Injured? Contact Sinas Dramis for a free consultation.

   

Hope Network Rehab Servs v Mich Catastrophic Claims Assoc, et al (COA – UNP 6/9/2022; RB #4427)   

Print

Michigan Court of Appeals; Docket #355372; Published  
Judges Borrello, Jansen, and Murray; Per Curiam 
Official Michigan Reporter Citation: Forthcoming; Link to Opinion


STATUTORY INDEXING: 
Power of Catastrophic Claims Association [§3104(8)] 
Reimbursement of Member Claims [§3104(10)(e)] 
Rules and Procedures of Catastrophic Claims Association [§3104(7)]

TOPICAL INDEXING: 
Not Applicable


SUMMARY: 
In this unanimous, published, per curiam decision, the Court of Appeals reversed the trial court’s denial of Defendant Michigan Catastrophic Claims Association’s (“MCCA”) motion for summary disposition seeking dismissal of Plaintiff Hope Network Rehabilitation Services’ (“Hope” or “Hope Network”) action for tortious interference with a business relationship or expectancy.  The Court of Appeals held, first, that Hope failed to present sufficient evidence to create a question of fact as to whether the MCCA intentionally interfered with Hope’s business expectancy of Defendant Farm Bureau General Insurance Company of Michigan (“Farm Bureau”), by threatening to withhold reimbursement from Farm Bureau if Farm Bureau settled Hope’s underlying first-party action against it for an amount agreeable to both Hope and Farm Bureau.  The Court held, second, that Hope Network failed to establish that it suffered damages as a result of the MCCA’s alleged interference.

Marilyn Koyl was seriously injured in a motor vehicle accident, after which she received in-home health care from Hope Network.  A dispute arose between Hope and Farm Bureau, the insurer with priority responsibility for Koyl’s no-fault PIP benefits related to the accident, as to the reasonable charge of Hope’s services.  Hope ultimately filed a first-party action against Farm Bureau, and after a year of unsuccessful negotiations by the parties in attempting to settle the case, Hope amended its complaint to add a claim of tortious interference of a business relationship or expectancy against the MCCA.  Hope alleged that the MCCA threatened to withhold reimbursement from Farm Bureau if Farm Bureau settled its action with Hope for an amount agreeable to both parties.  MCCA moved for summary disposition, which the trial court denied, noting that it was ‘possible to conceive of factual scenarios that could justify recovery,’ as Hope was alleging that the MCCA ‘threatened to withhold reimbursement to the insurer, which tends to run counter to its statutory mandate.’

The Court of Appeals reversed the trial court’s denial of the MCCA’s motion for summary disposition, observing, preliminarily, that to succeed on a claim of tortious interference with a business relationship or expectancy, a plaintiff must establish four things:  

“(1) ‘the existence of a valid business relationship or expectancy,’ (2) ‘knowledge of the relationship or expectancy on the part of the defendant,’ (3) ‘an intentional interference by the defendant inducing or causing a breach or termination of the relationship or expectancy,’ and (4) ‘resultant damage to the plaintiff.’ ” 

In this case, the MCCA argued, and the Court of Appeals held, that Hope failed to establish the third and fourth elements.  The Court of Appeals noted that the third element requires that a plaintiff ‘establish that the defendant acted both intentionally and either improperly or without justification.’  In this case, the Court of Appeals reasoned that Hope failed to allege specific facts to create a question of fact as to whether the MCCA intentionally or wrongfully interfered with its business relationship or expectancy with Farm Bureau.  The Court found that the MCCA threatening to withhold reimbursement from Farm Bureau did not inherently constitute wrongful conduct—especially considering the MCCA’s “power to step in before a settlement has been reached and adjust situations that it anticipates might otherwise expose it to unreasonable indemnification costs.  The Court ultimately concluded that because Hope’s Complaint did not allege any further facts that would constitute an unlawful interference by the MCCA, summary disposition was proper under MCR 2.116(C)(8).

“In this case, the sole conduct alleged was that the MCCA had either withheld or threatened to withhold reimbursement to Farm Bureau,3 and that by doing so the MCCA intentionally interfered with Hope’s business relationship and/or expectancy with Farm Bureau, inducing, causing, or contributing to a breach of that relationship or expectancy. Hope’s alleged business expectancy was that ‘its reasonable charges for the reasonably necessary services, products and/or accommodations that it provided to Marilyn Koyl for her care, recovery, or rehabilitation from her accident-related injuries would be covered and, ultimately, paid for by Defendant Farm Bureau.’ Hope’s act of filing a complaint against Farm Bureau for its alleged refusal to pay demonstrated that Hope and Farm Bureau were unable to reach an agreement with respect to whether the expenses were reasonable and necessary, and that it would be up to a jury to resolve the issue. See Nasser v Auto Club Ins Ass’n, 435 Mich 33, 55; 457 NW2d 637 (1990) (stating that ‘whether expenses are reasonable and reasonably necessary is generally one of fact for the jury’). Hope acknowledged, when moving to amend its complaint to add the tortious interference claim against the MCCA, that it had been attempting to resolve the dispute with Farm Bureau ‘for months,’ and that the MCCA’s alleged interference did not begin until after Hope filed this lawsuit against Farm Bureau. Even accepting the factual allegations in the complaint as true, Hope did not allege that the MCCA committed an inherently wrongful act, and Hope failed to allege, with any degree of specificity, affirmative acts that the MCCA committed with the motive of interfering with Hope’s business relationship or expectancy. Hope simply stated in its complaint that the MCCA refused to approve payment and/or threatened to withhold reimbursement to Farm Bureau and that these acts interfered with Hope’s business relationship with Farm Bureau. The MCCA’s alleged involvement with Farm Bureau with respect to Hope’s claim, which was not supported by specific facts, was not so inherently wrongful that it could never be justified given the MCCA’s power to step in before a settlement has been reached and adjust situations that it anticipates might otherwise expose it to unreasonable indemnification costs. See Badiee, 265 Mich App at 367. Therefore, Hope was required to allege in its complaint specific and affirmative acts that the MCCA intentionally committed in order to interfere with Hope’s business relations or expectancy. See CMI Int’l, Inc, 251 Mich App at 131. Because Hope failed to make any specific allegations to demonstrate acts of unlawful interference, the trial court erred by failing to grant summary disposition on Hope’s tortious interference claim under MCR 2.116(C)(8).” 

With respect to the fourth element, Hope alleged damages from the MCCA’s alleged interference ‘[included], but [were] not limited to, the costs of prosecuting the instant lawsuit’ and ‘delay.’ Neither, in the Court’s opinion, were cognizable damages.  Hope’s only actual damages were unpaid no-fault PIP benefits, which were unpaid entirely because of Farm Bureau’s actions—not the MCCA’s.  MCCA’s alleged interference would not prevent Hope from recovering “100 percent of the expenses that a jury concludes to be reasonable and reasonably necessary and, therefore, Hope would have no resultant damages as a result of the MCCA’s alleged interference.”

“With respect to the fourth element, a plaintiff pleading a claim of tortious interference with a business relationship or expectancy must show that, as a result of the interference, the plaintiff has suffered damages. Dalley, 287 Mich App at 323. The ‘business expectancy’ that Hope alleged to be interfered with was the payment of no-fault benefits for reasonable and necessary PIP expenses. The benefits were not paid, at least initially, because Farm Bureau disputed them. The MCCA had nothing to do with that decision. A jury will determine whether the expenses were reasonable and necessary. Nasser, 435 Mich at 55. Farm Bureau will be liable for the benefits that are legitimately due as determined by the jury. The MCCA, in turn, will be required to indemnify Farm Bureau for 100% of the amount of ultimate loss sustained under personal protection insurance coverages in excess of” the applicable statutory threshold. MCL 500.3104(2). Thus, as a matter of law, Hope will receive 100 percent of the expenses that a jury concludes to be reasonable and reasonably necessary and, therefore, Hope would have no resultant damages as a result of the MCCA’s alleged interference.” 


Lansing car accident lawyer Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit SinasDramis.com.

Copyright © 2022 Sinas Dramis Law Firm, George Sinas, Stephen Sinas.
All Rights Reserved.
Login (Publishers Only)

FacebookTwitterInstagram