Michigan Court of Appeals; Docket # 344808; Unpublished
Judges Cameron, Cavanagh, and Shapiro; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Lawfully Rendered Treatment [§500.3157]
TOPICAL INDEXING:
Not Applicable
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In this unanimous unpublished per curiam decision, the Court of Appeals affirmed the trial court’s summary disposition order dismissing the plaintiff’s first-party action to recover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 of rights. The Court of Appeals held: (1) that the defendant, Allstate Property & Casualty Insurance Company (“Allstate”) did have standing to challenge the licensure of the plaintiff, Kings Home Healthcare, Inc. (“Kings”)—an unlicensed adult foster care facility; and (2) that the trial court properly granted summary disposition in favor of Allstate based on its finding that Kings was not properly licesnsed as an adult foster care facility and that the treatments it provided to Allstate’s insured were therefore not “lawful” under MCL 500.3157.
Darell Johnson was injured in a motor vehicle collision in late 2016 and received “extensive 24[-]hour care” from Kings. At the time of the collision, Johnson was insured by Allstate, and after his course of treatment, he executed an assignment of rights to recover PIP benefits to Kings Kings then filed a complaint against Allstate to recover reimbursement for the care it provided to Johnson, and Allstate filed a motion for summary disposition, arguing that Kings was ineligible to recover because it was an unlicensed adult foster care facility. In response, Kings did not dispute that it was operating an unlicensed foster care facility, but rather alleged that Allstate lacked standing to challenge its licensure. The trial court ultimately granted Allstate’s motion for summary disposition.
On Appeal, Kings first argued that “the provisions governing licensure of facilities like the facility operated by plaintiff are enforced by the Department of Licensing and Regulatory Affairs (“LARA”) and therefore plaintiff’s lack of licensure is not subject to challenge by defendants.” The Court of Appeals rejected this argument, and distinguished the facts in this case from the facts in Miller v Allstate Ins Co, 481 Mich 601 (2008), upon which Kings relied, and in which the Supreme Court limited the ability of persons other than the Attorney General to challenge corporate status under the Business Corporations Act. The Court of Appeals noted that, unlike the BCA, the AFCFLA does not include any language preventing defendants like Allstate from asserting an affirmative defense of improper licensure.
Thus, like the enforcement of corporate status under the BCA, the enforcement of licensing requirements for adult foster care facilities is assigned to a regulatory agency and the Michigan Attorney General. That is where the similarities between the BCA and the AFCFLA end, however. As already stated, MCL 450.1221 of the BCA provides a presumption of legality pertaining to the incorporation of an entity that may only be challenged by the Attorney General. No provision of the AFCFLA provides a similar presumption of legality once certain documents are filed. Although a person may request an investigation of an adult foster care facility and there are certain procedures that LARA must follow once it determines that a facility is improperly operating as an unlicensed adult foster facility, this does not demonstrate that unlicensed adult foster care facilities are entitled to a presumption of legality under the AFCFLA that may only be rebutted by LARA. Rather, unlike the BCA, there is no language within the AFCFLA that prevents entities like defendants from asserting an affirmative defense of improper licensure.
Kings also argued that the trial court “improperly granted summary disposition based on its finding that the undisputed record evidence established that the services provided by plaintiff were not lawfully provided because plaintiff was not properly licensed under the AFCFLA.” The Court of Appeals rejected this argument as well, noting that MCL 500.3157 only provides for reimbursement of “lawfully render[ed] treatment.” Here, Kings met the definition of an adult foster care facility under MCL 400.713(1), and was therefore must have been licensed by the State of Michigan. It was not, and thus the services were not lawfully rendered.
