Michigan Court of Appeals; Docket #320543; Unpublished
Judges Meter, Cavanagh, and Wilder; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Allowable Expenses for Rehabilitation [§3107(1)(a)]
TOPICAL INDEXING:
Collateral Estoppel and Res Judicata
CASE SUMMARY:
In this unpublished per curiam Opinion, the Court of Appeals held that a medical provider’s claim for PIP benefits was barred by collateral estoppel and res judicata because the relevant issues involved in the case had been litigated and decided in a previous lawsuit between the insured and State Farm.
Plaintiff, Garden City Rehab, brought this action to recover the costs of therapy services it provided to Ali Elchami, for injuries he sustained in a 2009 accident. In a prior action filed by Elchami against his no-fault insurer, defendant State Farm, it was determined following a bench trial that rehab services were no longer reasonably necessary after October 2010. Therefore, in this action, State Farm sought summary disposition of Garden City Rehab’s claim, arguing it was barred by the doctrines of collateral estoppel and res judicata.
The Court of Appeals agreed with State Farm, holding that Garden City Rehab’s claim was barred by collateral estoppel and res judicata.
Regarding the issue of collateral estoppel, the Court of Appeals said:
“Here, plaintiff and Elchami shared a substantial identity of interest because plaintiff’s entitlement to recover benefits from defendant was directly dependent upon a showing that the services to Elchami qualified as a no-fault benefit in that they were reasonably necessary because of Elchami’s injuries in the 2009 accident. Moreover, because Elchami was liable to plaintiff for the services performed, and because Elchami’s Wayne County action also included a request for declaratory relief with respect to other benefits, they had a functional relationship for purposes of finding that Elchami was essentially acting in plaintiff’s interests in the Wayne County case.”
Because the issue was previously litigated and decided, and because Garden City Rehab and Elchami shared a “substantial identity of interests” and a “functional relationship,” the Court of Appeals concluded that collateral estoppel precluded plaintiff’s claim.
Regarding the issue of res judicata, the Court of Appeals reasoned:
“Because plaintiff provided Elchami with services before the Wayne County trial started, plaintiff’s claims could have been added to that action, and … there was a specific finding that spoke to the lack future damages. Furthermore, based on TBCI, plaintiff was in privity with Elchami because plaintiff was required to ‘stand in his shoes’ in order to recover no-fault benefits from defendant. Once again, Elchami and plaintiff were seeking the same thing: no-fault benefits to cover medical services necessitated by Elchami’s accident. Elchami properly represented the same underlying interests in the Wayne County case such that he was in privity with plaintiff.”
In conclusion, the Court of Appeals reversed and remanded for an order of partial summary disposition for State Farm.
