United States District Court, Eastern District of Michigan; Case #15-11464
Hon. Robert H. Cleland
Official Michigan Reporter Citation: Not Applicable; Opinion Not Available
Assigned Claims Facility Notice and Assignment of Claim [§3174]
Michigan Automobile Insurance Placement Facility (MAIPF)
In this Federal written Opinion, Judge Robert Cleland held that plaintiffs’ PIP claim was properly removed to federal court on the grounds of diversity, because the Michigan Automobile Insurance Placement Facility was “fraudulently joined” as a party defendant.
Plaintiffs in this case filed a state-court action against defendant Liberty Mutual and the Michigan Automobile Insurance Placement Facility (MAIPF) for the nonpayment of PIP benefits. Liberty Mutual removed the case to federal court based on diversity. Plaintiffs filed a motion for remand back to state court. The propriety of remand depended on whether the MAIPF was “fraudulently joined” as a party defendant because, if so, complete diversity would properly be established and vest the federal court with jurisdiction under 28 USC 1332.
Judge Cleland concluded the MAIPF was fraudulently joined and denied plaintiffs’ motion for remand. In determining that the MAIPF was fraudulently joined, the judge emphasized that plaintiffs did not have a valid basis for asserting claims against the MAIPF because the MAIPF merely assigned PIP benefit claims and did not pay claims.
In so holding, Judge Cleland said:
“The MAIPF … is an intermediary between claimants and insurers that evaluates claimants’ eligibility before assigning them an insurer to pay their benefits. The MAIPF’s enumerated duties do not extend to paying claimants’ benefits directly. … Accordingly, Plaintiffs’ two counts seeking No-Fault PIP benefits from Defendants are inapplicable to the MAIPF because the MAIPF does not pay such benefits. Likewise, despite Plaintiffs’ statement in its Motion to Remand that their complaint seeks to have MAIPF assign their claim …, the complaint does not contain any claim that the MAIPF has failed to fulfill its statutory duties to, inter alia, ‘make an initial determination of a claimant’s eligibility for [No-Fault insurance] benefits’ and ‘promptly assign the claim.’ … The complaint only notes that Plaintiffs’ claims have not been assigned to an insurer in order to explain why no claim number exists. … Plaintiffs’ only counts are for the payment of No-Fault PIP benefits, and the MAIPF cannot be held liable under either count; therefore, the court finds that there is no colorable basis for predicting that Plaintiffs could recover from the MAIPF and that MAIPF was fraudulently joined.”