James Derrick Mapson v. Farmers Insurance Exchange

CourtMichigan Court of Appeals
DecidedSeptember 14, 2023
Docket361240
StatusUnpublished

This text of James Derrick Mapson v. Farmers Insurance Exchange (James Derrick Mapson v. Farmers Insurance Exchange) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
James Derrick Mapson v. Farmers Insurance Exchange, (Mich. Ct. App. 2023).

Opinion

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to revision until final publication in the Michigan Appeals Reports.

STATE OF MICHIGAN

COURT OF APPEALS

JAMES DERRICK MAPSON, UNPUBLISHED September 14, 2023 Plaintiff-Appellee,

v No. 361240 Oakland Circuit Court FARMERS INSURANCE EXCHANGE, LC No. 2021-190970-NF

Defendant,

and

MICHIGAN CATASTROPHIC CLAIMS ASSOCIATION,

Defendant-Appellant.

TRAVIS BOUCHARD,

Plaintiff-Appellee,

v No. 362756 Oakland Circuit Court FARMERS INSURANCE EXCHANGE, LC No. 2022-192261-NF

Before: LETICA, P.J., and MURRAY and PATEL, JJ.

-1- PER CURIAM.

In Docket No. 361240, defendant Michigan Catastrophic Claims Association (MCCA) appeals by leave granted1 the trial court order denying its motion for summary disposition in favor of plaintiff, James Derrick Mapson (Mapson). In Docket No. 362756, defendant MCCA appeals by leave granted2 the trial court order denying its motion for summary disposition in favor of plaintiff, Travis Bouchard (Bouchard). After a joint motion by the parties, this Court consolidated the appeals “to advance the efficient administration of the appellate process.”3 We reverse the trial courts’ orders denying MCCA’s motions for summary disposition and remand for entry of orders granting summary disposition in favor of MCCA.

I. BASIC FACTS AND PROCEDURAL HISTORY

In Docket No. 361240, Mapson filed a complaint against Farmers Insurance Exchange (Farmers), seeking to enforce a June 21, 2005 judgment. Mapson also requested damages from MCCA, alleging that it conspired and tortiously interfered with his contract with Farmers. Specifically, Mapson asserted that he was injured in an automobile accident on March 3, 1996, that rendered him a “C5 complete quadriplegic.” He had no upper or lower limb functions and was completely dependent on others for daily living and safety, requiring 24-hour a day attendant care. In the underlying judgment, $38.00 an hour, 24-hours a day, was deemed a reasonable rate for family-provided attendant care. Despite the judgment, in June 2021, Farmers allegedly notified Mapson of its intent to pay for the home-based services contrary to the previously agreed-upon rate. Mapson raised two claims against Farmers, violation of the no-fault act, MCL 500.3101 et seq., and breach of contract.

With regard to MCCA, Mapson alleged that it interfered with the contract between Mapson and Farmers. Specifically, he submitted that MCCA agreed to reimburse Farmers for amounts in excess of $250,000, under MCL 500.3104(1). Mapson claimed that MCCA did not have the authority: (1) to withhold payment for the ultimate loss to the insured, (2) to determine reasonableness of the charges, and (3) to preapprove the insurer’s adjusting decisions. He asserted that MCCA acted wrongfully and with malice to cause Farmers to breach its agreement. Mapson also alleged that Farmers and MCCA conspired and acted in concert to deny the underlying judgment, causing him damages.

MCCA moved for summary disposition under MCR 2.116(C)(5) and (C)(8), asserting that it was created by the Legislature to address the concern that the provision of unlimited personal protection insurance (PIP) benefits for catastrophic injuries would be too costly and burden the

1 Mapson v Farmers Ins Exch, unpublished order of the Court of Appeals, entered October 27, 2022 (Docket No. 361240). 2 Bouchard v Farmers Ins Exch, unpublished order of the Court of Appeals, entered February 2, 2023 (Docket No. 362756). 3 Mapson v Farmers Ins Exchange, unpublished order of the Court of Appeals, entered April 14, 2023 (Docket Nos. 361240; 362756).

-2- member insurers. Thus, MCCA reimbursed or indemnified member insurers for the PIP losses that they incurred in excess of a catastrophic level. Accordingly, MCCA did not write insurance policies, was not a party to insurance contracts, and served to guard against unreasonable settlements of catastrophic claims. MCCA asserted that it was given the authority, by statute and through its plan of operation, to preapprove an insurance claim, and an insurer’s failure to obtain MCCA preapproval could result in a denial of all or a portion of a request for reimbursement. Additionally, member insurers had to report catastrophic claims and advise of developments that may impact MCCA’s interest. It was submitted that Mapson failed to state a claim because MCCA was authorized to provide oversight by statute, MCL 500.3104, as well as through its plan of operation.

MCCA further alleged that, to succeed on a claim for tortious interference, Mapson must assert an intentional performance of a per se wrongful act that is unjustified in law and serves the purpose of invading the contractual or business rights of another. However, Mapson did not demonstrate that MCCA acted intentionally and improperly because MCCA acted within its authority. Farmers was required to notify MCCA about Mapson’s claim and any development likely to materially affect MCCA. And, Farmers was permitted to seek preapproval for a claim and determine whether and how much should be paid for a claim. It then could seek reimbursement from MCCA. Because MCCA acted within the authority it was granted, MCCA asserted that Mapson failed to state a claim and it was entitled to summary disposition. And, because the underlying claim of tortious interference of a contract failed, MCCA further contended that Mapson’s claim of civil conspiracy could not be maintained.

Mapson opposed MCCA’s dispositive motion, alleging that MCCA’s position was contrary to the holding in United States Fidelity Ins & Guaranty Co (USFIG) v Mich Catastrophic Claims Ass’n (MCCA) (On Rehearing), 484 Mich 1; 795 NW2d 101 (2009). Specifically, Mapson claimed that the USFIG Court limited MCCA’s authority “to adjusting the ‘practices and procedures’ of the member insurers and d[id] not encompass adjustment to the payment amount agreed to between claimants and member insurers.” Id. at 6. Mapson further asserted that MCCA had no right to challenge the reasonableness of a claim. Rather, MCL 500.3157(7) did not allow an insurance company to reduce insurance payments by 45% when there was no charge by a provider for services. The value of services was controlled by a reasonableness standard. MCCA was not entitled to force member insurers into improper adjustment practices or to use threats of failure to reimburse the no-fault insurer to compel compliance with MCCA’s rate determinations. Thus, Mapson submitted that MCCA interfered with Farmers’ insurance payments, causing the reduced benefit amount. Because MCCA’s actions were improper, Mapson satisfied the elements of tortious interference with a contract and properly pleaded a conspiracy claim. The trial court denied MCCA’s motion for summary disposition by simply stating that Mapson had stated a claim. From this decision, MCCA appeals by leave granted.

In Docket No. 362756, Bouchard filed a complaint against Farmers and MCCA arising from the payment of no-fault benefits. Specifically, Bouchard alleged that he was rendered a paraplegic with a traumatic brain injury and posttraumatic diabetes on December 4, 1999, when the motorcycle he was riding on was struck by a truck that ran a stop sign. Because of the residual effects of his injuries, Bouchard claimed to continue to require home-based, skilled nursing care. After multiple disputes over reasonable fees, Farmers paid a daily rate of $672 (or $28 per hour) from April 1, 2009 through July 1, 2021. However, when Farmers subsequently sought

-3- preapproval of a rate of $28 an hour, MCCA rejected the rate without negotiation, stating that $16.03 was the approved rate. Consequently, against Farmers, Bouchard alleged violations of the no-fault act and breach of contract.

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James Derrick Mapson v. Farmers Insurance Exchange, Counsel Stack Legal Research, https://law.counselstack.com/opinion/james-derrick-mapson-v-farmers-insurance-exchange-michctapp-2023.