Michigan Court of Appeals; Docket #358872, 358884; Published
Judges Cavanagh, Kelly, and Garrett; Per Curiam
Official Michigan Reporter Citation: Forthcoming; Link to Opinion
One-Year Notice Rule Limitation [§3145(1)]
One-Year Back Rule Limitation [§3145(1)]
Assignments of Benefits – Validity and Enforceability
In this unanimous, published, per curiam decision, the Court of Appeals reversed the trial court’s denial of Defendant Suburban Mobility Authority for Regional Transportation’s (“SMART”) motions for summary disposition, in which it sought dismissal of Plaintiff Focus Imaging, LLC’s (“Focus”) action for No-Fault PIP benefits, as well as certain aspects of Plaintiff Marcel Farrar’s action for No-Fault PIP benefits.. The Court of Appeals held, first, that Focus Imaging, LLC (“Focus”)— Farrar’s treater/assignee, and an intervening plaintiff in Farrar’s action against SMART—could not rely on the filing date of Farrar’s action for purposes of the one-year-back rule under MCL 500.3145, reasoning that Focus Imaging was pursuing the same claims of plaintiff but as a different part, and, therefore, Focus’ complaint did not relate back to the filing date Farrar’s complaint The Court of Appeals held, second, that Farrar could not sue SMART for benefits he had assigned to various other providers because he was no longer the real party in interest with respect to those benefits.
Marcel Farrar was injured while traveling as a passenger on a SMART bus. After the crash—which occurred in February of 2019—Farrar received accident-related medical treatment from Focus, C-Spine Ortho, Allied Medical, Assure Neuromonitoring, and Integra Lab Solutions. He executed assignments in favor of each provider, and in February of 2020, he filed suit against SMART. In February of 2021, Focus joined the suit as an intervening plaintiff, seeking benefits related to treatment it provided to Farrar as far back as March of 2019. SMART then moved for partial summary disposition, arguing (1) that the benefits Focus claimed claims were barred by the one-year-back rule, and (2) that Farrar could not personally sue for the benefits he had assigned to C-Spine Ortho, Allied Medical, Assure Neuromonitoring, and Integra Lab Solutions, because he was no longer the real party in interest with respect to those benefits. The trial court disagreed on both accounts, denying SMART’s motion.
The Court of Appeals reversed the trial court’s denial of SMART’s motion, holding, first, that Focus was barred from recovering the benefits to which it was assigned by the one-year-back rule. Farrar had argued that because Focus stood in his shoes as his assignee, it could avail itself of his filing date, but the Court of Appeals disagreed, relying on its holding in Lakeland Neurocare Ctrs v Everest Nat’l Ins Co, unpublished opinion of the Court of Appeals, issued October 8, 2019 (Docket No. 340346), where it held that when an intervening plaintiff ‘is not seeking to add new claims or defenses . . . but rather, assert the same claims as plaintiffs, but as a different party,” its claims do not relate back to the original plaintiff’s filing date.
“On appeal, we concluded that the trial court did not abuse its discretion when it granted the claimant’s motion to intervene. Id. at 12. However, we also determined that the trial court erred when it concluded that the intervening complaint related back:
Gordon is clearly a different party than plaintiffs. She is not seeking to add new claims or defenses, MCR 2.118(D), but rather, assert the same claims as plaintiffs, but as a different party. Therefore, her claims would not relate back to the date of plaintiffs’ complaint. Because Gordon’s claims would not relate back to the date of the filing of the original complaint, she could only claim benefits dating one year back from the date that she filed her intervening complaint under MCL 500.3145, which was September 21, 2017. [Id. at 15.]
The same is true here. Focus Imaging is a different party that is not seeking to add new claims, but rather the same claims as plaintiff as a different party. Accordingly, the trial court erred when it concluded that Focus Imaging’s complaint related back.”
The Court then corrected the trial court’s conflation of the one-year-notice rule with the one-year-back rule, which it did when ruling that SMART could not invoke the one-year-back rule because Farrar and Focus complied with the one-year-notice rule.
“The trial court also concluded that Focus Imaging’s complaint was timely because defendant had notice of the lawsuit within one year of the incurred claims. In so doing, the trial court relied on MCL 500.3145(1), which states: ‘An action for recovery of personal protection insurance benefits payable under this chapter for an accidental bodily injury may not be commenced later than 1 year after the date of the accident that caused the injury unless written notice of injury as provided in subsection (4) has been given to the insurer within 1 year after the accident or unless the insurer has previously made a payment of personal protection insurance benefits for the injury.’
The court concluded that because defendant had notice of Focus Imaging’s claims within one year of incurring them, defendant could not rely on the one-year-back rule to defeat Focus Imaging’s claims. The trial court, however, appears to have confused the limitations period in MCL 500.3145(1) with the one-year-back rule in MCL 5003145(2). While the trial court was correct that if an insurer has notice of the injury within one year, it cannot invoke the one-year statute of limitations contained in MCL 500.3145(1). However, under MCL 500.3145(2): ‘[I]f the notice has been given or a payment has been made, the action may be commenced at any time within 1 year after the most recent allowable expense, work loss, or survivor’s loss has been incurred. 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.’ It is clear, therefore, that the issue of notice in subsection (1) is distinct from the one-year-back rule in subsection (2). In other words, Focus Imaging’s complaint was not time-barred; however, Focus Imaging was still required to commence the action within one year of incurring the claims in order to recover them. Because Focus Imaging did not, it could not rely on notice to defendant to save its claims.”
The Court of Appeals then held that Farrar—in his personal lawsuit against SMART—could not pursue benefits he had assigned to his other medical providers. Once he executed the assignments, the providers became the real parties in interest with respect to the assigned benefits, “and only they could sue to recover those benefits.”
“In Winfield v State Auto Prop & Cas Ins Co, unpublished per curiam opinion of the Court of Appeals, issued November 18, 2021 (Docket No. 355681), this Court addressed the same issue of whether a plaintiff seeking benefits under the no-fault act could sue to enforce claims of providers to whom the plaintiff has executed assignments. The plaintiff executed multiple assignments to medical providers in which ‘each assignment vested in the medical providers the right to collect PIP benefits from defendants for medical services rendered to plaintiff and her minor children.’ Winfield, unpub op at 4. Determining that by virtue of the assignments, the providers ‘stood in the position of plaintiff, possessed the same rights as plaintiff, and were subject to the same defenses as plaintiff,’ we concluded that ‘after plaintiff executed the assignments, the medical providers became the real parties in interest, and only the medical providers had the ability to enforce the acquired rights.’ Id. at 4-5.
The same is true here. Plaintiff executed assignments to C-Spine Ortho, Allied Medical, Assure Neuromonitoring, and Integra Lab Solutions between March 2019 and January 2020. There is no suggestion that the assignments were not valid. Accordingly, upon execution, these providers became the real parties in interest with respect to their claims for benefits, and only they could sue to recover those benefits. Plaintiff, therefore, did not have standing to sue to recover the benefits associated with those providers, and the trial court erred when it concluded otherwise.”