Background
On January 21, 2021, Kerry Zielinski was rear-ended while stopped at a red light by Charles Watkins, whose vehicle struck her car with enough force to push it into the car ahead. Zielinski was taken by ambulance to the emergency room with neck injuries. Her situation was complicated by a life-threatening bacterial infection she contracted shortly after the accident and by an extensive pre-existing medical history that included 19 prior spinal surgeries. Dr. Ayman Tarabishy, her treating pain-management physician, described her as “a lot more fragile and susceptible” than a patient with a healthy spine.
Dr. Christopher Elia began treating Zielinski in December 2021, after her recovery from the bacterial infection, and opined that her then-current neck pain and cervical myelopathy were caused by the accident. He performed cervical surgery in February 2022 and a corrective lumbar surgery in October 2023, testifying both were necessitated by the January 2021 crash. Zielinski sued Auto-Owners for unpaid personal protection insurance (PIP) benefits in January 2022. Auto-Owners received the neck-surgery bill in April 2022 and—in letters to Medicare in July and September 2022—acknowledged that Zielinski had injured her neck in the accident. Auto-Owners nonetheless arranged for a records-only “independent medical examination” by Dr. Steven Kalkanis in October 2022; he concluded there was no evidence of any accident-related spinal injury, and Auto-Owners formally denied both surgical bills in November 2023.
After a two-day jury trial, the jury awarded benefits for the February 2022 neck surgery (Michigan Head and Spine Institute bill) but rejected coverage for the October 2023 back surgery (Spine and Brain Surgery Specialists bill). The trial court then awarded Zielinski $11,797.65 in overdue benefits, penalty and pre-judgment interest, taxable costs, and $288,090 in attorney fees under MCL 500.3148(1), for a total judgment of $315,605.35. Auto-Owners appealed, contending it was entitled to a new trial based on improper closing-argument references to Watkins’s intoxication, that attorney fees were unwarranted, and that the $750 hourly rate approved for lead counsel was unreasonable.
The Court’s Holding
The Court of Appeals affirmed on all issues. On the new-trial question, the court agreed that plaintiff’s counsel erred by twice telling the jury in closing that Zielinski was “rear-ended at 45 miles an hour by a drunk driver”—Watkins’s possible intoxication was irrelevant to any of the three PIP issues before the jury and therefore inadmissible under MRE 402. But the error was unpreserved: Auto-Owners made no timely objection and requested no curative instruction. Applying the Reetz framework for unpreserved attorney-misconduct claims, the court found the error harmless. The jury’s split verdict—awarding one surgical bill while rejecting the other—demonstrated that jurors dispassionately weighed the evidence rather than acting out of passion or prejudice. The trial court’s standard instructions directing the jury to resist bias, treat the corporate defendant fairly, and decide the identified PIP issues on the evidence were sufficient to cure any prejudicial effect.
On attorney fees, the court held that Auto-Owners failed to rebut the statutory presumption of unreasonableness. The critical fact was that Auto-Owners had itself acknowledged the accident-neck injury nexus in its July 2022 Medicare correspondence—months before the Kalkanis records review was even commissioned. Because the relevant inquiry under Brown v Home-Owners Ins Co is the circumstances existing at the time payment was due, the October 2022 records review could not retroactively manufacture a “legitimate factual uncertainty” that Auto-Owners’ own communications showed did not exist by July 2022. The trial court therefore did not abuse its discretion in concluding that Auto-Owners unreasonably refused to pay and in awarding attorney fees under MCL 500.3148(1).
The court also upheld the $750 hourly rate for lead counsel. Applying the Pirgu three-step framework, the trial court had surveyed State Bar Economics of Law Practice data, considered Macomb County locality rates, and walked through all eight Pirgu factors on the record. Given the extraordinary medical complexity—116 total surgeries, 19 spinal surgeries pre-accident, dual treating physicians, and a case-evaluation award of only $10,000 against a jury verdict exceeding $72,000—the appellate court found no abuse of discretion in the rate selected.
Key Takeaways
- An insurer’s own written acknowledgment that a claimant’s injuries are accident-related—even if contained in a routine Medicare coordination letter—can defeat a later “legitimate factual uncertainty” defense to attorney fees under MCL 500.3148(1); a retroactively-obtained IME does not cure pre-existing admissions.
- Unpreserved claims of attorney misconduct in closing argument face a high bar: a split verdict showing the jury engaged with the evidence dispassionately, combined with standard anti-bias instructions, is sufficient to render isolated improper comments harmless under Reetz.
- The Pirgu attorney-fee framework requires trial courts to discuss each factor on the record; a thorough, factor-specific analysis—including judicial observations of counsel’s performance over time—will survive appellate scrutiny even when the resulting rate significantly exceeds local median figures.
- Michigan’s no-fault “eggshell plaintiff” principle applies fully: insurers must take claimants as they find them, and a lengthy pre-accident surgical history does not, by itself, justify denial of benefits for new accident-related treatment.
Why It Matters
This decision reinforces that Michigan no-fault insurers cannot use belated paper reviews to paper over prior admissions. When an adjuster’s own file reflects—even indirectly, as in Medicare coordination letters—that an injury is causally connected to a covered accident, that concession sets the clock running on the 30-day payment deadline under MCL 500.3142(2). Commissioning a records review only after the deadline has lapsed does not retroactively render the refusal reasonable, and the resulting exposure to six-figure attorney fees can dwarf the underlying benefit at issue.
The harmless-error analysis on the drunk-driver comments also carries a practical lesson for defense counsel: the failure to object contemporaneously to improper closing remarks—and to request curative instructions—forfeits the strongest avenue for relief on appeal. Courts will apply the Reetz plain-error-like inquiry, and a carefully structured verdict that partially favors the defense provides powerful evidence that the jury was not inflamed by the improper comments.