Michigan Court of Appeals; Docket # 348151; Unpublished
Judges Beckering, FortHood and Shapiro; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Assignment of Benefits – Validity and Enforceability
Collateral Estoppel and Res Judicata
Medical Provider Standing (Post-Covenant)
SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals reversed the trial court’s decision granting summary disposition in favor of defendant on the issue of whether the plaintiff, who assigned a right to payment for specific no-fault benefits may proceed on the remainder of the claim in a separate action. In doing so, the Court clarified that its holding in Henry Ford Health Sys, 326 Mich App 398, was controlling.
This case arose when plaintiff Oleg Finefter was struck by a motor vehicle while walking along a roadway. The driver of the vehicle was unknown. Plaintiff contended that he suffered a traumatic brain injury, a fractured left foot and ankle, fractured ribs, and chest, elbow, shoulder, and knee injuries. Plaintiff received treatment at Theramedic Rehab and Physical Therapy (Theramedic) and assigned his right to payment of no-fault benefits for this treatment to Theramedic. Shortly thereafter, Theramedic filed a complaint against defendant Farm Bureau General Insurance Company of Michigan seeking payment for the treatment provided to plaintiff. Two days later, plaintiff filed the instant action in his own name and against Jane Doe, “an individual whose identity is currently unknown.” On the first page of his complaint, plaintiff represented that “[t]here is no other civil action between these parties arising out of the same transaction or occurrence as alleged in this Complaint pending in this Court, not has any such action been previously filed and dismissed or transferred after having been assigned to a judge.” Shortly thereafter, defendant filed a motion for summary disposition, arguing that the action should be dismissed because of the prior action. Specifically, defendant asserted that plaintiff’s complaint sought “all allowable no-fault benefits without exception or limitation,” and that the complaint “falsely alleg[ed] that there [were] no other pending or resolved civil actions arising out of the same transaction or occurrence as alleged in the complaint.” In the alternative, defendant “objected to the nonjoinder of claims and parties and requested that the Court ‘order the joinder of claims and parties with the Theramedic case, which was filed first.”
The trial court entered an order scheduling oral argument and requiring that plaintiff’s brief in response to the motion be filed and received no later than January 30, 2019, providing that “[i]f a response brief is not filed, the Court will assume that opposing counsel does not have any authority for its respective position, and a written opinion will be issued on or before the scheduled hearing date.” Defendant then filed a motion to transfer and consolidate the action, to which plaintiff’s counsel concurred. However, plaintiff’s counsel clarified that it was not concurring to the motion for summary disposition and asked whether defendant would be dismissing the motion for summary disposition. Defendant’s counsel indicated that they were withdrawing the pending motion for summary disposition. However, after the motion to transfer was denied, defendant’s counsel emailed plaintiff’s counsel, advising that they would be proceeding with the motion for summary disposition since the transfer was denied. On February 18, 2019, plaintiff’s counsel received an email from defendant’s legal assistant directing counsel’s attention to “the attached correspondence in the Oleg Finefter matter.” The attachment was another copy of the motion for summary disposition previously filed on December 10, 2018. On February 25, 2019, the trial court entered its order granting defendant’s motion for summary disposition, finding that plaintiff failed to file the required response. The next day, plaintiff filed a motion for reconsideration recounting the email exchanges with defendant’s counsel regarding their concurrence to withdrawing the pending motion for summary disposition and asserting that plaintiff’s counsel detrimentally relied on that statement. Plaintiff’s counsel also explained that “when he received another copy of the motion for summary disposition on February 18, he believed the motion had been refiled and he e-mailed defendant’s counsel to advise that the dates on the motion were incorrect; at that point, he learned that defendant had not, in fact, withdrawn the motion as planned in December.” The Court denied plaintiff’s motion for reconsideration.
On appeal, plaintiff argued that the trial court erred by granting summary disposition and by denying his motion for reconsideration “on the basis of an erroneous application of Michigan law to the facts of this case.” In analyzing this claim, the Court found that the trial court had “substantively applied and granted summary disposition under MCR 2.116(C)(6),” which provides summary disposition where “[a]nother action has been initiated between the same parties involving the same claim.” The Court further noted that the trial court had treated plaintiff and Theramedic, plaintiff’s assignee in the first case, as identical parties, holding that “two actions, involving two Plaintiffs each as Finefter or in the stead of Finefter, should not be allowed to stand.” However, the Court clarified that under Michigan law, “as assignee of a cause of action becomes the real party in interest with respect to that cause of action, inasmuch as the assignment vests in the assignee all rights previously held by the assignor.” Moreover, the Court pointed out that plaintiff had only assigned Theramedic the right to payment for its services, while the complaint in the current action seeks payment of all PIP benefits under the policy. While the Court noted that neither party cited “any Michigan appellate cases expressly addressing whether a plaintiff who has assigned a right to payment for specific no-fault benefits may proceed on the remained of the claim in a separate action,” the Court concluded that its decision in Henry Ford Health Sys, 326 Mich App 398, compelled reversal of the trial court’s decision granting summary disposition.
In Henry Ford Health Sys, the plaintiff sought payment for medical treatment to the insured after the insured assigned her right to payment, and defendant sought summary disposition on the grounds that “the policy precluded as assignment without the insurer’s consent, and that the assignment was an invalid partial assignment of only the portion of the insured’s claim related to the plaintiff’s services, rather than her entire claim.” On appeal, the Court rejected the argument, explaining that “partial assignment may be upheld in a court of equity whenever ‘equitable and just results may be accomplished by it.’” Significantly, the Court rejected the defendant’s argument that “the insured’s ‘claim or cause of action is one for allegedly improper non-payment of all no-fault benefits,” noting that “under the no-fault act, PIP benefits are payable as loss accrues, and become overdue if not paid within 30 days of receipt of reasonable proof of the fact and of the amount of the loss sustained.” The Henry Ford Health Sys Court further held that “[i]f this Court were to hold that the assignment at issue in this case was an unenforceable partial assignment, it would effectively render the insured’s right to assign a claim for past or presently due benefits meaningless.”
Applying these principles to the case at hand, the Court found that the trial court’ erred in granting summary disposition because it was in “direct contravention” of the Court’s holding in Henty Ford Health Sys. Thus, although plaintiff failed to respond to the motion for summary disposition, “it is clear that plaintiff had not abandoned its claims . . . . Plaintiff’s proclaimed assumption that defendant had withdrawn the original motion for summary disposition as defense counsel confirmed he would do and plaintiff’s subsequent understanding that a new motion for summary disposition was being filed is understandable.”
