Michigan Court of Appeals; Docket # 330078; Unpublished
Judges Jansen, Beckering and Gadola; Unanimous, Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Payees of PIP Benefits: Service Providers as Payees [§3112]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion, the Court of Appeals held that pursuant to the Michigan Supreme Court’s decision in Covenant Medical Center, Inc v State Farm Mutual Automobile Ins Co, ___ Mich ___ (2017), intervening plaintiff-medical providers did not have a statutory cause of action against defendant-insurer for the recovery of no-fault benefits.
On July 8, 2013, plaintiff was a passenger in a vehicle that was struck by a hit-and-run driver. Plaintiff alleged that he sustained injuries. Plaintiff did not have no-fault insurance and the vehicle was not insured, and so he sought PIP benefits through the Michigan Assigned Claims Plan. The claim was assigned to defendant-State Farm, which denied benefits. Plaintiff and a fellow passenger then brought this action, seeking benefits from State Farm. Subsequently, the trial court permitted various medical providers to intervene, so they could seek payment for services they allegedly provided plaintiff after the accident. The trial court later dismissed plaintiff’s claim with prejudice after he failed to comply with discovery and failed to appear. State Farm then moved to dismiss the medical providers’ claims, arguing they were derivative of plaintiff’s claim and the dismissal of plaintiff’s claim required the dismissal of the medical providers’ claims. The trial court denied State Farm’s motion, finding the claims of the medical providers were not extinguished by the dismissal of plaintiff’s claim. While an appeal in the case was pending, the Michigan Supreme Court decided Covenant, holding that “healthcare providers do not possess a statutory cause of action against no-fault insurers for recovery of personal protection insurance benefits under the no-fault act.”
Based on the Covenant ruling, the Court of Appeals reversed the trial court’s decision and dismissed the medical providers’ claims.
In its analysis, the Court explained that, under MCL 500.3112, PIP benefits are payable “to or for the benefit of an injured person or, in case of his death, to or for the benefit of his dependents.” The Court noted that, before Covenant was issued, the Court of Appeals had consistently ruled that §3112 permitted a medical provider to maintain a direct cause of action against an insurer to recover PIP benefits.
However, the Supreme Court in Covenant held otherwise, the Court of Appeals noted. The Court said:
“Our Supreme Court reversed the decision of this Court in Covenant Med Center, specifically holding that ‘healthcare providers do not possess a statutory cause of action against no-fault insurers for recovery of personal protection insurance benefits under the no-fault act.’”
Regarding §3112 in particular, the Court of Appeals noted the Supreme Court said in Covenant:
“While this provision undoubtedly allows no-fault insurers to directly pay healthcare providers for the benefit of an injured person, its terms do not grant healthcare providers a statutory cause of action against insurers to recover the costs of providing products, services, and accommodations to an injured person. Rather, MCL 500.3112 permits a no-fault insurer to discharge its liability to an injured person by paying a healthcare provider directly, on the injured person’s behalf.”
Further, the Court of Appeals explained the Supreme Court in Covenant held that no other provision in the No-Fault Act grants a statutory cause of action to medical providers for the recovery of PIP benefits from an insurer. In this regard, the Covenant Court wrote:
“[N]o other provision of the no-fault act can reasonably be construed as bestowing on a healthcare provider a statutory right to directly sue no-fault insurers for recovery of no-fault benefits. We therefore hold that healthcare providers do not possess a statutory cause of action against no-fault insurers for recovery of personal protection insurance benefits under the no-fault act. The Court of Appeals caselaw concluding to the contrary is overruled to the extent that it is inconsistent with this holding. … In sum, a review of the plain language of the no-fault act reveals no support for plaintiff’s argument that a healthcare provider possesses a statutory cause of action against a no-fault insurer. This conclusion does not mean that a healthcare provider is without recourse; a provider that furnishes healthcare services to a person for injuries sustained in a motor vehicle accident may seek payment from the injured person for the provider’s reasonable charges. However, a provider simply has no statutory cause of action of its own to directly sue a no-fault insurer.”
Therefore, in accordance with the Covenant analysis, the Court of Appeals concluded the medical providers in the present case did not have a statutory cause of action against State Farm for the recovery of no-fault benefits, and that the trial court erred in denying State Farm’s motion for summary disposition.
