First-party action under the No-Fault Act (NFA); Personal protection insurance (PIP) benefits; “Incurred” expenses; Shanafelt v Allstate Ins Co

Holding that the trial court properly dismissed plaintiff-estate’s claims for PIP benefits as to some claimed medical expenses because they were not incurred but erred in dismissing others, the court affirmed in part, reversed in part, and remanded. Plaintiff’s decedent (Richards) was seriously injured in a car crash and later died. He had a no-fault auto insurance policy through defendant-Grange. Plaintiff alleged that Grange did not pay PIP benefits on Richards’ behalf. The trial court partially granted Grange summary disposition. The issue on appeal was “whether the medical expenses associated with Richards’ treatment at” nonparties-Spectrum “Hospital, DMC Rehabilitation Institute of Michigan, and Harper Hutzel Hospital were ‘incurred.’” The court found that “it is clear that an expense is incurred when the insured accepts medical treatment and is charged for the services provided, but that the expense does not remain ‘incurred’ indefinitely. Rather, once the insured is no longer legally responsible for the expense, then [it] ceases to be ‘incurred’ under” the NFA. Spectrum’s billing ledger reflected it had “written off the costs associated with Richards’ care” (apparently twice,) and plaintiff offered “no evidence to refute that the Spectrum bill has been written off so as to relieve him of any legal obligation to pay the bill either directly or through any available insurance.” Given the uncontroverted evidence “that plaintiff has no legal responsibility for the Spectrum bill,” the court held “that the expenses were not incurred and are not subject to payment by” Grange. Thus, the trial court did not err in “summarily dismissing this part of plaintiff’s claim.” But the circumstances as to the other two providers were different. While “the billing ledgers reflect a $0 balance, plaintiff produced evidence in the form of an affidavit from” a DMC billing representative (P) that contradicted them. P “averred that, ‘at this time,’ those medical providers were expecting payment from Grange and, as a result, they were not directly pursuing their right to payment from plaintiff. As explained in Shanafelt, . . . a plaintiff’s liability for the expenses from those providers is not altered merely because the providers expect payment from the insurer rather than from” plaintiff. Thus, the trial court erred in summarily dismissing the claims as to these providers.