Ryan Vandercook v. Auto-Owners Insurance Company ( 2018 )

STATE OF MICHIGAN
COURT OF APPEALS
RYAN VANDERCOOK, UNPUBLISHED
May 24, 2018
Plaintiff-Appellee,
v No. 339145
Washtenaw Circuit Court
AUTO-OWNERS INSURANCE COMPANY, LC No. 15-000750-NF
Defendant-Appellant.
Before: METER, P.J., and GADOLA and TUKEL, JJ.
PER CURIAM.
Defendant appeals as of right the trial court’s determination that the parties’ acceptance
of the case evaluation award only resolved the claims that were included in plaintiff’s case
evaluation summary. Defendant asserts that the trial court misinterpreted MCR 2.403 and
neglected to consider controlling caselaw for its decision. We agree and, therefore, reverse and
remand.
Plaintiff sued defendant for breach of a no-fault auto insurance policy issued by
defendant to recover no-fault personal protection insurance benefits (PIP) for expenses, loss of
wages, replacement services, and other benefits related to injuries sustained by plaintiff in an
auto accident on December 23, 2014. Plaintiff also sought declaratory relief for determination of
plaintiff’s rights to PIP benefits and defendant’s rights to reduction, set offs, or reimbursements
of paid benefits. The case was submitted for case evaluation. Plaintiff’s case evaluation
summary listed disputed benefits and stated that defendant owed approximately $93,000 for
medical expenses and family-provided attendant care. Defendant stated in its case evaluation
summary that it properly paid all PIP benefits and challenged numerous categories and specific
benefits demanded by plaintiff for, among other things, medical services, attendant care,
mileage, and wage loss. Defendant contended that it overpaid for services, entitling it to
reimbursement. Defendant also claimed a right to setoff because plaintiff received government-
provided benefits and had the right to receive other government benefits but refused to take
them.
The case evaluation panel considered the case and unanimously awarded plaintiff
$45,000. Plaintiff accepted the award but typed into the form that he accepted the award “as to
benefits referenced in Plaintiff’s Case Evaluation Summary only. Not including wage loss.”
Defendant also accepted the award which, because both parties had accepted, had the effect of
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settling the case for that amount. See MCR 2.403(M). After notification of the parties’ mutual
acceptance, defendant moved for clarification from the trial court as to whom the proper payees
were for payment of the case evaluation award.1 Plaintiff responded by arguing that he had
limited his case evaluation acceptance to the unpaid bills he had referred to in his case evaluation
summary. Plaintiff offered no legal argument and cited no rule, statute, or caselaw for his
position.
At the hearing on defendant’s motion, defendant argued that MCR 2.403 clearly provided
that mutual acceptance of a case evaluation award resolves all claims in an action, through the
date of the case evaluation. Plaintiff countered that he had accepted the case evaluation award
with a limited acceptance, which purportedly precluded defendant from refusing to pay
plaintiff’s providers for benefits that accrued before the date of case evaluation and had not been
in dispute. The trial court denied defendant’s motion, ruling that only the claims or damages
presented in plaintiff’s case evaluation summary were subject to the court rules regarding case
evaluation sanctions. The trial court reasoned that “[n]o-fault cases are different because the
claims continue to accrue the entire time that the case is pending in some—in some
circumstances.” However, the court did not rely on or even address the portion of MCR
2.403(M)(1) which contains an exception for claims involving PIP benefits that have not accrued
at the time of the case evaluation. Consequently, the parties were unable to agree on a proposed
order to submit to the trial court for entry because defendant contended that MCR 2.403 and
controlling caselaw did not permit a party to limit his acceptance to anything other than the
entirety of his claims asserted in the lawsuit.
The parties’ failure to agree on the order prompted them each to file motions. Plaintiff
moved to set aside the case evaluation, and defendant moved to settle the order and dismiss the
case pursuant to MCR 2.403(M). At some point, defendant issued and sent plaintiff a check in
the amount of the case evaluation award. At the hearing on the parties’ competing motions,
plaintiff announced that, based on his limited acceptance of the panel’s decision, he had filed a
separate lawsuit for PIP benefits that he claimed were not resolved by the case evaluation award.
Defendant argued that the court rule and controlling caselaw did not permit what plaintiff did.
The trial court ultimately ruled against defendant and ordered that the parties’ case evaluation
acceptance only resolved the claims included in plaintiff’s case evaluation summary. Defendant
now appeals.
“The proper interpretation and application of a court rule is a question of law, which this
Court reviews de novo.” Haliw v Sterling Hts, 471 Mich. 700, 704; 691 NW2d 753 (2005). The
interpretation and application of a court rule is governed by the principles of statutory
1
At the time, this Court’s ruling in Covenant Med Ctr, Inc v State Farm Mut Auto Ins Co, 313
Mich. App. 50, 54; 880 NW2d 294 (2015), rev’d 500 Mich. 191 (2017), was in effect and provided
that medical providers had standing to bring a direct claim against an insurer for payment of no-
fault benefits. Defendant explained to the trial court that it did not want to pay plaintiff and still
remain liable to plaintiff’s medical providers if it did so. The Supreme Court would not reverse
Covenant until months later.
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construction, commencing with an examination of the plain language of the court rule. Id. at
704-705. “The intent of the rule must be determined from an examination of the court rule itself
and its place within the structure of the Michigan Court Rules as a whole.” Id. at 706. This
Court has explained:
The goal of court rule interpretation is to give effect to the intent of the drafter,
the Michigan Supreme Court. The Court must give language that is clear and
unambiguous its plain meaning and enforce it as written. Each word, unless
defined, is to be given its plain and ordinary meaning, and the Court may consult
a dictionary to determine that meaning. [Varran v Granneman (On Remand), 312
Mich. App. 591, 599; 880 NW2d 242 (2015) (citations omitted).]
Defendant argues that the trial court failed both to follow applicable law and to apply
MCR 2.403 correctly. In so doing, defendant argues that the trial court denied defendant the
finality that case evaluation should afford the parties when they mutually submit the case for
case evaluation and accept the case evaluation panel’s decision. We agree.
MCR 2.403 in relevant part provides:
(A) Scope and Applicability of Rule.
(1) A court may submit to case evaluation any civil action in which the relief
sought is primarily money damages or division of property.
* * *
(3) A court may exempt claims seeking equitable relief from case evaluation for
good cause shown on motion or by stipulation of the parties if the court finds that
case evaluation of such claims would be inappropriate.
* * *
(I) Submission of Summary and Supporting Documents.
* * *
(3) The case evaluation summary shall consist of a concise summary setting forth
that party’s factual and legal position on issues presented by the action. . . .
(K) Decision.
* * *
(2) Except as provided in subrule (H)(3), the evaluation must include a separate
award as to each plaintiff’s claim against each defendant and as to each cross-
claim, counterclaim, or third-party claim that has been filed in the action. For the
purpose of this subrule, all such claims filed by any one party against any other
party shall be treated as a single claim.
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* * *
(L) Acceptance or Rejection of Evaluation.
(1) Each party shall file a written acceptance or rejection of the panel’s
evaluation with the ADR clerk within 28 days after service of the panel’s
evaluation. Even if there are separate awards on multiple claims, the party must
either accept or reject the evaluation in its entirety as to a particular opposing
party. The failure to file a written acceptance or rejection within 28 days
constitutes rejection.
* * *
(M) Effect of Acceptance of Evaluation.
(1) If all the parties accept the panel’s evaluation, judgment will be entered in
accordance with the evaluation, unless the amount of the award is paid within 28
days after notification of the acceptances, in which case the court shall dismiss the
action with prejudice. The judgment or dismissal shall be deemed to dispose of
all claims in the action and includes all fees, costs, and interest to the date it is
entered, except for cases involving rights to personal protection insurance benefits
under MCL 500.3101 et seq., for which judgment or dismissal shall not be
deemed to dispose of claims that have not accrued as of the date of the case
evaluation hearing.
(2) If only a part of an action has been submitted to case evaluation pursuant to
subrule (A)(3) and all of the parties accept the panel’s evaluation, the court shall
enter an order disposing of only those claims.
The general purpose of case evaluation under MCR 2.403 “is to expedite and simplify the
final settlement of cases to avoid a trial.” Magdich & Assoc, PC v Novi Dev Assoc, LLC, 305
Mich. App. 272, 276-277; 851 NW2d 585 (2014) (quotation marks and citation omitted). Further,
acceptance of case evaluation serves as a final adjudication and is therefore binding on the
parties, similar to a consent judgment or settlement agreement. Id.
In CAM Constr v Lake Edgewood Condo Ass’n, 465 Mich. 549, 554-555; 640 NW2d 256
(2002), the Michigan Supreme Court considered the effect of the parties’ acceptance of a case
evaluation award pursuant to MCR 2.403(M) on claims that allegedly had not been presented in
case evaluation. The plaintiff’s complaint alleged four breach-of-contract claims against the
defendant, with the fourth based on a separate contract. Id. at 551. The trial court summarily
dismissed the fourth count. Id. The case then went to case evaluation, and the parties accepted
the award. Id. at 551-552. Following case evaluation, the plaintiff contended that it had reserved
the right to appeal the summary dismissal of the fourth count and that the parties’ case evaluation
acceptance resolved only the first three claims. Id. at 552. The Michigan Supreme Court held
that, pursuant to MCR 2.403(M)(1), the parties’ acceptance resolved all of the plaintiffs’ claims
in the action—even those that had been summarily disposed. Id. at 555. The Court explained
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that “allowing bifurcation of the claims within such actions, as plaintiff suggests, would be
directly contrary to the language of the rule.” Id.
Importantly, the CAM Constr Court overruled this Court’s earlier decisions that construed
MCR 2.403(M)(1) as allowing submission of less than all issues to case evaluation. 2 Id. at 556,
557. The Court explained that “[a]llowing the parties involved in the case evaluation process to
make such a showing has no basis in the court rule.” Id. at 556. The Court summarized that the
“unambiguous language [of MCR 2.403(M)(1)] evidences our desire to avoid bifurcation of civil
actions submitted to case evaluation.” Id. at 557. Simply put, “If all parties accept the panel’s
evaluation, the case is over.” Id. As this Court has noted, “the purpose of case evaluation is to
resolve the case, not to bifurcate litigation or decide it piecemeal.” Magdich & Assoc, 305 Mich
App at 280.
In this case, the parties agreed to submit the case to case evaluation. Neither party
objected to case evaluation under MCR 2.403(C).3 Further, the trial court did not exempt any
aspect of plaintiff’s action from case evaluation under MCR 2.403(A)(3). Therefore, the case
evaluation panel had the entire case for its consideration and determination.
We hold that plaintiff’s claims in this action did not consist of a dispute over only some,
but not all, no-fault PIP benefits. Plaintiff’s complaint nowhere limited the scope of the
adjudication to a specific set or list of disputed benefits. In Count I, plaintiff sought money
damages for payment of all expenses for his care, recovery, and rehabilitation; wage loss; and
replacement services, including other PIP benefits. In Count II, plaintiff sought determination of
his rights to wage loss benefits, replacement service expenses, medical expenses, no-fault
interest, attorney fees, and other benefits allegedly owed by defendant. Plaintiff also sought
determination by the trial court of whether defendant could reduce, set off, or seek
reimbursement for overpaid PIP benefits. Plaintiff’s complaint plainly did not limit his civil
action to the benefits he listed in his case evaluation summary.
Plaintiff’s contention that MCR 2.403 permitted him to limit his acceptance lacks merit.
As the Supreme Court’s decision in CAM Constr makes clear, MCR 2.403 nowhere permits a
party in an action involving one plaintiff against one defendant to (1) submit less than all of his
claims to case evaluation and (2) limit any acceptance. Only in cases involving multiple parties
with claims against each other does MCR 2.403(L) give the parties the option to accept all or
part of a case evaluation award. The form used for acceptance and rejection also cannot be
construed to permit limited acceptances as attempted by plaintiff. The form very clearly tracks
2
Those Court of Appeals cases interpreted the prior version of MCR 2.403, which the CAM
Constr Court described as being “less detailed” than the present version. CAM Constr, 465 Mich.
at 556.
3
“MCR 2.403(C) allows a party to file a motion to remove the matter from case evaluation.”
Magdich & Assoc, 305 Mich. App. at 280 (emphasis added). Thus, even this provision would not
allow plaintiff to only submit some of his non-equitable claims to case evaluation.
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MCR 2.403(L). Therefore, plaintiff had no option or right to limit his acceptance of the case
evaluation award.
MCR 2.403(M)(1) unambiguously describes the effect of acceptance of a case evaluation
award. Upon acceptance by both parties, the trial court must dismiss the action with prejudice,
and the judgment or dismissal “shall be deemed to dispose of all claims in the action.”
(Emphasis added.) However, for no-fault cases involving the rights to PIP benefits, the trial
court’s judgment may not dispose of claims that have not accrued as of the date of the case
evaluation hearing. But all claims which have accrued at the time of the case evaluation are, as a
matter of law, disposed of pursuant to MCR 2.403(M)(1). Accordingly, plaintiff’s acceptance of
the case evaluation award in this case disposed of all disputes over PIP benefits that had accrued
before the date of the case evaluation.
Therefore, the trial court improperly allowed plaintiff to limit his acceptance of case
evaluation in contravention of the plain language of MCR 2.403. Upon both parties’ acceptance
of case evaluation, MCR 2.403(M)(1) required the trial court to enter judgment and dismiss the
entire action—not review plaintiff’s case evaluation summary and allow him to bifurcate his
claims so that he could file another lawsuit for PIP benefits which had accrued before the date of
the case evaluation hearing.
Reversed and remanded for proceedings consistent with this opinion. We do not retain
jurisdiction. Defendant, as the prevailing party, may tax costs pursuant to MCR 7.219.
/s/ Patrick M. Meter
/s/ Michael F. Gadola
/s/ Jonathan Tukel
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