Saginaw Circuit Court. LC No. 13-020416-NF.
COVENANT MEDICAL CENTER INC, Retired, PLAINTIFF-APPELLANT:
CHRISTOPHER J SCHNEIDER, GRAND RAPIDS, MI.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Retired,
DEFENDANT-APPELLEE: ANDREW D CONCANNON, SAGINAW, MI.
M. J. KELLY, P.J., and MURRAY and SHAPIRO, JJ.
Mich.App. 51] Per Curiam.
Covenant Medical Center, Inc., appeals by right the circuit
court's order granting summary disposition to defendant,
State Farm Mutual Automobile Insurance Company, under MCR
2.116(C)(7) (claim barred by release). For the reasons stated
in this opinion, we reverse.
2011, State Farm's insured, Jack Stockford, was injured
in a motor vehicle accident. In 2012, Covenant Medical
provided medical services to Stockford for the injuries he
sustained. Covenant Medical billed State Farm $43,484.80 for
those services, sending bills in July, August, and October
2012. In November 2012, State Farm responded to the bills in
writing. Subsequently, on April 2, 2013, in exchange for
payment of $59,000, Stockford entered into a written
agreement with State Farm that purported to release State
Farm from liability " regarding all past and present
claims incurred through January 10, 2013," as a result
of the 2011 accident.
Covenant Medical filed the instant action, alleging that
State Farm had unreasonably refused to pay $43,484.80 for the
medical services rendered to Stockford. State Farm moved for
summary [313 Mich.App. 52] disposition, arguing that Covenant
Medical's claims were barred by the settlement payments
from State Farm to Stockford and the release signed by him as
part of that settlement. The trial court concluded that the
release barred Covenant Medical's claims and granted
summary disposition in favor of State Farm.
appeal, Covenant Medical argues that because it provided
written notice to State Farm regarding the medical services
provided to Stockford, it is entitled to pursue the
$43,484.80, along with penalties, interests, and
costs. We agree.
of the issue involves the application of MCL 500.3112. "
The primary goal of statutory interpretation is to ascertain
the legislative intent that may reasonably be inferred from
the statutory language." Krohn v Home-Owners Ins
Co, 490 Mich. 145, 156; 802 N.W.2d 281 (2011) (quotation
marks and citations omitted). " Unless statutorily
defined, every word or phrase of a statute should be accorded
its plain and ordinary meaning, taking into account the
context in which the words are used." Id.
(citations omitted). " If the plain and ordinary meaning
of the language of the statute is clear, judicial
construction is inappropriate." Lakeland Neurocare
Ctrs v State Farm Mut Auto Ins, 250 Mich.App. 35, 37;
645 N.W.2d 59 (2002). " When construing a statute, a
court must read it as a whole." Klooster v City of
Charlevoix, 488 Mich. 289, 296; 795 N.W.2d 578 (2011).
500.3112 provides in pertinent part:
[313 Mich.App. 53] Personal protection insurance benefits are
payable to or for the benefit of an injured person or, in the
case of his death, to or for the benefit of his dependents.
Payment by an insurer in good faith of personal
protection insurance benefits, to or for the benefit of a
person who it believes is entitled to the benefits,
discharges the insurer's liability to the extent of the
payments unless the insurer has been notified in writing of
the claim of some other person. If there is doubt about
the proper person to receive the benefits or the proper
apportionment among the persons entitled thereto, the
insurer, the claimant or any other interested person may
apply to the circuit court for an appropriate order. The
court may designate the payees and make an equitable
apportionment, taking into account the relationship of the
payees to the injured person and other factors as the court
considers appropriate. [Emphasis added.]
500.3112 provides that if the insurer does not have notice in
writing of any other claims to payment for a particular
covered service, then a good-faith payment to its insured is
a discharge of its liability for that service. However, the
plain text of the statute provides that if the insurer has
notice in writing of a third party's claim, then the
insurer cannot discharge its liability to the third party
simply by settling with its insured. Such a payment is not in
good faith because the insurer is aware of a third
party's right and seeks to extinguish it without
providing notice to the affected third party. Instead, the
statute requires that the insurer apply to the circuit court
for an appropriate order directing how the no-fault benefits
should be allocated. That was not done in this case.
Accordingly, under the plain language of the statute, because
State Farm had notice in writing of Covenant Medical's
claim, State Farm's payment to Stockford did not
discharge its liability to Covenant Medical.
Farm relies on Mich Head & Spine Institute, PC v
State Farm Mut Auto Ins Co, 299 Mich.App. 442; [313
Mich.App. 54] 830 N.W.2d 781 (2013). However, the rule
applied in that case does not apply here. The issue presented
in Mich Head & Spine was " whether an
insured's release bars a healthcare provider's claim
for payment for medical services rendered to the insured
after the release was executed." Id.
at 448 (emphasis added). The circumstances presented in
Mich Head & Spine did not implicate MCL 500.3112
while the instant case does. When the relevant services were
rendered and the insurer ...