COA 374546 JOHNTHAN DEMPSTER V STATE FARM MUTUAL AUTOMOBILE INSURANCE CO Opinion - Per Curiam - Unpublished 8/20/2026

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
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S T A T E O F M I C H I G A N
C O U R T O F A P P E A L S
JOHNTHAN DEMPSTER,
Plaintiff-Appellee,
UNPUBLISHED
August 20, 2026
2:16 PM
v No. 374546; 375033
Wayne Circuit Court
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY,
LC No. 23-001880-NI
Defendant-Appellant.
Before: CAMERON, P.J., and MALDONADO and WALLACE, JJ.
PER CURIAM.
In this no-fault action brought by plaintiff, Johnthan Dempster, for recovery of personal
protection insurance (PIP) benefits after an automobile accident, defendant, State Farm Mutual
Automobile Insurance Company, appeals as of right the trial court order awarding plaintiff
attorneys fees and the final judgment.1 After a jury found that work loss benefits stemming from
plaintiff’s injuries were owing and overdue to plaintiff, the trial court awarded plaintiff $60,291.71
in attorney fees under MCL 500.3148. On appeal, defendant argues that the trial court erred by
awarding plaintiff attorney fees because defendant’s refusal to pay work loss benefits was
reasonable and based on a bona fide factual dispute. We affirm.
I. BACKGROUND
In September 2021, plaintiff was driving westbound on Charlevoix Street in Detroit when
another vehicle failed to stop at a stop sign and struck plaintiff’s vehicle on the passenger side.
The next day, plaintiff went to urgent care suffering from pain in his wrist and lower back. It was
recommended that plaintiff go to the emergency room for further treatment. Plaintiff’s CT scan
from Beaumont Hospital showed that he had three herniated discs. Plaintiff had not received any
1 Although these appeals were consolidated, there is only one issue on appeal. Dempster v State
Farm Mut Auto Ins Co, unpublished order of the Court of Appeals, entered April 9, 2025 (Docket
Nos. 374546 and 375033).

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medical treatment related to his back before the subject accident and later testified that he had
never been told that he had herniated discs in his back. At the time of the accident, plaintiff’s
vehicle was insured by defendant.
Plaintiff began treatment with a neurosurgeon for his injuries. Although plaintiff and his
doctor discussed the possibility of surgery, plaintiff elected to try a more conservative approach of
pain management. Plaintiff’s doctor referred him to Dr. John Marshall, who specialized in
physical medicine and rehabilitation. The record contains extensive notes from plaintiff’s
appointments with Dr. Marshall, which reflect that plaintiff had chronic pain due to trauma from
the accident. After trying non-invasive methods of relieving pain for several months, Dr. Marshall
began treating plaintiff using epidural injections. Prior to the accident, plaintiff worked as a truck
driver. Due to his injuries and taking narcotics to treat his injuries, plaintiff was unable to return
to work.
Defendant initially determined that plaintiff’s visit to urgent care and subsequent treatment
was reasonable and necessary because of continuous back pain from the accident. However, after
investigation, defendant stopped further payment for medical bills and wage loss related to the
accident.
In April 2022, surveillance showed plaintiff “walking around quite a bit, driving to
different locations, performing activities, vacuuming out his car . . . , and walking without a limp.”
Defendant’s claims specialist testified that this was significant because at that time plaintiff was
claiming a need for eight hours of attendant care, including “transferring and position assistance
with hygiene, grooming, medication management, [and] meal prep.” Further, in July 2022,
Dr. Jayant Jagannathan, a neurosurgeon hired by defendant, performed a medical evaluation of
plaintiff. In light of his examination of plaintiff and review of the medical records, Dr. Jagannathan
opined that plaintiff was suffering from chronic pain because of degenerative problems in his
spine, and not acute injuries from the accident. Dr. Jagannathan did not find “a specific injury that
[he could] directly attribute to the accident,” and noted that the pars defect was likely something
that plaintiff was born with and often degenerative in nature. Notably, Dr. Jagannathan opined
that the scans from after plaintiff’s prior motorcycle accident were “almost identical” to the scans
after the subject accident. However, he acknowledged that he had not reviewed the film of the
scan, only the report. Defendant sent a letter dated August 10, 2022, informing plaintiff that
defendant would not be paying further benefits.
A second examination was performed by another expert retained by defendant,
Dr. Christopher Schoenherr, who specialized in physical medicine and rehabilitation, on
December 8, 2022. Based on his examination of plaintiff and review of plaintiff’s medical records,
Dr. Schoenherr concluded that plaintiff “had a myofascial injury secondary to a motor vehicle
accident and a whiplash type environment,” but concluded that “[t]he other findings appear to be
chronic degenerative in nature.” Dr. Schoenherr opined that plaintiff likely had some lumbar pain
after the accident, but his “current symptoms do not appear to be related to the motor vehicle
accident.” Further, he believed that plaintiff may “have needed some work restrictions for 2-4
weeks. After that time I would have expected he would have been approaching full duty with no
permanent impairment.”

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In February 2023, plaintiff initiated the present action alleging that defendant wrongfully
withheld benefits for allowable expenses. The case proceeded to a two-day trial in January 2025,
during which the jury heard testimony from plaintiff and a claims specialist from State Farm. The
jury also heard the recorded deposition testimonies of Dr. Marshall, Dr. Jagannathan, and Dr.
Schoenherr. At the conclusion of trial, the jury determined that plaintiff sustained an accidental
bodily injury arising out of the operation of a motor vehicle. The jury also found that plaintiff
sustained work loss as a result of his injuries and that he was entitled to $149,630 in work loss
benefits. Further, the jury found that payment for such loss was overdue, and that plaintiff was
entitled to penalty interest in the amount of $17,955.60. However, the jury found that plaintiff did
not incur allowable medical expenses arising out of the accidental bodily injury.
Plaintiff moved for attorney’s fees pursuant to MCL 500.3148, in addition to costs and
prejudgment interest. In response, defendant argued that plaintiff was not entitled to attorney fees
because there was a bona fide factual dispute regarding whether plaintiff was entitled to benefits.
Defendant argued that it reasonably relied on two reports by its expert witnesses and that it had no
duty to reconcile the conflicting opinions before stopping payments. After a hearing on the motion,
the trial court found that defendant had unreasonably refused to pay benefits, reasoning that this
finding was consistent with the jury’s determination to award penalty interest.
Defendant now appeals.
II. STANDARDS OF REVIEW
A request for attorney fees under MCL 500.3148(1) presents a mixed question of law and
fact. Ross v Auto Club Group, 481 Mich 1, 7; 748 NW2d 552 (2008). “What constitutes
reasonableness is a question of law, but whether the defendant’s denial of benefits is reasonable
under the particular facts of the case is a question of fact.” Id. A finding is clearly erroneous
when, although there is evidence to support it, the reviewing court on the entire record is left with
a definite and firm conviction that a mistake was made. Id. “With that said, we review a trial
court’s ultimate decision to award attorney fees for an abuse of discretion. An abuse of discretion
occurs when the trial court’s decision is outside the range of reasonable and principled outcomes.”
Johnson v USA Underwriters, 328 Mich App 223, 247; 936 NW2d 834, 846 (2019) (quotation
marks and citations omitted).
III. ANALYSIS
The no-fault act provides for a system of no-fault automobile insurance, which requires
Michigan drivers to purchase personal protection insurance (PIP). “The goal of the no-fault
insurance system was to provide victims of motor vehicle accidents assured, adequate, and prompt
reparation for certain economic losses.” Shavers v Attorney General, 402 Mich 554, 578-579; 267
NW2d 72 (1978), cert den sub nom Allstate Ins Co v Kelley, 442 US 934 (1979). To that end, the
act provides for penalty interest and attorney fees when an insurer unreasonably refuses to make
timely benefits payments. Thus, the act encourages insurers to “pay PIP benefits to claimants
promptly and sort out priority and reimbursement issues later” by imposing “the very real
possibility that steep penalties will be assessed against an insurer that drags its feet in paying PIP
benefits to claimants.” Esurance Prop & Cas Ins Co v Mich Assigned Claims Plan, 507 Mich 498,
519; 968 NW2d 482 (2021).

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With regard to attorney fees, MCL 500.3148(1) provides:
[A]n attorney is entitled to a reasonable fee for advising and representing a claimant
in an action for personal or property protection insurance benefits that are overdue.
The attorney’s fee is a charge against the insurer in addition to the benefits
recovered, if the court finds that the insurer unreasonably refused to pay the claim
or unreasonably delayed in making proper payment.
Thus, “MCL 500.3148(1) establishes two prerequisites for the award of attorney fees.” Moore v
Secura Ins, 482 Mich 507, 517; 759 NW2d 833 (2008). First, benefits must
be overdue under MCL 500.3142(2). Id. Second, the trial court must find that the insurer
“unreasonably refused to pay the claim or unreasonably delayed in making proper payment.” Id.,
quoting MCL 500.3148(1). To determine whether an insurer acted unreasonably, the trial court
must engage in a fact-specific inquiry. Id. at 522.
“If a claimant establishes the first prerequisite, a rebuttable presumption arises regarding
the second,” and “[t]he insurer then bears the burden of justifying the refusal or delay.” Brown v
Home-Owners Ins Co, 298 Mich App 678, 690-691; 828 NW2d 400 (2012). “The insurer can
meet this burden by showing that the refusal or delay is the product of a legitimate question of
statutory construction, constitutional law, or factual uncertainty.” Ross, 481 Mich at 11. A trial
court “must examine the circumstances as they existed at the time the insurer made the decision,
and decide whether that decision was reasonable at that time.” Brown, 298 Mich App at 691. “An
insurer’s initial refusal to pay benefits under Michigan’s no-fault insurance statutes can be deemed
reasonable even though it is later determined that the insurer was required to pay those benefits.”
Moore, 482 Mich at 525. “[T]he determinative factor . . . is not whether the insurer ultimately is
held responsible for benefits, but whether its initial refusal to pay was unreasonable.” Id. at 522
(cleaned up). Although MCL 500.3148(1) does not require an insurer “to reconcile conflicting
medical opinions,” our Supreme Court has made it clear that “an insurer acts at its own risk in
terminating benefits in the face of conflicting medical reports.” Id.
In the present case, as noted, the jury determined that plaintiff sustained work loss as a
result of his injuries and awarded him $149,630 in work loss benefits. Further, the jury concluded
that payments were overdue, and that plaintiff was entitled to penalty interest. Accordingly, a
rebuttable presumption arose that defendant’s refusal to pay benefits was unreasonable, entitling
plaintiff to attorney fees. See Brown, 298 Mich App at 690-691.
Defendant argues that the trial court erred in awarding attorney fees because this case
presents a “classic bona fide factual dispute” regarding whether plaintiff’s injuries arose from the
accident or were pre-existing injuries. Defendant argues that it reasonably discontinued benefits
nearly a year after the accident based upon the reports of its two expert witnesses, which suggested
plaintiff had recovered from any injuries he may have sustained in the accident and his current
symptoms were from a chronic degenerative condition that existed prior to the accident.
However, we must determine the reasonableness of defendant’s decision based on the
circumstances that existed in August 2022 when defendant stopped further payments. See Brown,
298 Mich App at 691. Defendant cannot support its decision with Dr. Schoenherr’s opinion, which
was obtained in December 2022, after payments were discontinued.

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As we cannot consider Dr. Schoenherr’s opinion, defendant can rely only on the report of
Dr. Jagannathan and the surveillance of plaintiff, but neither was sufficient to overcome the
presumption that defendant’s failure to pay was unreasonable. Although the surveillance video
itself was not presented to this Court, the summary of the surveillance, and the description by the
parties, suggests that it was inconsequential. The surveillance showed plaintiff doing small
everyday tasks such as leaving his home, getting into his vehicle, or vacuuming his truck for a few
minutes. As there was not a claim that plaintiff was entirely disabled and unable to walk, this
evidence proves very little. The surveillance tells us little about the pain plaintiff may have been
in when performing everyday tasks and did not suggest that plaintiff was able to return to work as
a truck driver.
This leaves the report of Dr. Jagannathan. Dr. Jagannathan acknowledged that he did not
have access to the actual images of plaintiff’s injuries; therefore, his opinion was based solely on
reports about plaintiff’s CT scans and subsequent MRIs. In addition to not viewing the actual
images, his conclusion that the scans from plaintiff’s motorcycle accident and the subject accident
were “almost identical” was based merely on his assumption that the term “disc bulging” as used
in the 2019 scan, was synonymous with the “disc herniation” present in the 2021 scans.2
It bears mention that from the start it appeared that Dr. Jagannathan was unobjectively
skeptical of the idea that the accident caused, or at the very least could have exacerbated, injuries
in plaintiff’s back. Dr. Jagannathan was dismissive of what he called plaintiff’s “subjective”
claims of pain, suggesting that plaintiff’s claims were not credible without some accompanying
objective injury. Also, as plaintiff notes on appeal, Dr. Jagannathan’s report incorrectly stated that
plaintiff did not seek medical treatment until “several days” after the accident, when plaintiff went
to urgent care the very next day. In sum, Dr. Jagannathan’s report contains at least one inaccuracy
and an assumption that should have given defendant more pause before stopping payment of
benefits to plaintiff.
Given Dr. Marshall’s opinion that the multiple disc herniations were likely caused by the
trauma of the accident and the inaccuracies and assumptions made in Dr. Jagannathan’s report, the
trial court did not err by finding that defendant could not reasonably rely on Dr. Jagannathan’s
report to stop payments under plaintiff’s insurance policy and avoid the penalty of attorney fees
under MCL 500.3148(1). Although defendant was not required to reconcile the conflicting
medical opinions of Dr. Marshall and Dr. Jagannathan, it took a risk by choosing to stop payments
based almost solely on the report of defendant’s retained expert. See Moore, 482 Mich at 522.
That risk was ill-advised in this case.
Defendant makes a great deal out of the jury’s finding that plaintiff was not entitled to
additional medical benefits, arguing that this shows that the decision to discontinue all benefits
was reasonable. However, work loss and medical expenses are distinct categories of PIP benefits.
See Johnson v Recca, 492 Mich 169, 176-177; 821 NW2d 520 (2012). Therefore, the decision not
2 The record reflects that the 2019 scan described “mild disc bulging L3-L4 through L5-S1,”
whereas the report on the 2021 scan after the subject accident described “mild posterior disc
herniation at L3-L4, L4-L5, with moderate posterior disc herniation L5-S1.”

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to award medical expense benefits did not preclude the jury’s decision to award work loss benefits
and does not preclude a finding that work loss benefits were overdue and unreasonably withheld.
The trial court did not clearly err by finding that defendant’s decision was unreasonable
under the circumstances and that plaintiff was entitled to attorney fees. See Ross, 481 Mich at 7.
Affirmed.
/s/ Thomas C. Cameron
/s/ Allie Greenleaf Maldonado
/s/ Randy J. Wallace

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