Court Opinion

ID: 4324764
Source: CourtListenerOpinion
Date Created: 2018-10-26 09:11:03.473788+00
Date Added: 2024-06-11T14:46:39.637106
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

CITIZENS INSURANCE COMPANY OF                                         UNPUBLISHED
AMERICA,                                                              October 25, 2018

               Plaintiff-Appellee,

v                                                                     No. 337309; 338082
                                                                      Genesee Circuit Court
JERRY SHOLTEY,                                                        LC No. 13-101298-NF

               Defendant/Third-Party Plaintiff-
               Appellee,

and

AUTO CLUB INSURANCE ASSOCIATION,

               Defendant/Third-Party Defendant-
               Appellant.

Before: MURRAY, C.J., and BORRELLO and RONAYNE KRAUSE, JJ.

PER CURIAM.

        In Docket No. 337309, third-party defendant, Auto Club Insurance Association
(“ACIA”), appeals as of right the trial court’s order granting third-party plaintiff, Jerry Sholtey’s,
motion for summary disposition. In Docket No. 338082, ACIA appeals as of right the trial
court’s order awarding Sholtey no-fault attorney fees and interest. This matter arises out of
ACIA’s cancellation of a no-fault insurance policy it issued to Sholtey, and specifically whether
the notice ACIA provided was sufficient to effectuate that cancellation. We affirm the trial
court’s order granting Sholtey’s motion for summary disposition, but reverse the order awarding
Sholtey no-fault attorney fees and interest.

                                        I. BACKGROUND

                         A. FACTS AND PROCEDURAL OVERVIEW

        On January 9, 2012, Christine Delavega was injured while driving a vehicle owned by
and registered to her father, Jerry Sholtey. After the accident, Delavega first sought personal
protection insurance (PIP) benefits from ACIA, Sholtey’s no-fault insurance carrier for 30 years.
In early 2011, Sholtey had renewed his policy for a one-year term beginning May 1, 2011,
                                                 -1-
through May 1, 2012. Sholtey opted to pay his premiums on an installment plan.
Notwithstanding this apparent policy renewal, ACIA denied Delavega’s claim for no-fault
benefits, asserting that it had cancelled Sholtey’s policy effective January 3, 2012, for failure to
pay the premiums. ACIA alleged that a notice of cancellation was mailed to Sholtey on
December 15, 2011, purporting to warn him of the impending termination of the policy. Sholtey
claimed that he never received ACIA’s cancellation notice.

        Because Delavega did not have any alternative coverage, she sought PIP benefits through
the Michigan Assigned Claims Plan. 1 On February 9, 2012, Delavega’s claim was assigned to
plaintiff, Citizens Insurance Company of Michigan (“Citizens”). Thereafter, Citizens paid
Delavega’s PIP benefits.

       Operating under the belief that Sholtey was uninsured, Citizens filed suit against Sholtey
seeking reimbursement of the no-fault benefits it had paid to or on behalf of Delavega. In his
answer to Citizen’s complaint, Sholtey alleged that he was insured by ACIA on the date of the
accident. In addition, Sholtey filed a third-party complaint against ACIA for breach of the
insurance contract. In turn, Citizens added ACIA as a party-defendant to its complaint for
reimbursement.

       In its answers and affirmative defenses, ACIA alleged that it sent a cancellation notice to
Sholtey on December 15, 2011, indicating that the policy would cancel on January 3, 2012,
unless the outstanding past-due premiums were paid. ACIA asserts that when the premiums
were not paid, the policy was properly terminated, effective January 3, 2012.

        Eventually, after protracted litigation, including multiple motions for summary
disposition, the trial court held that ACIA had not timely and properly cancelled Sholtey’s
policy. Accordingly, the court granted summary disposition to Sholtey, denied ACIA’s motion
for summary disposition, entered judgment in favor of Citizens, and directed ACIA to reimburse
Citizens for the no-fault benefits it had paid. The trial court initially denied Sholtey’s request for
no-fault penalty interest and attorney fees, but on rehearing, the trial court granted that request.

                                  B. APPLICABLE STATUTES

        To place the facts in context, a brief review of the statutory provisions governing policy
cancellations is helpful. MCL 500.3020 governs the cancellation of insurance policies by setting
forth the provisions that must be included in policies of insurance. MCL 500.3020(1)(b)
provides:

             (1) A policy of casualty insurance, except worker’s compensation and
       mortgage guaranty insurance, including all classes of motor vehicle coverage,

1
  Pursuant to MCL 500.3171, the Michigan Automobile Insurance Placement Facility maintains
the Michigan Assigned Claims Plan. “If no insurance is available, a person may obtain benefits
through the Assigned Claims Plan, which serves as the insurer of last priority.” Titan Ins Co v
American Country Ins Co, 312 Mich App 291, 298; 876 NW2d 853 (2015).

                                                 -2-
       shall not be issued or delivered in this state by an insurer authorized to do
       business in this state for which a premium or advance assessment is charged,
       unless the policy contains the following provisions:

                                              * * *

              (b) Except as otherwise provided in subdivision (d), that the policy may be
       canceled at any time by the insurer by mailing to the insured at the insured’s
       address last known to the insurer or an authorized agent of the insurer, with
       postage fully prepaid, a not less than 10 days’ written notice of cancellation with
       or without tender of the excess of paid premium or assessment above the pro rata
       premium for the expired time.

In addition, MCL 500.3020(6) requires that the notice of cancellation include a statement “that
the insured shall not operate or permit the operation of the vehicle to which notice of cancellation
is applicable, or operate any other vehicle, unless the vehicle is insured as required by law.”

        MCL 500.3020(1) requires that the “mailing of a notice of cancellation must be
reasonably calculated to be delivered so as to arrive at the insured’s address at least ten days
before the date specified for cancellation for the notice to be effective.” Nowell v Titans Ins Co,
466 Mich 478, 480; 648 NW2d 157 (2002). However, “[w]hile the Legislature undoubtedly
expected that this should ordinarily result in personal receipt of the notice of cancellation by the
insured before it became effective, the statutory language utilized cannot fairly be read as
requiring actual notice as a condition for a cancellation to become effective.” Id. at 484.

                              C. CANCELLATION DOCUMENTS

         Although receipt of various documents was disputed by the parties, there were several
pertinent documents presented to the trial court. A document entitled “AUTO INSURANCE-
CANCELLATION NOTICE,” dated December 14, 2011, provided that Sholtey’s ACIA policy
would cancel January 3, 2012, “if the TOTAL AMOUNT OWED or the MINIMUM DUE is not
received by the company by JAN 03 2012 (12:00 Noon E.T.).” ACIA has, at all times, asserted
that this document was placed in the mail to Sholtey on December 15, 2011.

       A second document, entitled “CANCELLATION OF POLICY,” purports on its face to
have been mailed on January 17, 2012, eight days after the accident. This document provides:

       THIS IS TO NOTIFY YOU THAT YOUR POLICY EFFECTIVE MAY 01, 2011
       WAS CANCELLED BECAUSE OF NON-PAYMENT OF PREMIUMS.
       COVERAGE UNDER THIS POLICY TERMINATED AT 12:01 A.M. ON JAN
       03, 2012.

In addition to the foregoing language, the January 17, 2012 cancellation also included the
cautionary language: “YOU MAY NOT OPERATE OR PERMIT THE OPERATION OF
YOUR VEHICLE, OR OPERATE ANY OTHER VEHICLE UNLESS SUCH VEHICLE IS
INSURED AS PROVIDED BY MICHIGAN LAW.”

                        D. MOTIONS FOR SUMMARY DISPOSITION

                                                -3-
        On June 20, 2014, Citizens filed a motion for summary disposition, arguing that it was
entitled to reimbursement from either Sholtey or ACIA. Citizens reasoned that Sholtey was
liable under MCL 500.3177(1), as the owner of an uninsured motor vehicle; alternatively, ACIA
would be responsible for reimbursing Citizens under MCL 500.3114 and MCL 500.3175, as the
insurer of the vehicle. On August 15, 2014, the trial court entered an order granting Citizens’
motion for partial summary disposition and specified the amount of reimbursement due from
either Sholtey or ACIA.2

       Between July 2014 and October 2016, Sholtey and ACIA filed, between the two of them,
five motions for summary disposition. In general, ACIA argued that Sholtey’s no-fault policy
was not in effect at the time of the January 9, 2012, accident because it was cancelled for non-
payment of premiums, effective January 3, 2012. ACIA further asserted that a red slip
containing the statutorily mandated cautionary language was included in the cancellation
documents sent to Sholtey. ACIA relied almost exclusively on the deposition testimony and
multiple affidavits of Rhonda Goosic, vice president of Source HOV, a company under contract
with ACIA to provide services, including the preparing and mailing of documents.

        In contrast, Sholtey argued, among other things, that he had not received the December
15, 2011 cancellation notice, that there was no factual support for the proposition that Source
HOV mailed the cancellation notice to Sholtey, and that even if the December 15, 2011
cancellation notice was properly mailed, it was defective because it failed to include the
statutorily-required “cautionary language.” Sholtey pointed out that Goosic’s affidavits routinely
contradicted her deposition testimony, which had been that the only document included in the
December 15, 2011 mailing to Sholtey was the cancellation notice, and that notice did not
contain the cautionary language. The early motions were denied by the trial court as premature.
However, following a hearing in October 2016, the trial court held that ACIA did not timely mail
a proper notice of cancellation to Sholtey. The trial court granted Sholtey’s motion for summary
disposition, denied ACIA’s motion, granted judgment against ACIA and in favor of Citizens in
the revised amount of $381,050.27, and declined to impose sanctions or fees against ACIA.

        ACIA subsequently filed a motion for rehearing in which it argued that the trial court
erred when it concluded that ACIA failed to give proper notice of cancellation to Sholtey. ACIA
assumed, for purposes of its motion, that the court had accepted Sholtey’s argument that the red
slip containing the statutorily mandated cautionary language was not included in the cancellation
documents mailed to Sholtey on December 15, 2011. ACIA requested further opportunity to
present additional documentary evidence to refute this assertion. Sholtey also filed a motion for
reconsideration of the trial court’s denial of no-fault penalty interest and attorney fees against
ACIA.

       On February 15, 2017, the trial court entered an order denying ACIA’s motion for
rehearing. The court also considered and granted in part Sholtey’s motion for rehearing.

2
  As Citizens continued to pay PIP benefits, the amount of the reimbursement request increased.
Consequently, on several occasions, Citizens successfully moved to amend the order to change
the amount to which it was entitled from either Sholtey or ACIA.

                                               -4-
Specifically, the court held that Sholtey was entitled to penalty interest and attorney’s fees. It
thereafter entered an order permitting Sholtey to recover attorney fees from ACIA in the amount
of $57,635.50, and penalty interest in the amount of $71,534.99.

                                II. SUMMARY DISPOSITION

        ACIA argues that the trial court erred when it denied its motion for summary disposition
and, instead, granted summary disposition in Sholtey’s favor. Specifically, ACIA asserts that
there is a question of fact whether it complied with the requirements of MCL 500.3020. We
disagree.

                                 A. STANDARD OF REVIEW

        Both ACIA and Sholtey, in their cross-motions, moved for summary disposition pursuant
to MCR 2.116(C)(10). “Summary disposition is appropriate under MCR 2.116(C)(10) if there is
no genuine issue regarding any material fact and the moving party is entitled to judgment as a
matter of law.” West v Gen Motors Corp, 469 Mich 177, 183; 665 NW2d 468 (2003). When
considering a motion for summary disposition under MCR 2.116(C)(10), a court must view the
evidence submitted in the light most favorable to the nonmoving party. Id. A genuine issue of
material fact exists when the evidence submitted “might permit inferences contrary to the facts
asserted by the movant.” Opdyke Investment Co v Norris Grain Co, 413 Mich 354, 360; 320
NW2d 836 (1982). This Court reviews de novo a trial court’s decision on a motion for summary
disposition. Spiek v Dep’t of Transp, 456 Mich 331, 337; 572 NW2d 201 (1998).

                                         B. ANALYSIS

        Michigan law requires that the notice of cancellation “shall be accompanied by a
statement that the insured shall not operate or permit the operation of the vehicle to which notice
of cancellation is applicable, or operate any other vehicle, unless the vehicle is insured as
required by law.” MCL 500.3020(6). “The general rule is that effective cancellation requires
strict compliance with the cancellation clause.” Depyper v Safeco Ins Co of America, 232 Mich
App 433, 438; 591 NW2d 344 (1998). Furthermore, “[i]nsurance contracts should be construed
in light of statutory requirements, and mandatory statutory provisions should be read into
insurance contracts.” Id. “The use of the word ‘shall’ in a statute connotes a mandatory duty or
requirement.” Id. Consequently, the trial court correctly determined that pursuant to MCL
500.3020(6), ACIA was required to include the cautionary statement in its notice of cancellation.

         ACIA claims that in addition to the cancellation notice itself, it included a red insert,
allegedly bearing the cautionary language, in the December 15, 2011 mailing to Sholtey.
However, this assertion is not supported by the evidence presented to the trial court. Source
HOV was under contract with ACIA to provide services, including the preparing and mailing of
documents on ACIA’s behalf. Source HOV’s vice president, Rhonda Goosic, specifically
testified that the only thing included in the envelope sent to Sholtey on December 15, 2011, was
the cancellation notice, and it is undisputed that this notice did not include the cautionary
language. Referencing the December 15, 2011 cancellation notice, Goosic explained the
significance of two black bars, called OMR marks, next to Sholtey’s name in the
correspondence:

                                                -5-
              A. To the left of the address block you will see two wide bars.

              Q. Okay.

              A. Those are called OMR marks, OMR. And what it does it tells the
       machine when they see two bars, it tells the machine that this is the first page in
       the mailing. If there are subsequent mailings that belong in the same envelope
       you will see single bars.

              And for this particular mailing that we did, this cancellation notice, there
       was only one page. So all we see was two bars. So only one page or this actual
       document was the only thing presented in that envelope. And then to the, then to
       the upper right of the address block you’ll see a very small set of numbers, 4104...
       [Emphasis added.]

Thus, Goosic clearly and unequivocally testified that the only document in the envelope mailed
to Sholtey was the cancellation notice. It is undisputed that this one-page document did not
include the cautionary language mandated by MCL 500.3020(6). The omission of this
mandatory warning rendered the cancellation notice ineffective:

               Insurance laws and policies are to be liberally construed in favor of
       policyholders, creditors, and the public . . . Construing [MCL 500.3020(6)][3]
       liberally, in favor of policyholders, and giving due regard to the deterrent purpose
       of the warning, we hold, as a matter of law, that defendant's failure to give the
       warning mandated by [MCL 500.3020(6)] renders its cancellation notice
       ineffective. [Depyper, 232 Mich App at 441-442 (internal citations omitted).]

Because the December 15, 2011 cancellation notice failed to comply with the cautionary warning
requirement of MCL 500.3020(6), the trial court correctly held that ACIA had not effectively
cancelled the policy. As a result, Sholtey was insured by ACIA on the day of Delavega’s
accident.

                          C. ACIA’S ADDITIONAL AFFIDAVITS

       Notwithstanding the foregoing, ACIA asserts that three affidavits executed by Goosic
after her deposition created a question of fact whether an insert containing the cautionary
language was included in the December 15, 2015 mailing. We disagree.

       In support of its first unsuccessful motion for summary disposition, ACIA relied on
Goosic’s July 23, 2014 affidavit, because she had yet to be deposed. In this affidavit, Goosic
averred that on December 14, 2011, using information electronically provided by ACIA, Source
HOV prepared and then mailed a cancellation notice to Sholtey on December 15, 2011. After

3
 At the time the plaintiff in Depyper was injured, the cautionary language mandate was found at
MCL 500.3020(5).

                                               -6-
the trial court denied summary disposition, ACIA deposed Goosic on September 30, 2014.
During this deposition, Goosic admitted that, contrary to her first affidavit, Source HOV did not
actually mail the cancellation notice to Sholtey. Instead, Sholtey’s cancellation notice, along
with many others, was forwarded to a different entity, Pitney-Bowes, for “presort services” in
order to obtain a lower mailing rate. More significantly, Goosic testified, as discussed above,
that the only document in the envelope to Sholtey was the cancellation notice. She also testified
that ACIA did not require that Source HOV prepare a mailing manifest containing the names of
the recipients of the cancellation notices.

        After her deposition, and despite her testimony that no manifests were required, Goosic
purportedly nevertheless found a mailing manifest for the December 15, 2011, mailing date that
included Sholtey’s name. This resulted in a second Goosic affidavit, dated April 9, 2015, in
which she attested to the recent discovery of these new documents. Then, when ACIA renewed
its motion for summary disposition, it relied on a third affidavit from Goosic, dated September 4,
2015, in which she again switched course and claimed that Source HOV, not Pitney-Bowes,
mailed the cancellation notice and included in that mailing envelope not only the cancellation
notice, but the red cautionary language insert, and a return envelope. In other words, three
separate items.

        After the court denied ACIA’s motion for summary disposition and granted Sholtey’s
motion for summary disposition, ACIA provided a fourth Goosic affidavit in its motion for
rehearing. In that motion, ACIA sought to present additional documentary evidence to the court,
specifically an “Inserts Requirement Sheet” and a “Michigan Legacy-Auto Line Mail Matrix,”
which apparently required that Source HOV include the red caution insert in every cancellation
package. In her fourth affidavit, dated December 16, 2016, Goosic referenced these two
documents, and further attempted to explain what she “really meant” by her deposition testimony
that “only” the cancellation notice was included in the envelope mailed to Sholtey:

              13. In my deposition taken September 30, 2014, pages 27-28, I was asked
       about the two bars that appeared on the cancellation notice that was mailed to
       Jerry Sholtey on December 15, 2011, which I explained as follows:

               “Those are called OMR marks, OMR, And what it does is it tells the
       machine that this is the first page in the mailing. If there are subsequent mailings
       that belong in that same envelope you will see single bars. And for this particular
       cancellation notice, there was only one page. So all we see was two bars. So
       only one page or (sic) this actual document was the only thing presented in that
       envelope.”

              14. When I testified that “one page” was “the only thing presented in that
       envelope” to Jerry Sholtey, I was only referring to the “page” that Source HOV
       printed from the secured, encrypted information provided by ACG, i.e., the
       cancellation notice for Jerry Sholtey. I was not referring to the two “inserts” that
       were also included in the total mailing package, i.e., the 606-38E return envelope
       and the 8800-1223-PS-N9 red Caution Slip.

                                               -7-
               15. In my affidavit of September 4, 2015, ¶ 6, I explained (consistent with
       the foregoing statements) that on December 15, 2011, Source HOV inserted into a
       #10 mailing envelope addressed to Jerry Sholtey . . . (1) the Jerry Sholtey
       Cancellation notice, (2) a red cautionary insert, and (3) a #9 return envelope.

ACIA asserts that Goosic’s three affidavits prepared after her deposition were either consistent
with her deposition testimony or, alternatively, simply a further exposition of her testimony. We
disagree.

        Goosic’s affidavits attesting to the presence of additional documents in the mailing to
Sholtey, specifically, the red cautionary insert, directly contradicts her deposition testimony. As
such, the trial court did not err when it refused to consider this contradictory evidence. “It is well
settled that a party may not raise an issue of fact by submitting an affidavit that contradicts the
party’s prior clear and unequivocal testimony.” Palazzola v Karmazin Prod Corp, 223 Mich
App 141, 154-155; 565 NW2d 868 (1997). This rule has been equally applied to the affidavits of
nonparty witnesses. Id. Accordingly, Goosic’s conflicting and contradictory affidavits do not
create questions of fact.

        In the face of Goosic’s clear and unequivocal deposition testimony, ACIA asserts that
additional documents independently supported the assertion that Sholtey’s cancellation notice
included a red cautionary insert. Specifically, ACIA points to a mailing manifest that included
Sholtey’s name; and a “Mail Services Job Checklist” that purportedly required Source HOV’s
insert operators to include a “verified insert” and a “correct return envelope” in every
cancellation package. These documents were produced before the hearing on the cross-motions
for summary disposition. The manifest, however, simply shows that a mailing went out; it does
not show the mailing’s content. Arguably, the Mailing Services Job Checklist does suggest
Source HOV’s customary practice. ACIA argues that this evidence was, therefore, sufficient to
establish that it mailed a cancellation package to Sholtey that included the cautionary language.
In support of this proposition, ACIA relies on this Court’s decision in Good v Detroit Auto Inter-
Ins Exch, 67 Mich App 270, 274-276; 241 NW2d 71 (1976).

        In Good, this Court held that “upon proper evidence of business custom and habit of a
commercial house as to addressing and mailing, the mere execution of the letter in the usual
course of business rebuttably presumes subsequent receipt by the addressee.” Good, 67 Mich
App at 276. However, this is a rebuttable presumption and a challenging party may rebut the
presumption by presenting evidence to the contrary. Id. at 276-278. The Court in Good did not
consider whether the cancellation notice was legally deficient because the issue was not pleaded
in that case. Id. at 278. In any event, in this case, Sholtey came forward with sufficient evidence
to rebut the presumption that the cautionary insert was included. Specifically, Goosic’s
unequivocal deposition testimony was that the only document mailed to Sholtey on December
15, 2011, was the notice of cancelation, which did not include the cautionary language. Again,
we do not believe ACIA may manufacture its own question of fact.

        In its motion for rehearing, ACIA attempted to offer two additional documents that
purportedly established the custom of including with the cancellation notice a red cautionary
insert and a return envelope. However, the trial court properly exercised its discretion and
refused to consider this additional evidence. A trial court does not abuse its discretion when, on

                                                 -8-
a motion for reconsideration, it “decline[s] to consider new legal theories or evidence that could
have been presented when the motion was initially decided.” Yoost v Caspari, 295 Mich App
209, 220; 813 NW2d 783 (2012).

        Goosic’s multiple affidavits did not create a genuine issue of disputed material fact.
Accordingly, the trial court properly determined that there was no genuine factual question
whether a cautionary insert was included in the December 15, 2011 mailing to Sholtey. ACIA’s
failure to comply with the requirements of MCL 500.3020(6) rendered the cancellation notice
ineffective. Consequently, the trial court did not err when it granted summary disposition in
Sholtey’s favor.

                      III. ATTORNEY FEES AND PENALTY INTEREST

       Next, ACIA argues that the trial court incorrectly awarded Sholtey penalty interest and
attorney fees under MCL 500.3142 and MCL 500.3148. We agree.

                                  A. STANDARD OF REVIEW

        “A trial court’s decision to grant or deny a motion for attorney fees [under the no-fault
act] presents a mixed question of fact and law.” Brown v Home-Owners Ins Co, 298 Mich App
678, 689; 828 NW2d 400 (2012). The trial court’s findings of fact are reviewed for clear error,
while questions of law are reviewed de novo. Id. at 690. “A finding is clearly erroneous when,
although there is evidence to support it, the reviewing court on the entire record is left with a
definite and firm conviction that a mistake was made.” Marilyn Froling Revocable Living Trust
v Bloomfield Hills Country Club, 283 Mich App 264, 296; 769 NW2d 234 (2009) (citation and
quotation marks omitted). However, this Court reviews for an abuse of discretion a trial court’s
ultimate decision whether to award attorney fees. Smith v Khouri, 481 Mich 519, 526; 751
NW2d 472 (2008). “An abuse of discretion occurs when the trial court’s decision is outside the
range of reasonable and principled outcomes.” Id. “Issues of statutory interpretation are
questions of law that we review de novo.” Koontz v Ameritech Servs, Inc, 466 Mich 304, 309;
645 NW2d 34 (2002).

        Additionally, when interpreting a statute, the “primary goal is to give effect to the intent
of the legislature.” Rowland v Washtenaw Co Rd Comm, 477 Mich 197, 202; 731 NW2d 41
(2007). The actual words used in the statute are the best indicator of intent and the words
“should be interpreted based on their ordinary meaning and the context within which they are
used in the statute.” Dep’t of Environmental Quality v Worth, 491 Mich 227, 237-238; 814
NW2d 646 (2012). When the words are unambiguous, they must be given “their plain meaning.”
Rowland, 477 Mich at 202.

                                          B. ANALYSIS

        The trial court initially denied Sholtey’s request for no-fault penalty interest and attorney
fees, reasoning that because Citizens timely paid Delavega’s PIP benefits, no sanctions would be
awarded. However, after ACIA moved for rehearing and presented yet more evidence
contradicting Goosic’s deposition testimony, the court granted Sholtey’s motion for rehearing
and held that Sholtey was entitled to penalty interest and attorney fees for the following reasons:

                                                -9-
       The Court declined to grant this request as Sholtey’s claim was paid by Citizens
       in full, and ACIA, had, in the Court’s opinion, initially asserted a viable defense
       that it had cancelled third-party-plaintiff’s policy for nonpayment of premium by
       mailing to him a notice of cancellation more than ten days prior to the effective
       date of the cancellation. [MCL 500.3020(1)(b)] [sic.]

               However, now that the Court is entering a contemporaneous order denying
       third-party defendant’s motion for rehearing of its motion for summary
       disposition, under MCR 2.119(F)(3), for the reasons stated in that opinion, the
       Court will reconsider in part, its failure to have awarded penalty interest attorney
       fees [sic] to third-party plaintiff Sholtey. Attorney fees are to be awarded under
       MCL 500.3148(1) against an insurer if the Court finds that the insurer
       “unreasonably refused to pay the claim or unreasonably delayed in making proper
       payment.” Penalty interest attaches when personal protection benefits are
       overdue, i.e., not paid within 30 days after an insurer receives reasonable proof of
       the fact and the award [sic4] of loss sustained. (MCL 500.3142).

               The Court finds that third-party defendant “unreasonably refused to pay
       the claim or unreasonably delayed in making proper payment” after September 4,
       2015, when Rhonda Goosic provided an affidavit which contradicted her clear
       and unequivocal deposition testimony of September 30, 2014, which deposition
       contradicted her July 23, 2014 affidavit.

               Accordingly, third-party plaintiff may submit a motion for the
       modification of the November 28, 2016, order in respect to attorney fees, penalty
       interest, and an amended or separate order that Citizens’ claim against Sholtey is
       dismissed.

Thereafter, the court awarded Sholtey attorney fees in the amount of $57,637.50, costs in the
amount of $125, and interest on the damages in the amount of $71,534.88, plus a daily rate of
interest of $125.28 from March 28, 2017 until damages were fully paid. On appeal, ACIA does
not take issue with the reasonableness of the award, but instead challenges Sholtey’s entitlement
under MCL 500.3142 and MCL 500.3148 to any no-fault penalties.

       MCL 500.3148 governs awards of attorney fees in no-fault cases. MCL 500.3148(1)
provides:

              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

4
  MCL 500.3142(2) actually provides: “Personal protection insurance benefits are overdue if not
paid within 30 days after an insurer receives reasonable proof of the fact and of the amount of
loss sustained.” (Emphasis added.)

                                              -10-
       pay the claim or unreasonably delayed in making proper payment. [Emphasis
       added.]

Under a plain reading of the statute, an attorney is only entitled to a reasonable fee when
advising or representing a “claimant” in an action for personal or property protection insurance
benefits which are overdue. The statute does not define “claimant,” but our Supreme Court’s
recent decision in Covenant Med Ctr, Inc v State Farm Mut Auto Ins Co, 500 Mich 191; 895
NW2d 490 (2017), and cases from this Court that followed Covenant, offer guidance.

        In Covenant, the Court held that healthcare providers do not possess a statutory cause of
action against no-fault insurers for recovery of PIP benefits. Covenant, 500 Mich at 196. To
reach this conclusion, the Court considered several provisions of the no-fault act, including MCL
500.3148(1). The healthcare provider argued that “the Legislature’s use of the word ‘claimant,’
instead of ‘injured person,’ demonstrated that other persons, like providers, may bring lawsuits to
recover PIP benefits.” Id. at 214 n 37. The Court found this argument unhelpful to the
healthcare provider, because no provisions in the act established that healthcare providers were
proper claimants under the act, nor did they “create rights to PIP benefits that do not otherwise
exist.” Id. at 215 n 37. The Court in Covenant further noted:

               Because the no-fault act does not define “claim,” we may consult a
       dictionary definition . . . The relevant dictionary definitions of “claim” include “a
       demand for something due or believed to be due” and “a right to something.”
       Merriam–Webster’s Collegiate Dictionary (11th ed.). Therefore, to have a
       “claim” under the no-fault act, a provider must have a right to payment of PIP
       benefits from a no-fault insurer. [Id. at 211 n 31 (emphasis added) (internal
       citation omitted).]

By implication, a “claimant” is someone who has a right to payment of PIP benefits from the no-
fault insurer.

        Support for this definition of “claimant” is further found in this Court’s decision in
Allstate Ins Co v State Farm Mut Auto Ins Co, 321 Mich App 543; 909 NW2d 495 (2017). In
that case, Allstate, the assigned-claims insurer, sued State Farm for reimbursement of PIP
benefits paid, after it was discovered that State Farm insured the negligent driver. Id. at 546-547.
At issue in that case was whether the plaintiff’s claim for reimbursement was timely under MCL
500.3175(3). Id. at 547-548. Again, the definition of “claimant” was integral to the resolution of
the issues. This Court held that “it is the injured person who is the claimant that receives PIP
benefits, in the form of the insurer paying the health care provider.” Id. at 558. The Court
cautioned that this definition of “claimant” is not necessarily synonymous with “the injured
person” because the no-fault act specifically provides that a claimant may not always be an
injured person. Id. This Court explained:

       For example, MCL 500.3105(4) provides, in part, that “[b]odily injury is
       accidental as to a person claiming personal protection insurance benefits unless
       suffered intentionally by the injured person or caused intentionally by the
       claimant.” So that subsection contemplates that the claimant could intentionally
       cause the injured person bodily injury.

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               Another obvious example of a claimant being different from the injured
       person is when the injured person dies as a result of the accident. See, e.g., MCL
       500.3108(1) (providing that PIP “benefits are payable for a survivor’s loss which
       consists of a loss, after the date on which the deceased died, of contributions of
       tangible things of economic value”); MCL 500.3112 (providing that PIP “benefits
       are payable to or for the benefit of an injured person or, in case of his death, to or
       for the benefit of his dependents”). When the injured person dies, the person
       claiming no-fault benefits will necessarily be a different person from the one who
       was injured. [Id. at 558-559.]

In Allstate Ins Co, this Court concluded that the injured person in that case was the “claimant”
because she had a right to PIP benefits from the assigned-claim insurer. Id. at 559.

        The foregoing decisions are instructive. In this case, as ACIA correctly notes, Sholtey’s
daughter, Delavega, is the “claimant” because she is the only one who is entitled to assert a claim
for and receive PIP benefits. Sholtey is not entitled to receive any PIP benefits. Simply put,
Sholtey does not qualify as a claimant under the act. As such, the trial court’s grant of an award
of attorney fees against ACIA and in favor of Sholtey is contrary to the plain language of the
statue. Accordingly, reversal is required. Further, as will be explained below, Sholtey was not
entitled to an award of attorney fees because the benefits were not “overdue.”

        The trial court also awarded Sholtey no-fault penalty interest under MCL 500.3142. The
court initially declined to award no-fault penalty interest because Citizens promptly paid the PIP
benefits, and thus there were no overdue benefits. On rehearing, however, the court awarded
interest from September 4, 2015, forward because it found that at that point, ACIA’s continuing
refusal to pay was unreasonable. We conclude that the trial court erred.

       MCL 500.3142 governs no-fault penalty interests, and it provides:

               (1) Personal protection insurance benefits are payable as loss accrues.

               (2) Personal protection insurance benefits are overdue if 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. For the purpose of calculating the extent to
       which benefits are overdue, payment shall be treated as made on the date a draft
       or other valid instrument was placed in the United States mail in a properly
       addressed, postpaid envelope, or, if not so posted, on the date of delivery.

             (3) An overdue payment bears simple interest at the rate of 12% per
       annum. [Emphasis added.]

MCL 500.3142(2) specifically defines “overdue” benefits as those not paid within 30 days after
an insurer receives reasonable proof of the fact of the amount of the loss sustained. Moreover,
the benefits cease to be “overdue” when payment is actually made. In this case, it is undisputed
                                               -12-
that Citizens timely paid the benefits; thus, they ceased to be “overdue” at that point. Clearly,
MCL 500.3142 does not contemplate awarding 12% interest under the posture of the present
case.

       For these reasons, we reverse the trial court’s order awarding no-fault attorney fees and
penalty interest.

                                      IV. CONCLUSION

       We affirm the trial court’s order granting Sholtey’s motion for summary disposition in
Docket No. 337309, and we reverse the order awarding Sholtey no-fault attorney fees and
penalty interest in Docket No. 338082. Citizens and Sholtey may tax costs in Docket No.
337309, and ACIA may tax costs in Docket No. 338082, as the respective prevailing parties in
each appeal. MCR 7.219(A).

                                                           /s/ Christopher M. Murray
                                                           /s/ Stephen L. Borrello
                                                           /s/ Amy Ronayne Krause

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