Summary
In Cook v DAIIE, 114 Mich. App. 53, 55; 318 N.W.2d 602 (1982), this Court made a distinction between penalty interest and penalty attorney fees under the no-fault act. Penalty attorney fees are awardable under § 3148 if the insurer unreasonably refused to pay or unreasonably delayed in making payment.
Summary of this case from Sharp v. Preferred Risk Ins. Co.Opinion
Docket No. 52273.
Decided September 8, 1981. Amended opinion filed March 4, 1982.
Blum, Brady Rosenberg, for plaintiff.
Dickinson, Mourad, Brandt, Hanlon Becker (by Joyce E. Parker), and Gromek, Bendure Thomas (by Nancy L. Bosh), of counsel, for defendant.
This panel of the Court issued an opinion in this matter on September 8, 1981. Subsequently, on the Court's own motion by order dated November 23, 1981, the Court granted rehearing limited to the issue of whether the same standard of reasonableness should be used to determine whether the plaintiff is entitled to the additional 12% interest, as contemplated by MCL 500.3142(2); MSA 24.13142(2), and attorney fees, as contemplated by MCL 500.3148(1); MSA 24.13148(1).
Our further review convinces us that the standards for determining the interest awards under the two statutes are in fact dissimilar. MCL 500.3142; MSA 24.13142 provides as follows:
"(1) Personal protection insurance benefits are payable as loss accrues.
"(2) Personal protection insurance benefits are over-due if not paid within 30 days after an insurer receives reasonable proof of the fact and of the amount of loss sustained. If reasonable proof is not supplied as to the entire claim, the amount supported by reasonable proof is overdue if not paid within 30 days after the proof is received by the insurer. Any part of the remainder of the claim that is later supported by reasonable proof is overdue if not paid within 30 days after the proof is received by the insurer. For the purpose of calculating the extent to which benefits are overdue, payment shall be treated as made on the date a draft or other valid instrument was placed in the United States mail in a properly addressed, postpaid envelope, or, if not so posted, on the date of delivery.
"(3) An overdue payment bears simple interest at the rate of 12% per annum." (Emphasis added.)
On the other hand, MCL 500.3148(1); MSA 24.13148(1) provides:
"Sec. 3148.(1) An attorney is entitled to a reasonable fee for advising and representing a claimant in an action for personal or property protection insurance benefits which are overdue. The attorney's fee shall be a charge against the insurer in addition to the benefits recovered, if the court finds that the insurer unreasonably refused to pay the claim or unreasonably delayed in making proper payment." (Emphasis added.)
Thus, on remand the trial court need only determine whether personal protection insurance benefits were paid within 30 days after reasonable proof of the loss and its amount were conveyed to the insurer to award 12% simple interest on an overdue payment.
However, it will be necessary for the court to find that the insurer unreasonably refused to pay the claim or unreasonably delayed in making proper payment to order the defendant to pay attorney fees under the statute.
To the extent it is not modified by this amended opinion, our original opinion remains in full force and effect.
Remanded, in accordance with the original and amended opinions.