Michigan Court of Appeals; Docket # 348806; Unpublished
Judges Cavanagh, Servitto and Cameron; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
Medical Provider Standing (Post-Covenant)
In this unanimous unpublished per curiam opinion, the Court of Appeals upheld the trial court’s dismissal of plaintiff’s claims with prejudice and upheld the trial court’s order denying defendant’s motion for case evaluation sanctions. In doing so, the Court found that plaintiff failed to establish a prima facie case for entitlement to no-fault benefits by failing to properly add its billing manager to its witness list and failing to properly subpoena defendant’s claims adjuster. The Court further held that the trial court was permitted to rely on the interest of justice exception when denying defendant’s motion for case evaluation sanctions.
This case arose from a motor vehicle accident involving Latoya Williams. Plaintiff was one of Williams’s medical providers following the accident. Plaintiff sought payment for the services provided from defendant, which Williams had purported to be her no-fault insurance provider. Defendant refused to make payment, and plaintiff filed suit alleging a breach of contract. Following the Michigan Supreme Court’s opinion in Covenant Med Ctr, Inc v. State Farm Mut Auto Ins Co, 500 Mich 191; 895 NW2d 490 (2017), plaintiff obtained an assignment of rights from Williams and successfully moved to amend its complaint. Defendant answered the amended complaint, denying liability. In the month leading up to trial, plaintiff filed both a motion for summary disposition and a motion to compel a deposition, both of which were denied as untimely under the trial court’ scheduling orders. On the first day of trial, defendant made an oral motion for a directed verdict or for summary disposition, contending that plaintiff could not meet its burden of proof. After oral arguments, the trial court held that plaintiff was precluded from calling its billing manager to testify at trial because she was not on plaintiff’s witness list and held that plaintiff had “failed to present a witness who could testify as to whether there was a valid contract of no-fault insurance at the time of the accident, which is an element [plaintiff] must prove for entitlement to PIP benefits.” The court further acknowledged that although plaintiff had intended to call defendant’s claims adjuster, she was not available because plaintiff had not validly subpoenaed her. Thus, the trial court found that plaintiff could not present a prima facie case without either witness and dismissed plaintiff’s claims with prejudice. The trial court subsequently denied defendant’s motion for case evaluation sanctions, concluding that “awarding no costs was in the interest of justice under MCR 2.403(O)(11).
On appeal, the Michigan Court of Appeals first examined the denial of plaintiff’s motion to compel and motion for summary disposition. With respect to plaintiff’s motion for summary disposition, the Court noted that a trial court has the “discretion to set a limit on the time within which a [motion for summary disposition] may be filed,” and that this court’s policy was that “motions for summary disposition must be filed at least 60 days prior to trial.” The Court further noted that plaintiff had filed its motion 20 days before trial. Accordingly, the Court found that the trial court had not abused its discretion when it refused to consider plaintiff’s late-filed motion for summary disposition. With respect to plaintiff’s motion to compel discovery, the Court similarly held that “[b]ecause plaintiff’s . . . motion to compel was made after discovery closed under the trial court’s scheduling order . . . it was not an abuse of discretion for the trial court to deny the motion on that basis.”
The Court next examined the trial court’s decision to dismiss plaintiff’s claims. The Court noted that the trial court in this case appeared to have granted summary disposition in favor of defendant because, absent any testimony from plaintiff’s billing manager or defendant’s claims adjuster, there was no genuine issue of material fact. The Court clarified that “because [plaintiff] stood in the shoes of Williams, it was [plaintiff’s] burden to establish that Williams was entitled to payment for the services that [plaintiff] provided to her.” However, due to plaintiff’s failure to include its billing manager on its witness list and failure to serve defendant’s claims adjuster within the proper time frame, the Court concluded that the trial court did not err by dismissing plaintiff’s claims based on its conclusion that plaintiff could not establish a prima facie case, which required proving that there was a valid policy of insurance and that its charges were payable under MCL 500.3107(1)(a). In this case, plaintiff, through its failure to properly subpoena defendant’s claims adjuster, was unable to authenticate defendant’s claims file which plaintiff indicated included the insurance policy between Williams and defendant. Further, plaintiff, through its failure to add its billing manger to its witness list, could not present its bills. The Court concluded that because the trial court had not abused its discretion by precluding either defendant’s claims adjuster or plaintiff’s billing manager, plaintiff could not “establish, by a preponderance of evidence, that [it was] entitled to PIP benefits.” Thus, the Court found that the trial court had not abused its discretion in granting summary disposition to defendant.
Finally, the Court examined defendant’s cross-appeal that the trial court had abused its discretion by denying its motion for case evaluation sanctions. The Court noted that the trial court had explained that “[A]t the time of the case evaluation, the case evaluation was $20,000. There were recent Court of Appeals decisions [sic] that significantly affected [Midwest Medical’s] cause of action [during the course of the proceeding]. So, for those reasons, the Court finds, pursuant to MCR 2.403[(O)(11)], the Court may, in the interest of justice, refuse to award actual costs. So, for those reasons, the Court is going to deny [defendant’s] request for case eval[uation]sanctions.” The Court of Appeals clarified how broadly to interpret the interest of justice exception, stating
"We believe that the exceptional nature of the “interest of justice” provision, the settlement-encouraging purpose of MCR 2.405, and . . . precedents of the Court set the broad parameters of the exception. Attempts to give meaning to the term “interest of justice” must fit within these parameters. We are mindful that this term is susceptible to broad readings that would consume the general rule of awarding fees and nullify MCR 2.405’s purpose of encouraging settlement . . . . On the other hand, it would be inappropriate to read the term so narrowly that the exception itself would be effectively nullified."
Thus, the Court of Appeals upheld the trial court’s dismissal of defendant’s motion for case evaluation sanctions.