Following Supreme Court majority, Court of Appeals rejects common fund attorney fee
Reality Edwards was injured in a motor vehicle accident, incurring $17,000.00 in medical bills. Her parents hired George R. Hamo to pursue payment of the bills under the no fault PIP law. At the same time, Hurley Medical Center hired a firm called Advomas, Inc., to investigate and pursue no fault benefits. Ultimately, Hamo negotiated an extension of the statute of limitations with the insurer and Advomas filed suit on Hurley's behalf against the insurer, but did not serve the Complaint, relying on the extension. In the interim, Hamo had notified Hurley of his involvement and offered to represent Hurley's interests, as well. Hurley rejected this offer and continued to rely upon Advomas.
The insurer then paid the full amount of medical expenses owing and Hurley sued Hamo in Genesee County Circuit Court seeking a determination that he was not entitled to any part of Hurley's recovery. After a hearing, the Court ruled that Hamo was entitled to a partial fee under the common fund rule because he had expended "substantial effort" to secure payment of the medical bill. The Court of Appeals reversed this holding, concluding that under a recent decision by the Supreme Court, the common fund doctrine did not apply to an attorney's efforts to secure "voluntary" payment of no fault medical benefits on behalf of an injured person.The Republican majority of the Supreme Court had held that the injury victim owed the medical expense to the provider, regardless of coverage, and that the attorney was merely creating a fund, for the victim, with which to pay an outstanding bill. This was a surprising holding, given that the courts had previously held that in the context of a no fault medical claim, the victim might not even have standing to participate in a dispute between the provider and insurer over the "reasonableness and necessity" of the services rendered.