Michigan Court of Appeals; Docket #360537; Published
Judges Markey, Jansen, and Kelly; Per Curiam
Official Michigan Reporter Citation: Forthcoming; Link to Opinion
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”) motion for summary disposition, in which it sought dismissal of Plaintiff Parie Wallace’s action for no-fault PIP benefits. The Court of Appeals held (1) that at the time Wallace filed her action, she was not the real party in interest with respect to claims she had assigned to her medical providers, and (2) that Wallace and her providers’ attempts to mutually revoke the assignments after Wallace filed suit—which they did because the providers could no longer pursue the claims, themselves, due to the one-year-back rule—did not reinvest Wallace with the right to pursue those claims in her existing suit.
Parie Wallace was injured while traveling as a passenger on a SMART bus which crashed into another vehicle. Wallace received treatment from various medical providers following the crash, assigning to each provider her right to pursue PIP benefits related to her treatment. Wallace later filed suit against SMART for unpaid PIP benefits—the same benefits she assigned to her providers—and SMART moved for summary disposition, arguing that Wallace was not the real party in interest with respect to those claims. By that point, Wallace’s providers were barred by the one-year-back rule from pursuing, themselves, the claims they had been assigned, and thus, after SMART moved for summary disposition, Wallace and her providers attempted to mutually revoke the assignments. The trial court ruled that the mutual revocations were effective and reinvested in Wallace the right to pursue the claims she had originally assigned and denied SMART’s motion.
The Court of Appeals reversed the trial court’s summary disposition order, holding that the mutual revocations did not reinvest in Wallace the right to pursue the claims that were assigned to her providers at the time she filed suit. The Court observed that in Robinson v Szczotka, unpublished per curiam opinion of the Court of Appeals, issued April 6, 2023 (Docket No. 359646), it addressed an almost identical scenario and held that ‘one must be the real party in interest at the time the lawsuit is filed, and a retroactive, or nunc pro tunc, revocation may not be used to correct a factual problem that existed when the lawsuit was filed.’ By the date Wallace and her providers mutually revoked the assignments, then, the providers’ rights had been extinguished by the one-year-back rule and “there remained no actionable causes of action to give back to [Wallace].”
“In this case, the majority of benefits at issue were assigned to the medical providers before plaintiff filed her complaint. Plaintiff executed assignments to C-Spine Ortho, Sierra Surgical, Select Specialists, and Baz Eagle Transportation between October 2019 and January 2020. Thus, upon execution of these assignments, these providers became the real parties in interest to the claims for benefits, and only the providers could bring an action to recover said benefits. See Farrar, ___ Mich App at ___; slip op at 5. After executing the assignments and during the litigation, plaintiff obtained revocations for the assignments from C-Spine Ortho, Sierra Surgical, Select Specialists, and Baz Eagle Transportation in January 2022, after she filed her complaint.
While the revocations of the assignments reassigned the providers’ claims for benefits back to plaintiff, the revocations occurred more than a year after SMART denied the medical providers’ claims for benefits. Plaintiff and the providers executed the revocations in January 2022, and these revocations transferred the providers’ interests to the claims for benefits back to plaintiff. However, by the time plaintiff obtained these revocations, the providers no longer had valid claims for benefits by operation of the one-year-back rule. See Robinson, unpub op at 7. SMART denied Sierra Surgical’s claims on January 24, 2020, Select Specialists’ claims on February 11, 2020, Baz Eagle Transportation’s claims on February 28, 2020, and C-Spine Ortho’s claims on April 8, 2020. As such, the providers needed to bring an action against SMART within one year of its formal denial, which they failed to do.”