Court Opinion

ID: 4147757
Source: CourtListenerOpinion
Date Created: 2017-02-23 08:09:22.032718+00
Date Added: 2024-06-11T14:37:46.703606
License: Public Domain

STATE OF MICHIGAN

                           COURT OF APPEALS

PATRICE SMITH and ALEAN LEWIS,                                      UNPUBLISHED
                                                                    February 21, 2017
               Plaintiffs-Appellees,

v                                                                   No. 329270
                                                                    Macomb Circuit Court
AUTO-OWNERS INSURANCE COMPANY,                                      LC No. 14-000069-NF

               Defendant-Appellant.

Before: GLEICHER, P.J., and MURRAY and FORT HOOD, JJ.

PER CURIAM.

        Defendant appeals as of right the trial court’s order of judgment entered in favor of
plaintiffs following a jury trial in this action brought pursuant to the no-fault act, MCL 500.3101
et seq. We affirm.

      On appeal, defendant first argues that the trial court erred in denying its motion for
judgment notwithstanding the verdict (JNOV). We disagree.

        This Court reviews de novo a trial court’s decision on a motion for JNOV. Dell v
Citizens Ins Co of America, 312 Mich. App. 734, 752; 880 NW2d 280 (2015). “In reviewing a
motion for JNOV [this Court] must construe all evidence and inferences from the evidence in the
nonmoving party’s favor, and, if reasonable jurors could have honestly reached different
conclusions, the jury verdict must stand.” Hecht v Nat’l Heritage Academies, Inc, 499 Mich. 586,
605-606; 886 NW2d 135 (2016) (citations, footnotes and quotation marks omitted). “[A] motion
for JNOV should be granted only when there was insufficient evidence presented to create an
issue of fact for the jury.” Heaton v Benton Constr Co, 286 Mich. App. 528, 532; 780 NW2d 618
(2009) (citation omitted).

       Defendant contends that the record evidence established as a matter of law that plaintiffs
engaged in fraud during their pursuit of first-party no-fault benefits. Specifically, defendant
points to discrepancies in Patrice Smith’s no-fault insurance policy application related to her
address and employment status. Defendant also argues that plaintiffs fraudulently submitted
forms for replacement services where, on the same days that they made claims for replacement
services, plaintiffs were observed engaging in activities such as driving, cleaning, shopping, and
caring for children. With respect to Alean Lewis, defendant asserts that she sought
reimbursement for lawn care when she lived in an apartment.

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        During trial, the jury was presented with evidence explaining the discrepancies in Smith’s
policy application as well as Lewis’s request to be reimbursed for lawn maintenance. For
example, Smith testified that when she applied for no-fault insurance, she gave the agent her
identification and vehicle registration, and as the insurance agent processed her application, he
missed the change of address label on the back of her driver’s license. According to Smith, she
told the insurance agent about his mistake and she believed that the error was corrected. With
respect to her employment status, Smith testified that the insurance agent did not inquire if she
was employed, and that she was in her work uniform when she purchased the policy.
Additionally, Lewis testified that she owns multiple apartment buildings, that she lived in one of
the units, and that she was requesting lawn care reimbursement for a portion of lawn care related
to her own personal space.

        While defendant points to the surveillance evidence1 as proof that plaintiffs engaged in
fraud, this evidence, construed in plaintiffs’ favor, does not conclusively establish that the
replacement services statements plaintiffs submitted were fraudulent. The replacement services
forms consisted of a calendar grid within which a claimant could circle various activities that
were performed by others for the claimant’s benefit. There is a key identifying several activities
for which an individual might require assistance. On the days that Smith was surveilled, she was
observed conducting daily activities such as driving, going to a restaurant, and visiting a medical
facility and various stores. For the same days on the replacement services form, Smith stated
that she needed assistance with dusting, laundry, dishes, meal preparation, grooming, and
“other.” In her own handwriting, Smith noted that “other” referred to the care of her three
children, including taking them to and from school, feeding them, and helping them dress. Of
particular note, Smith did not state on the replacement services claim forms that she required
assistance driving or shopping on the days she was surveilled. Smith further explained at trial
that as a single parent and the primary caregiver of her children, there were occasions when she
had to drive, even while in pain, in order to take her children to school and to attend her
physician-prescribed physical therapy. Notably, the surveillance investigator observed Smith
moving slowly, shopping for a back brace, remaining in the car while sending her children into a
store on an errand, and driving herself to a medical facility. On the basis of this evidence,
reasonable minds could differ regarding whether plaintiffs committed fraud related to their
application for no-fault benefits.2 Where “reasonable jurors could have honestly reached

1
  Defendant also points to inconsistencies regarding Smith’s ability to drive and care for her
children that existed between (1) an August 29, 2013 recorded telephone conversation between
Smith and Charles E. Bloomfield, an employee of defendant, (2) surveillance evidence taken of
Smith on August 30, 2013, and (3) the documentation regarding replacement services that Smith
completed. While these matters pertain to Smith’s credibility, we note that it is well-settled that
“[i]ssues of witness credibility are for the jury to decide.” Landin v Healthsource Saginaw, Inc,
305 Mich. App. 519, 544; 854 NW2d 152 (2014) (citation omitted).
2
  Additionally, following the five-day jury trial, as part of the special verdict form, the jury was
asked whether either plaintiff had engaged in fraud in pursuit of their claims for no-fault benefits.
The unanimous jury answered clearly in the negative. The jury had also been instructed on the
applicable law of fraud as part of the trial court’s final instructions.

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different conclusions, the jury verdict must stand.” Hecht, 499 Mich. at 605-606 (footnote,
citation and quotations omitted).

        In support of its position, defendant cites this Court’s decision in Bahri v IDS Prop Cas
Ins Co, 308 Mich. App. 420; 423; 864 NW2d 609 (2014), arguing that fraud is established as a
matter of law when surveillance evidence depicts a claimant performing in an able manner tasks
for which they sought replacement services. In Bahri, the healthcare providers intervened in a
first-party no-fault case to recover no-fault benefits payable to the named insured for medical
services they provided after a motor vehicle accident. Id. at 421, 422. Reviewing the trial
court’s decision on the defendant’s motion for summary disposition pursuant to MCR
2.116(C)(10), this Court concluded that the healthcare providers stood in the shoes of the named
insured; therefore, where the named insured was precluded from recovering benefits under the
terms of the no-fault policy after engaging in fraud, the healthcare providers were precluded
from recovering payment as well. Bahri, 308 Mich. App. at 423-426.

        In Bahri, the plaintiff was found to have engaged in fraud contrary to the terms of the
applicable no-fault policy after she sought to recover benefits for replacement services that were
performed during a 19-day time period preceding the motor vehicle accident. Id. at 425.
Surveillance evidence in Bahri also confirmed that the “[p]laintiff was observed bending, lifting,
carrying objects, running errands, and driving - on the dates when she specifically claimed she
needed help with such tasks.” Id. at 425. As a matter of procedure, we note that the Bahri case
came to this Court following the trial court’s grant of the defendant’s motion for summary
disposition. Id. at 423. Conversely, in this case, defendant’s claims on appeal arise in the
context of challenging the trial court’s decision on a motion seeking JNOV following a five-day
jury trial. Further, as noted above, in determining whether the trial court correctly denied
defendant’s motion for JNOV, we construe the record evidence in plaintiffs’ favor, and where
reasonable minds could differ, the jury verdict should be left undisturbed. Hecht, 499 Mich. at
605-606. Finally, the types of inconsistencies established by the surveillance evidence in Bahri
are not present in the instant case. Therefore, we conclude that defendant’s reliance on Bahri is
not persuasive, and the trial court properly denied defendant’s motion for JNOV.

        Defendant next argues that the trial court abused its discretion when it admitted evidence
related to medical billing records and permitted the jury to consider claims for medical expenses
where there was insufficient evidence regarding the reasonableness of those expenses. We
disagree.

        We review the trial court’s ruling regarding the admission of evidence for an abuse of
discretion. Craig v Oakwood Hosp, 471 Mich. 67, 76; 684 NW2d 296 (2004). A trial court does
not abuse its discretion when its decision falls within the range of reasonable and principled
outcomes. Ypsilanti Charter Twp v Kircher, 281 Mich. App. 251, 273; 761 NW2d 761 (2008).

        Pursuant to MCL 500.3107(1)(a), personal protection insurance (PIP) benefits are
payable for “[a]llowable expenses consisting of all reasonable charges incurred for reasonably
necessary products, services and accommodations for an injured person’s care, recovery, or
rehabilitation.” (Emphasis added.) Whether medical expenses are reasonable presents a
question of fact for the jury. Bronson Methodist Hosp v Auto-Owners Ins Co, 295 Mich App

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431, 448, 449; 814 NW2d 670 (2012); Kallabat v State Farm Mut Auto Ins Co, 256 Mich. App.
146, 151; 662 NW2d 97 (2003).

        Defendant’s challenge to the admission of the evidence focuses on how a plaintiff may
establish that charges sought under the no-fault act are “reasonable” as contemplated by MCL
500.3107(1)(a). Specifically, defendant argues that the only method by which a plaintiff can
establish the reasonableness of a medical charge is to compare that charge to the wholesale cost
the provider paid to the seller of the product. Defendant then reasons that because one of
plaintiffs’ medical providers, Dr. Nazih Iskander, failed to produce records establishing his
wholesale costs, plaintiffs could not establish the reasonableness of the charges. In support of its
argument, defendant relies on this Court’s decision in Bronson.

       In Bronson, the plaintiff was a medical provider seeking reimbursement from the
defendants, who were no-fault insurers. Bronson, 295 Mich. App. at 434, 435. At issue in
Bronson was whether the defendant no-fault insurers could discover the wholesale costs of
surgical implant products in challenging whether the costs charged for the supplies were
reasonable pursuant to MCL 500.3107(1)(a). Bronson, 295 Mich. App. at 442. This Court
concluded that “the no-fault act permit[ed] defendants to discover the wholesale cost [to the
provider] of the surgical implant products for which the insureds were charged.” Id. at 442-443.
In the context of setting forth how a defendant no-fault insurer, conducting its “cost-policing
function” under the no-fault act, may challenge the reasonableness of services and equipment
provided to their insureds, the Bronson Court referred to an earlier decision of this Court,
Advocacy Org for Patients & Providers v Auto Club Ins Ass’n, 257 Mich. App. 365; 670 NW2d
569 (2003) (AOPP). Specifically, the Bronson Court stated, in pertinent part as follows:

               While AOPP supports an insurer’s practice of determining the
       reasonableness of a provider’s charges for . . . products by comparing those
       charges to the amounts charged for those products by other, similar providers,
       AOPP does not suggest that this is the only permissible approach under the [no-
       fault] act.

                                              * * *

              Accordingly, defendants’ ability to assess the reasonableness of provider
       charges is not limited to a comparison of customary charges among similar
       providers. [Bronson, 295 Mich. App. at 449, 450.]

The Bronson Court further recognized that once a lawsuit is initiated, a medical provider bears
the burden of establishing the reasonableness of its charges, and “[t]he parties are free to
introduce evidence to the fact-finder regarding the reasonableness of [a medical provider’s]
charges.” Id. at 450.

              Plaintiff [medical provider] is free to argue that its charges are in line with
       those of other similar providers for the . . . products at issue . . . and defendants
       [no-fault insurers] may respond by asserting that plaintiff’s markup over the
       average wholesale cost of those products renders the charges excessive. But

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       ultimately, the burden of proof is on the provider to show how and why the
       charges are reasonable. [Id.]

The Bronson Court also recognized that in AAOP, this Court had expressly declined to set forth
specific factors for a defendant no-fault insurer to consider when discerning whether a charge
under the no-fault act is reasonable. Id. at 449. Concluding that the defendant no-fault insurers
“were entitled to discover the wholesale costs of the surgical implant products for which the
insureds were charged[,]” the Bronson Court further stated “explicitly” that its holding was
limited to “the sort of durable medical-supply products at issue” in that specific case, given that
such products can be “easily quantified.” Id. at 450, 451. Accordingly, our close reading of
Bronson demonstrates that it does not stand for the narrow proposition of law that defendant
asserts.

         In this case, employees of the Metro Pain Clinic and Affiliated Diagnostic of Oakland
responsible for medical billing testified at trial regarding the specific method by which billing
rates for medical services and supplies were determined. For example, Noor Jaff testified that
the charges Metro Pain Clinic submitted to defendant for medical services and equipment were
reasonable and customary, explaining that when setting the billing rates, she contacted several
other hospitals and doctors to ascertain what they were charging for similar equipment and
services. According to Jaff, Metro Pain Clinic’s charges were in fact less than what other
facilities charged. Samira Bazzi from Affiliated Diagnostic of Oakland provided similar
testimony. In admitting the evidence of the charges for medical services and products provided
to plaintiffs over defense counsel’s objection, the trial court reasoned that the reasonableness of
the charges for the medical services and products provided to plaintiffs was properly left to the
trier of fact. The trial court’s determination was congruent with established case law, and both
Bazzi and Jaff presented the jury with sufficient evidence to consider whether the medical
expenses were reasonable. Moreover, defense counsel was afforded the opportunity to cross-
examine the witnesses regarding the reasonableness of the charges for medical services and
products provided to plaintiffs. Accordingly, the trial court’s determination to allow the
evidence fell within the range of reasonable and principled outcomes, and we discern no abuse of
discretion.

        In a related argument, defendant asserts that where Dr. Iskander failed to produce
documents related to the costs incurred in acquiring goods that were then provided and billed to
plaintiffs, the trial court abused its discretion when it permitted Dr. Iskander’s video deposition
de bene esse to be played to the jury. Our review of the record did not yield any instance where
defendant requested that the trial court decline to admit the deposition in its entirety on the basis
that defendant argues on appeal. Accordingly, where this issue was not raised before and
determined by the trial court, it was not properly preserved for our review. Hines v Volkswagen
of America, Inc, 265 Mich. App. 432, 443; 695 NW2d 84 (2005); MRE 103(a)(1). In any event,
Dr. Iskander was not a party to the litigation, and the court rules do not provide the trial court
with authority to sanction plaintiffs for Dr. Iskander’s non-compliance with a subpoena. See
MCR 2.313(D) (authorizing the trial court, in response to a motion, to order sanctions against a
party who does not comply with a discovery request); MCR 2.506(F) (authorizing the trial court

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to sanction a party for failure to comply with a subpoena). On this record, we do not discern any
error in the admission of Dr. Iskander’s deposition at trial.3

       Affirmed. Plaintiffs, as the prevailing parties, may tax costs pursuant to MCR 7.219.

                                                           /s/ Elizabeth L. Gleicher
                                                           /s/ Christopher M. Murray
                                                           /s/ Karen M. Fort Hood

3
  We also note that our review of the record did not reflect that defendant sought the requested
information from Dr. Iskander any earlier in the lower court proceedings during the discovery
process. The trial court also observed on the record that the medical bills at issue were readily
available to defendant during the lower court proceedings.

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