Michigan Court of Appeals; Docket # 341289; Unpublished
Judges Sawyer, Markey, and Stephens; Per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Intervention by Service Providers and Third Party Payors in PIP Claims
SUMMARY:
In this unanimous unpublished per curiam decision, the Court of Appeals affirmed the trial court’s summary disposition order dismissing the plaintiff’s first-party action to recover no-fault PIP benefits on the basis of an assignment. While the case was pending in the trial court, the Supreme Court issued its decisions in Covenant Med. Ctr., Inc. v. State Farm Mut. Auto. Ins. Co., 500 Mich. 191 (2017) and WA Foote Mem. Hosp. v. Mich. Assigned Claims Plan, 321 Mich. App. 159 (2017)—the latter holding that Covenant applies retroactively. As a result, the plaintiff, Spectrum Health Hospitals (“Spectrum”), no longer possessed an independent cause of action against the defendant, Farm Bureau Mutual Insurance Company of Michigan (“Farm Bureau”). On appeal, the Court of Appeals declined to convene a conflict to overrule WA Foote, and held that the trial court did not abuse its discretion by denying Spectrum’s motion to amend its complaint to add various claims for benefits.
As for the Court of Appeals’ declination of Spectrum’s request that it convene a conflict to overrule WA Foote, the Court stated:
However, the Michigan Supreme Court has since affirmed this Court’s conclusion that Covenant “applies retroactively.” WA Foote Mem Hosp, 934 NW2d at 45. Given the Supreme Court’s decision, we note Spectrum’s request for a conflict panel to overrule this Court’s decision in WA Foote is essentially moot because we are now bound by the Supreme Court’s determination of Covenant’s retroactivity in WA Foote Mem Hosp, 934 NW2d at 44-45. See State Treasurer v Sprague, 284 Mich App 235, 242; 772 NW2d 452 (2009). Applying Covenant to this case, we conclude Farm Bureau was entitled to summary disposition under MCR 2.116(C)(8) because Spectrum lacks a statutory cause of action to pursue benefits for services provided to Conley in See Covenant, 500 Mich at 200; Bronson Healthcare Group, Inc v Mich Assigned Claims 2015. Plan, 323 Mich App 302, 307; 917 NW2d 682 (2018). Accordingly, the trial court did not err by granting summary disposition to Farm Bureau.
Spectrum first argued that the trial court abused its discretion by not allowing it to amend its complaint to include an assignment theory based on an assignment executed by its patient, Farm Bureau’s insured, after Spectrum filed the current action. The Court of Appeals disagreed, noting that such an amendment would actually be a supplemental pleading that would not relate back to the filing date of the original complaint, pursuant to the Court of Appeals’ previous decision in Jawad A. Shah, MD, PC v. State Farm Mut. Auto. Ins. Co., 324 Mich. App. 182 (2018). Therefore, the supplemental pleading would be barred by the one-year-back rule.
Spectrum next argued that it should be allowed to amend its complaint to plead an agency theory on the basis of Conley’s June 2017 assignment. The Court of Appeals again disagreed, noting that a claim based on agency would also be barred by the one-year-back rule. Moreover, the Court noted that, unlike an assignee, an agent is not a real party in interest, and cannot, therefore, file suit for its patient’s benefit in its own name.
Spectrum lastly argued that it should be allowed to litigate a request for declaratory judgment, even in the absence of a valid assignment, because it has an “interest in ensuring that benefits are paid for the services [its patient] received and there exists an actual controversy regarding the amount of benefits.” The Court again disagreed, noting that Spectrum could not maintain an action for declaratory judgment because it lacked standing.
As applied in this case, contrary to its arguments on appeal, Spectrum may not maintain an action for declaratory judgment because Spectrum lacks standing to litigate a declaration of Farm Bureau’s contractual obligations to Conley and there is not an actual controversy necessitating a decree to guide Spectrum’s conduct. That is, absent a valid assignment, Spectrum lacks a direct cause of action for PIP benefits. See Covenant, 500 Mich at 195-196, 216-217 & n 40. And declaratory judgment, which incorporates the doctrine of standing, may not be used to create standing for Spectrum to pursue declaratory judgment on a claim for PIP benefits which Spectrum does not possess. See Pontiac Police, 309 Mich App at 624-625. Additionally, absent a contract between Spectrum and Farm Bureau, Spectrum also has no need of a preliminary determination to guide its future conduct to preserve its rights. See id. Rather, Spectrum’s legal rights are governed by its relationship with Conley; and, regardless of Farm Bureau’s liability to Conley or Conley’s right to benefits, Spectrum’s legal rights and remedy under Covenant, 500 Mich at 217, are clear: “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.”
