Dixon, et al v. St Paul Protective Insurance Company
Filing
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OPINION AND ORDER GRANTING PLAINTIFFS MOTION FOR SUMMARY JUDGMENT AS TO THE AWARDING OF ATTORNEYS FEES [#14]. Signed by District Judge Gershwin A. Drain. (Bankston, T)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
RICHARD DIXON,
PAULA DIXON,
Plaintiffs,
Case No. 13-cv-14118
HON. GERSHWIN A. DRAIN
v.
ST. PAUL PROTECTIVE INSURANCE
COMPANY d/b/a THE TRAVELERS
INDEMNITY COMPANY,
Defendant.
______________________________________/
OPINION AND ORDER GRANTING PLAINTIFFS’ MOTION FOR SUMMARY
JUDGMENT AS TO THE AWARDING OF ATTORNEY’S FEES [#14]
I.
INTRODUCTION
On July 24, 2014, Plaintiffs filed the complaint that underlies this motion, against
Plaintiff Richard Dixon’s (“Dixon” or “Plaintiff”) insurer, Defendant St. Paul Protective
Insurance Company, doing business as The Travelers Indemnity Company (“Travelers”). The
Dixons held an automobile insurance policy with Travelers. On August 24, 2010, Richard Dixon
sustained bodily injuries in an automobile accident.
Some of Plaintiff’s serious bodily
impairments included amputations above his right knee and distal right ring finger as well as
multiple bone fractures, lacerations, and trauma to his bodily systems. On August 6, 2013,
Plaintiff sustained additional injuries when he stepped in a hole on his property. Plaintiff Dixon,
as an initial matter, contended that his 2010 automobile injuries precipitated the injuries that he
sustained in his 2013 fall.
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Dixon then argued that, under the terms and conditions of his automobile insurance
policy, Travelers was obligated to pay certain expenses or losses. Plaintiffs asserted that they
provided reasonable proof for full payment of all personal protection insurance benefits, as
required by Michigan law. The Dixons alleged, however, that Defendant unreasonably refused
to pay or has unreasonably delayed in making proper payments for attendant care, recovery,
medical, and rehabilitation expenses.
The parties have settled the matter as to Plaintiffs’ claim for insurance benefits. Presently
before this Court is Plaintiffs’ Motion for Partial Summary Judgment as to Attorney’s Fees, filed
on September 22, 2014. Dkt. No. 14. On December 10, 2014, the Court directed the parties to
file supplemental briefing in regard to Plaintiff’s motion. Dkt. No. 20. Upon review of the
briefs of both parties, the Court will grant Plaintiff’s motion.
II.
LAW AND ANALYSIS
A. Legal Standard
Federal Rule of Civil Procedure 56(a) empowers the court to render summary judgment
forthwith “if the pleadings, depositions, answers to interrogatories and admissions on file,
together with the affidavits, if any, show that there is no genuine issue as to any material fact and
that the moving party is entitled to judgment as a matter of law.” See Redding v. St. Eward, 241
F.3d 530, 532 (6th Cir. 2001). The Supreme Court has affirmed the court's use of summary
judgment as an integral part of the fair and efficient administration of justice. The procedure is
not a disfavored procedural shortcut. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986); see
also Cox v. Kentucky Dept. of Transp., 53 F.3d 146, 149 (6th Cir. 1995).
The standard for determining whether summary judgment is appropriate is “‘whether the
evidence presents a sufficient disagreement to require submission to a jury or whether it is so
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one-sided that one party must prevail as a matter of law.’” Amway Distributors Benefits Ass’n v.
Northfield Ins. Co., 323 F.3d 386, 390 (6th Cir. 2003) (quoting Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 251-52 (1986)). The party seeking summary judgment “bears the initial burden of
specifying the basis upon which it contends judgment should be granted and of identifying that
portion of the record which, in its opinion, demonstrates the absence of a genuine issue of
material fact.” Celotex, 477 U.S. at 322. The evidence and all reasonable inferences must be
construed in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co., Ltd.
v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Redding, 241 F.3d at 532 (6th Cir. 2001). The
evidence presented must be such on which a jury could reasonably find for the non-moving
party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). “[T]he mere existence of
some alleged factual dispute between the parties will not defeat an otherwise properly supported
motion for summary judgment; the requirement is that there be no genuine issue of material
fact.” Id. at 247-48 (emphasis in original); see also Nat’l Satellite Sports, Inc. v. Eliadis, Inc.,
253 F.3d 900, 907 (6th Cir. 2001).
If the movant establishes by use of the material specified in Rule 56(c) that there is no
genuine issue of material fact and that it is entitled to judgment as a matter of law, the opposing
party must come forward with “specific facts showing that there is a genuine issue for trial.”
First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 270 (1968); see also McLean v. 988011
Ontario, Ltd., 224 F.3d 797, 800 (6th Cir. 2000). Mere allegations or denials in the nonmovant's pleadings will not meet this burden, nor will a mere scintilla of evidence supporting the
non-moving party. Anderson, 477 U.S. at 252. Rather, there must be evidence on which a jury
could reasonably find for the non-movant. McLean, 224 F.3d at 800 (citing Anderson, 477 U.S.
at 252).
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B. Discussion
In this case, the Court considers the award of attorney’s fees for overdue insurance
benefits under Michigan’s No-Fault Insurance Act. While the parties have settled the substantive
issue in regard to the parties’ original cross-motions for summary judgment, the settled issue
remains inextricably tied with the issue at the heart of Plaintiff’s immediate motion for attorney’s
fees.
Michigan’s No Fault statute states that:
An attorney is entitled to a reasonable fee for advising and representing a
claimant in an action for personal or property protection insurance benefits
which are overdue. The attorney’s fee shall be a charge against the insurer
in addition to the benefits recovered, if the court finds that the insurer
unreasonably refused to pay the claim or unreasonably delayed in making
proper payment.
MICH. COMP. LAWS § 500.3148(1).
Michigan law further states that personal protection
insurance benefits are overdue:
[I]f not paid within 30 days after an insurer receives reasonable proof of
the fact and of the amount of loss sustained. If reasonable proof is not
supplied as to the entire claim, the amount supported by reasonable proof
is overdue if not paid within 30 days after the proof is received by the
insurer. Any part of the remainder of the claim that is later supported by
reasonable proof is overdue if not paid within 30 days after the proof is
received by the insurer.
MICH. COMP. LAWS § 500.3142(2). In summary, in making this determination concerning
attorney’s fees, the Court must evaluate whether “[the] claimant’s benefits qualify as overdue
and whether [the] insurer unreasonably refused to pay or unreasonably delayed in making
payment.” Moore v. Secura Ins., 482 Mich. 507, 511 (2008).
“A refusal by an insurer to pay benefit[s] may be reasonable even if the carrier is
ultimately found liable for the benefits.” K.G. ex rel. Gray v. State Farm Mut. Auto Ins. Co., 674
F.Supp.2d 862, 873 (E.D. Mich. 2009). “What constitutes reasonableness is a question of law,
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but whether the defendant’s denial of benefits is reasonable under the particular facts of the case
is a question of fact.” Moore, 482 Mich. at 516 (citing Ross v. Auto Club Grp., 481 Mich. 1, 7
(2008)).
The Michigan Supreme Court has further stated that, “[t]he determinative factor in our
inquiry is not whether the insurer ultimately is held responsible for benefits, but whether its
initial refusal to pay was reasonable.” Ross v. Auto Club Grp., 481 Mich. 1, 11 (2008). A
plaintiff is not entitled to attorney’s fees if the defendant can demonstrate that its refusal or delay
“is the product of a legitimate question of statutory construction, constitutional law, or factual
uncertainty.” Id. (citing Gobler v. Auto-Owners Ins. Co., 428 Mich. 51, 66 (1987)).
Defendant does not challenge Plaintiff about whether the insurance benefits were
overdue. Defendant argues that it neither unreasonably refused to pay nor unreasonably delayed
in making payment to Plaintiff on insurance proceeds. Defendant contends that the medical
opinion of the insurance company’s independent medical examiner (“IME”), Dr. Joseph P.
Femminineo, created a factual uncertainty that countered the medical opinion of Plaintiff’s
treating physician, Dr. Julie Gronek. Defendant, in effect, attempts to use its IME report to
overcome the presumption of unreasonableness embodied in the attorney’s fees provision of the
Michigan No-Fault statute.
A factual uncertainty can be created by demonstrating the conflicting opinions of medical
examiners. See generally, Moore, 482 Mich. 512-16, 521-25. In Moore, the Michigan Supreme
Court overruled Liddell v. Detroit Auto. Inter-Ins Exch., 102 Mich.App. 636 (1981), and the
definition of “unreasonableness” that the court put forth. In Liddell, the trial court held, and the
appellate court affirmed, that where the defendant-insurer made no inquiry beyond the opinion of
its own IME doctor and where it refused to reconcile conflicting medical opinions, the denial of
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benefits was unreasonable. Moore, 482 Mich. at 514-15. In overruling the lower courts, the
Michigan Supreme Court held:
We reject the Court of Appeals analysis of Liddell. In Liddell, the Court
held that a trial court did not clearly err when it found an insurer’s conduct
unreasonable where the insurer “did not attempt to contact” physicians
with conflicting opinions “or in some other way attempt to ascertain the
true situation in the fact of contradictory reports.” Nothing in the plain
language of MCL 500.3148(1) [or impliedly], however, requires an insurer
to reconcile conflicting medical opinions.
Id. at 521 (footnote omitted). In other words, the No-Fault statute does not require insurers to
“go beyond” the medical opinion of their physicians. Id. at 522. Moreover, “an insurer need not
resort to a ‘tie breaker’ to resolve conflicting medical reports.” Id.
The Michigan Supreme Court, however, noted that, “an insurer acts at its own risk in
terminating benefits in the face of conflicting medical reports.” Id. Plaintiffs assert that this
language stands for the proposition that Defendant’s failure to properly evaluate the medical
opinion of Plaintiff’s treating physicians should be accounted for. On this point, Plaintiffs
emphasize that the Michigan No-Fault statutes “requires that the trial court engage in a factspecific inquiry to determine whether ‘the insurer unreasonably refused to pay the claim or
unreasonably delayed in making proper payment.” Id.
Plaintiffs highlight that Andrew Zido, the claims representative that assessed and
discontinued Plaintiff Dixon’s benefits claim,1 testified that:
I didn’t think [Dr. Gronek’s] medical records were very clear. I seen [sic]
that in her testimony she focused more on the upper extremities and her
medical records seem to more of the lower extremities. And there was
always a lag time that I was receiving reports, a couple of months later.
So she was able to establish a better timeframe, timeline of events, and
was able to put it into one piece and I think that was beneficial. And I
know that’s the reason I went back and attendant care was needed based
on her testimony.
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Zido is also the insurance company’s technical specialist for the state of Michigan. Zido commissioned
the independent medical examination.
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Plfs.’ Supp. Brief 9 (Ex. A, Zido Dep. 33-35) (emphasis in original). Plaintiffs further point out
that Dr. Femminineo’s examination of Dixon lasted only 26 minutes.
Plaintiff bolsters the significance of this testimony to support the idea that Defendant
failed to properly evaluate the evidence in the first instance. While in Moore, the Court found
that it was not necessary to reconcile conflicting medical opinions, it also noted that, “[w]hen the
claimant provides [reasonable] evidence, the insurer then must evaluate that evidence as well as
evidence supplied by the insurer’s doctor before making a reasonable decision regarding whether
to provide the benefits sought.” Moore, 482 Mich. 523. Additionally, while the insurer is not
required to “go beyond” the opinion of its own IME or to resort to a “tie-breaker”, “an insurer
acts at its own risk in terminating benefits in the face of conflicting medical reports.” Id. at 522.
The insurer must justify its refusal or delay. Id. at n.21.
Plaintiffs essentially contend that Travelers “acted at its own risk” when it terminated
Dixon’s attendant care benefits in the face of conflicting medical reports. Plaintiff argues that
this judicial language suggests that a conflicting medical report from an insurer’s IME does not
create a per se factual uncertainty that would relieve Defendant’s burden of showing that it acted
reasonably when it terminated Dixon’s attendant care benefits.
The Court agrees with Plaintiff.
The seemingly conflicting language2 in Moore is
reconcilable. While Dr. Femminineo’s medical report conflicted with that of Dr. Gronek’s, this
does not relieve the Court of its burden to look at the factual circumstances in its entirety. To
reiterate, “[w]hen the claimant provides [reasonable] evidence, the insurer then must evaluate
2
Compare Moore’s language stating, “[n]othing in the plain language of MCL 500.3148,
however, requires an insurer to reconcile conflicting medical opinions. Id. at 521 (footnote omitted). The
No-Fault statute does not require insurers to “go beyond” the medical opinion of their physicians. Id. at
522. Moreover, “an insurer need not resort to a ‘tie breaker’ to resolve conflicting medical reports.” Id.;
with later language that states, “an insurer acts at its own risk in terminating benefits in the face of
conflicting medical reports.” Id.
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that evidence as well as evidence supplied by the insurer’s doctor before making a reasonable
decision regarding whether to provide the benefits sought.” Moore, 482 Mich. at 523. Travelers
Indemnity’s claim representative testified that he was confused when he made the decision to
terminate Plaintiff’s attendant care benefits. Defendant, however, had an obligation to evaluate
the evidence supplied by Dr. Gronek before making a reasonable decision. Even if Dr. Gronek’s
report focused more on the lower extremities, Dr. Gronek’s medical report also provided an
extensive amount of information in regard to Plaintiff’s upper extremities from which Mr. Zido
could have made a proper evaluation. See, e.g., Plfs.’ Exs. B, E.
Defendant’s implication that Plaintiff Dixon’s attending physician provided a dearth of
information concerning the functionality of his upper extremities is unfounded.
Plaintiffs
provided reasonable proof of Plaintiff Dixon’s need for attendant care. It appears that Defendant
has failed to evaluate that proof. For this reason, the Court finds that Defendant has not availed
itself of its burden to demonstrate that it did not act unreasonably in refusing to timely pay
Plaintiff’s attendant care benefits.
C. Amount of Attorney’s Fees
Plaintiffs have not indicated the amount of the attorney’s fees for which they seek. In
addition, Plaintiffs have also not submitted any documentation, i.e. billing. As a result, the Court
is unable to determine whether the amount sought is reasonable.
Rule 54.1.2 of the Local Rules of the Eastern District of Michigan requires a “detailed
affidavit of counsel supporting the reasonableness of the claimed attorneys [sic] fees.” K.G. ex
rel. Gray v. State Farm Mut. Auto Ins. Co., 674 F.Supp.2d at 873-74. In addition, “[t]he
reasonableness of attorneys [sic] fees claimed under MCL 500.3148 should be determined with
reference to the factors outlined in Rule 1.5 of the Michigan Rules of Professional Conduct.” Id.
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at 873 (citing Univ. Rehab. Alliance, Inc. v. Farm Bureau Gen. Ins. Co. of Mich., 279 Mich.App.
691 (2008)).
For the reasons stated, Plaintiffs have not properly substantiated their claim for attorney’s
fees. Given that the Court has determined that awarding attorney’s fees are appropriate, the
Court directs Plaintiffs to submit a brief and affidavits curing this inefficiency.
The
supplemental briefs and affidavits are due 28 days from the date of this order.
III.
CONCLUSION
Plaintiffs’ Motion for Summary Judgment as to Attorney’s Fees is GRANTED.
It is HEREBY ORDERED that Plaintiffs submit the amount for which attorney’s fees are
sought.
It is FURTHER ODERED that Plaintiffs submit a brief and affidavits substantiating the
requested claim for attorney’s fees, within 28 days from the date of this order.
SO ORDERED.
February 13, 2015
Detroit, Michigan
/s/Gershwin A Drain
GERSHWIN A. DRAIN
United States District Judge
CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was served upon counsel of record
and any unrepresented parties via the Court's ECF System to their respective email or First Class
U.S. mail addresses disclosed on the Notice of Electronic Filing on February 13, 2015.
s/Tanya R. Bankston
TANYA R.BANKSTON
Case Manager & Deputy Clerk
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