Michigan Court of Appeals; Docket # 346990; Unpublished
Judges Beckering, Fort Hood, and Shapiro; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
Penalty Attorney Fees on Appeal [§3148]
In this unanimous unpublished per curiam decision, the Court of Appeals reversed the trial court’s order granting the plaintiff, Liliya Komendat, only a portion of the attorney fees she requested against the defendant, Home-Owners Insurance Company, and remanded for further proceedings consistent with its opinion. Only one of many charges incurred by Komendat was found to be overdue for purposes of MCL 500.3148, and thus the trial court calculated her award of attorney fees by considering only the hypothetical amount of time it would have taken her attorneys to pursue that one, single charge, as opposed to the total amount of hours her attorneys spent on the case. The Court of Appeals held that the trial court’s calculation was erroneous, and that “all reasonable attorney time in an action that recovers an overdue benefit unreasonably withheld should be included in the baseline number of hours unless those services were dedicated solely to the recovery of benefits that were found not overdue.”
Komendat was injured as a result of a motor vehicle crash, and sought PIP benefits under her husband’s insurance policy with Home-Owners. Home-Owners paid various medical and transportation bills initially, but eventually refused to pay any further benefits in light of an insurance medical examination in which the physician conducting the exam concluded that Komendat “should have only required three to six months of treatment.” Komendat subsequently filed the underlying actions seeking overdue PIP benefits and UM coverage from Home-Owners. The lawsuit proceeded to trial, and at the close of Home-Owners’ proofs, Komendat moved for a directed verdict regarding a single prescription medication bill that Home-Owners failed to pay, totaling $107.17. The trial court granted Komendat’s motion, and awarded her both the $107.17 owed for the bill and $38.57 in penalty interest. As for all other charges Komendat sought, a jury returned a verdict in favor of Home-Owners. Komendat subsequently filed a posttrial motion for attorney fees pursuant to MCL 500.3148(1), in light of the trial court’s directed verdict with respect to the single prescription medication charge. Komendat requested $235,000, an amount based on the total amount of time her attorneys spent representing her in the case. The trial court awarded her only $4,688.75 in attorney fees, however, an amount based on the total number of hours the trial court felt would have been reasonably necessary to pursue the single prescription medication charge: 15.5 hours.
On appeal, the Court of Appeals held that the trial court erred in its calculation of Komendat’s attorney fees award. Rather than calculate the award based on the amount of time it would have taken to pursue the single prescription medication charge in a vacuum, the Court of Appeals held that all the hours Komendat’s attorneys spent working on the case should be considered when determining the award, unless those hours were “dedicated solely to the recovery of benefits that were found not overdue.” The Court of Appeals analogized this case to Tinnin v Famers Ins Exch, 287 Mich App 511, in which it determined that “‘all of the attorney’s time for which plaintiff sought compensation was sufficiently related to securing the overdue benefits compensable under MCL 500.3148, even though some benefits were properly denied. Id. at 521.”
In sum, all reasonable attorney time in an action that recovers an overdue benefit unreasonably withheld should be included in the baseline number of hours unless those services were dedicated solely to the recovery of benefits that were found not overdue, in which case that time was not attributable to recovery of the overdue benefit.
. . .
Thus, in Tinnin, we rejected the notion that attorney services must be solely directed at overdue benefits to be compensable. Instead, we concluded that all of the attorney time in that case was “sufficiently related” to the recovery of the overdue benefit. To be clear, the caselaw does not require that an attorney’s time be solely or even primarily related to the overdue benefits. Nor does it require the trial court, as occurred in this case, to speculate as to the number of hours that would have been spent if the plaintiff had sought payment only for the benefits that were found to have been unreasonably denied. Such an exercise is clearly speculative and is untethered to what took place in the actual, rather than hypothetical, litigation.