Court Opinion

ID: 4089256
Source: CourtListenerOpinion
Date Created: 2016-10-13 07:09:22.87507+00
Date Added: 2024-06-11T14:34:04.610250
License: Public Domain

STATE OF MICHIGAN

                           COURT OF APPEALS

BRUCE E. RUBEN, M.D., P.C.,                                       UNPUBLISHED
                                                                  October 11, 2016
              Plaintiff-Appellee/Cross-Appellant,

v                                                                 No. 326717
                                                                  Oakland Circuit Court
BRIAN BADGETT,                                                    LC No. 2002-041588-NF

              Intervening Plaintiff,

and

ALLSTATE INSURANCE COMPANY,

              Defendant-Appellant/Cross-
              Appellee.

ALLSTATE INSURANCE COMPANY,

              Plaintiff/Counter-Defendant,

v
                                                                  Oakland Circuit Court
BRUCE E. RUBEN M.D., PC,                                          LC No. 2013-136272-NF

              Defendant/Counter-Plaintiff.

Before: SHAPIRO, P.J., and HOEKSTRA and RONAYNE KRAUSE, JJ.

PER CURIAM.

        Allstate appeals as of right an opinion and order granting Ruben’s motion for relief
concerning an arbitration agreement and the value of medical services charged to Allstate as the
no-fault insurance company of intervening plaintiff, Brian Badgett. Ruben cross-appeals as of
right the same opinion and order granting Allstate’s motion to vacate an arbitration award. We
vacate the portion of the opinion and order granting Ruben’s motion for relief and remand for
further proceedings consistent with this opinion.

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                          I. FACTS AND PROCEDURAL HISTORY

        In 1990, Badgett was injured as a pedestrian in a car accident, and is entitled to receive
no-fault benefits from Allstate Insurance Company (Allstate). Badgett suffers from a permanent
state of infection and has been treated by Bruce Ruben, M.D., since the accident. Following a
jury trial involving a dispute over Ruben’s charges to Allstate for medical services and products
provided to Badgett, the parties entered into a final judgment intended to govern any future
disputes regarding the value of services provided by Ruben and charged to Allstate.

        The parties agreed to use the values determined by the jury for those products and
services listed in the jury verdict form, and for those products and services not listed in the jury
verdict form, the final judgment states:

       [W]ith respect to any Disputed or Potentially Disputed Item that is found to be
       medically necessary for the care and treatment of Badgett, or with respect to any
       item not on the Jury Verdict Form but which the parties agree to be medically
       necessary, the reasonable and customary charge which Allstate shall pay for such
       item shall be defined by the 85th percentile for the geographical situs in which the
       treatment is provided to Badgett as set forth in the most recently published
       INGENIX manual.

        The final judgment also provides for a dispute resolution process. First, with regard to
any disputed item, the parties should negotiate amongst themselves to resolve the dispute. If the
parties cannot resolve the dispute, “then the parties shall submit their dispute to the American
Arbitration Association (“AAA”) to be conducted in accordance with Michigan law.” The final
judgment further provides:

       Any award rendered by the AAA shall be binding upon the parties, and Judgment
       may be entered thereon by any court of competent jurisdiction. However, either
       party shall have a right of appeal to this Court as to any arbitration award. The
       standard of review and procedure relative to any such appeal shall be governed by
       MCR 3.602. Any ruling by the Court on an appeal from an arbitration award
       shall be final and binding upon the parties, and they shall exercise no further
       rights of appeal.

The court retained jurisdiction to enforce the judgment, rule on any appeals from arbitration, or
modify the judgment pursuant to MCR 2.612.

        In 2008, a dispute arose regarding Ruben’s charges to Allstate for Tygacil, a drug the
doctor began administering to Badgett. Ruben administered 50 milligram (mg) doses twice
daily. Ruben billed Allstate at $145.81 per mg, which was the value published in the 2008
Ingenix manual, and $94.05 per mg, which the value published in the 2009 Ingenix manual.
Believing that the correct Ingenix value of Tygacil was $4.05 per mg, Allstate reimbursed Ruben
at that rate from September 22, 2008, through December 31, 2009. Ruben disputed Allstate’s
reimbursement rate, and the parties appointed a private arbitration panel to arbitrate the dispute,
not the AAA.

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        On June 27, 2012, the arbitrators awarded Ruben $4,345,674.00, subsequently amended
to $4,642,958.74, recognizing Allstate’s claim regarding a mistake in the manuals, but
concluding that the unambiguous terms of the final judgment evidenced the parties’ intent to use
those values published in the Ingenix manuals. One of the three arbitrators dissented. Allstate
moved for vacation of the arbitration award in the trial court, and Ruben moved for confirmation
of the award.1 In opinions and orders on July 23, 2014, January 26, 2015, and March 11, 2015,
the trial court vacated the award. It also granted Ruben’s motion for relief from the final
judgment’s no-appeal provision in its March 2015 opinion and order.

       On appeal, Allstate argues that the trial court erred by granting Ruben’s motion for relief
under MCR 2.612(C)(1)(f). We agree.

                                    II. STANDARD OF REVIEW

         This Court reviews a trial court’s decision regarding a motion for relief from judgment
pursuant to MCR 2.612(C) for an abuse of discretion. Peterson v Auto Owners Ins Co, 274 Mich
App 407, 412; 733 NW2d 413 (2007), citing Haberkorn v Chrysler Corp, 210 Mich. App. 354,
382; 533 NW2d 373 (1995). “An abuse of discretion occurs when the trial court’s decision is
outside the range of reasonable and principled outcomes.” Kalaj v Khan, 295 Mich. App. 420,
425; 820 NW2d 223 (2012). Further, “ ‘[t]he proper interpretation and application of a court rule
is a question of law, which we review de novo.’ ” Rose v Rose, 289 Mich. App. 45, 49; 795
NW2d 611 (2010), quoting Henry v Dow Chem Co, 484 Mich. 483, 495; 772 NW2d 301 (2009)
(alteration in original).

                           III. RELIEF FROM NO-APPEAL PROVISION

        Ruben requested, and the court granted, relief from the final judgment’s no-appeal
provision. The agreement and final judgment between the parties explicitly states that the trial
court retains jurisdiction to enforce the judgment, rule on any appeals from arbitration, or modify
the judgment pursuant to MCR 2.612.

      The court granted relief from the no-appeal provision under MCR 2.612(C)(1)(f) (O IV, p
2). MCR 2.612(C)(1) states:

          (1) On motion and on just terms, the court may relieve a party or the legal
          representative of a party from a final judgment, order, or proceeding on the
          following grounds:

          (a) Mistake, inadvertence, surprise, or excusable neglect.

          (b) Newly discovered evidence which by due diligence could not have been
          discovered in time to move for a new trial under MCR 2.611(B).

1
    In so doing, Allstate filed a separate action and Ruben filed a counter-claim.

                                                  -3-
       (c) Fraud (intrinsic or extrinsic), misrepresentation, or other misconduct of an
       adverse party.

       (d) The judgment is void.

       (e) The judgment has been satisfied, released, or discharged; a prior judgment on
       which it is based has been reversed or otherwise vacated; or it is no longer
       equitable that the judgment should have prospective application.

       (f) Any other reason justifying relief from the operation of the judgment.

A motion for relief from under MCR 2.612(C)(1)(f) must be made “within a reasonable time.”
MCR 2.612(C)(2); Heugel v Heugel, 237 Mich. App. 471, 482-483; 603 NW2d 121 (1999).
Additionally:
       In order for relief to be granted under MCR 2.612(C)(1)(f), the following three
       requirements must be fulfilled: (1) the reason for setting aside the judgment must
       not fall under subsections a through e, (2) the substantial rights of the opposing
       party must not be detrimentally affected if the judgment is set aside, and (3)
       extraordinary circumstances must exist that mandate setting aside the judgment in
       order to achieve justice. Heugel, 237 Mich. App. at 478-479; King v McPherson
       Hosp, 290 Mich. App. 299, 304; 810 NW2d 594 (2010).

        The first requirement is satisfied here. In its motion for relief, Ruben asserted that the
court should grant relief from the no-appeal provision because the court inaccurately applied
MCR 3.602 when vacating the arbitration award. Although the court did not provide much
explanation for its decision to grant relief under MCR 2.612(C)(1)(f), it did state in its opinion
and order that its vacation of the arbitration award, based on its interpretation of the final
judgment, could be an issue involving a matter of public concern. Neither of these reasons for
setting aside the final judgment’s no-appeal provision fall under MCR 2.612(C)(1)(a) through
(e).

        However, the second and third requirements for granting relief have not been satisfied.
Granting relief from the no-appeal provision would, and did, detrimentally affect Allstate’s
substantial rights. “A consent judgment is in the nature of a contract, and is to be construed and
applied as such.” Laffin v Laffin, 280 Mich. App. 513, 517; 760 NW2d 738 (2008), citing Gramer
v Gramer, 207 Mich. App. 123, 125; 523 NW2d 861 (1994). Deeply rooted in our law is the
notion that unambiguous contracts that are freely entered into by both parties and do not violate
public policy shall be enforced by the courts. Rose, 289 Mich. App. at 58-59. By granting relief,
the court detrimentally affected Allstate’s substantial rights to have the final judgment enforced
as written. See Id. at 60-61 (“Indisputably, affording defendant relief from this freely negotiated,
nonmodifiable judgment would detrimentally affect plaintiff’s substantial right to enforcement of
the contract.”).

         With regard to the third factor, no extraordinary circumstances exist to mandate granting
relief in order to achieve justice. Ruben argues that the trial court’s failure to follow MCR 3.602
when vacating the arbitration award amounts to an extraordinary circumstance. However, “[t]he
caselaw construing MCR 2.612(C)(1)(f) contemplates that extraordinary circumstances

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warranting relief from a judgment generally arise when the judgment was obtained by the
improper conduct of a party.” Rose, 289 Mich. App. at 62, citing Heugel, 237 Mich. App. at 479.
Ruben explicitly asserts that he is not challenging the validity or enforceability of the no-appeal
provision itself, indicating that the judgment was not obtained improperly. Due to the fact that
only one of the three requirements to grant relief through MCR 2.612(C)(1)(f) was met, the trial
court erred when granting Ruben’s motion for relief from the no-appeal clause.

                                IV. AUTHORITY TO VACATE

        On cross-appeal, Ruben argues that the trial court erred when it concluded that the
arbitrators exceeded their authority pursuant to MCR 3.602(J)(2)(c) and vacated the award. By
concluding that the court abused its discretion when it granted Ruben’s request for relief from
the final judgment’s no-appeal provision, this Court will not address the issue raised by Ruben
on cross-appeal.

                                       V. CONCLUSION

        The trial court abused its discretion in granting Ruben’s motion for relief from the no-
appeals clause contained within the final judgment. We vacate the portion of the order granting
Ruben’s relief and remand for further proceedings consistent with this opinion. We do not retain
jurisdiction.

                                                            /s/ Douglas B. Shapiro
                                                            /s/ Joel P. Hoekstra
                                                            /s/ Amy Ronayne Krause

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