Michigan Court of Appeals; Docket # 328005; Unpublished
Judges Fort Hood, Gleicher and O’Brien; Unanimous, per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Collateral Estoppel and Res Judicata
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion, the Court of Appeals held that res judicata did not bar plaintiff-medical provider’s action for PIP benefits because the injured party, who filed suit against defendant-insurer for uninsured motorist benefits, and plaintiff, the medical services provider that filed suit for PIP benefits, were not in privity with one another.
Charles Hendon Jr. was injured when his vehicle was allegedly rear-ended by a hit-and-run driver. Defendant-Sentinel Insurance was Hendon’s auto insurer. Plaintiff-VHS Huron Valley Sinai Hospital (doing business as DMC Surgery Hospital) provided services for Hendon’s care, recovery and rehabilitation for his injuries. The total cost of these services was $68,569. Hendon filed suit against Sentinel for uninsured motorist (UM) benefits and also alleged negligence on the part of the hit-and-run driver. Hendon did not include a claim for PIP benefits as part of his lawsuit. Thereafter, plaintiff brought suit against Sentinel, asserting a claim for PIP benefits for the medical services it provided Hendon. Sentinel and Hendon settled his UM lawsuit, which was dismissed by stipulation. Sentinel then filed a summary disposition motion on plaintiff’s suit for PIP benefits, arguing it was barred by res judicata. The trial court denied the motion and entered a stipulated order for dismissal and consent agreement, which closed the case, but allowed Sentinel to appeal the denial of summary disposition.
The Court of Appeals affirmed, rejecting Sentinel’s argument that res judicata barred plaintiff’s claim for PIP benefits.
In so ruling, the Court said the first element of res judicata was satisfied – that is, the earlier action was decided on the merits and resulted in a final decision. However, the second element was not met, the Court said, because both actions did not involve the same parties or their privies.
Citing TBCI, PC v State Farm Mutual Automobile Ins Co, 289 Mich. App. 39 (2010), the Court of Appeals explained:
“We agree that, under TBCI, Hendon, as the insured, and DMC, as his medical provider, had substantially identical interests in the recovery of no-fault PIP benefits from Sentinel, as the insurer, for the reasonable and necessary medical services rendered to Hendon for his accidental bodily injury arising out of the motor vehicle accident. … However, unlike in TBCI, Hendon did not assert a claim regarding the non-payment of PIP benefits under the no-fault act in his earlier action. Instead, Hendon asserted only a claim for uninsured motorist benefits, which ‘permits an injured motorist to obtain coverage from his or her own insurance company to the extent that a third-party claim would be permitted against the . . . at-fault driver.’ … DMC, as the medical provider of no-fault PIP benefits, had no interest or right in the uninsured motorist benefits sought during Hendon’s earlier litigation.”
As a result, the Court found that plaintiff and Hendon did not share a “substantial identity of interest” in the UM benefits, nor did plaintiff have a “mutual or successive relationship” in those benefits.
Further, the Court of Appeals said there was no evidence of a “working or functional relationship” between plaintiff and Hendon. According to the Court, Hendon, in his action for UM benefits, did not represent or protect plaintiff’s legal interest or right to recover PIP benefits for the medical services that were provided to him. Rather, Hendon’s lawsuit “involved only his right to uninsured motorist benefits,” the Court stated.
In light of the foregoing, the Court of Appeals concluded that Hendon and plaintiff were not in privity with one another for purposes of res judicata and that plaintiff’s claim for PIP benefits was not barred. Because the second element of res judicata disposed of Sentinel’s appeals, the Court said it was unnecessary to address the third and final element.
