Conversion; MCL 600.2919a(1); “Own use”; Deposit of two-party checks into a law firm’s Interest on Lawyers Trust Account (IOLTA); MCL 440.3110(4); MI Rules of Professional Conduct (MRPC) 1.15(c); Attorney’s charging lien; The common-fund exception to the “American Rule” as to attorney fees; Popma v Auto Club Ins Ass’n; Miller v Citizens Ins Co (Miller I & II); Michigan Assigned Claims Plan (MACP)

The court held that the trial court did not err in granting plaintiff-healthcare provider (VHS) summary disposition on its statutory conversion claim against defendant-Dailey Law Firm. It concluded the grant of summary disposition for VHS and award of damages “did not preclude Dailey from recovering attorney fees” – to the extent the firm believes it is owed attorney fees, its remedy is to sue its client (defendant-Jones). Jones was injured in an auto accident. Dailey helped him obtain coverage under the MACP, which assigned coverage to nonparty-Citizens. Jones received services from a VHS subsidiary as part of his treatment. VHS sent Citizens invoices totaling $10,592. Citizens sent Dailey checks “totaling g $9,532.80, which reflected a reduced rate negotiated by Citizens and VHS (the ‘Citizens checks’). The checks were made payable to” VHS’s subsidiary and the firm. Dailey deposited them to its IOLTA, “but did not remit any payment to VHS.” The court determined that because VHS “presented evidence showing the Citizens checks were payable to both VHS and Dailey, and because VHS offered evidence showing only Dailey acted on the Citizens checks, the burden then shifted to Dailey to” show a genuine issue of material fact existed for trial. It further found that Dailey failed to offer “sufficient documentary evidence” to refute VHS’s claim. Thus, the court concluded that “the trial court did not err in granting summary disposition on the basis of statutory conversion because there was not a genuine dispute of fact as to whether Dailey converted the Citizens checks for its own use.” Dailey contended that it held an attorney’s charging lien and that “the trial court effectively invalidated its right to be paid attorney fees.” The court found its appellate arguments asserted an entitlement to fees under the common-fund exception to the American Rule. While the firm relied on Miller I, the Supreme Court, in Miller II, rejected the court’s “application of the common-fund exception in these circumstances[.]” The Supreme Court determined that “a medical provider is not obliged to reduce its costs to contribute to an insured’s attorney fees.” The trial court’s order, awarding VHS all the funds from the Citizens checks, “effectively restricted Dailey from recovering attorney fees from VHS.” But the order did not prevent it “from receiving compensation for its efforts.” Affirmed.