The No-Fault Act (NFA); Action for payment of no-fault benefits; Attorney fees under MCL 500.3148(1); Ross v Auto Club Group; Coverage dispute related to domicile; Workman v DAIIE

The court held that the trial court did not err in declining to award plaintiff attorney fees under MCL 500.3148(1) because the record showed “a genuine and fact-intensive dispute” as to the injured person’s (W) “domicile at the time payment” of no-fault benefits was withheld. It noted that the dispositive question was not whether defendant-Progressive “was ultimately correct on the issue of coverage, but whether its position at the time payment was withheld was unreasonable, given that it appeared [W] was not living with—i.e., domiciled—with his parents when the accident occurred.” It further noted that the “concept of a person’s ‘domicile’” for NFA purposes “is not determined by a single factor.” Rather, it is determined considering “multiple indicia[.]” The court found that the record supported “Progressive’s position that its initial denial of payment was based on a bona fide factual uncertainty.” The evidence existing at the time “included sworn testimony that [W] had been formally evicted. His belongings were removed from his parents’ home, he did not stay in their home overnight, and [he] affirmatively stated that he did not intend to return. [W] further described himself as homeless and transient during the relevant period. These facts bore directly on the intent and physical presence factors relevant to the determination of his domicile.” And the court noted that “MCL 500.3148(1) does not require an insurer to conclusively establish a new domicile to rebut the presumption of unreasonableness.” In addition, although “a showing of bad faith is neither required nor dispositive under MCL 500.3148(1), the absence of bad faith does not undermine the [trial] court’s ruling where, as here, the insurer’s refusal to pay was supported by a bona fide factual uncertainty.” While the trial court ultimately resolved the domicile “question in plaintiff’s favor, MCL 500.3148(1) does not impose attorney-fee liability merely because the insurer’s position was unsuccessful.” Affirmed.