Gary Whited sued Defendant Motorists Mutual Insurance, Co. ("Motorists"), for failure to pay benefits allegedly owed. Motorists counterclaimed against Mr. Whited, his sister, Patricia Green, Ms. Green's daughter, Christina Marvaso, and Luv-n-Care, LLC, a Michigan corporation, alleging overpayment, unjust enrichment, fraud and misrepresentation.
Before the Court are Motorists' Amended Renewed Motion to Dismiss, Motion for Summary Judgment and Motion for Declaratory Relief against Mr. Whited, Ms. Green and Luv-n-Care (Dkt. #95), and Motorists' Motion for Summary Judgment as to Christina Marvaso (Dkt. #93). Both motions are fully briefed. The Court heard arguments on August 20, 2010.
For reasons that follow, Motorists' motions are GRANTED IN PART and DENIED IN PART.
Around September 10, 1982, Gary Whited was involved in a car accident which left him a C5-6 incomplete quadriplegic. At the time, Plaintiff was insured under a policy issued by Motorists Mutual Insurance, Co., in accordance with Michigan's No-Fault Automobile Insurance Act ("the No-Fault Act"), Mich. Comp. Laws ("M.C.L.") § 500.3101, et seq.
In July 1983, Mr. Whited was released from the hospital into the care of his sister, Patricia Green. Ms. Green became Mr. Whited's attendant caregiver, and was compensated by Motorists for her services. For 20 years, she took care of her brother by herself, 24 hours per day, 365 days per year.
After 20 years, Mr. Whited's condition worsened, and Ms. Green could no longer take care of him by herself. In June 2003, Mr. Whited received a second, full-time, attendant caregiver, also paid for by Motorists.
In June 2007, Mr. Whited's condition deteriorated significantly; he became dependent on a ventilator for breathing, and he required a feeding tube. Ms. Green retained a home health agency, Health Partners, to provide attendant care, but she quickly became displeased with its services.
In August 2007, Ms. Green created a home health care agency named Luv-n-Care, LLC, solely dedicated to taking care of Mr. Whited. Luv-n-Care was owned in equal parts by Ms. Green, Mr. Whited, and Ms. Green's daughter, Patricia Marvaso. Ms. Green and Ms. Marvaso were the company's President and Secretary, respectively. On October 11, 2007, Luv-n-Care took over all attendant care services for Mr. Whited.
Until 2008, Mr. Whited and Ms. Green spent part of the year at Ms. Green's house in Monroe County, Michigan, and the rest in Florida. However, in December 2008, Mr. Whited was moved to Florida permanently. Ms. Green went with him, but retained her house in Michigan.
In July 2009, Mr. Whited's condition took another turn for the worse. Over the following months, he was hospitalized several times. Some of these stays were only a few days long; others lasted months. Mr. Whited died on April 9, 2010.
On November 20, 2007, Plaintiff sued Motorists in Wayne County Circuit Court to recover attendant-care payments allegedly owed under the No-Fault Act. (Dkt. #1.) Motorists removed to this Court in February 2008, and in June, counterclaimed for overpayment and unjust enrichment. (Dkt. #7.) Motorists amended its counterclaim on February 26, 2009, adding third-party claims against Ms. Green, Ms. Marvaso, and Luv-n-Care. (Doc. # 50.) Motorists alleged unjust enrichment against Luv-n-Care, and unjust enrichment, fraud and misrepresentation against Mss. Green and Marvaso.
In June 2003, the start of the disputed period, Motorists paid Ms. Green $21.95 per hour as a High Tech Aide ("HTA"); the second caregiver was paid $12 per hour as a Home Health Aide ("HHA"). Motorists paid for attendant care every other week, based on invoices submitted by Ms. Green. Theoretically, the total cost should have been $12,222 every other week, or $293,328 over a year. The actual amounts paid by Motorists tended to fluctuate above and below the $293,328 figure, but stayed within a range of 25,000.
From June to October 2007, Health Partners assumed responsibility for Mr. Whited's care. Health Partners hired Patricia Green and several other caregivers who were used to working with Mr. Whited. Ms. Green and the other caregivers did the same work as before, but Motorists paid Health Partners significantly higher rates for its services. For instance, Health Partners billed Motorists $26.75 per hour for Ms. Green's work as an HTA, and $25.75 for the other caregivers as HHAs.
In October 2007, Luv-n-Care replaced Health Partners, and immediately began charging roughly double the rates Ms. Green billed Motorists before Health Partners was brought in. When Motorists refused to pay the increased rates, Plaintiff sued for unpaid and underpaid attendant care benefits and invoices. On advice from its attorney, throughout this litigation Motorists continued to pay $12,222 on a bi-monthly basis, the same amount Motorists paid before Health Partners arrived. Luv-n-Care accepted the payments, but continued to send invoices to Motorists at the increased rates.
Motorists claims it paid over $7,713,397.32 since Mr. Whited's accident for his care. Of this total, Ms. Green received $3,066,152.00; another $738,112 was paid to Luv-n-Care and individual caregivers. Presumably, the rest was spent on actual treatment for Mr. Whited.
Motorists claims that, from June 2003 to April 2010, based on representations by Patricia Green, Christina Marvaso and Luv-n-Care, it paid over one million dollars for attendant-care services that were either not provided, or unlawfully provided, to Mr. Whited. In general, Motorists contends that Mr. Whited did not require constant care by two people (or 48 hours of attendant care per day), but that one full-time caregiver with additional assistance equivalent to four hours (or 28 hours per day) would have sufficed. Specifically, Motorists seeks to recover: (1) $19,459.48 for attendant care when Mr. Whited was hospitalized in intensive care; (2) $572,631.60 for services during the night; (3) $52,534.97 for services allegedly provided by Ms. Marvaso; (4) $7,137.25 for services allegedly provided by Elizabeth Rehahn; and (5) $381,754.40 for services that were not provided, or that were outside of the caregivers' scope of employment.
Discovery was an acrimonious process, with disputes at almost every step. The parties traded subpoenas, motions to quash, motions to compel and requests for protective orders. (Dkt. ## 11-12, 17-18, 20-21, 25, 30, 37, 41-42). Between October 2008 and February 2009, the Court issued four orders for Plaintiff to produce discoverable materials. (Dkt. ##15, 24, 35, 49.) These orders covered a variety of documents pertaining to Luv-n-Care itself (incorporation papers, payroll and employee-benefits records, expense ledgers), and to its caregivers (personnel files including job descriptions, applications, resumes and certifications). The Court also ordered production of tax and bank records for Mr. Whited and Ms. Green, and Ms. Marvaso's bank records.
One of the most contentious issues was the production of Luv-n-Care's time and attendance sheets ("timesheets") and daily progress notes, sometimes referred to as patient progress notes ("DPNs"). Every two weeks, caregivers were given individual timesheets to keep track of their hours. For each shift, they wrote down the date, their arrival and departure times, and the number of hours worked. These forms were filled in by hand and signed by the individual caregiver. Timesheets were collected by Ms. Green and used to determine caregiver compensation.
For each individual shift, caregivers were also required to fill out a DPN. DPNs were also handwritten and signed by the individual caregiver. Their purpose was to summarize Mr. Whited's condition and keep a record of the care he received.DPNs were kept in a three-ringed binder available to all caregivers, so the later shifts could review them and see what services or activities the earlier shifts performed.
Whether Mr. Whited required or received round-the-clock attention from two caregivers is in dispute. However, the parties agree that, if two caregivers were present at the same time, they each filled out a separate DPN. Motorists also states that it was "standard operating procedure" for caregivers to identify each other in their respective DPNs. It is unclear if, by "standard operating procedure," Motorists means that this is a regulatory mandate, something certified nursing assistants ("CNAs") are trained to do, or if this practice was specific to Luv-n-Care. In any case, Plaintiff does not dispute that this was common practice among caregivers.
Following substantial allegations that some documents were falsified, the Court warned Plaintiff that failure to comply with discovery orders would result in the action's dismissal. The Court also ordered that Plaintiff's computers undergo a forensic analysis to determine if they were used to manufacture or alter evidence. Since these events form the basis of Motorists' motion to dismiss, the Court describes them in detail.
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