Michigan Court of Appeals; Docket # 345449; Unpublished
Judges Borrello, Meter, and Swartzle; Per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Collateral Estoppel and Res Judicata
SUMMARY:
In this unanimous unpublished per curiam decision, the Court of Appeals reversed the trial court’s denial of the defendant’s motion for summary disposition seeking dismissal of the plaintiff’s first-party action to recover no-fault PIP benefits. The plaintiff, The Medical Team, Inc. (“The Medical Team”), sought no-fault PIP benefits in the Washtenaw Circuit Court from the defendant, Auto-Owners Insurance Company (“Auto-Owners”), for treatments it provided to Auto-Owners’ insured, Richard Kalamas. Kalamas simultaneously filed his own first-party action against Auto-Owners in the Wayne Circuit Court, and in that case, the Wayne Circuit Court ruled that Kalamas violated the fraud exclusion provision in his policy and dismissed all of his claims against Auto-Owners. The Court of Appeals thus held that in this case, based on the Wayne Circuit Court’s ruling, The Medical Team’s claim against Auto-Owners failed because Kalamas, himself, no longer had any valid claims against Auto-Owners.
The Wayne Circuit Court’s order dismissing Kalamas’s direct action against Auto-Owners provided “that it resolved all pending claims” by Kalamas against Auto-Owners. After the Wayne Circuit Court’s order, Auto-Owners moved for summary disposition in The Medical Team’s separate action in Washtenaw Circuit Court, arguing that res judicata barred The Medical Team’s claims because the Wayne Circuit Court ruled that Kalamas was ineligible for any PIP benefits under his policy. The trial court denied Auto-Owners’ motion, finding that The Medical Team was not a party to the Wayne Circuit Court and thus could not be bound by that result. The trial court also denied Auto-Owners’ subsequent motion to amend its affirmative defenses to include collateral estoppel and/or res judicata.
The Court of Appeals reversed the trial court’s denial of Auto-Owners’ motion for summary disposition, noting that “a medical provider’s action for reimbursement for services provided to a person injured in a motor vehicle accident is dependent on the validity of the injured insured’s underlying claim for PIP benefits.” The Medical Team, by virtue of the assignment it obtained from Kalamas, possessed only the rights to collect no-fault PIP benefits against Auto-Owners that Kalamas, himself, possessed.
In this case, the Wayne Circuit Court entered a judgment that “all” of Kalamas’s claims for PIP benefits were barred, under the terms of his insurance policy with Auto-Owners, based on Kalamas’s fraudulent statements. The Wayne Circuit Court therefore dismissed Kalamas’s action against Auto-Owners with prejudice. As we explained in Grimmer v Lee, 310 Mich App 95, 102; 872 NW2d 725 (2015), “[a] dismissal with prejudice amounts to an adjudication on the merits and bars a further action based on the same facts.” See also MCR 2.504(B)(3). Provider sought reimbursement based on services it allegedly provided to Kalamas on the theory that it had been assigned to right to collect Kalamas’s PIP benefits for those services. Provider thus possessed only the rights Kalamas possessed and was clearly Kalamas’s privy. Dawoud, 317 Mich App at 521-524; Burkhardt, 260 Mich App at 653; TCBI, 289 Mich App at 44. Finally, considering that Provider’s claim necessarily depended on showing that Kalamas was entitled to the PIP benefits for which Provider sought reimbursement, Provider’s claim could have been resolved as part of the same lawsuit. Adair, 470 Mich at 121, 124-125; TCBI, 289 Mich App at 43. In summary, because Kalamas’s claim was “substantively barred on the merits, any derivative claims necessarily fail as well.” See Dawoud, 317 Mich App at 524.
