the affidavit of employee Kristina Myslinski and an investigative report that included summaries of statements obtained from Willbanks, Lora Mae King, and Carlette Hamm, another daughter of the Kings. State Farm argued that these statements indicated that Estes had a room in the Kings' home where he kept his personal belongings, including clothing. State Farm further argued that there was evidence that Estes received his social security checks at the Kings' home and had been in the King's home just before leaving on his trip. Second, State Farm argued that Travelers was collaterally estopped from denying responsibility. State Farm relied on the January 28, 1992, letter it received from Travelers indicating that Travelers would assume full responsibility for payment of benefits because Estes resided with the Kings. State Farm also noted that Travelers did not actually deny responsibility for payment of benefits until July 1992.

On January 22, 1999, plaintiffs also moved for summary disposition. Plaintiffs admitted that Estes' domicile was a question of fact likely to preclude summary disposition. However, plaintiffs argued that it was ultimately entitled to recover the medical expenses and attorney fees and interest. Plaintiffs also responded to the motions for summary disposition filed by State Farm and Travelers, arguing that their claim was not barred by the statute of limitations because it was exempt from the statute pursuant to M.C.L. § 600.5821(4).

On May 6, 1999, the trial court granted plaintiffs' motion for summary disposition, denied Travelers' motion for summary disposition, and granted in part State Farm's motion for summary disposition. The trial court determined that subsection 5821(4) superseded the one-year limitation period in subsection 3145(1). The court reasoned that plaintiffs collectively were a political subdivision of the state of Michigan and brought this action to recover the cost of providing hospital services to Estes. The trial court also found that there was no genuine issue of material fact concerning Estes' domicile. After reviewing all the documentary evidence submitted, the court determined that Estes was domiciled with the Kings. The court's determination was based on evidence that Estes had his own room in the Kings' home, that he kept his room locked, that the room contained his personal belongings, and that Estes used the Kings' address on his Tennessee driver's license and received his social security checks at the Kings' address. The court reasoned that evidence concerning Estes' trips to Mississippi was insufficient to establish a genuine issue of material fact. The court also granted plaintiffs' request for interest and attorney fees under subsections 3142(3) and 3148(1), M.C.L. § 500.3142(3) and 500.3148(1), on the ground that the insurers' actions were unreasonable.

Following the trial court's rulings, the parties entered into a partial settlement. The parties agreed that the reasonable charge for the medical expenses was $300,000 and that the reasonable amount for plaintiffs' attorney fees was $15,866 through August 23, 1999. The parties also agreed to toll the interest from August 26, 1999, until plaintiffs filed the motion for entry of judgment.

On September 27, 1999, plaintiffs moved for entry of judgment. Plaintiffs requested interest and attorney fees under subsections 3142(3) and 3148(1) and interest under § 6013 of the Revised Judicature Act, M.C.L. § 600.6013. Ultimately, the trial court concluded that Travelers and State Farm were both liable for attorney fees under subsection 3148(1) in the amount of $21,641. The trial court also concluded that Travelers was liable for interest under subsection 3142(3) in the amount of $279,616.² The court also found that plaintiffs were entitled to interest from both Travelers and State Farm at the fluctuating rate contained in M.C.L. § 600.6013(6).

I

Travelers first argues that the trial court erred in granting summary disposition in favor of plaintiffs. In reviewing a motion under MCR 2.116(C)(10), this Court must determine whether the evidence presented fails to establish a genuine issue of material fact entitling the movant to judgment as a matter of law. Arias v. Talon Development Group, 239 Mich. App. 265, 266, 608 N.W.2d 484 (2000). This Court should consider the pleadings, affidavits, depositions, admissions, and other documentary evidence available to it. Weakley v. Dearborn Heights, 240 Mich. App. 382, 384, 612 N.W.2d 428 (2000).

Travelers first contends that the trial court should not have considered Myslinski's affidavit because the affidavit did not meet the requirements of MCR 2.119(B)(1)(c). MCR 2.119(B)(1)(c) provides that if an affidavit is filed in support of or in opposition to a motion, it must "show affirmatively that the affiant, if sworn as a witness, can testify competently to the facts stated in the affidavit." Myslinski's affidavit...