Michigan Court of Appeals; Docket # 345216; Unpublished
Judges Fort Hood, Servitto, and Boonstra; 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In this unanimous unpublished per curiam decision featuring an action to recover no-fault PIP benefits, the Court of Appeals determined that the plaintiff was not estopped from bringing a lawsuit against his no-fault insurer despite the fact that a directed verdict was ordered against one of his medical provider assignees in a separate lawsuit arising out of the incident, but to which the plaintiff was not a party. Collateral estoppel “precludes relitigation of an issue in a subsequent, different cause of action between the same parties when the prior proceeding culminated in a valid final judgment and the issue was actually and necessarily determined in that prior proceeding.” However, in order for collateral estoppel to apply, “the same parties must have had a full and fair opportunity to litigate the issue.” Since the plaintiff in this case was not a party to his provider’s separate, previous action, the Court of Appeals determined that he did not have a full and fair opportunity to litigate the issue of entitlement to no-fault PIP benefits.
This case arose out of an incident in September 2015 in which a motor vehicle struck the plaintiff while he was providing landscaping services to a condominium complex. The plaintiff was repairing a lawnmower in the roadway when the son of one of the complex’s residents drove into him and injured him. The plaintiff sought medical treatment for his injuries, and assigned his rights to no-fault PIP benefits to one of his treating facilities, Clear Imaging. In May 2016, the plaintiff filed a complaint for PIP benefits against his no-fault insurer in circuit court. In August 2017, Clear Imaging filed a separate complaint in district court for PIP benefits against the plaintiff’s no-fault insurer, the rights to which it had been assigned by the plaintiff. While the plaintiff’s action in circuit court was pending, a trial was held in Clear Imaging’s separate lawsuit in which the district court granted the defendant’s motion for a directed verdict, “stating in the order that plaintiff was not involved in a motor vehicle accident on September 4, 2015, and did not sustain accidental bodily injury arising out of the ownership, operation, maintenance, or use of a motor vehicle on that date.” Shortly thereafter, the defendant filed a motion for summary disposition in the plaintiff’s action in circuit court, relying on the district court’s order. The circuit court granted the defendant’s motion on the basis of collateral estoppel.
The Court of Appeals reversed the circuit court’s grant, pointing out that in order for collateral estoppel to apply, the following three elements must be satisfied:
(1) a question of fact essential to the judgment must have been actually litigated and determined by a valid and final judgment; (2) the same parties must have had a full and fair opportunity to litigate the issue; and (3) there must be mutuality of estoppel.
The Court conceded that the first and third elements were satisfied. In both Clear Imaging’s district court action and the plaintiff’s circuit court action, the same issue was in dispute: whether the plaintiff was entitled to PIP benefits for injuries he sustained in the September 2015 incident. That issue was litigated and determined by a valid and final judgement in the form of a directed verdict in Clear Imaging’s district court action. Similarly, since Clear Imaging “stood in the shoes” of the plaintiff, and was therefore a privy of the plaintiff in the district court matter, estoppel was mutual.
As for the second element, however, the Court of Appeals determined that the plaintiff did not have a full and fair opportunity to litigate the issue of entitlement to PIP benefits. The plaintiff’s circuit court action sought payment for PIP benefits separate from those which he assigned to Clear Imaging. Thus, the plaintiff and Clear Imaging were not in complete privity and “the interests and claims presented in plaintiff’s complaint against defendant . . . were not presented and protected in the district court action.” Moreover, the plaintiff had no involvement in or awareness of Clear Imaging’s district court action, so “it cannot be said that [the] plaintiff’s interests were fully presented and protected in the district court action or that the judgment involving Clear Imaging may justly be considered binding on the plaintiff despite him not being a party to the district court action.”
The Court further established that even if the plaintiff and Clear Imaging were in complete privity, the fact that Clear Imaging did not call the plaintiff as a witness in the district court trial suggested that the plaintiff had not been given a full and fair opportunity to litigate his claim.
There is a need for a new determination of the issue because of the potential adverse impact of the district court ruling on the interests of persons who were not parties in Clear Imaging’s action. See id., quoting 1 Restatement Judgments, 2d, ch 3, Former Adjudication, §28(5)(b). Insofar as the record on appeal indicates, plaintiff’s other medical providers, including Spine Specialists of Michigan, Atlas PT, and Spectra Clinical Laboratory, were not parties in Clear Imaging’s action against defendant, and are owed $8,691.05 in PIP benefits. Plaintiff’s alleged replacement service providers are owed a total of $11,680 in PIP benefits. If plaintiff is not afforded the opportunity to litigate his entitlement to PIP benefits, he and the other medical and service providers will be bound by a decision that they were neither aware of nor had the opportunity to fairly and fully participate in.
. . .
Apart from PIP benefits owed to Clear Imaging, plaintiff’s PIP benefits claim exceeded the district court’s jurisdiction. Thus, plaintiff’s action in the circuit court could afford plaintiff opportunities in the presentation and determination of $135,435.98 in PIP benefits allegedly owed that would not have been available to plaintiff in the district court. Moreover, in seeking in excess of $100,000.00 worth of PIP benefits, plaintiff would have a stronger, more compelling interest to thoroughly and fervently advocate that he qualified for PIP benefits than would a provider who provided only one day of services and was seeking payment only for that day of services. We are satisfied that plaintiff did not have a full and fair opportunity to litigate his claims and underlying issues with respect to his claims and that summary disposition based upon collateral estoppel was improper.
