Court Opinion

ID: 6800609
Source: CourtListenerOpinion
Date Created: 2022-07-22 06:05:23.532575+00
Date Added: 2024-06-11T16:03:11.609053
License: Public Domain

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                  revision until final publication in the Michigan Appeals Reports.

                           STATE OF MICHIGAN

                             COURT OF APPEALS

MAPLE MANOR REHAB CENTER OF NOVI,                                      UNPUBLISHED
INC. and MAPLE MANOR NEURO CENTER,                                     July 21, 2022
INC.,

               Plaintiffs-Appellees/Cross-Appellants,

v                                                                      No. 355775
                                                                       Washtenaw Circuit Court
TRAVELERS CASUALTY & SURETY                                            LC No. 17-001178-NF
COMPANY,

               Defendant-Appellant/Cross-Appellee.

Before: MARKEY, P.J., and BOONSTRA and RIORDAN, JJ.

PER CURIAM.

        Defendant/cross-appellee Travelers Casualty & Security Company (Travelers) appeals by
right the judgment entered by the trial court awarding plaintiffs/cross-appellants Maple Manor
Rehab Center of Novi, Inc. (Maple Manor Rehab), and Maple Manor Neuro Center, Inc. (Maple
Manor Neuro) (collectively, plaintiffs), $757,871.11 in damages, $276,069.28 in penalty interest,
$136,290 in attorney fees, and $3,765.84 in taxable costs. Specifically at issue in this appeal is
Travelers’ challenge to the trial court’s order denying its motion for summary disposition under
MCR 2.116(C)(10) and granting summary disposition in favor of plaintiffs under MCR 2.116(I).
We affirm in part, reverse in part, vacate in part, and remand the matter to the trial court for further
proceedings.

                    I. PERTINENT FACTS AND PROCEDURAL HISTORY

         James Bourdage (Bourdage) was injured in a motor vehicle accident in July 2014, while a
passenger in his employer’s vehicle. The vehicle was insured under a commercial insurance policy
issued by Travelers. Bourdage suffered catastrophic injuries, including a traumatic brain injury
that left him “in a permanent vegetative state.” Bourdage’s wife was appointed as his guardian
and conservator. After initially receiving care at another rehabilitation facility, Bourdage was
transferred to Maple Manor Rehab in April 2015. Because Bourdage was Maple Manor Rehab’s
first patient to receive medical services under Michigan’s no-fault insurance act, MCL 500.3101

                                                  -1-
et seq., the facility hired billing consultant Susan Taylor to determine what to charge for
Bourdage’s care and treatment and to negotiate with Travelers a price for Bourdage’s care. Taylor
testified at her deposition that she and Amy Driscoll, Travelers’ claims adjustor for Bourdage,
agreed to an all-inclusive rate of $3,800 per weekday and $1,520 per weekend day. Subsequently,
Taylor and Driscoll negotiated a 10% discounted rate, reducing the rate to $3,420 per weekday
and $1,368 per weekend day. Travelers made payments of approximately $667,735.24 to Maple
Manor Rehab, which covered Bourdage’s care from April 1, 2015 until October 31, 2015.
Although Bourdage remained at Maple Manor Rehab until August 31, 2016, Travelers did not pay
for any of the care or treatment he received after October 31, 2015.

        In March 2016, Bourdage’s attorney filed a complaint for coverage against Travelers in
Washtenaw Circuit Court.1 In November 2017, the trial court entered a stipulated order for
dismissal of the action without prejudice; the order provided that Bourdage should refile the
complaint within one week of the dismissal, and that the reinitiated case would, for purposes of
the one-year-back rule of MCL 500.3145, involve expenses incurred on or after March 4, 2015.2
Bourdage refiled the case on November 21, 2017, seeking to recover all no-fault personal
protection insurance (PIP) benefits due and owing, statutory interest of 12% per annum on all
overdue benefits, and reasonable attorney fees for Travelers’ allegedly unreasonable refusal to pay
or delay in payment.

         On September 14, 2018, plaintiffs, Bourdage, and Travelers entered into a litigation
agreement according to which Bourdage would assign his right to collect no-fault benefits to
plaintiffs, plaintiffs and Bourdage would execute a “Hold-Harmless Agreement,” and plaintiffs
would then substitute for Bourdage in the pending litigation. The agreement provided that, should
the trial court deny the motion to substitute, plaintiffs could file a new action in Washtenaw Circuit
Court seeking the same relief, and Travelers would agree, among other things, to waive any
assertion of “the 1-year back provisions of MCL 500.3145” as a defense in the newly-filed action.
The trial court subsequently entered a stipulated order allowing plaintiffs to substitute for
Bourdage in the underlying case and to file a first amended complaint. In Count I of their first
amended complaint, plaintiffs sought payment for the no-fault benefits due and owing for
Bourdage’s care, 12% statutory interest, and reasonable attorney fees. Plaintiffs also added claims
for breach of contract (Count II), promissory estoppel (Count III), fraud and misrepresentation
(Count IV), silent fraud (Count V), and quantum meruit (Count VI).

       On April 24, 2019, Travelers moved for summary disposition with respect to Maple Manor
Neuro under MCR 2.116(C)(10), contending that Maple Manor Neuro did not have a right of
recovery because it had not contracted to provide medical services to Bourdage, had not provided
medical services to Bourdage, and was not licensed to provide adult foster care, nursing home, or
subacute care services. Travelers also sought summary disposition with respect to Maple Manor
Rehab under MCR 2.116(C)(10), arguing that Bourdage had not “incurred” debt for purposes of

1
 The procedural history of this and related actions is complex; we will address it only to the extent
pertinent to the issues before us on appeal.
2
  It appears that the parties entered into this stipulation in light of a then-upcoming trial date, to
allow time to complete necessary discovery and to allow for a meaningful facilitation.

                                                 -2-
MCL 500.3107(1)(a) and, even if he had, Travelers was not liable for charges more than one year
back from the date of the assignment, September 14, 2018. Travelers also moved to preclude
evidence about the calculation and negotiation of the per diem rate charged for Bourdage’s care.

        In response, plaintiffs argued that Maple Manor Neuro was established to bill for the few
patients at Maple Manor Rehab who required “catastrophic subacute rehabilitation services arising
out of automobile accidents,” that there was no requirement for the billing entity to be licensed,
and that Maple Manor Neuro had a right of recovery because it was one of Bourdage’s assignees.
Plaintiffs also argued that Bourdage had indisputably incurred medical debt and had assigned to
plaintiffs the right to recover PIP benefits in payment of that debt, and that Travelers had agreed
to waive the one-year-back rule for the newly filed case. Plaintiffs also argued that Travelers had
provided no basis for excluding evidence of Taylor’s rate calculation and Travelers’ agreement to
the negotiated per diem rate charged for Bourdage’s care and treatment.

         After a hearing and additional briefing on the application of the one-year-back rule, the
trial court entered an order denying summary disposition to Travelers and granting summary
disposition in favor of plaintiffs under MCR 2.116(I). In addition to adopting plaintiffs’ reasoning,
the trial court made the following findings and conclusions:

       (1) that Defendant agreed to waive application of the one-year back rule; (2) that
       Defendant is summarily liable to pay [Plaintiffs’] bills as charged; (3) that
       Defendant has presented no evidence demonstrating a valid defense to the subject
       charges, including that the subject charges are not reasonable and necessary;
       (4) that Defendant contracted with Plaintiff[s] to pay [Plaintiffs’] charges in
       accordance with an agreed rate plan; and (5) that said payments are overdue.

The trial court found Travelers’ remaining claims, defenses, and arguments without merit. The
trial court denied reconsideration. Subsequently, plaintiffs moved the trial court for entry of a final
order of judgment, and the trial court entered a final order and judgment as described. This appeal
followed. Plaintiffs cross-appealed, arguing that the trial court had erred in calculating the amount
of the attorney fee award and penalty interest.

                                  II. SUMMARY DISPOSITION

       Travelers argues that the trial court erred by denying its motion for summary disposition
and by granting summary disposition in favor of plaintiffs. We disagree regarding the trial court’s
denial of Travelers’ motion, but agree regarding the trial court’s grant of summary disposition,
under MCR 2.116(I)(2), in favor of plaintiffs, with respect to issues not raised in the motion.

     A. DENIAL OF TRAVELERS’ MOTION FOR SUMMARY DISPOSITION UNDER
                             MCR 2.116(C)(10)

                                   1. STANDARD OF REVIEW

        This Court reviews de novo a trial court’s decision on a motion for summary disposition.
See Barnard Mfg Co, Inc v Gates Performance Engineering, Inc, 285 Mich App 362, 369; 775
NW2d 618 (2009). We also review de novo whether the trial court properly interpreted and applied
the relevant statutes. Makowski v Governor, 317 Mich App 434, 441; 894 NW2d 753 (2016).

                                                 -3-
Likewise, the proper interpretation of a contract and the legal effect or application of a contract are
questions of law reviewed de novo on appeal. Rory v Continental Ins Co, 473 Mich 457, 464; 703
NW2d 23 (2005).

        Travelers sought summary disposition under MCR 2.116(C)(10), which tests the factual
sufficiency of the complaint. Joseph v Auto Club Ins Ass’n, 491 Mich 200, 206; 815 NW2d 412
(2012). A trial court evaluating a motion for summary disposition under Subrule (C)(10)
“considers affidavits, pleadings, depositions, admissions, and other evidence submitted by the
parties . . . in the light most favorable to the nonmovant.” Maiden v Rozwood, 461 Mich 109, 119-
120; 597 NW2d 817 (1999). Summary disposition is appropriate when, “[e]xcept as to the amount
of damages, there is no genuine issue as to any material fact, and the moving party is entitled to
judgment or partial judgment as a matter of law.” MCR 2.116(C)(10). This Court’s review of a
trial court’s summary disposition decision is limited to the evidence that had been presented to the
court at the time the motion was decided. Innovative Adult Foster Care, Inc v Ragin, 285 Mich
App 466, 475-476; 776 NW2d 398 (2009).

        Summary disposition under MCR 2.116(I)(1) may be granted when the “affidavits or other
proofs show that there is no genuine issue of material fact.” Summary disposition under
MCR 2.116(I)(2) may be granted if “it appears to the court that the opposing party, rather than the
moving party, is entitled to judgment.” Summary disposition under MCR 2.116(I) is appropriate
only if basic due-process requirements are also satisfied. See Lamkin v Hamburg Twp Bd of
Trustees, 318 Mich App 546, 550; 899 NW2d 408 (2017).

                              2. HOLD-HARMLESS AGREEMENT

        Travelers argues that the Hold-Harmless Agreement executed between plaintiffs and
Bourdage relieved Bourdage of legal liability for the costs of his treatment, and therefore, because
Bourdage was not legally liable for plaintiffs’ medical charges, the charges were not “incurred”
under MCL 500.3107(1)(a). Further, Travelers contends that, because the charges were not
“incurred,” they were not “allowable expenses,” and plaintiffs, as assignees of Bourdage, were not
entitled to recover PIP benefits payable to Bourdage. We disagree.

        MCL 500.3107(1)(a)3 provides that PIP benefits are generally payable for “[a]llowable
expenses consisting of reasonable charges incurred for reasonably necessary products, services
and accommodations for an injured person’s care, recovery, or rehabilitation.” To recover PIP
benefits for allowable expenses, a claimant must prove the following: “(1) the expense must be for
an injured person’s care, recovery, or rehabilitation, (2) the expense must be reasonably necessary,
(3) the expense must be incurred, and (4) the charge must be reasonable.” Douglas v Allstate Ins
Co, 492 Mich 241, 259; 821 NW2d 472 (2012).

     This Court has held that medical expenses are incurred for purposes of
MCL 500.3107(1)(a) when the insured becomes legally obligated to pay those expenses. See

3
  MCL 500.3107 was amended in 2019, but the amendments of by 2019 PA 21 have no impact on
the resolution of this appeal. Consistent with the parties’ practices, references to the no-fault act
are to the version currently in effect.

                                                 -4-
Bombalski v Auto Club Ins, 247 Mich App 536, 543; 637 NW2d 251 (2001). Absent a legal
obligation, expenses are not incurred for purposes of the statute. See, e.g., Duckworth v
Continental Nat’l Indemnity Co, 268 Mich App 129, 134-137; 706 NW2d 215 (2005) (holding that
a Canadian citizen injured in a motor vehicle accident in Canada did not incur medical expenses
under MCL 500.3107(1)(a) because his medical care was free under the Ontario Health Insurance
Plan, he was never billed for the services, and he could not be held liable for those costs under
Canadian law); Bombalski, 247 Mich App at 543 (holding that because the plaintiff’s medical
insurance paid a negotiated rate in satisfaction of medical expenses, the plaintiff was not liable for
the full amounts charged by the medical providers and, therefore, had not incurred those expenses).

       In this case, Bourdage incurred expenses when he accepted, received, and became liable
for medical care and treatment from Maple Manor Rehab. On September 14, 2018, plaintiffs and
claimant Angelina Bourdage, acting as Bourdage’s conservator and guardian, executed an
Assignment of Rights and a Hold-Harmless Agreement. The Assignment of Rights stated in
relevant part:

               I, ANGELINA BOURDAGE, as Conservator, Guardian, Executor,
       Personal Representative, power of attorney, the estate, responsible party, and/or
       authorized agent for JAMES BOURDAGE, (“Assignor”), hereby assigns to
       [plaintiffs and others] (“Assignees”) all rights, privileges and remedies to payment
       for health care services, products or accommodations (“services”) provided by
       Assignees to Assignor to which Assignor is or may be entitled to under chapter 31
       of the Insurance Code (MCL 500.3101, et seq.), the No-Fault Act.

               The assignment as set forth above is for all services provided to Assignor
       by Assignee prior to or at the time of Assignor’s execution of this agreement for
       dates of service April 3, 2015 through August 29, 2016. Assignor hereby certifies
       that Assignor has incurred charges for services provided by the Assignee for which
       the rights, privileges and remedies for payment are hereby assigned. This
       assignment does not extend to any future benefits for which liability for payment
       has not been incurred.

              Assignor and Assignee agree that as consideration for this assignment,
       Assignees assume the burden, otherwise born by Assignor, to pursue payment for
       services rendered by the Assignees, from the insurance company or entity
       responsible to pay for such services. . . .

               This agreement shall further constitute a lien on any award in favor of
       Assignor by judgment, settlement, arbitration or otherwise, pertaining to any
       portion of the services rendered by the entities above, and Assignor consents to
       assign the portion of the award to each respective entity of Assignees above.

        Once the assignment was made, plaintiffs “stood in Bourdage’s shoes,” and the shoes in
which Bourdage had been standing were those of an injured person who had incurred expenses for
his care, recovery, or rehabilitation. See Coventry Parkhomes Condo Ass’n v Federal Nat’l Mtg
Ass’n, 298 Mich App 252, 256-257; 827 NW2d 379 (2012) (“It is well-established that an assignee
stands in the shoes of an assignor, acquiring the same rights and being subject to the same defenses

                                                 -5-
as the assignor.”). At the time of the assignment, Bourdage undisputedly possessed the right to
seek recovery of no-fault benefits from Travelers to cover medical expenses incurred from his
injury. The assignment transferred this right to recover that incurred debt to plaintiffs. The
assignment did not completely relieve Bourdage of his obligation regarding payment of these
expenses, as is evident in the statement that the assignment constituted a lien on any award
pertaining to medical services provided by the assignees and the requirement that Bourdage assign
any award received through judgment, settlement, arbitration, or otherwise to the assignees.

       Nonetheless, Travelers argues that the Hold-Harmless Agreement executed along with the
Assignment of Rights made Bourdage (and therefore his assignees) not liable for the expenses
claimed. We disagree. The Hold-Harmless Agreement states in relevant part:

              The parties to this Agreement acknowledge there are pending litigations for
       the unpaid medical bills of James Bourdage who was a patient at Maple Manor for
       dates of service April 3, 2015 to August 29, 2016. The parties acknowledge that
       the unpaid medical bills of Maple Manor and all of its related entities are
       substantial.

               Two actions are currently pending in Washtenaw County Circuit Court
       Travelers Casualty and Surety Company Case No. 18-451-NF and Angelina
       Bourdage, as Conservator for James Bourdage Case No. 17-1178-NF, and any and
       all other cases.

                Maple Manor and all of its related entities shall seek recovery solely and
       exclusively from Travelers Casualty and Surety Company for the unpaid medical
       bills. Regardless of the outcome of these pending litigations, Angelina Bourdage
       and James Bourdage or their estate, shall be held harmless and they shall not be
       held liable for any unpaid medical bills. Maple Manor and all of its entities release,
       waives [sic], and forever discharges [sic] Angelina Bourdage, Angelina Bourdage
       as Conservator for James Bourdage, and James Bourdage from any and all
       liabilities, claims, damages, losses, damages [sic], indebtedness, lawsuits, costs,
       expenses, attorney fees that relate to Angelina Bourdage, Angelina Bourdage as
       Conservator for James Bourdage, and James Bourdage.

        Travelers argues that the release language in the last sentence of the agreement effectively
relieved Bourdage from liability and, therefore, caused debt that was indisputably incurred to
become unincurred for purposes of MCL 500.3107(1)(a). Plaintiffs argue that the Hold-Harmless
Agreement is simply a promise not to engage in “balance billing,” i.e., not to bill Bourdage for
medical expenses in excess of what plaintiffs might recover in their lawsuit(s) against Travelers.
We conclude that the Hold Harmless Agreement is a covenant not to sue and therefore does not
release Bourdage of all liability for incurred expenses.

        “The cardinal rule in the interpretation of contracts is to ascertain the intention of the
parties. To this rule all others are subordinate. To arrive at a proper interpretation of particular
language, the entire contract must be considered.” McIntosh v Groomes, 227 Mich 215, 218; 198
NW 954 (1924). “If the language of the contract is clear and unambiguous, it is to be construed

                                                -6-
according to its plain sense and meaning; but if it is ambiguous, testimony may be taken to explain
the ambiguity.” New Amsterdam Cas Co v Sokolowski, 374 Mich 340, 342; 132 NW2d 66 (1965).

        The Michigan Supreme Court has explained the difference between a covenant not to sue
and a release of liability as follows:

               There is a material difference between a covenant not to sue and a release.
       A release immediately discharges an existing claim or right. In contrast,
       a covenant not to sue is merely an agreement not to sue on an existing claim. It
       does not extinguish a claim or cause of action. The difference primarily affects
       third parties, rather than the parties to the agreement. [J & J Farmer Leasing, Inc
       v Citizens Ins Co of America, 472 Mich 353, 357-358; 696 NW2d 681 (2005).]

        In this case, the Hold-Harmless Agreement identifies the actions pending in the Washtenaw
Circuit Court concerning Bourdages’s medical expenses, and hints at the possibility of other
actions. The agreement then states that “Maple Manor and all of its related entities shall seek
recovery solely and exclusively from [Travelers]” for these unpaid medical bills. Viewed in light
of the Assignment of Rights, see In re Estate of Koch, 322 Mich App 383, 399; 912 NW2d 205
(2017), the Hold-Harmless Agreement does not extinguish the cause of action that Bourdage
transferred to plaintiffs. J & J Farmer Leasing, 472 Mich at 357-358. The Hold-Harmless
Agreement does not alter Bourdage’s assignment to plaintiffs of the right to recover no-fault
benefits for medical debt indisputably incurred; nor does it alter Bourdage’s obligation to remit
any award received through judgment, settlement, arbitration, or otherwise to the assignees.
Through the Hold-Harmless Agreement, plaintiffs merely promised Bourdage that they would
seek recovery of the medical expenses that Bourdage incurred solely and exclusively from
Travelers, and that they would not seek to hold Bourdage liable. Accordingly, the Hold-Harmless
Agreement was effectively a covenant not to sue.4 Id.

         We conclude that the Hold-Harmless Agreement did not extinguish the cause of action that
Bourdage transferred to plaintiffs, nor did it relieve Bourdage of the responsibility to remit to
plaintiffs any award pertaining to the cost of medical services they provided to him. Accordingly,
the trial court did not err by denying summary disposition to Travelers on the question of whether
Bourdage “incurred” allowable expenses for purposes of MCL 500.3107(1)(a).5

4
  The cases that Travelers cites in support of its argument are distinguishable; they involve
claimants who, unlike Bourdage, never incurred medical expenses for treatment. See Farm
Bureau Gen Ins Co v Blue Cross Blue Shield of Mich, 314 Mich App 12, 25; 884 NW2d 853
(2015); Duckworth, 268 Mich App at 134-137; Bombalski, 247 Mich App at 543.
5
 To the extent the trial court granted summary disposition in favor of plaintiff on this issue under
MCR 2.116(I), we affirm that determination for the same reasons.

                                                -7-
                                  3. ONE-YEAR-BACK RULE

        Travelers also argues that the one-year-back rule, MCL 500.3145, barred plaintiffs’
recovery because the medical expenses claimed were incurred more than one year before the date
of the Assignment of Rights, i.e., September 14, 2018. We disagree.

        MCL 500.3145(2) allows a claimant to file an action to recover PIP benefits within one
year after the most recent allowable expense was incurred, but prohibits the claimant from
recovering “benefits for any portion of the loss incurred more than 1 year before the date on which
the action was commenced.” This Court did hold in Shah v State Farm Mut Auto Ins Co, 324 Mich
App 182, 204-205; 920 NW2d 148 (2018), that the reference point for the one-year-back rule is
the date the insured patient assigned his or her right to PIP benefits. However, this Court was clear
that an assignment of rights results in a healthcare provider obtaining “only the rights [the injured
party] actually held at the time of the execution of the assignment” and that an assignment could
not result a greater right to recovery than that possessed by the assignor. Id. at 204-205. In this
case, Bourdage had the right to recover benefits back to March 4, 2015. He obtained this right
through the November 2017 stipulation in which Bourdage and Travelers agreed that the 2016
case would be dismissed without prejudice and refiled within seven days, and that the refiled case
would have a one-year-back limitations date of March 4, 2015. The dispositive question is whether
this right was transferred to plaintiffs. We hold that, regardless of whether the assignment
transferred this right, the right was transferred when plaintiffs substituted for Bourdage in the
pending litigation.

        Travelers argues that Bourdage assigned rights that he possessed under the no-fault act and
that the stipulation regarding the limitations date was not such a right; rather, it was a personal
right arising from an agreement negotiated between counsel for Bourdage and Travelers. We
conclude that even if the March 4, 2015 limitations date was not part of the “rights, privileges, and
remedies” under the no-fault act that Bourdage assigned to plaintiffs, plaintiffs would nevertheless
be entitled to the benefit of that agreement when they substituted for Bourdage.

       Substitution of parties is governed by MCR 2.202, which states in relevant part:

               (B) Transfer or Change of Interest. If there is a change or transfer of
       interest, the action may be continued by or against the original party in his or her
       original capacity, unless the court, on motion supported by affidavit, directs that the
       person to whom the interest is transferred be substituted for or joined with the
       original party, or directs that the original party be made a party in another capacity.
       Notice must be given as provided in subrule (A)(1)(c).

                                              * * *

              (D) Substitution at Any Stage. Substitution of parties under this rule may
       be ordered by the court either before or after judgment or by the Court of Appeals
       or Supreme Court pending appeal. . . .

      Read in tandem, MCR 2.202 (B) and (D) suggest that “[a] substituted party steps into the
same position of the original party.” See Corbin v Blankenburg, 39 F3d 650, 654 (CA 6, 1994)

                                                -8-
(quotation marks and citation omitted).6 Nothing in MCR 2.202 indicates that a substituted party
would not be subject to the same stipulations and orders to which the original party was subject.
In the present case, the trial court’s November 15, 2017 order provided, among other things, “that
the ‘refiled’ case shall have a “ ‘one year back’ limitation date of March 4, 2015.” When the case
was refiled with Bourdage as the plaintiff, Travelers acknowledged the stipulation and order when,
in its defenses and affirmative defenses to the complaint, it stated that “some or all of [plaintiffs’]
claims [are] precluded pursuant to MCL 500.3145, as [they] may pertain to any claims for
reimbursement of benefits prior to March 7 [sic], 2015.” When plaintiffs substituted for Bourdage,
they stepped into the same position as Bourdage, which included benefiting from the parties’
agreement regarding the one-year-back limitations date. Travelers has provided no authority that
would compel an outcome different than that indicated by the court rule.

        For these reasons, we conclude that the trial court did not err by denying Travelers’ motion
for summary disposition under MCR 2.116(C)(10), because the one-year-back rule did not bar
plaintiffs’ claims for expenses incurred after March 4, 2015. Barnard Mfg Co, 285 Mich App at
369.7

                                   4. MAPLE MANOR NEURO

        Travelers also argues that the trial court erred by denying Travelers’ motion for summary
disposition with respect to Maple Manor Neuro. We disagree.

        PIP benefits are payable for “[a]llowable expenses consisting of reasonable charges
incurred for reasonably necessary products, services and accommodations for an injured person’s
care, recovery, or rehabilitation.” MCL 500.3107(1)(a). “[A] physician, hospital, clinic, or other
person that lawfully renders treatment to an injured person for an accidental bodily injury covered
by personal protection . . . may charge a reasonable amount for the treatment . . . .”
MCL 500.3157(1). Treatment “lawfully render[ed]” means treatment rendered in compliance with
licensing requirements. See Cherry v State Farm Mut Auto Ins Co, 195 Mich App 316, 320; 489
NW2d 788 (1992).

       Plaintiffs’ first amended complaint referred to Maple Manor Rehab and Maple Manor
Neuro collectively as “Maple Manor,” and alleged that “Plaintiff Maple Manor provided
reasonably necessary products, services, accommodations services, recovery services,

6
  Although we are not bound by the decisions of lower federal courts, this Court may find them
persuasive. See Abela v Gen Motors Corp, 469 Mich 603, 606-607; 677 NW2d 325 (2004). In
addition, we may look to federal caselaw interpreting similarly worded federal rules of civil
procedure. See White v Taylor Distributing Co, Inc, 275 Mich App 615, 627; 739 NW2d 132
(2007). Corbin addressed Fed R Civ P 25(c), which states in relevant part that “[i]f an interest is
transferred, the action may be continued by or against the original party unless the court, on
motion, orders the transferee to be substituted in the action or joined with the original party.”
7
 Again, to the extent the trial court granted summary disposition in favor of plaintiff on this issue
under MCR 2.116(I), we affirm that determination.

                                                 -9-
rehabilitation” and that Travelers was obligated to “pay Plaintiff Maple Manor: for the reasonably
necessary” services it provided to Bourdage.

         There is no dispute that Maple Manor Neuro was incorporated for the sole purpose of
providing accounting and billing services for patients treated at Maple Manor Rehab who were
eligible for no-fault benefits, and that Maple Manor Neuro itself did not provide any healthcare
services to Bourdage. There is also no dispute that Bourdage was treated by properly licensed
healthcare professionals at Maple Manor Rehab, and that Maple Manor Rehab was properly
licensed to provide the type of care and treatment Bourdage received. Because Maple Manor
Rehab “lawfully render[ed] treatment” to Bourdage, Maple Manor Rehab was entitled to “charge
a reasonable amount for the products, services and accommodations rendered.”
MCL 500.3157(1). Nothing in the statute prohibits a healthcare provider from billing for those
charges through a separate entity or prohibits either of those entities from being an assignee of
Bourdage’s right to no-fault payments in satisfaction of those charges. Travelers has not argued
that plaintiffs’ internal corporate structure violates the no-fault act or that Maple Manor Neuro was
billing for something other than the treatment Maple Manor Rehab lawfully rendered to Bourdage.
We find no error by the trial court requiring reversal. Barnard Mfg, 285 Mich App at 369.

      B. GRANT OF SUMMARY DISPOSITION IN FAVOR OF PLAINTIFFS UNDER
                              MCR 2.116(I)

        Travelers also argues that the trial court erred by granting summary disposition in favor of
plaintiffs on issues that Travelers did not raise in its motion for summary disposition and for which
it had no notice that the trial court was considering granting summary disposition. We agree that,
under the particular circumstances of this case, the trial court erred by granting summary
disposition under MCR 2.116(I) in favor of plaintiffs to this extent.

        Summary disposition under MCR 2.116(I) is appropriate only if basic due-process
requirements are also satisfied. See Lamkin, 318 Mich App at 550. Travelers argues that the trial
court violated its due-process rights because it had no notice that the trial court was contemplating
summary disposition on the issues of liability and the reasonableness of plaintiffs’ charges and
services and, therefore, had no obligation to present evidence relative to these issues. Travelers’
argument is not without merit. Nevertheless, this Court will not reach a constitutional issue if a
case may be resolved on other grounds. Pythagorean, Inc v Grand Rapids Twp, 253 Mich App
525, 527; 656 NW2d 212 (2002). In the present case, we need not reach the constitutional issue
because the trial court’s grant of summary disposition to plaintiffs under MCR 2.116(I) was, to
this extent, contrary to the requirements of the no-fault act.

        The no-fault act is intended not only to “provide individuals injured in motor vehicle
accidents assured, adequate and prompt reparation for certain economic losses,” but also to provide
these benefits at the lowest cost to the individual and the system.” Spectrum Health Hosps v Farm
Bureau Mut Ins Co of Mich, 333 Mich App 457, 479; 960 NW2d 186 (2020) (quotation marks and
citation omitted). Accordingly, insurers are statutorily obligated to pay only a reasonable charged
for allowed expenses, MCL 500.3107, and healthcare providers are allowed to charge only a
reasonable amount for treatment, not to exceed the amount customarily charged for like treatment
in cases not involving insurance, MCL 500.3157.

                                                -10-
        To recover PIP benefits, a claimant bears the burden of proving, among other things, that
the charges were reasonable and the services were reasonably necessary. Douglas, 492 Mich
at 259. As to who decides what is a reasonable charge,

       this Court has explained that healthcare providers necessarily make the initial
       determination of reasonableness by charging the insured for the services. Once
       [they] charge the insured, the insurer then makes its own determination regarding
       what is reasonable and pays that amount to plaintiffs. If the no-fault insurer does
       not pay all the charges, a healthcare provider may file suit to challenge the failure
       to fully pay the bills. It is the healthcare provider’s burden to establish the
       reasonableness of the charges by a preponderance of the evidence. And a hospital’s
       itemized bills and records do not, standing alone, satisfy the reasonableness
       requirement. [Spectrum Health Hosps, 333 Mich App at 483-484 (quotation marks
       and citations omitted).]

Ultimately, whether the amount charged by the healthcare provider is reasonable is generally a
question of fact for a jury. Id. at 484.

         Plaintiffs argue that the fact that the amounts charged for Bourdage’s care were negotiated
with Travelers renders the services per se necessary and the amount charged per se reasonable.
We disagree. Plaintiffs cite no authority supporting the proposition that such a negotiated price is
dispositive of the price’s reasonableness or of the reasonable necessity of the services provided.
Our Supreme Court has commented that it may be possible in some cases “for the court to decide
the question of the reasonableness or necessity of particular expenses as a matter of law . . . .”
Nasser v Auto Club Ins Ass’n, 435 Mich 33, 55; 457 NW2d 637 (1990). “[I]f it could be said with
certainty that an expense was both reasonable and necessary, the court could make the decision as
a matter of law.” Id. (quotation marks and citation omitted). But the trial court in the present case
did not make a finding of reasonableness. Nor was the issue significantly argued by the parties;
in fact, in their response to Travelers’ motion for partial summary disposition, plaintiffs asked the
trial court to grant summary disposition in their favor under MCR 2.116(I) as to the issue of
liability, but requested that the trial court order a trial on the amount of damages. In other words,
even though plaintiffs requested that the trial court find that Travelers was liable for reasonable
and necessary expenses incurred by Bourdage, the trial court went beyond that request to also grant
summary disposition as to the amount of damages.

        The trial court’s order in this case relieved plaintiffs of their burden to prove that their
charges were reasonable and their services to Bourdage reasonably necessary. Plaintiffs assert that
the trial court deemed the rate agreed-upon by plaintiffs and Travelers “reasonable.” However,
the record shows that the trial court did not find plaintiffs’ charged rate reasonable. Instead, the
court concluded that Travelers had not presented any evidence that the rate was not reasonable.
Moreover, there is no record evidence from which the trial court could have concluded that
plaintiffs’ charges were reasonable, as plaintiffs had yet to present any such evidence.

       Plaintiffs argue that insurers and providers can agree on “reasonable charges” and that
“[a]greements of that nature are enforceable.” They cite in support of these assertions Thomas v
Mich Mut Ins Co, 138 Mich App 117; 358 NW2d 902 (1984), and Farm Bureau Gen Ins Co v Blue
Cross Blue Shield of Mich, 314 Mich App 12, 25; 884 NW2d 853 (2015). However, neither of

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these cases involves a claimant seeking PIP benefits. Moreover, the trial court was not presented
with evidence that Travelers had agreed that the rates charged and services provided were
reasonable, or had somehow waived its right to challenge the reasonableness of charges and
services incurred after it ceased paying for Bourdage’s care. The trial court’s decision relieved
plaintiffs of the burden of proof that they must satisfy in order to recover PIP benefits for allowable
expenses. See Spectrum Health Hosps, 333 Mich App at 480-481.

        Although the expenses incurred by Bourdage may indeed be reasonable and necessary
under the no-fault act, we conclude that it was error for the trial court to grant summary disposition
under MCR 2.116(I) without allowing the parties to present evidence and argument on this issue
and without making an explicit determination of reasonableness and necessity. Because the trial
court’s decision was contrary to the requirements of the no-fault act and to relevant caselaw, we
reverse the trial court’s grant of summary disposition in favor of plaintiffs under MCR 2.116(I)
(except as noted elsewhere in this opinion), vacate the final order, and remand the matter further
proceedings as to the reasonableness of plaintiffs’ per diem charges and the reasonable necessity
of the services provided.

            III. DENIAL OF TRAVELERS’ MOTION TO EXCLUDE EVIDENCE

         Travelers also argues that the trial court abused its discretion by denying its motion to
exclude evidence as being “without merit,” but without offering any factual or evidentiary analysis
of its holding. We disagree. We review for an abuse of discretion a trial court’s decision to admit
or exclude evidence. Nahshal v Fremont Ins Co, 324 Mich App 696, 710; 922 NW2d 662 (2018).
“An abuse of discretion occurs when the decision results in an outcome falling outside the range
of principled outcomes.” Zaremba Equip Inc v Harco Nat’l Ins Co, 302 Mich App 7, 21; 837
NW2d 686 (2013).

        Michigan’s court rules require trial courts rendering decisions after bench trials to make
“brief, definite, and pertinent” findings of fact and conclusions of law. MCR 2.517(A)(1).
However “[f]indings of fact and conclusions of law are unnecessary in decisions on motions unless
findings are required by a particular rule.” MCR 2.517(A)(4); see also Yakowich v Dep’t of
Consumer & Indus Servs, 239 Mich App 506, 510 n 6; 608 NW2d 110 (2000). Travelers has not
identified any court rule requiring a trial court to make findings of fact or conclusions of law when
ruling on a motion to preclude evidence. Therefore, the trial court did not err by denying Travelers’
motion without making specific findings of fact or conclusions of law.

        Moreover, the trial court also did not abuse its discretion by denying Travelers’ motion to
exclude evidence. Travelers sought to exclude evidence of any agreement Travelers made to pay
the rate negotiated by Maple Manor Rehab and Travelers, including Taylor’s report or testimony
concerning her determination of an appropriate per diem rate. Travelers argues that Taylor was
not qualified to make such a determination. But even assuming that Taylor was not qualified to
determine a per diem rate, Travelers fail to explain why her testimony should be excluded, given
that Travelers presumably “ma[de] its own determination regarding what is reasonable and pa[id]
that amount to plaintiffs.” See Spectrum Health Hosps, 333 Mich App at 483-484.

       Travelers also sought to exclude, as a sanction for alleged spoliation of evidence, testimony
and evidence about plaintiffs’ calculation of a per diem rate and any agreement between plaintiffs

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and Travelers about a per diem rate. This Court reviews a trial court’s decision to sanction a party
for spoliation of evidence for a clear abuse of discretion. See Brenner v Kolk, 226 Mich App 149,
160; 573 NW2d 65 (1997). “An abuse of discretion occurs when the decision results in an outcome
falling outside the range of principled outcomes.” Zaremba Equip Inc, 302 Mich App at 21.
“[S]poliation may occur by the failure to preserve crucial evidence . . . .” Bloemendaal v Town &
Country Sports Ctr, Inc, 255 Mich App 207, 212; 659 NW2d 684 (2002). A trial court has the
authority to sanction a party for failing to preserve evidence that it knew or should have known
was relevant before litigation began. Id. at 211. “[I]n a case involving the failure of a party to
preserve evidence, a trial court properly exercises its discretion when it carefully fashions a
sanction that denies the party the fruits of the party’s misconduct, but that does not interfere with
the party’s right to produce other relevant evidence.” Brenner, 226 Mich App at 161. An
appropriate sanction may be the “exclusion of evidence that unfairly prejudices the other
party . . . .” Id.

        Travelers argues that plaintiffs spoliated evidence by failing to preserve Taylor’s
handwritten analysis of the various rates of rehabilitation facilities, compiled in 2015, and that the
trial court abused its discretion by refusing to sanction plaintiffs by excluding any evidence that
Travelers had ever negotiated or agreed to a per diem rate for Bourdage. We disagree. Even if
plaintiffs had a duty to preserve Taylor’s comparative analysis, the trial court did not abuse its
discretion by dismissing Travelers’ motion. Travelers has not shown how the failure to preserve
the evidence benefited plaintiffs or prejudiced Travelers. The cases upon which Travelers relies
to support its argument in favor of sanctions illustrate that spoliation sanctions are appropriate
when the party that lost, destroyed, or failed to preserve the evidence benefits from the fact that
the evidence is missing. See Bloemendaal, 255 Mich App at 214 (affirming the trial court’s
sanction on the basis of spoliation when the plaintiffs’ disassembly of a motorcycle without testing
a certain part that was critical to the plaintiffs’ theory of liability, and the Travelers’ theory of
defense, made it impossible to duplicate the test because the material part had been removed);
Brenner, 226 Mich App at 163-164 (affirming the trial court’s determination that a sanction was
appropriate because the plaintiff did not preserve for inspection the tires and seat belt that the
plaintiff claimed failed and caused her to suffer injuries in a car accident).

         In this case, although the comparative analysis may have been relevant to the
reasonableness of plaintiffs’ per diem rate, it was not dispositive, see Spectrum Health Hosps, 333
Mich App at 480-481. Moreover, although Travelers argues that the loss of Taylor’s written
analysis makes it impossible for it to challenge the information that plaintiffs used to induce them
to first make payment, Travelers still had the opportunity to make its own determination of the
reasonableness of plaintiffs’ proposed per diem rate, and is still permitted to challenge the
reasonableness of that rate, whether by comparison to other similar facilities or otherwise. The
loss of a written list of the precise facilities Taylor used to arrive at her determination is simply
not very significant, and in light of these circumstances, the trial court’s denial of Travelers’
motion to exclude evidence did not fall outside the range of principled outcomes. See Zaremba
Equip Inc, 302 Mich App at 21.

                                        IV. CONCLUSION

       For the foregoing reasons, we affirm that portion of the trial court’s July 10, 2019 order
denying Travelers’ motion for summary disposition under MCR 2.116(C)(10), reverse that portion

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of the same order granting summary disposition under MCR 2.116(I) in favor of plaintiffs (except
as noted elsewhere in this opinion), vacate the trial court’s December 7, 2020 final order and
judgment, and remand the matter to the trial court for further proceedings. Considering our
disposition of these issues, we need not address Travelers’ other claims of error, or plaintiffs’
cross-appeal.

        Affirmed in part, reversed in part, vacated in part, and remanded for further proceedings
consistent with this opinion. We do not retain jurisdiction.

                                                           /s/ Jane E. Markey
                                                           /s/ Mark T. Boonstra
                                                           /s/ Michael J. Riordan

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