State Farm gets temporary reprieve on paying attorneys fees on PIP claim
Charles Carignan lost a leg in a car-motorcycle collision. His doctor initially ordered 24-hour attendant care for the man while he adapted to his new condition and a Occupational Therapis recommended housing modifications. State Farm thought it new better and declined to pay the attendant care or the entire home changes. Carignan sued and the jury found in his favor, awarding about $11,000.00 in PIP benefits. The jury expressly concluded that some of the payments were "overdue" (meaning that they weren't paid within 30 days of reasonable proof. The trial court then awarded over $100,000.00 in attorney's fees after confirming that the attorney's work justified that amount.
State Farm appealed and the Court of Appeals set the fee award aside temporarily. It noted that while the Court had reviewed the reasonableness of the attorneys' actions and fees, it had not mde a careful factual analysis of whether the insurer's delay was unreasonable. Since the PIP insurer owes fees only if it's actions were unreasonable, and not merely because it was mistaken, the case was sent back to the trial judge to review the basis for the insurer's delay.