Order Michigan Supreme Court
Lansing, Michigan
March 7, 2008 Clifford W. Taylor,
Chief Justice
133416 Michael F. Cavanagh
Elizabeth A. Weaver
Marilyn Kelly
Maura D. Corrigan
COMMUNITY RESOURCE CONSULTANTS, Robert P. Young, Jr.
INC., Stephen J. Markman,
Justices
Plaintiff-Appellee,
v SC: 133416
COA: 269726
Ingham CC: 04-000879-CK
PROGRESSIVE MICHIGAN INSURANCE
COMPANY,
Defendant-Appellant.
_________________________________________/
On December 5, 2007, the Court heard oral argument on the application for leave
to appeal the February 1, 2007 judgment of the Court of Appeals. On order of the Court,
the application is again considered. MCR 7.302(G)(1). In lieu of granting leave to
appeal, we REVERSE the judgment of the Court of Appeals. Under the Michigan No-
Fault Act, MCL 500.3101 et seq., when defendant made partial payments and refused to
pay for specific services in plaintiff’s invoices, plaintiff could not insulate those services
from the one-year back rule, MCL 500.3145(1), by unilaterally applying defendant’s
subsequent payments to the remainder of the overdue invoices. Defendant produced
evidence that it explicitly allocated payments to specific invoices, leaving specific
portions unpaid. Plaintiff failed to meet its burden under MCR 2.116(C)(10) to produce
evidence that either refuted defendant’s evidence or demonstrated defendant’s assent to
plaintiff’s accounting practice. Maiden v Rozwood, 461 Mich 109, 120-21 (1999).
Plaintiff’s remedy for defendant’s refusal to pay was provided by statute. A payment is
overdue “if not paid within 30 days after an insurer receives reasonable proof of the fact
and of the amount of loss sustained.” MCL 500.3142(2). Overdue payments are
assessed a penalty of “simple interest at the rate of 12% per annum.” Id. § 3142(3).
Plaintiff was required to file an action for the overdue payments within 1 year of when
the losses were incurred. Id. § 3145(1). “Incurred” means “‘[t]o become liable or subject
to, [especially] because of one’s own actions.’” Proudfoot v State Farm Mut Ins Co, 469
Mich 476, 484 (2003), quoting Webster’s II New College Dictionary (2001). “Liable” is
defined as “legally responsible[.]” Random House Webster’s College Dictionary (1991).
Generally, one becomes liable for the payment of services once those services have been
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rendered. “‘[P]laintiff became liable for her medical expenses when she accepted
medical treatment.’” Bombalski v Auto Club Ins Ass’n, 247 Mich App 536, 542 (2001),
quoting Shanafelt v Allstate Ins Co, 217 Mich App 625, 638 (1996). As this Court
explained in Proudfoot, supra at 484 n 4, “An insured could [become] liable for costs by
various means, including . . . signing a contract for products or services.” In this case, the
expenses for services were “incurred” when the services were rendered. We REMAND
this case to the Ingham Circuit Court for entry of partial summary judgment in favor of
defendant, and for further proceedings not inconsistent with this order.
CAVANAGH, J., would deny leave to appeal.
WEAVER, J., dissents and states as follows:
I dissent and would deny leave to appeal because I am not persuaded that the
Court of Appeals judgment in this matter should be peremptorily reversed.
KELLY, J., dissents and states as follows:
In peremptorily reversing the judgment of the Court of Appeals, the majority fails
to address the trial court’s conclusion regarding open accounts. The Court of Appeals
noted with approval the trial court’s determination that open accounts are commonly used
in “many commercial contexts.” That fact may constitute usage-of-trade evidence that
defendant was on notice of plaintiff’s accounting practice.
Additionally, the majority suggests that plaintiff should file a lawsuit whenever
full payment is delayed in order to protect its claim to payment. This ignores the
practical benefits of having an open account for continuing services.
The majority resolves in a peremptory fashion the legal issue of when losses are
incurred for purposes of MCL 500.3145(1). It concludes that losses are incurred at the
time medical services are rendered. Because this conclusion has wide-reaching effect, it
should not be made in a peremptory fashion. Rather, we should grant leave to appeal to
fully consider when losses are incurred in the context of medical services and, more
specifically, in the context of continuing medical services.
For these reasons, I dissent from the order.
I, Corbin R. Davis, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
March 7, 2008 _________________________________________
t0304 Clerk