Ridley v. Esurance Ins. Co.

• Docket Number: 362312
• Decision Date: 09 November 2023
• Parties: LAKOKO RIDLEY, Plaintiff-Appellee, v. ESURANCE INSURANCE COMPANY, Defendant-Appellant. and ZMC PHARMACY LLC,
• Court: Court of Appeal of Michigan

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LAKOKO RIDLEY, Plaintiff-Appellee, and ZMC PHARMACY LLC, ^[1] Intervening Plaintiff, v. ESURANCE INSURANCE COMPANY, Defendant-Appellant.

No. 362312

Court of Appeals of Michigan

November 9, 2023

UNPUBLISHED

Macomb Circuit Court LC No. 2019-001889-NF

Before: Boonstra, P.J., and Borrello and Feeney, JJ.

Per Curiam.

Defendant appeals by delayed leave granted^[2] the judgment for plaintiff in this first-party no-fault action. On appeal, defendant argues the trial court erred by denying it an award of attorney fees under the no-fault act, denying it sanctions under the case evaluation court rule, and finding its proof of requested attorney fees and case evaluation sanctions insufficient. We affirm.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

The case arises from a February 11, 2019 motor vehicle accident in which plaintiff sustained bodily injuries. At the time of the accident, defendant insured plaintiff. Plaintiff filed her May 16, 2019 complaint claiming defendant was obligated to pay personal protection insurance ("PIP") benefits under the no-fault act, MCL 500.3101 et seq., for medical expenses, attendant care, wage loss, replacement services, and transportation.

On February 3, 2020, the matter proceeded to case evaluation where plaintiff claimed $198,327.67 in medical expenses, $22,975.50 in wage loss, $7,140 in replacement services, and $19,200 in attendant care^[3] for a total of $247,643.17, exclusive of interest and attorney fees. The case evaluation award form designated plaintiff as "party #1," intervening plaintiff as "party #2," and defendant as "party #3." The awards were listed as "$3,500.00 in favor of pty # 1 v pty # 2," and "$100,000.00 in favor of pty # 1 vs pty # 3." The accompanying "acceptance/rejection result notice" listed both of the award amounts as for plaintiff and against defendant. Plaintiff and defendant rejected the award.

After trial on July 22, 2021, the jury returned a verdict on July 28, 2021 in favor of plaintiff. The completed verdict form contained the following questions and answers:

Q. Are Plaintiff Lakoko Ridley's claims fraudulent or so excessive as to have no reasonable foundation?

A. No

* * *

Q. [W]hat is the amount of allowable expenses owed to Lakoko Ridley (include only expenses not already paid by the defendant)?

A. $3,133.71-for payment to Detroit Recieving [sic] Hptl.

Q. Was payment for any of the expenses or losses to which Lakoko Ridley was entitled overdue?

(Payment for an expense or loss is overdue if it is not paid within 30 days after the defendant receives reasonable proof of the fact and the amount of the claim. An overdue claim bears interest at the rate of 12 percent per annum from the date the expense or loss became overdue. A claim is not overdue if it is reasonably in dispute)

A. No

In August, 2021, defendant moved for mandatory case evaluation sanctions of $26,815.31 in costs and $179,085 in attorney fees, under MCR 2.403(O).^[4] About a week later, defendant moved for attorney fees in the amount of $197,895 under MCL 500.3148(2) of the no-fault act, alleging plaintiff's claims were so excessive as to have no reasonable foundation. Defendant also argued portions of plaintiff's claims regarding her replacement services and wage loss were fraudulent.

Plaintiff responded to defendant's motions arguing defendant's calculation of its claimed attorney fees was unreasonable and unsupported by anything other than defense counsel's statements, and defendant was entitled to no more than the flat fee of $9,500 paid for counsel's services. Plaintiff requested an evidentiary hearing regarding hours, recoverable costs claimed in the motion for case evaluation sanctions, and defense attorneys' statements regarding these claims. Plaintiff also filed its motion on September 6, 2021 to set aside the case evaluation claiming "[s]he was unable to present bills in excess of $200,000 at trial given Dr. Tessie Chinyere Jenkins/Northwest Neurology Clinic's settlement of a RICO lawsuit involving defendant" and other direct provider actions that were filed after case evaluation and the no-fault act was amended to permit direct provide claims.^[5] Defendant acknowledged these direct providers claimed expenses totaling $135,136.66. On October 8, 2021, the trial court denied plaintiff's motion, finding in part that "plaintiff's attempt to continue to collect on behalf of Dr. Jenkins and Northwest Neurology Clinic would suggest she (plaintiff) had an obligation to ensure that she still had that right [to collect], (i.e., Dr. Jenkins and Northwest Neurology Clinic had not been paid or otherwise resolved their alleged right to payment)." The trial court also found, "[s]imilarly, plaintiff would have signed the various assignments of her right to seek payment from defendant to her providers. Having waived those rights, plaintiff clearly can not argue surprise at being prevented from seeking payments on behalf of those providers at trial."

In its November 29, 2021 Opinion and Order, the trial court also denied defendant's motions for costs and fees and directed plaintiff to prepare a judgment consistent with the jury verdict. In the associated opinion, the trial court referenced MCL 500.3148, MCR 2.403(O) and MCR 1.105 and noted, "defendant's motions append more than six hundred (600) pages of exhibits without any meaningful reference to those exhibits." The trial court also found:

[T]he case evaluators made two awards in favor of plaintiff against defendant, one for $3,500 and another for $100,000. The basis(es) for the two separate awards is not explained or readily discernible.

Significant portions of plaintiff's claims (attendant care, certain medical expenses, replacement services and wage loss) were dismissed after the parties had rejected the case evaluation award. Another substantial portion of plaintiff's claims could not be presented at trial when her medical providers chose to pursue their own recoveries in separate actions; Dr. Tess[y] Jenkins and Northwest Neurology Clinic also entered an unrelated settlement that deprived plaintiff of additional medical expenses and potential testimony regarding the need for both continuing treatment and services. Thus, justice does not favor an award of costs and fees to defendant.

* * *

Given the failure to provide satisfactory proof of its costs and fees, defendant is not entitled to costs and fees either under MCR 2.403(O)(1) or MCL 500.3148(2).

Moreover, the jury's verdict specifically referenced the allowable expenses owed to plaintiff as being for payment of Detroit Receiving Hospital's bill. As these expenses were incurred on the date of the accident, defendant's obligation to previously pay these expenses was long overdue. Consequently, plaintiff would be entitled to an award of attorney fees under MCL 500.3148(1) that would offset any award of such fees to defendant under MCL 500.3148(2).

Therefore, defendant is not entitled to an award of costs and fees.

Defendant moved for reconsideration, which the trial court denied. This appeal followed.

II. STANDARD OF REVIEW

The findings of fact underlying an award of attorney fees are reviewed for clear error, Brown v Home-Owners Ins Co, 298 Mich.App. 678, 690; 828 N.W.2d 400 (2012), while underlying questions of law are reviewed de novo, Loutts v Loutts, 298 Mich.App. 21, 24; 826 N.W.2d 152 (2012). A finding is clearly erroneous when, although there is evidence to support it, the appellate court on review of the entire record, is left with a definite and firm conviction a mistake was made. Marilyn Froling Revocable Living Trust v Bloomfield Hills Country Club, 283 Mich.App. 264, 296; 769 N.W.2d 234 (2009). Where the decision whether to award attorney fees is within the trial court's discretion, it will be reviewed on appeal for an abuse of discretion, as will the award. Smith v Khouri, 481 Mich. 519, 526; 751 N.W.2d 472 (2008); In re Temple Marital Trust, 278 Mich.App. 122, 128; 748 N.W.2d 265 (2008). Additionally, the determination of the reasonableness of the attorney fees will be reviewed on appeal for an abuse of discretion. Khouri, 481 Mich. at 526; In re Temple Marital Trust, 278 Mich.App. at 128. An abuse of discretion occurs when the court's decision is outside the range of reasonable and principled outcomes. Khouri, 481 Mich. at 526; Van Elslander v Thomas Sebold & Assoc, Inc, 297 Mich.App. 204, 211; 823 N.W.2d 843 (2012).

Further, "[w]e review a trial court's decision on a motion for reconsideration for an abuse of discretion." Woods v SLB Prop Mgmt, LLC, 277 Mich.App. 622, 629; 750 N.W.2d 228 (2008). We review de novo whether the trial court properly interpreted relevant statutes. Makowski v Governor, 317 Mich.App. 434, 441; 894 N.W.2d 753 (2016).

The primary goal when construing a statute is to ascertain and give effect to the intent of the Legislature. When determining the Legislature's intent, this Court must first look to the statute's specific language. Judicial construction is unnecessary if the meaning of the language is clear. However, judicial construction is appropriate when reasonable minds can differ regarding the statute's meaning. Terms contained in the no-fault act are read" 'in the light of its legislative history and in the context of the no-fault act as a whole.'" Further, courts should not abandon common sense when construing a statute. Given the remedial nature of the no-fault act, courts must liberally construe its provisions in favor of the persons who are its intended beneficiaries. [Farmers Ins Exch v AAA of Mich, 256 Mich.App. 691, 695; 671 N.W.2d 89 (2003), quoting Proudfoot v State Farm Mut Ins Co, 254 Mich.App. 702, 708-709; 658 N.W.2d 838 (2003), aff'd in part and vacated in part on other grounds 469 Mich. 476; 673 N.W.2d

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