DLT II v. Allstate Ins. Co.

1

DLT II, a legally protected person, by Next Friend DANNY W. THOMASON, and DANNY W. THOMASON individually, Plaintiffs-Appellees, v. ALLSTATE INSURANCE COMPANY, also known as ASMI AUTO INSURANCE, Defendant/Cross-Plaintiff/Cross-Defendant-Appellant, and MICHELLE HOFFMAN, Defendant/Cross-Defendant/Cross-Plaintiff.

No. 360502

Court of Appeals of Michigan

May 25, 2023

UNPUBLISHED

Circuit Court LC No. 2011-000281-NF

Before: Markey, P.J., and Murray and Feeney, JJ.

PER CURIAM.

Defendant-appellant Allstate Insurance Company, appeals by leave granted^[1] the trial court's order granting plaintiffs^[2] DLT and Danny Thomason's motion to compel Allstate's compliance with the consent judgment. On appeal, Allstate argues that the trial court erred by holding that the legislative amendments to the no-fault act contained in 2019 PA 21 did not apply to pre-amendment automobile injuries even though the claims for benefits accrued after the effective date of the amendments. After Allstate filed this appeal this Court rejected the exact arguments Allstate makes here. See Andary v USAA Cas Ins Co, __ Mich.App. __; __ N.W.2d __ (2022) (Docket No. 356487), lv gtd __ Mich. __; 979 N.W.2d 823 (2022). We are bound by Andary, under MCR 7.215(J)(1), to affirm the trial court's decision, and "a Supreme Court order granting leave to appeal does not diminish the precedential effect of a published opinion of the Court of Appeals," MCR 7.215(C)(2). Moreover, because the Supreme Court has already granted leave in Andary, we cannot declare a conflict. MCR 7.215(J)(2). Andary v USAA Cas Ins Co, 979 N.W.2d 823 (Mich, 2022). For these reasons alone, we must affirm.

I. BACKGROUND AND PROCEDURAL HISTORY

This case arises from an automobile accident on March 7, 1995, where DLT, who was five years old at the time, sustained a traumatic brain injury, necessitating around-the-clock attendant care services for the remainder of his life. DLT's mother, Michelle Hoffman, maintained an automobile insurance policy with Allstate, and immediately following the accident, Allstate began paying Personal Injury Protection (PIP) benefits to or for the benefit of DLT, including payments related to the attendant care services provided by DLT's parents, Hoffman and Thomason.

In 2011, a dispute arose between the parties regarding the hourly rate charged by Hoffman and Thomason for providing attendant care services to DLT, prompting plaintiffs' suit in the Calhoun Circuit Court. The parties entered into a consent judgment on October 10, 2011, which provided that Allstate would pay Thomason and Hoffman $16 per hour for attendant care services provided to DLT until March 1, 2012. Thereafter, the hourly rate and amount of care necessary for DLT's care were to be determined by the results of DLT's physical medicine and rehabilitation (PM&R) and occupational therapy (OT) evaluations. Moreover, according to the consent judgment, "[i]f legislation is enacted which imposes limits on the number of hours and/or the hourly rate payable to family care givers, such as Danny W. Thomason and Michelle Hoffman, then Allstate Insurance Company shall be authorized to immediately adjust the number of hours paid and/or the hourly rate paid to conform to the legislative enactment, assuming such legislation is deemed to affect ongoing claims which predate the effective date of the legislation. If there is a disagreement as to retroactivity, this Court will decide that issue on motion by any party . . . ."

Pursuant to the consent judgment, in 2012, DLT underwent physical medicine and rehabilitation (PM&R) and occupational therapy (OT) evaluations to determine the level of attendant care necessary for his care and the reasonable hourly rate for the care. The OT specialist opined that $22 per hour represented a reasonable fee for the attendant care services provided to DLT, and the hourly rate was adjusted accordingly.^[3] The most recent dispute, and the subject of this appeal, concerned the no-fault reforms contained in 2019 PA 21 and 2019 PA 22, effective June 11, 2019, where the Legislature introduced, among other things, a new fee schedule and other PIP benefit limitations under MCL 500.3157 for treatment or training rendered after July 1, 2021. On June 30, 2021, Allstate notified plaintiffs that pursuant to the 2019 amendments of the no-fault act, Allstate would begin adjusting the hourly rate for attendant care services to the reduced statutory rate of $12.59 and offered to waive the 56-hour weekly limitation. Plaintiffs subsequently filed their motion to compel compliance with the consent judgment, arguing that retroactive application of the 2019 amendments would result in an unconstitutional deprivation of the parties' vested contractual rights under the Contracts Clause of this state under Const 1963, art 1, § 10. Plaintiffs further argued that the Legislature did not intend for the amendments to apply retroactively, considering that the amended statutes did not include any language suggesting retroactive application.

In response, Allstate argued that the 2019 amendments applied to claims accrued after the effective date of the amendments, regardless of when the automobile accident occurred. Allstate argued that applying the 2019 amendments to ongoing PIP claims related to pre-amendment injuries does not render the statute as operating retroactively because, under MCL 500.3110(4), a person's right to receive PIP benefits accrue not when the injury occurs but, instead, as the allowable expense is incurred. Allstate argued that the adjustments made to DLT's care complied with MCL 500.3157 and that the Legislature demonstrated its intention for the statute to apply to pre-amendment injuries in MCL 500.2111f(8), which directed insurers to pass on realized savings from the application of MCL 500.3157 for accidents that occurred before July 2, 2021. Additionally, Allstate alleged that plaintiffs consented to these changes by entering the consent judgment, which allowed Allstate to adjust the PIP benefits for attendant care provided to DLT in accord with future legislation. Plaintiffs' Contract Clause argument was moot, Allstate argued, because the amendments were not retroactive and plaintiffs consented to the adjustments in the consent judgment.

Following oral arguments on plaintiffs' motion to compel, the trial court entered its February 8, 2022, order granting plaintiffs' motion, holding that the 2019 amendments did not apply to ongoing PIP claims premised upon motor vehicle accidents pre-dating the amendments. The court relied on the language of MCL 500.3157 and determined that the Legislature did not manifest an intent for retroactive application of the statute. The court concluded that retroactive application of the 2019 amendments would take away or impair vested rights that DLT acquired under the previous reiteration of the law and by the consent judgment. On this basis, the court held that 2019 legislative amendments did not apply to the attendant care services provided to DLT, either as to the hourly rate or as to the number of hours of allowable services per week, and ordered Allstate to continue to pay for the attendant care services provided to DLT at a rate of $22 per hour.

II. STANDARD OF REVIEW

The proper interpretation of a consent judgment is a question of law subject to de novo review. Hein v Hein, 337 Mich.App. 109, 115; 972 N.W.2d 337 (2021). Statutory interpretation is an issue of law that is also reviewed de novo. Shinholster v Annapolis Hosp, 471 Mich. 540, 548; 685 N.W.2d 275 (2004).

III. NO-FAULT REFORMS

Allstate argues that the trial court erred in holding that MCL 500.3157(2) and (7) did not mandate the reduction of payments for DLT's attendant care services rendered after July 1, 2021.

In June of 2019, the Legislature enacted 2019 PA 21 and 2019 PA 22, making significant changes to the no-fault regime. Among the reforms, the Legislature amended MCL 500.3157 to include fee schedules and limitations to the payment of PIP benefits, which capped the amount reimbursable to medical providers or persons rendering treatment to an injured person for an accidental bodily injury under the no-fault act. See MCL 500.3157(2) and (7). According to MCL 500.3157, the amended fee schedule limitations went into effect on July 1, 2021, and the new reimbursement limitations were applied to treatment rendered on July 2, 2021, or later. MCL 500.3157(14) ("Subsections (2) to (13) apply to treatment or rehabilitative occupational training rendered after July 1, 2021."). The legislative reforms to MCL 500.3157 also operated to limit the reimbursable hours of in-home attendant care to 56 hours per week when certain enumerated individuals, including relatives, provided the services. MCL 500.3157(10).^[4]

Allstate's arguments are precluded by this Court's decision in Andary, which held that persons injured in motor vehicle accidents before the Legislature enacted 2019 PA 21 and 2019 PA 22 were not subject to the limited PIP benefits under the amendments because "the Legislature did not clearly demonstrate an intent for the amendments to apply retroactively to persons injured in pre-amendment accidents." Andary, __ Mich.App. at __; slip op at 1.

In sum, the amended version of MCL 500.3157 contains no 'clear, direct, and unequivocal' expression of intent to have subsections (7) and (10) apply retroactively, i.e., to individuals who were injured before its effective date, even as to services provided after its effective date. Nor is such language found elsewhere in the amended no-fault act. MCL 500.2111f(8) is insufficient to overcome the presumption of retroactivity when it is located in a separate chapter of the insurance code and does not directly call for retroactive application.

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