If this opinion indicates that it is “FOR PUBLICATION,” it is subject to 

revision until final publication in the Michigan Appeals Reports.

-1-

S T A T E O F M I C H I G A N

C O U R T O F A P P E A L S

STEVEN WASENKO,

Plaintiff/Appellant/Cross-Appellee,

FOR PUBLICATION

July 20, 2023

9:20 a.m.

v No. 361452

Wayne Circuit Court

THE AUTO CLUB GROUP, LC No. 19-016381-NF

Defendant,

and

NABIH AYAD,

Appellee,

and

AYAD LAW, PLLC,

Appellee/Cross-Appellant.

Before: HOOD, P.J., and SHAPIRO and YATES, JJ.

YATES, J.

The cost of litigating a claim under the no-fault act, MCL 500.3101 et seq., can be sizable, 

as this case illustrates. Plaintiff, Steven Wasenko, was seriously injured in an automobile collision, 

so he hired an attorney, Nabih Ayad of Ayad Law, PLLC (Ayad Law), to seek personal protection 

insurance (PIP) benefits from his insurer. Ayad’s efforts on plaintiff’s behalf ultimately bore fruit 

in the form of a $251,523 settlement, but that resolution left open an issue of future benefits starting 

on July 1, 2021. Soon thereafter, a dispute arose between plaintiff and Ayad Law about the firm’s 

right to attorney fees for future attendant-care benefits plaintiff received. The trial court concluded 

that Ayad Law’s contingent-fee agreement with plaintiff entitled Ayad Law to obtain one-third of 

the attendant-care benefits provided to plaintiff for a period of three years. Plaintiff and Ayad Law 

were dissatisfied with that result, so both of them appealed. On appeal, plaintiff insists Ayad Law 

is not entitled to any fees for future attendant-care benefits, whereas Ayad Law contends that it is 
-2-

entitled to one-third of the attendant-care benefits in perpetuity. Because we believe that the trial 

court incorrectly relied on MCL 500.3148(4), rather than contract principles, to resolve the dispute, 

we must vacate the trial court’s decision and remand the case for further consideration.

I. FACTUAL BACKGROUND

On November 14, 2000, plaintiff suffered catastrophic injuries in a motor-vehicle collision 

that left him paralyzed from the waist down. More than a decade later, in 2011, plaintiff suffered 

a life-threatening infection that he described as a complication from the injuries that he sustained 

in the 2000 collision. The infection caused a perpetually open wound that prevented plaintiff from 

working and required in-home attendant care. Beginning in June 2011, defendant, The Auto Club 

Group (Auto Club), paid for plaintiff’s enhanced care. But on March 1, 2019, Auto Club stopped 

making those payments due to plaintiff’s alleged fraud.

After Auto Club cut off payments for plaintiff’s attendant-care benefits based on purported 

fraud, plaintiff retained attorney Ayad and his law firm, Ayad Law, to seek relief. Ayad then filed 

a complaint on December 6, 2019, acting as plaintiff’s attorney under a contingent-fee agreement. 

After two years of litigation, Ayad settled plaintiff’s case against Auto Club for $251,523, which 

covered all of plaintiff’s claims up to July 1, 2021, and took the issue of alleged fraud by plaintiff 

off the table. As a result, the matter of attendant-care benefits beginning on July 1, 2021, remained 

unresolved despite the settlement negotiated between plaintiff and Auto Club. In fact, Ayad stated 

on the record at the time the settlement was memorialized that plaintiff intended to file a separate 

lawsuit to address the retroactivity of an amendment to the no-fault act that was in dispute.1

After execution of the settlement agreement, attorney Ayad wrote to plaintiff asserting that 

Ayad and his firm had an attorney’s lien on all future payments to plaintiff for attendant care. That 

claim was presented to the trial court for resolution when Auto Club moved to reopen plaintiff’s 

no-fault case to obtain an “order of proper distribution of benefits pursuant to MCL 500.3112.” In 

response to that motion, the trial court issued an order on May 17, 2022, that granted Ayad Law’s 

motion to withdraw as plaintiff’s counsel, denied plaintiff’s motion to quash Ayad Law’s lien, but 

decreed “that pursuant to MCL 500.3148(4), Ayad Law, PLLC’s charging lien is limited to three 

years.” Neither plaintiff nor Ayad and his law firm were satisfied with that result, so plaintiff filed 

an appeal and Ayad and his law firm filed a cross-appeal bringing the entire fee dispute before this 

Court.

II. LEGAL ANALYSIS

“A fee agreement between an attorney and a client is a contract.” Souden v Souden, 303 

Mich App 406, 416; 844 NW2d 151 (2013). Therefore, a “fee or retainer agreement . . . is subject 

 

1

In 2021, Andary v USAA Cas Ins Co, ___ Mich App ___; ___ NW2d ___ (Docket No. 356487) 

was pending in this Court. In a published opinion issued on August 25, 2022, we determined 

that benefits under the no-fault act for injuries that occurred before legislative amendments to 

that act went into effect were not impacted by those amendments. Our Supreme Court thereafter 

granted leave to appeal, Andary v USAA Cas Ins Co, 510 Mich 944; 979 NW2d 823 (2022), and 

the case is now pending in that Court.
-3-

to the law of contracts.” Kalisek Estate v Durfee, 322 Mich App 142, 149; 910 NW2d 717 (2017). 

Accordingly, an attorney and a client “are free to contract as they see fit, and courts must enforce 

contracts as written unless they are in violation of law or public policy.” Edmore Village v Crystal 

Automation Sys, Inc, 322 Mich App 244, 263; 911 NW2d 241 (2017). But “contracts that violate 

our ethical rules violate our public policy and therefore are unenforceable.” Evans & Luptak, PLC 

v Lizza, 251 Mich App 187, 196; 650 NW2d 364 (2002). Similarly, an agreement that violates the 

laws of Michigan is unenforceable as written. 1031 Lapeer LLC v Rice, 290 Mich App 225, 231; 

810 NW2d 293 (2010).

The contingent-fee agreement plaintiff and Ayad Law signed in November 2019 provided 

that “as compensation for services rendered by attorney Client will pay a fee contingent on any net 

recovery as follows: One third of the entire recoveries after outstanding debts are deducted.” Also, 

that contingent-fee agreement entitled Ayad Law to a lien “upon Client’s cause of action, claim or 

counterclaim.” Thus, as a matter of contract, Ayad Law could plausibly claim as its fee one-third 

“of the entire recoveries” it obtained for plaintiff, meaning one-third of all attendant-care payments 

made to plaintiff by Auto Club. Conversely, plaintiff could plausibly assert that Ayad Law had a 

contractual right limited to one-third of the $251,523 in settlement proceeds that flowed from the 

resolution of the lawsuit that Ayad Law filed on plaintiff’s behalf. The trial court would therefore 

have to choose between those two positions as a matter of contract law. And because there may 

be an ambiguity in the governing language of the contingent-fee agreement,2the trial court might 

be able to consider extrinsic evidence in making that choice. Kendzierski v Macomb Co, 503 Mich 

296, 311; 931 NW2d 604 (2019).

The trial court chose a different path. Citing an attorney-fee provision in the no-fault act, 

MCL 500.3148(4), the trial court ruled that Ayad Law’s “charging lien is limited to three years.” 

According to MCL 500.3148(4):

For a dispute over payment for allowable expenses under section 3107(1)(a) 

for attendant care or nursing services, attorney fees must not be awarded in relation 

to future payments ordered more than 3 years after the trial court judgment or order 

is entered.

The trial court framed the entire dispute over attorney fees as a matter that had to be resolved under 

that language. But considered in the broader context of the entire statute, the trial court’s reliance 

on only subsection (4) of MCL 500.3148 to arrive at its decision is unsustainable.

For decades, MCL 500.3148 did not include subsection (4), which was not added until June 

2019. See 2019 PA 21. Prior to its amendment in 2019, MCL 500.3148 was universally regarded 

as a “penalty provision” designed to ensure that an insurer promptly pays its insured. Ross v Auto 

Club Group, 481 Mich 1, 11; 748 NW2d 552 (2008). Indeed, the first subsection of the statute—

MCL 500.3148(1)—constitutes “an exception to the American rule, which provides that attorney 

fees generally are not recoverable from the losing party as costs in the absence of an exception set 

 

2

“A contractual term is ambiguous on its face only if it is equally susceptible to more than a 

single meaning.” Barton-Spencer v Farm Bureau Life Ins Co of Mich, 500 Mich 32, 40; 892 

NW2d 794 (2017).
-4-

forth in a statute or court rule expressly authorizing such an award.” Pirgu v United Servs Auto 

Ass’n, 499 Mich 269, 274-275; 884 NW2d 257 (2016) (quotation marks and citation omitted). As 

MCL 500.3148(1) makes clear, the “attorney’s fee [under the statute] is 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.” Thus, that language contemplates 

attorney fees paid by “the insurer,” as opposed to the insured. With the addition of subsection (4) 

to MCL 500.3148, our Legislature placed a cap on the penalty of attorney fees against the insurer. 

That cap is expressed in MCL 500.3148(1), which now makes the penalty provision of the statute 

“[s]ubject to subsections (4) and (5)” of MCL 500.3148. See MCL 500.3148(1).

To apply MCL 500.3148(4) to cap the amount of attorney fees that plaintiff’s attorneys can 

recover from their clients in PIP cases under the no-fault act is to pound a round peg into a square 

hole. When plaintiff’s attorneys recover fees from their clients in PIP cases, that recovery of fees 

manifestly does not constitute a “penalty,” as contemplated by our Supreme Court. See Ross, 481 

Mich at 11. Our decision in Beach v State Farm Mut Auto Ins Co, 216 Mich App 612; 550 NW2d 

580 (1996), illustrates the salient distinction between attorney fees recovered from an insurer and 

attorney fees recovered from a plaintiff’s attorney’s own client in a PIP case under the no-fault act. 

There, plaintiff sought attorney fees from his insurer under MCL 500.3148(1), but we affirmed the 

trial court’s denial of all requested attorney fees because the jury had found “that no [PIP] benefits 

were overdue[.]” Id. at 628. If we applied that same statutory language from MCL 500.3148(1) 

to Ayad Law’s request for attorney fees, Ayad Law would be entitled to no fees whatsoever from 

its own client because no portion of plaintiff’s claim for future PIP benefits for attendant care was 

“overdue,” as required by MCL 500.3148(1). Applying the penalty provision of the statute in that 

manner makes no sense, so application of the cap on penalty-provision attorney fees prescribed by 

MCL 500.3148(4) likewise makes no sense. Instead, we are convinced that MCL 500.3148 in all 

of its subsections applies only to “penalty provision” attorney fees recovered from insurers, rather 

than attorney fees recovered by plaintiff’s attorneys from their own clients in PIP cases under the 

no-fault act.

Having decided that MCL 500.3148(4) has no bearing on the amount of attorney fees that 

Ayad Law can recover from plaintiff for future attendant-care benefits, we have no choice but to 

vacate the trial court’s award of capped attorney fees to Ayad Law. We must remand the case for 

additional consideration of Ayad Law’s attorney-fee request under the contract principles that we 

have laid out in this opinion. Because there is no restriction on the fee agreement imposed by any 

Michigan statute, the trial court must decide the case based entirely on contract principles unless 

it concludes that the contract is unenforceable. See, e.g., Evans & Luptak, 251 Mich App at 196 

(holding that an “ ‘unethical fee agreement’ ” is unenforceable as a matter of public policy).

Vacated and remanded for further consideration. We retain jurisdiction. 

/s/ Christopher P. Yates

/s/ Noah P. Hood
Court of Appeals, State of Michigan

ORDER

Steven Wasenko v The Auto Club Group

Docket No. 361452

LC No. 19-016381-NF

Noah P. Hood

Presiding Judge

Douglas B. Shapiro

Christopher P. Yates

Judges

For the reasons detailed in the opinion issued concurrently with this order, the Court 

VACATES the May 17, 2022 order capping attorney fees and costs awarded to Ayad Law, and 

REMANDS this matter to the Wayne Circuit Court for a redetermination of reasonable attorney fees and 

costs to which defense counsel is entitled. The redetermination shall be supported by factual and legal 

findings sufficiently detailed to allow meaningful appellate review. We retain jurisdiction.

Upon the expiration of the 42-day period in which to file an application for leave to appeal 

in the Supreme Court, MCR 7.305(D)(5), the trial court shall reconsider the attorney fee and costs issues. 

The trial court’s findings on remand may be rendered orally from the bench or in a written opinion. 

Proceedings on remand shall be given priority until they are concluded. Within seven days after entry of 

a new order awarding reasonable attorney fees and costs, appellant shall file with this Court a copy of that 

order and the written findings if the findings are memorialized in writing. The transcripts of all 

proceedings on remand shall be prepared and filed within 21 days after the completion of the proceedings.

Any party may file a supplemental brief pertaining to the issues raised on remand within 

21 days after entry of the trial court’s order deciding the matter or 21 days after the transcript of the hearing 

is filed, whichever is later. The responsive party may file a supplemental brief in reply. Alternatively, 

the parties may file a stipulation to dismiss the appeal.

_______________________________

Presiding Judge

July 20, 2023