Frances a Miller v. Blue Cross Blue Shield of Michigan

STATE OF MICHIGAN
COURT OF APPEALS
FRANCIS A. MILLER, UNPUBLISHED
September 6, 2016
Petitioner-Appellee,
v No. 326300
Washtenaw Circuit Court
BLUE CROSS BLUE SHIELD OF MICHIGAN, LC No. 11-001099-AA
Respondent-Appellant,
and
OFFICE OF FINANCIAL AND INSURANCE
REGULATION,
Respondent.
Before: BOONSTRA, P.J., and METER and BECKERING, JJ.
BOONSTRA, J., (dissenting).
I respectfully dissent. The majority affirms the circuit court’s finding that respondent’s1
defense of petitioner’s appeal of a decision by the Office of Financial and Insurance Regulation
(OFIR) was frivolous. It does so while conceding that the circuit court erred in awarding
attorney fees and costs under MCL 600.2591,2 but extrapolates that the circuit court “would have
similarly sanctioned respondent for a vexatious defense under MCR 7.216(C)(1)(b).” I disagree
in both respects and would hold that the circuit court clearly erred in sanctioning respondent.
First, I think it behooves us to place in context the narrow issue that is before us. That
issue is whether the circuit court properly sanctioned respondent (whether based on
“frivolousness” or “vexatiousness”) in advocating on appeal (to the circuit court) for the
1
By “respondent” in this opinion, I refer only to respondent-appellant BCBSM.
2
As the majority notes, “MCR 2.114(F) states that ‘a party pleading a frivolous claim or defense
is subject to costs as provided in MCR 2.625(A)(2).’ MCR 2.625(A)(2) clarifies that ‘if the
court finds on motion of a party that an action or defense was frivolous, costs shall be awarded as
provided by MCL 600.2591.’ ”
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affirmance of an administrative decision of OFIR. The larger context is that the entire predicate
for the circuit court’s sua sponte initiation of the sanctions issue was its “medical” judgment
regarding the need for skilled nursing care to administer a feeding tube. As the majority notes,
“The gist of the trial court’s reasoning in granting an award of attorney fees and costs was that
respondent could not have reasonably believed that the pertinent documents had been considered
because it was patently unreasonable to conclude that a feeding tube could be administered
without skilled nursing care.”
Thus, it was the circuit court’s insertion into the proceedings of its own “medical”
judgment that has now spawned extensive litigation over the propriety of the resulting sanctions
award.3 Yet, the circuit court was not qualified to render a “medical” judgment, and it in any
event appears to have rendered an erroneous one. See, e.g., “Home Gastronomy Tube Feeding,”
http://www.upmc.com/patients-visitors/education/nutrition/Pages/home-gastrostomy-tube-
feeding.aspx (last accessed August 23, 2016) (providing patients with information regarding how
to administer a feeding tube upon discharge from a health care facility).
In any event, the issue now before us is whether the circuit court, having so spawned the
sanctions issue in the first place, was correct to find respondent’s advocacy in favor of affirming
OFIR’s decision to be “frivolous,” and whether the majority is correct in extrapolating that the
circuit court also would have properly found the defense to be “vexatious.” I conclude that the
defense was neither frivolous nor vexatious, that the circuit court erred in awarding sanctions,
and that the majority compounds that error by its affirmance.
At the outset, I do not believe that the majority is correct in equating a finding of
frivolousness under MCL 600.2591(3)(a), MCR 2.625(A)(2), and MCR 2.114 with a finding that
an appeal is vexatious under MCR 7.216(C)(b).4 The cases the majority cites for this proposition
generally support the notion that taking an appeal from a dismissed frivolous claim that merely
reasserts the grounds found frivolous below justifies a finding that the appeal was vexatious. See
Fisher v Detroit Free Press, Inc, 158 Mich App 409, 418; 404 NW2d 765 (1987), BJ’s & Sons
Constr Co, Inc v Van Sickle, 266 Mich App 400, 413; 700 NW2d 432 (2005); for another
example of the articulation of this rule, see Briarwood v. Faber's Fabrics, Inc, 163 Mich App
784; 415 NW2d 310 (1987). However, all of these cases involved a dismissal of a claim at the
trial court level, a finding there of frivolousness under MCL 600.2591(3)(a), MCR 2.625(A)(2),
and MCR 2.114, and the subsequent filing of an appeal reasserting the same frivolous grounds.
None of the cases cited support an award of sanctions against a party to an appellate proceeding
who was successful in the court or administrative tribunal below (as was respondent in this case).
3
The propriety of OFIR’s underlying order, and the circuit court’s reversal of it, is not at issue in
this appeal.
4
More specifically, the majority concludes that the standards for frivolousness and vexatiousness
are “analogous” simply because “[c]ourts have considered ‘frivolous’ and ‘vexatious’ appeals in
tandem.”
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Further, this Court has stated that “the definition of a frivolous claim under
MCL 600.2591(3)(a) is different from the definition of a vexatious appellate proceeding under
MCR 7.216(C)(1).” Edge v Edge, 299 Mich App 121, 134-135; 829 NW2d 276, 283-284
(2012). Although the Edge court referred to the definition of a vexatious appeal under
MCR 7.216(C)(1) as “much broader” than the definition of a frivolous claim or defense under
MCL 600.2591(3)(a) and MCR 2.114, it does not necessarily follow that one definition fully
encompasses the other. This Court noted in DeWald v Isola (After Remand), 188 Mich App 697,
703, 470 NW2d 505 (1991), that Federal Rule of Civil Procedure 11 is the “federal analog” of
MCR 2.114, while MCR 7.216(C) is “roughly analogous” to Federal Rule of Civil Procedure 38.
The DeWald Court noted that the United Supreme Court had distinguished these two federal
rules and denied their equivalency in Cooter & Gell v Hartmarx Corp, 496 US 384, 110 S Ct
2447, 110 L Ed 2d 359 (1990). DeWald, 188 Mich App at 701-702; see also Edge, 299 Mich
App at 282.
All of this is to say that I do not believe that we may simply swap the circuit court’s
finding of frivolousness for a finding of vexatiousness, on the basis of “right result wrong
reason.” See Schellenberg v Rochester, Mich Lodge No 2225, 228 Mich App 20, 47; 577 NW2d
163 (1998). I would therefore not substitute MCR 7.216(C) as the basis for the circuit court’s
sanctions award in light of the circuit court’s failure to make any specific findings regarding a
violation of that court rule. DeWald, 188 Mich App at 701-702; see also Edge, 299 Mich App at
282.
Additionally, the parties have not provided this Court with, and my research has not
revealed, any case where an appellee, having succeeded below, was sanctioned in such a manner
under MCR 7.216(C)(1)(b) for essentially arguing that the lower court or tribunal’s dismissal of
the appellant’s case should be affirmed. Such a sanction seems contrary to the apparent purpose
of the court rule. See Haliw v City of Sterling Heights, 257 Mich App 689, 703; 669 NW2d 563
(2003), rev’d on other grounds 471 Mich 700 (2005) (noting that MCR 7.216(C) provides relief
in the form of appellate attorney fees to a prevailing party in the trial court faced with the
necessity of defending a vexatious appeal). I also note, although it is not essential to my
thinking, that the “roughly analogous” Federal Rule of Appellate Procedure, Rule 38, allows
only for an award of damages to an appellee. FR App P 38.
Certainly, MCR 7.216(C)(1)(b) allows sanctions to be awarded when “a pleading,
motion, argument, brief, document, or record filed in the case or any testimony presented in the
case was grossly lacking in the requirements of propriety, violated court rules, or grossly
disregarded the requirements of a fair presentation of the issues to the court.” This language
suggests that the award of appellate attorney fees is not necessarily confined to sanctions against
the appellant, as either party may present motions, arguments, briefs, documents, or records.
However, the circuit court never made any such findings in this case. Rather the circuit court
stated that it found that “Blue Cross had no reasonable basis to believe that the facts underlying
their legal position were true and that their position was devoid of any arguable legal merit.”
This language tracks much more closely to MCR 7.216(C)(1)(a), which states that an appeal may
be vexatious if “the appeal was taken for purposes of hindrance or delay or without any
reasonable basis for belief that there was a meritorious issue to be determined on appeal.”
(Emphasis added). Thus, even assuming that the work the majority does on the circuit court’s
behalf (in substituting references to MCR 7.216(C) for the circuit court’s references to
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MCL 600.2591) is appropriate, it would seem that the circuit court’s holding falls under section
(1)(a) of that rule, which is limited to sanctions of an appellant or cross-appellant, as they are the
parties that “take” an appeal. See Black’s Law Dictionary (9th ed), 1590 (defining “take” as “to
claim one’s rights under,” i.e. as relevant to the instant case, a party who claims their right to
appeal or cross-appeal); George Realty Co v Paragon Refining Co of Mich, 282 Mich 297, 300;
276 NW 455 (1937) (noting that an appeal may be taken only by a party aggrieved by the
decision of the court below).
Finally, even if I agreed with the majority’s reasoning in concluding that the trial court
was able to sanction respondent in such a manner under MCR 7.216(C)(1)(b), I would conclude
that it committed clear error in doing so. As the majority states, respondent argued before the
trial court that OFIR’s decision was authorized by law. The majority finds noteworthy that
OFIR’s order, in a section entitled “BCBSM’s Argument”, contains the phrase “In addition, there
were no records provided for the time period of March 25 through April 6, 2010 to determine if
skilled care was provided.” The majority says that this statement “should have alerted
respondent to a problem.” I fail to see how.
In the first instance, it is clear from context that this statement represents not a statement
from OFIR itself, or even from Maximus; rather, it represents a summary of respondent’s
argument in support of its denial of petitioner’s claim before OFIR, in which it argued that
petitioner had failed to provide evidence of skilled care required for the period after March 25.
Additionally, it is clear from both Maximus’s report and OFIR’s order that all relevant records
were considered. Maximus’s report clearly references the receipt of documents from both
respondent and petitioner on January 12, 2011, the day that petitioner faxed the remainder of the
relevant records, and, as the majority states, specifically noted that “[m]edical records from
2/16/10 to 4/6/10 were included in the case file.” OFIR’s order states that Maximus’s
recommendation was “based on extensive expertise and professional judgment” and that it was
adopting the recommendation in upholding’s respondent’s denial. Thus I simply fail to see what
“problem” respondent should have been alerted to, by OFIR’s summary of its arguments in an
order upholding respondent’s denial, such that its defense of that decision on appeal could be
said to be “grossly lacking in the requirements of propriety,” or to have “violated court rules, or
grossly disregarded the requirements of a fair presentation of the issues to the court.”
MCR 7.216(C)(1)(b).
Simply put, it appears that respondent’s argument that OFIR complied with
MCL 550.1911(13) and (15), was at the very least a proper, non-vexatious argument on appeal,
notwithstanding that the argument was ultimately unsuccessful. Although the circuit court made
much of the fact that OFIR’s order did not specifically reference the presence of a feeding tube,
petitioner’s feeding tube was just one component of petitioner’s overall medical condition, which
was evaluated by two separate medical review organizations and found not to require skilled
nursing care after March 19. For the reasons noted, and although the court’s reversal of
respondent’s denial is not at issue in this appeal, I cannot find that the circuit court’s subjective
(and apparently erroneous) belief that it was “patently unreasonable” to conclude that the
presence of a feeding tube did not in all instances require skilled nursing care sufficiently
supports the conclusion that respondent’s arguments were in violation of MCR 7.216(C)(1)(b).
Maximus determined that after March 19, petitioner was at a “high functional level” and had
plateaued in her mobility and activities of daily living for 2 weeks prior to” that date. This
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evaluation was based upon the totality of petitioner’s medical situation, not merely the presence
of a feeding tube. Further, I do not see in any of the statutes cited by the majority the
requirement that OFIR specifically make reference to all individual aspects of an insured’s
medical treatment in rendering its decision. The circuit court, at the motion hearing, honed in on
the issue of the feeding tube, and found it dispositive to its decision, apparently based on its
personal belief that a feeding tube in all instances requires skilled nursing care. While that
decision, erroneous or not, is not at issue on appeal, I believe that the circuit court’s personal
opinion and dissatisfaction with respondent’s arguments regarding the feeding tube issue was
insufficient grounds to find respondent in violation of MCR 7.216(C)(1)(b), even if I were to
find that the rule applied in the instant case. For all these reasons, and unlike the majority, I do
have a “definite and firm conviction” that a mistake was made, Kitchen, 465 Mich at 661-662,
and accordingly I would reverse the circuit court’s sanctions award.
/s/ Mark T. Boonstra
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