Michigan Court of Appeals; Docket # 350750; Unpublished
Judges Letica, Gleicher, and O’Brien; Per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion; Link to Dissent
STATUTORY INDEXING:
One-Year Back Rule Limitation [§3145(1)]
TOPICAL INDEXING:
Assignments of Benefits—Validity and Enforceability
SUMMARY:
In this majority unpublished per curiam decision (Letica, concurring, Gleicher, dissenting), the Court of Appeals reversed the trial court’s denial of Defendant Home-Owners Insurance Company’s (“Home-Owners”) motion for summary disposition seeking dismissal of the plaintiffs’ first-party action to recover no-fault PIP benefits on the basis of an assignment. The plaintiffs (North Shore Injury Center, Inc., Excellent Pain Consultants, Inc., Red Wings Medical Transportation, LLC, and Northland Radiology, Inc.—collectively, “plaintiffs”), Joys King’s medical providers, and Joys King, filed separate first-party actions one month apart, and almost one full year after the plaintiffs filed their action, the Supreme Court issued its decision in Covenant Med Ctr, Inc v State Farm Mut Auto Ins Co, 500 Mich 191 (2017). The plaintiffs thereafter obtained assignments from King, and argued that the operative date for purposes of the one-year back rule was not the date they obtained their assignments, but rather the date King filed his separate first-party action against Home-Owners. The Court of Appeals disagreed, holding that the operative dates for purposes of the one-year back rule were the dates of assignment, and that, since all the plaintiffs’ claims occurred more than one-year prior to the date they obtained their assignments, their action was barred.
The plaintiffs filed their action in July of 2016 to recover no-fault PIP benefits for the various treatments they provided to King, and in August of 2016, King filed his own first-party action against Home-Owners. Then, in May of 2017, the Supreme Court issued its decision in Covenant—prompting King to subsequently execute assignments for the plaintiffs—and in 2018, the Court of Appeals issued its decision in Jawad A Shah, MD, PC v State Farm Mut Auto Ins Co, 324 Mich App 182 (2018), holding that the operative date for purposes of the one-year-back rule is the date of assignment, not the date an action to recover PIP benefits is filed. In light of the Court’s holding in Shah, Home-Owners moved for summary disposition, arguing that plaintiffs’ claims for benefits were barred by the one-year-back rule.
The plaintiffs advanced the following argument in response: that their claims were not barred by the one-year-back rule—and that Shah was inapplicable—because King had filed his own suit against Home-Owners in August of 2016. Therefore, since King preserved his right to collect benefits as far back as August of 2015, the plaintiffs, who were “stepping into King’s shoes” by way of the assignments, also had the right to pursue benefits as far back as August of 2015. Ultimately, the trial court agreed with the plaintiffs and denied Home-Owners’ motion, “reasoning that, based on ‘the law of assignment,’ King assigned to plaintiffs his right to collect no-fault benefits from defendant that were incurred less than one year before King filed his complaint in his lawsuit against defendant.”
The Court of Appeals reversed the trial court’s denial of Home-Owners’ motion for summary disposition, emphasizing the following language in MCL 500.3145(1):
"An action for recovery of personal protection insurance benefits payable under this chapter for accidental bodily injury may not be commenced later than 1 year after the date of the accident causing the injury unless written notice of injury as provided herein has been given to the insurer within 1 year of the accident . . . . However, the claimant may not recover benefits for any portion of the loss incurred more than 1 year before the date on which the action was commenced."
The Court noted that King filed “an action” in August of 2016, and that the plaintiffs filed “an action” in July of 2016. However, the language in MCL 500.3145(1), “‘the date on which an action was commenced[,]’ refers to the date that the specific action was commenced; it cannot be the date on which a different, separate action was commenced.” Therefore, the Court held that the plaintiffs’ case was governed by Shah after all, and that the operative date for purposes of the one-year-back rule was the date the assignments were executed. And, since the plaintiffs’ claims all arose more than one year prior to the assignments’ executions, the plaintiffs’ action was barred by MCL 500.3145.
"In reaching a different conclusion, the trial court reasoned that if King could recover losses incurred not more than one year before his action was commenced, then plaintiffs, standing in the shoes of King, could also recover losses incurred not more than one year before King’s action was commenced. This reasoning overlooks the fact that King did not have the same rights to recovery in plaintiffs’ action against defendant that he did in his own, separate action against defendant. MCL 500.3145(1) limits recovery to one year before “the action”—meaning a claimant’s specific action—was commenced. [citation omitted]. King, in his action against defendant, could recover losses incurred not more than one year before his specific action was commenced. But King was not part of plaintiffs’ action. As such, King, in plaintiffs’ action against Defendant, could not recover losses incurred not more than one year before King’s entirely separate action against defendants was commenced. In short, King did not have the same rights to recovery in plaintiffs’ action (which he was not part of) as he did in his own action. Because King, in plaintiffs’ action, did not have the right to recover losses incurred not more than one year before King’s separate action against Defendant was commenced, he could not assign such a right to plaintiffs. The trial court erred by holding that King could assign a right he did not have."
Justice Gleicher dissented, arguing preliminarily that Shah was incorrectly decided, as “[r]elation back analysis focuses on notice and fairness.” Since Home-Owners had notice of the plaintiffs’ claims two times over within the one-year period of limitations, there was no conceivable prejudice that would have come to it if the plaintiffs’ amended complaint to reflect the assignments they had obtained related back to the filing of their original complaint. Justice Gleicher further argued that this case was fundamentally different from Shah because, in Shah, the injured plaintiff had not filed his own lawsuit. She noted that the one-year-back rule presented no obstacle to Joys King to recover for the services at issue in the plaintiffs’ separate lawsuit because she filed her own lawsuit against Home-Owners within a year of when the expenses were incurred. Therefore, her providers, “standing in her shoes” with their assignments, should have been able to pursue the same benefits she herself was entitled to pursue.
"This case is fundamentally different than Shah because here, the claimant preserved his claims under the one-year-back rule by filing suit against Home-Owners within a year of when the expenses were incurred. Alternatively stated, the one-year-back rule presented no obstacle to King’s recovery for services provided by plaintiffs. Michigan courts have long held that '[a]n assignee stands in the shoes of the assignor and acquires the same rights as the assignor possessed.' [citation omitted] Assignment in hand, the provider-plaintiffs gained the rights that King possessed at the time of the assignment—and the one-year-back rule did not constrain those rights.
That’s why the majority’s singular concentration on distinguishing between “a” and “the” as the terms are used in MCL 500.3145(1) is fundamentally misplaced. The distinctions are meaningless because the relation-back doctrine does the work. Home-Owners had notice of King’s claim and the providers’ involvement within the one-year notice period. King himself provided the notice and preserved his claim. He then assigned his right to sue on his claims to plaintiffs in this case. I would hold that King’s accomplishment of notice and the filing of his separate lawsuit distinguishes this case from Shah and compels affirming the circuit court."
