                           STATE OF MICHIGAN

                            COURT OF APPEALS



LIBERTY MUTUAL FIRE INSURANCE                                        UNPUBLISHED
COMPANY,                                                             July 25, 2017

               Plaintiff/Cross-Defendant-Appellee,

v                                                                    No. 332597
                                                                     Oakland Circuit Court
MICHAEL T. ROSS,                                                     LC No. 2015-146559-CZ

               Defendant/Cross-Plaintiff-
               Appellant.


Before: GLEICHER, P.J., and M. J. KELLY and SHAPIRO, JJ.

PER CURIAM.

        In this case involving first-party benefits under the no-fault act, MCL 500.3101 et seq.,
plaintiff/cross-defendant, Liberty Mutual Fire Insurance Company, moved for summary
disposition under MCR 2.116(C)(8), (C)(9), and (C)(10), asserting that defendant/cross-plaintiff,
Michael Ross, had failed to state a valid defense to its claims against him, that Ross had failed to
state a claim upon which relief could be granted in his counterclaim, and that, in any event,
summary disposition was appropriate as to both claims because there was no genuine issue as to
any material fact and it was entitled to judgment as a matter of law. The trial court agreed and
granted summary disposition on all claims in Liberty Mutual’s favor. Ross appeals by right. We
affirm the trial court’s grant of summary disposition on Liberty Mutual’s claim, but reverse the
trial court’s grant of summary disposition on Ross’s counterclaim and remand for further
proceedings consistent with this opinion.

                                        I. BASIC FACTS

        On January 30, 2010, Ross sustained a traumatic brain injury as a result of a motor
vehicle accident. Liberty Mutual, his no-fault insurer, paid personal protection injury (PIP)
benefits to him, including wage loss benefits. At some point, Liberty Mutual encouraged Ross to
apply for Social Security Disability, and he did so. Ross acknowledges that he was approved for
Social Security Disability and received disability benefits as a result. The record reflects that the
Social Security Administration found Ross disabled as of January 30, 2010 and that, as a result
of his disability, he was entitled to benefits starting in July 2010.




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         When Liberty Mutual learned that Ross was receiving disability benefits, it sent him a
letter stating that under MCL 500.3109(1), he was required to reimburse it $35,501.60. Ross did
not reimburse Liberty Mutual, so it filed suit against him, seeking reimbursement of the
$35,501.60 it had paid Ross for wage loss benefits.

        In response, Ross filed an answer, a number of affirmative defenses, and a counterclaim.
Relevant to the arguments raised on appeal, Ross asserted as an affirmative defense that Liberty
Mutual’s “cause of action is based upon illegal conduct,” so “it is barred by the wrongful
conduct rule.” Further, in his counterclaim, he alleged Liberty Mutual was liable for breach of
contract and unjust enrichment premised on Liberty Mutual’s failure to pay “reasonable and
necessary expenses related to” rehabilitation. Ross also asserted that Liberty Mutual had refused
to pay the claim for rehabilitation expenses on a timely basis, so he was entitled to 12% interests
on the claim as well as reasonable attorney fees.

         On October 5, 2015, Liberty Mutual filed a motion for summary disposition under MCR
2.116(C)(8), (C)(9), and (C)(10). Liberty Mutual argued that it was entitled to summary
disposition under MCR 2.116(C)(9) because Ross had failed to raise any substantive defense to
its pleadings and because Ross admitted he had a no-fault policy with Liberty Mutual, admitted
receiving benefits from Liberty Mutual, and admitted receiving an award from the Social
Security Administration. Liberty Mutual also asserted that it was entitled to summary
disposition under MCR 2.116(C)(10) because Ross admitted to everything that is necessary for
Liberty Mutual to obtain a judgment in its favor on its complaint. Finally, Liberty Mutual argued
that it was entitled to summary disposition under MCR 2.116(C)(8) because Ross’s counterclaim
was without merit given that Liberty Mutual had paid and was still paying all compensable and
related bills reasonably and necessarily incurred as a result of the accident. Thereafter, the trial
court granted summary disposition in Liberty Mutual’s favor.

                                       II. JURISDICTION

                                 A. STANDARD OF REVIEW

      Liberty Mutual argues that we lack jurisdiction over this matter because the appeal is not
from a final order and was not timely filed. We review de novo questions of jurisdiction.
Barnard Mfg Co, Inc v Gates Performance Engineering, Inc, 285 Mich App 362, 367-368; 775
NW2d 618 (2009).

                                         B. ANALYSIS

         Generally, we “have jurisdiction to hear appeals as of right that are filed within 21 days
of a final order or judgment.” Barnard Mfg Co, Inc, 285 Mich App at 368; MCR 7.204(A)(1)(a).
However, if a party files a motion for reconsideration “within 21 days of the final order or
judgment, the appeal may be filed within 21 days of the order deciding that motion.” Barnard
Mfg Co, Inc, 285 Mich App at 368, quoting MCR 7.204(A)(1)(b). Here, the trial court issued an
order granting summary disposition in Liberty Mutual’s favor on December 18, 2015, and Ross
filed a timely motion for reconsideration of that order. On January 8, 2016, while the motion for
reconsideration was pending, the trial court entered a judgment in favor of Liberty Mutual in the
amount of $35,501.60. Thereafter, on April 4, 2016, the trial court denied the motion for

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reconsideration. Ross filed a claim of appeal on April 22, 2016, i.e., within 21 days of the order
denying reconsideration. Accordingly, we conclude that Ross’s appeal was from a final order,
i.e., the opinion and order granting summary disposition on all claims, and it was timely given
that it was filed within 21 days of the trial court’s denial of Ross’s motion for reconsideration.

                                 III. SUMMARY DISPOSITION

                                  A. STANDARD OF REVIEW

        Ross argues that the trial court erred by granting summary disposition on all claims in
Liberty Mutual’s favor. This Court reviews de novo a trial court’s decision on a motion for
summary disposition. Barnard Mfg Co, Inc, 285 Mich App at 369. “A motion under MCR
2.116(C)(8) tests the legal sufficiency of the complaint” and all “well-pleaded factual allegations
are accepted as true and construed in a light most favorable to the nonmovant.” Maiden v
Rozwood, 461 Mich 109, 119; 597 NW2d 817 (1999). “When deciding a motion brought under
this section, a court considers only the pleadings.” Id. at 119-120. Similarly, “[a] motion under
[MCR 2.116(C)(9)] is analogous to one brought pursuant to MCR 2.116(C)(8) in that both
motions are tested by the pleadings alone, with the court accepting all well-pleaded allegations as
true.” In re Smith Estate, 226 Mich App 285, 288; 574 NW2d 388 (1997). However, given that
the parties and the trial court both relied on documentary evidence, this Court will “proceed
under the standard of review applicable to a motion made under MCR 2.116(C)(10).” BC Tile &
Marble Co, Inc v Multi Building Co, Inc, 288 Mich App 577, 582; 794 NW2d 76 (2010). In
reviewing a (C)(10) motion, a court considers “affidavits, pleadings, depositions, admissions,
and other documentary evidence submitted by the parties in the light most favorable to the party
opposing the motion.” Greene v A P Prods, Ltd, 475 Mich 502, 507; 717 NW2d 855 (2006)
(citations and quotation marks omitted). The motion “tests the factual support for a claim and
should be granted if there is no genuine issue as to any material fact and the moving party is
entitled to judgment as a matter of law.” MEEMIC Ins Co v DTE Energy Co, 292 Mich App
278, 280; 807 NW2d 407 (2011).

                                B. LIBERTY MUTUAL’S CLAIM

      Ross first argues that the trial court erred in granting summary disposition on Liberty
Mutual’s $35,501.60 claim for reimbursement. We disagree.

        Under MCL 500.3109(1),1 Ross is required to reimburse Liberty Mutual for social
security disability benefits arising from the January 2010 accident that are duplicative of the PIP
benefits arising from the same accident and the same injury. However, Ross argues that Liberty
Mutual’s claim is barred by the wrongful-conduct rule. Generally, a plaintiff’s claim will be

1
    MCL 500.3109(1) provides:

                 Benefits provided or required to be provided under the laws of any state or
         the federal government shall be subtracted from the personal protection insurance
         benefits otherwise payable for the injury under this chapter.



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barred if it is based on the plaintiff’s “own illegal conduct.” Orzel v Scott Drug Co, 449 Mich
550, 558-560; 537 NW2d 208 (1995). Nevertheless, “[t]he mere fact that a plaintiff engaged in
illegal conduct . . . does not mean that his claim is automatically barred under the wrongful-
conduct rule.” Id. at 561. “To implicate the wrongful-conduct rule, the plaintiff’s conduct must
be prohibited or almost entirely prohibited under a penal or criminal statute.” Id.

        Ross claims that Liberty Mutual made him apply for social security disability benefits
even though Liberty Mutual believed he was capable of working. Ross produced documentary
evidence indicating that in order to qualify for social security disability benefits, an individual
must not be able to do the work he or she did before and must not be able to adjust to other work
because of his or her medical conditions. He also introduced excerpts of Liberty Mutual’s claim
log that showed that at the same time that Liberty Mutual was assisting Ross in his job search it
was insisting that he also apply for social security disability. Finally, Ross submitted an affidavit
stating that Liberty Mutual required him to apply for social security disability benefits even
though he felt that he was still employable.

       Under 42 USC 1383a, provides that “whoever”

              (1) knowingly and willfully makes or causes to be made any false
       statement or representation of a material fact in any application for any benefit
       under this subchapter,

               (2) at any time knowingly and willfully makes or causes to be made any
       false statement or representation of a material fact for use in determining rights to
       any such benefit,

                (3) having knowledge of the occurrence of any event affecting (A) his
       initial or continued right to any such benefit, or (B) the initial or continued right to
       any such benefit of any other individual in whose behalf he has applied for or is
       receiving such benefit, conceals or fails to disclose such event with an intent
       fraudulently to secure such benefit either in a greater amount or quantity than is
       due or when no such benefit is authorized, [or]

                                               * * *

              (5) conspires to commit any offense described in any of paragraphs (1)
       through (3),

       shall be fined under Title 18, imprisoned not more than 5 years, or both, . . . .

Ross appears to contend that because he felt he was able to work and because Liberty Mutual
also believed he was able to work (as demonstrated by its efforts to find a job for him), Liberty
Mutual knowingly and willfully caused him to lie on his social security disability application and
therefore violate 42 USC 1383a. Ross, however, has submitted no evidence showing that
Liberty Mutual required him to lie on his application, nor has he directed this Court’s attention to
any false or misleading statements in his actual application. Although he asserts that discovery is
ongoing, if there were false or misleading statements in the application, or if Liberty Mutual


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required him to make false or misleading statements in his application, then—in an effort to
avoid summary disposition—Ross could have averred such facts in a supporting affidavit.

        Therefore, even viewing the record facts in the light most favorable to Ross, i.e., that
Liberty Mutual required him to apply for Social Security Disability benefits even when he
thought he was employable, given that there is no actual evidence of fraud in the social security
disability application, we conclude that the wrongful-conduct rule does not bar Liberty Mutual’s
claim. See Orzel, 449 Mich 561.

       In sum, the trial court did not err in granting Liberty Mutual summary disposition on its
claims against Ross.

                                 C. ROSS’S COUNTERCLAIM

         Ross also argues that the trial court erred in dismissing his counterclaim based on Liberty
Mutual’s alleged failure to pay reasonable and necessary rehabilitation costs. Under MCL
500.3107(1)(a), PIP benefits are payable for “[a]llowable expenses consisting of all reasonable
charges incurred for reasonably necessary products, services and accommodations for an injured
person’s care, recovery, or rehabilitation.” In Douglas v Allstate Ins Co, 492 Mich 241, 277-278;
821 NW2d 472 (2012), our Supreme Court explained that “MCL 500.3107(1)(a) imposes four
requirements that an insured must prove before recovering PIP benefits for allowable expenses:
(1) the expense must be for an injured person’s care, recovery, or rehabilitation, (2) the expense
must be reasonably necessary, (3) the expense must be incurred, and (4) the charge must be
reasonable.” It is well settled that rehabilitation expenses include vocational rehabilitation. See
Bailey v Detroit Auto Inter-Ins Exch, 143 Mich App 223, 227-228; 371 NW2d 917 (1985)
(holding that “ ‘rehabilitation’ should be construed to include vocational rehabilitation as an
allowable expense under § 3107(a) of the Michigan no-fault act”); Tennant v State Farm Mut
Auto Ins Co, 143 Mich App 419, 428; 372 NW2d 582 (1985) (noting that ‘rehabilitation’
includes vocational rehabilitation); Kondratek v Auto Club Ins Ass’n, 163 Mich App 634, 637;
414 NW2d 903 (1987) (same); Maxwell v Citizens Ins Co of America, 245 Mich App 477, 482-
483; 628 NW2d 95 (2001) (same). In Maxwell, this Court stated that “the primary and generally
understood meaning of ‘rehabilitate’ is ‘1. To restore or bring to a condition of good health,
ability to work, or productive activity.’ ” Id. at 486, quoting Random House Webster’s College
Dictionary (1997), p. 1096. Similarly, in Griffith v State Farm Mut Auto Ins Co, 472 Mich 521,
534-535; 697 NW2d 895 (2005), our Supreme Court stated that as used in § 3107(1)(a):

       “Recovery” is defined as “restoration or return to any former and better condition,
       esp. to health from sickness, injury, addiction, etc.” Random House Webster’s
       College Dictionary (2001). “Rehabilitate” is defined as “to restore or bring to a
       condition of good health, ability to work, or productive activity.” Id. Both terms
       refer to restoring an injured person to the condition he was in before sustaining his
       injuries. Consequently, expenses for “recovery” or “rehabilitation” are costs
       expended in order to bring an insured to a condition of health or ability sufficient
       to resume his preinjury life. Because “recovery” and “rehabilitation” are
       necessary only when an insured has been injured, both terms refer to products,
       services, and accommodations that are necessary because of injuries sustained
       through the use of a motor vehicle.

                                                -5-
Therefore, vocational rehabilitation should restore an insured to the condition he was in before
sustaining his injuries. “Reasonably necessary” expenses are assessed using an objective
standard that looks to actual necessity, not just an individual’s subjective belief “that a service is
necessary for an injured person’s care, recovery, or rehabilitation.” Krohn v Home–Owners Ins
Co, 490 Mich 145, 159-160; 802 NW2d 281 (2011). Generally, it is a question of fact whether
the services or products provided were reasonably necessary. Id. at 157-158.

        As an initial matter, the trial court determined that Ross had quit his job as an emergency
room physician two years before the motor vehicle accident and was only working as an
emergency room independent contractor. The court concluded that as a result Ross wanted
Liberty Mutual “to go beyond restoring him to a position he was in prior to the accident” because
he wanted Liberty Mutual “to pay all related costs to completely retrain him in a career that he
abandoned more than two years prior to the accident.” The record evidence, however, viewed in
the light most favorable to Ross, plainly shows that he was employed as an emergency room
physician on the date of the accident, albeit on an independent contractor basis.2 There was also
record evidence allowing for an inference that Ross maintained both his continuing education
units (CEUs) and his medical certifications.3 Therefore, the trial court erred in granting
summary disposition on Ross’s counterclaim on this basis.

        Next, Liberty Mutual argues that we should affirm the trial court’s grant of summary
disposition because the expenses claimed are not for reasonably necessary vocational
rehabilitation services, products, or accommodations given that they are merely the costs that any
physician would have to pay in order to maintain his or her professional license. Ross, however,
asserts that the costs were for reasonably necessary services, products, or accommodations
because the accident prevented him from practicing as an emergency room physician and would
continue to do so until he was up-to-date on his CEUs and certifications, and until he had
completed a supervised mentorship program. He supported his claim with a large quantity of
documentary evidence, including (1) a letter from the nurse case manager, who explicitly stated
that the re-credentialing materials were “part of the cognitive re-training therapy” and that a
specialized indemnity insurance policy for the supervised mentorship was party of the vocational
rehabilitation process because “but for the traumatic brain injury” Ross “would not be required to
carry such a policy” (2) a report from Ross’s speech pathologist that stated that “the CEU work
has been utilized for therapy purposes in addition to licensing requirements,” and (3)



2
 The nursing plan stated that Ross’s work history included “Medical Doctor: Emergency, board
certified. Continuous employment and practice in hospital and clinic based Emergency
Medicine since 1982 to date of MVA.”
3
  The vocational rehabilitation report/plan stated that Ross required continuing education units
dating back to 2010, which viewed in the light most favorable to Ross indicates that before the
2010 accident he was current with his continuing education units. The report/plan further stated
that Ross was approximately four years behind in his certification coursework, which again
suggests that he was current with his certification coursework before the accident given that the
report was authored in 2014 and the accident occurred in 2010.



                                                 -6-
prescriptions for various CEUs, mentorships, re-certifications, and memberships in medical
associations from Dr. Steven Hinderer, his treating physician. Accordingly, on this record, we
are not prepared to say that all of the expenses were not vocational rehabilitation expenses
reasonable and necessary to return him to his preinjury condition. Rather, this is a question
better suited to a jury. See Nelson v Detroit Inter-Ins Exchange, 137 Mich App 226, 231; 359
NW2d 536 (1984). Accordingly, on this record summary disposition is not appropriate on the
ground that the expenses were not for reasonably necessary vocational rehabilitation services,
products, or accommodations.

        In conclusion, viewed in the light most favorable to Ross, the record shows he was
working as an emergency room physician on the date of the accident and that there is a jury
question with regard to whether the claimed expenses were reasonably necessary. Accordingly,
on the record before us, the trial court erred in granting Liberty Mutual summary disposition on
Ross’s counterclaim. 4

         We affirm the trial court’s grant of summary disposition on Liberty Mutual’s claim
against Ross, but we reverse the trial court’s grant of summary disposition on Ross’s
counterclaim and remand for further proceedings. On remand, the trial court should address
Liberty Mutual’s claim that the claimed expenses were not incurred within the meaning of MCL
500.3107(1)(a). We do not retain jurisdiction. No taxable costs, neither party having prevailed
in full. MCR 7.219(A).

                                                            /s/ Elizabeth L. Gleicher
                                                            /s/ Michael J. Kelly
                                                            /s/ Douglas B. Shapiro




4
  Liberty Mutual also asserts that we should affirm the trial court because the expenses Ross
claims Liberty Mutual must pay were not actually incurred. In order to qualify as “allowable
expenses” under MCL 500.31074(1)(a), the expenses must also have been incurred. The
requirement that expenses be incurred means that an insurer is only required to pay a claimant
“upon submission of evidence that services were actually rendered and of the actual cost
expended.” Douglas, 492 Mich at 266–267. However, we decline to address this argument
given that the trial court did not address its merits. See Miller v Inglis, 223 Mich App 159, 168;
567 NW2d 253 (1997).



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