James McKinley Mills v. Titan Insurance Company ( 2017 )

STATE OF MICHIGAN
COURT OF APPEALS
JAMES MCKINLEY MILLS, UNPUBLISHED
August 8, 2017
Plaintiff-Appellee,
and
CITY XPRESS, LLC, MERCY TRANSPORT,
LLC, and DETROIT ANESTHESIA GROUP,
PLLC,
Intervening-Plaintiffs,
v No. 331460
Wayne Circuit Court
TITAN INSURANCE COMPANY, LC No. 15-000562-NF
Defendant-Appellant.
Before: FORT HOOD, P.J., and CAVANAGH and RONAYNE KRAUSE, JJ.
PER CURIAM.
In this action to recover no-fault benefits under the Michigan Assigned Claims Plan
(MACP), defendant, the assigned claims insurer, appeals by leave granted the trial court’s order
granting in part and denying in part defendant’s motion for summary disposition under MCR
2.116(C)(10). We affirm.
Plaintiff, a pedestrian, was struck and injured by an unidentified motor vehicle on March
30, 2014 in Clinton Township, Michigan. Because plaintiff did not have no-fault insurance
coverage and the driver of the other vehicle could not be identified, plaintiff filed a claim with
the MACP to recover benefits pursuant to the no-fault act, MCL 500.3101 et seq. Defendant was
assigned to provide coverage for plaintiff’s accident. Plaintiff subsequently filed this action,
alleging that defendant failed to pay benefits that were due. In his complaint, plaintiff stated that
he “sustained injuries which required medical treatment, rehabilitation treatment, household
replacement services, attendant care services, prescription items and medical appliances, wage
loss benefits, and other [unspecified] benefits . . . .” Intervening plaintiffs joined the action to
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recover for medical services provided to plaintiff.1 As relevant to this appeal, defendant moved
for summary disposition pursuant to MCR 2.116(C)(10), arguing that plaintiff’s claims for
benefits pursuant to the no-fault act were barred in their entirety because plaintiff submitted
fraudulent documentation in support of his claim for attendant care services. The trial court
granted defendant’s motion in part, dismissing with prejudice plaintiff’s attendant care claims.
After defendant filed an application for leave to appeal the trial court’s order, this Court granted
defendant’s application.2
On appeal, defendant argues that the trial court erred by dismissing only plaintiff’s
attendant care claims, rather than dismissing the action in its entirety. We disagree.
This Court reviews de novo a trial court’s decision regarding a motion for summary
disposition. McLean v Dearborn, 302 Mich. App. 68, 72; 836 NW2d 916 (2013).
In reviewing a motion under MCR 2.116(C)(10), the trial court considers
affidavits, pleadings, depositions, admissions, and other evidence introduced by
the parties to determine whether no genuine issue of material fact exists and the
moving party is entitled to judgment as a matter of law. The evidence submitted
must be considered in the light most favorable to the opposing party. [Id. at 73
(citations and quotation marks omitted).]
As an initial matter, we note that defendant premised its motion for summary disposition
on this Court’s decision in Bahri v IDS Prop Cas Ins Co, 308 Mich. App. 420; 864 NW2d 609
(2014). In that case, this Court held that a fraud exclusion in a no-fault insurance policy
precluded the plaintiff’s claim for no-fault benefits where there was no genuine issue of material
fact regarding the plaintiff’s fraud. Id. at 425-426. In Bahri, the plaintiff had sought household
replacement services for a period from October 1, 2011 to February 29, 2011, although the motor
vehicle accident at issue in that case had not even taken place until October 20, 2011. Id. at 425.
The plaintiff was also surveilled and found to be “performing activities inconsistent with her
claimed limitations.” Id.
Defendant urges us to conclude that Bahri controls the disposition of this case and hold
that plaintiff’s alleged fraudulent conduct with respect to his attendant care claims should bar the
remainder of his claims. However, we agree with plaintiff that Bahri is distinguishable and
1
In his brief on appeal, plaintiff argues that intervening-plaintiffs, as medical providers, “may
sue the responsible no-fault [personal injury protection] PIP insurer for a patient’s unpaid
medical bills.” We recognize that the Michigan Supreme Court recently held in Covenant Med
Ctr v State Farm Mut Auto Ins Co, ___ Mich ___, ___; 895 NW2d 490 (2017) (Docket No.
152758); slip op at 24, 25, that a medical provider does not possess a statutory cause of action
pursuant to the no-fault act, MCL 500.3101 et seq., to pursue a no-fault insurer for PIP benefits.
However, the propriety of intervening-plaintiffs’ claims is not at issue in this appeal.
2
Mills v Titan Ins Co, unpublished order of the Court of Appeals, entered June 2, 2016 (Docket
No. 331460).
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therefore not dispositive. For example, Bahri involved the application of a fraud exclusion
provision in a no-fault insurance policy. The policy provision in Bahri provided, in pertinent
part, that “[the defendant insurance company] [does] not provide coverage for any insured who
has made fraudulent statements or engaged in fraudulent conduct in connection with any
accident or loss for which coverage is sought under the policy.” Id. at 423-424. In contrast, at
issue here is plaintiff’s right to receive benefits through the MACP, and plaintiff’s recovery is
governed by the statutory provisions of the no-fault act. Our conclusion is consistent with this
Court’s recent decision in Shelton v Auto-Owners Ins Co, 318 Mich. App. 648, ___; ___ NW2d
___ (2017); slip op at 3, where this Court recognized, in pertinent part, as follows:
The law governing application of the policy exclusion in Bahri is not
applicable in this case. In Bahri, the provision applied to the plaintiff in that case
because “[the] defendant issued [the subject] no-fault automobile policy to [the]
plaintiff.” Bahri, 308 Mich. App. at 421. In this case, however, [the] plaintiff was
not a party to, nor an insured under, the policy; she was injured while a passenger
and because neither she nor her spouse or resident relative had a no-fault policy,
defendant was required to pay her benefits pursuant to statute, not pursuant to a
contractual agreement. [Emphasis added.]
In Shelton, the plaintiff was injured while a passenger in a single-car collision, and she pursued
the defendant for personal injury protection (PIP) benefits where she did not own a motor vehicle
or reside with a relative who owned a motor vehicle. Id.; slip op at 2. The Shelton Court went
on to recognize that “the exclusionary [fraud] provision in defendant’s no-fault policy does not
apply to plaintiff and cannot operate to bar plaintiff’s claim.” Id.; slip op at 3.
The applicable no-fault statute in this case is MCL 500.3173a(2), which provides, in
pertinent part, as follows:
A person who presents or causes to be presented an oral or written
statement, including computer-generated information, as part of or in support of a
claim to the Michigan automobile insurance placement facility for payment or
another benefit knowing that the statement contains false information concerning
a fact or thing material to the claim commits a fraudulent insurance act under
[MCL 500.4503] that is subject to the penalties imposed under [MCL 500.4511].
A claim that contains or is supported by a fraudulent insurance act as described
in this subsection is ineligible for payment or benefits under the assigned claims
plan. [Emphasis added.]3
3
As relevant to this appeal, MCL 500.4503 provides, in pertinent part, as follows:
A fraudulent insurance act includes, but is not limited to, acts or omissions
committed by any person who knowingly, and with an intent to injure, defraud, or
deceive:
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In Covenant Med Ctr v State Farm Mut Auto Ins Co, ___ Mich ___, ___ ; 895 NW2d 490
(2017) (Docket No. 152758); slip op at 6, the Michigan Supreme Court recently articulated the
applicable rules of statutory construction:
[The Court of Appeals] . . . reviews de novo questions of statutory
interpretation. The role of [the Court of Appeals] in interpreting statutory
language is to ascertain the legislative intent that may reasonably be inferred from
the words in a statute. The focus of [the Court’s] analysis must be the statute’s
express language, which offers the most reliable evidence of the Legislature’s
intent. When the statutory language is clear and unambiguous, judicial
construction is not permitted and the statute is enforced as written. [A] court may
read nothing into an unambiguous statute that is not within the manifest intent of
the Legislature as derived from the words of the statute itself. [Footnotes,
citations and quotation marks omitted.]
MCL 500.3173a(2) defines “a fraudulent insurance act” as occurring when “[a] person . .
. presents or causes to be presented an oral or written statement, including computer-generated
information, as part of or in support of a claim to the Michigan automobile insurance placement
facility for payment or another benefit knowing that the statement contains false information
concerning a fact or thing material to the claim.” (Emphasis added.) This definition is
consistent with the statutory language of MCL 500.4503(c) and (d). Notably, MCL 500.4503
narrows the focus of that statutory provision, and refers to “acts . . . committed by any person . . .
knowingly,” and requires “an intent to . . . defraud[ ] or deceive[.]”
The record evidence contained the deposition testimony and attendant care and household
replacement services forms of Angela Bakeley and Jean Mitchell, two women with whom
(c) Presents or causes to be presented to or by any insurer, any oral or written
statement including computer-generated information as part of, or in support of, a
claim for payment or other benefit pursuant to an insurance policy, knowing that
the statement contains false information concerning any fact or thing material to
the claim.
(d) Assists, abets, solicits, or conspires with another to prepare or make any oral
or written statement including computer-generated documents that is intended to
be presented to or by any insurer in connection with, or in support of, any claim
for payment or other benefit pursuant to an insurance policy, knowing that the
statement contains any false information concerning any fact or thing material to
the claim.
* * *
(i) Knowingly and willfully assists, conspires with, or urges any person to
fraudulently violate [MCL 500.4501 et seq.], or any person who due to that
assistance, conspiracy, or urging knowingly and willfully benefits from the
proceeds derived from the fraud.
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plaintiff had personal relationships who assisted him following the motor vehicle accident at
issue. In support of its motion for summary disposition, defendant included Bakeley’s attendant
care claim forms dated July 14, 2014, in which she represented that she provided attendant care
to plaintiff from March 31, 2014 until July 31, 2014, with the exception of May 2 through May
7, 2014. Defendant also included Bakeley’s household replacement services statements dated
July 14, 2014, indicating that she provided services from April 1, 2014 through July 17, 2014.
Defendant also provided the trial court with Mitchell’s June 2014 attendant care claim forms,
dated “June 2014[,]” in which Mitchell represented that she provided attendant care for plaintiff
from June 15, 2014, until June 31, 2014.4 Mitchell also signed an attendant care form dated
“July 2014[,]” in which she represented that she provided attendant care services to plaintiff
from July 1, 2014 until July 31, 2014.
Defendant also included the deposition testimony of plaintiff. His deposition testimony,
as well as that of Bakeley and Mills, can be characterized as unclear, confusing and disjointed.
For example, in her November 19, 2015 deposition, Bakely alternatively testified that plaintiff
began living with her “[s]ince his [motor vehicle] accident[,]” and “a couple weeks” after the
motor vehicle accident. Bakeley would help plaintiff with “dressing [himself], bathing, shaving,
helping him to get out [of] the bed and things of that nature[ ]” until he left her home on an
unspecified date in either July or August of 2014. Bakeley later testified that plaintiff was able
to get himself dressed, but that she would help him with taking a shower, and overall she would
assist plaintiff with “personal” matters two to three hours a day on a regular basis. Bakeley
testified that she did not drive plaintiff anywhere or make meals for him or do his laundry, and it
appeared from her deposition testimony that she opined that plaintiff was capable of completing
these tasks on his own. Bakeley further testified that she filled out the attendant care forms and
household replacement services statements at the same time, and she did so because “[plaintiff]
had got a call from his lawyer and his lawyer had said to do it all at once and fax those back to
[plaintiff’s lawyer.]” According to Bakeley’s testimony toward the conclusion of her deposition,
plaintiff left her home on an unspecified date in July 2014 after only staying with her
intermittently throughout July 2014, and she filled out the attendant care forms for defendant the
way that she did, even though plaintiff did not reside with her every day in July 2014, “[b]ecause
[plaintiff] stated that his lawyer stated to do that like that [sic].”
Mitchell testified during her May 5, 2015 deposition that beginning on an unspecified
date in June 2014 when plaintiff moved in with her, she would assist plaintiff with attendant care
matters such as assisting plaintiff in making his way to the shower and bathroom and “household
chores.” Mitchell also made sure that plaintiff took his prescribed medication. As of the date of
her deposition, May 5, 2015, Mitchell was continuing to assist plaintiff, who was still in a great
deal of pain and “[h]aving a lot of difficulty[ ]” arising from the March 30, 2014 motor vehicle
accident. Plaintiff testified that following his March 30, 2014 motor vehicle accident, he resided
with Bakeley for approximately two months, and that she would help him with attendant care
and household services for about 16 hours a day for that time period. Plaintiff then moved “back
home[ ]” with Mitchell, who, up until the date of his May 5, 2015 deposition, would assist him
4
The last day of June is, in fact, the 30th.
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with attendant care and household services. According to plaintiff, Bakeley was compensated
for her services out of proceeds from plaintiff’s no-fault insurance claim, but Mitchell had not
yet been compensated. Notably, during his deposition, plaintiff was not presented with copies of
Bakeley’s and Mitchell’s attendant care forms and household replacement services statements,
and was not questioned with regard to any knowledge he may have had regarding how the forms
were completed. Likewise, Mitchell was not questioned concerning how she completed the
forms and statements at issue.
During the hearing on defendant’s motion for summary disposition, the trial court
recognized that there was evidence of fraudulent conduct in the record.
You know what? Here’s the thing. Even if we separate this, somebody is
lying, okay. No. Listen. Dealt with this for years over in criminal [court]. You
can’t fool me. Somebody is lying.
Somebody is trying to be compensated for services either they didn’t
perform, okay, or just the other person performed and they want to just tag along,
okay.
But the reality is, they put in forms covering dates that two of these people
didn’t performs [sic] together. And that’s by the testimony of the plaintiff.
During the motion hearing, plaintiff’s counsel informed the trial court that “there is
nothing in [plaintiff’s] testimony to show that [plaintiff has] committed fraud, and he’s the
underlying [p]laintiff.” Plaintiff’s counsel further informed the trial court that plaintiff’s counsel
submitted Bakeley’s attendant care and household replacement services forms to defendant after
they were apparently submitted to him by plaintiff, but he could not recall whether plaintiff
directly tendered to him the forms pertaining to Mitchell. According to plaintiff’s counsel at one
point during the motion hearing, “one thing to keep in mind is [Mitchell’s claim forms] were
never submitted by [plaintiff] [to defendant].” Plaintiff’s counsel essentially characterized the
questionable claim forms as the result of inadvertence, repeatedly emphasizing that Mitchell’s
claim forms for June 2014 and July 2014 were not submitted to defendant for payment.
The trial court ultimately decided to strike the attendant care portion of plaintiff’s claims,
stating, “[t]here’s no question there’s fraud here. There’s no question.” The trial court went on
to hold:
I know you [defendant] want the whole claim to be dismissed. But the
Court can’t determine whether or not the plaintiff himself orchestrated this, or we
have a competing interest with these two ladies, and I’m just going to leave it at
that; okay? You don’t know.
The trial court later stated that it was striking the attendant care portion of plaintiff’s claims
“because I can’t tell who did what.” Moreover, the trial court indicated its hesitance to impose
the “extreme remedy . . . or penalty” of dismissing the entirety of plaintiff’s claims without a
showing that plaintiff was aware of, and participating and engaging in, any fraudulent conduct.
Put another way, it is clear from the record that the trial court was unable to determine whether
plaintiff had an intent to defraud or deceive defendant. MCL 500.4503.
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The trial court’s ultimate decision conformed with the plain language of MCL
500.3173a(2), which states that “a fraudulent insurance act” requires a showing that one acted
“knowing that the statement contains false information concerning a fact or thing material to the
claim . . . [.]” While the record evidence is no doubt contradictory, conflicting and often times
confusing with regard to when Bakeley and Mitchell provided attendant care and household
replacement services for plaintiff following his motor vehicle accident, it is also devoid of any
indication of plaintiff’s involvement in, or understanding or awareness of, the submission of the
claim forms by Bakeley and Mitchell with regard to attendant care and household replacement
services. Put another way, as the trial court aptly recognized, the record does not contain any
indication that plaintiff “[knew] that the statements [submitted by Bakeley and Mitchell]
contained false information concerning a fact or thing material to the claim . . . .”5 MCL
500.3173a(2). Accordingly, we conclude that the trial court correctly denied summary
disposition of the remainder of plaintiff’s no-fault claims.
Affirmed. We do not retain jurisdiction. Plaintiff, as the prevailing party, may tax costs
pursuant to MCR 7.219.
/s/ Karen M. Fort Hood
/s/ Mark J. Cavanagh
5
While not dispositive to our analysis, we note that plaintiff, in his response to defendant’s
motion for summary disposition and in his brief on appeal, observes that Mitchell’s claim forms
had not been in fact tendered to defendant for payment, but were submitted to defendant
inadvertently in response to a discovery request.
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