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Chiropractors Rehabilitation Group, PC v. State Farm Mutual Automobile Insurance Co.

Court of Appeals of Michigan

October 29, 2015

CHIROPRACTORS REHABILITATION GROUP, PC, Plaintiff-Appellee,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellant. ELITE HEALTH CENTERS, INC., ELITE CHIROPRACTIC, PC, and HORIZON IMAGING, LLC, Plaintiffs-Appellees,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellant

          Oakland Circuit Court. LC No. 2013-009983-AV. Oakland Circuit Court. LC No. 2014-139132-AV.

         For CHIROPRACTORS REHABILITATION GROUP PC, Plaintiff-Appellee: LOUIE L. ANDREOPOULOS, ROYAL OAK, MI.

         For STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellant: ERIC D. SMITH, NORTHVILLE, MI.

         Before: WILDER, P.J., and SHAPIRO and RONAYNE KRAUSE, JJ.

          OPINION

          [313 Mich.App. 116] Kurtis T. Wilder, P.J.

         These consolidated appeals are before this Court by leave granted.[1] In each case, defendant, State Farm Mutual Automobile Insurance Company (State Farm), appeals a circuit court order affirming a district court order denying a motion for summary disposition. In Docket No. 322317, State Farm also [313 Mich.App. 117] challenges the district court's order denying leave to amend its affirmative defenses. We affirm in part and reverse in part.

         I

         Plaintiffs in both cases are healthcare providers that rendered medical treatment to individuals allegedly injured in motor vehicle accidents. The medical providers brought actions in the district court, under the no-fault act, MCL 500.3101 et seq., seeking reimbursement for medical expenses related to the treatment rendered. State Farm, the no-fault insurer allegedly responsible for payment of personal protection insurance (PIP) benefits under the no-fault act, filed motions for summary disposition in which it argued, among other things, that the injured parties were not eligible for the payment of PIP benefits and, therefore, the healthcare providers were similarly precluded from seeking such benefits. The district courts denied State Farm's motion for summary disposition in each case.

         A

         In Docket No. 320288, Raynard Jackson allegedly sustained injuries on or about September 4, 2011, while a passenger in a motor vehicle owned and operated by Mohammed Abdullah. At the time, Abdullah's vehicle was insured under a no-fault policy issued by State Farm. Because of incomplete and conflicting police reports and medical records, there were questions regarding whether Jackson was injured in the accident. Consequently, in response to Jackson's claim for PIP benefits, State Farm requested that Jackson submit to a medical examination (ME) as permitted under MCL 500.3151 and an examination under oath (EUO). Jackson failed to appear for two ME appointments [313 Mich.App. 118] scheduled in February and March 2012. He similarly failed to attend the EUO. In April 2012, State Farm advised Jackson, through his legal counsel, that because of Jackson's failure to cooperate with its investigation of the claim, State Farm was suspending his claim for benefits.

         Sometime after the accident, Jackson sought treatment from plaintiff, Chiropractors Rehabilitation Group, PC. When State Farm failed to reimburse plaintiff for the charges associated with its treatment of Jackson, plaintiff filed a complaint alleging that, under the no-fault act, it was entitled to reimbursement from State Farm for the services it provided to Jackson. On May 10, 2013, State Farm moved for summary disposition under MCR 2.116(C)(10), arguing that it was not responsible for charges associated with plaintiff's treatment of Jackson. State Farm asserted that because Jackson had failed to cooperate in its investigation of the claims, he was not eligible for coverage under the policy. State Farm then reasoned that Jackson's ineligibility for coverage barred the claims of any healthcare provider seeking coverage on Jackson's behalf.

         The district court denied State Farm's motion for summary disposition. The court held that questions of fact existed regarding whether Jackson was eligible for coverage under the no-fault act and whether Jackson's ineligibility would bar the provider's claims. The district court also denied State Farm's motion for reconsideration. On appeal, the circuit court affirmed the district court's order.

         B

         In Docket No. 322317, Ricky Johnson was purportedly a passenger in a vehicle involved in an accident on June 28, 2012, but the traffic report identified only [313 Mich.App. 119] " Qutrel Monteque" as a passenger. Johnson purportedly gave the police a false name at the time of the accident. On August 23, 2012, Johnson sought treatment from plaintiff Elite Health Centers, Inc. Johnson complained of neck and back pain that he attributed to injuries sustained in the accident. Johnson also sought treatment from plaintiff Horizon Imaging, LLC, in September 2012, where he underwent three MRIs.

         On September 19, 2012, Johnson filed a claim for PIP benefits with State Farm, which had issued a policy of no-fault insurance to Veretta Robinson, the owner of the vehicle in which Johnson was allegedly a passenger. On January 22, 2013, State Farm requested that Johnson appear for an EUO on February 4, 2013. Johnson failed to appear for this scheduled EUO and later failed to appear at EUOs rescheduled for March 20, 2013 and March 22, 2013.

         On September 6, 2013, plaintiffs filed a first amended complaint seeking PIP benefits from State Farm. Plaintiffs sought reimbursement of nearly $20,000 in outstanding medical expenses related to plaintiffs' treatment of Johnson. On November 19, 2013, State Farm filed a motion to amend its affirmative defenses and for summary disposition. Through this motion, State Farm sought to include as an affirmative defense that plaintiffs' suit was barred because Johnson had failed to cooperate with State Farm's investigation of the claim. State Farm also argued that summary disposition of plaintiffs' claims was appropriate because Johnson's ineligibility for PIP benefits precluded plaintiffs from seeking such benefits. Additionally, State Farm asserted that the policy language at issue required Johnson to submit to an EUO as a condition precedent to the recovery of benefits. State Farm argued that Johnson's failure to [313 Mich.App. 120] cooperate made it impossible to establish whether a loss occurred or whether it was first in priority to provide no-fault coverage to Johnson. State Farm, therefore, reasoned that summary disposition was appropriate under MCR 2.116(C)(10). In response, plaintiffs argued that because EUO provisions in insurance contracts may not act as a condition precedent to the recovery of PIP benefits, State Farm was not entitled to summary disposition.

         The district court denied State Farm's motion to amend its affirmative defenses and for summary disposition. The court ruled that State Farm had provided no legal authority to warrant an amendment to the affirmative defenses. With respect to the summary disposition motion, the court held that Johnson's actions did not preclude a healthcare provider's claim because a healthcare provider has a right to a separate cause of action.

         On January 30, 2014, State Farm moved for reconsideration of the district court's order denying leave to amend its affirmative defenses. In this motion, State Farm argued that healthcare providers lacked standing to pursue a claim for PIP benefits, asserting that only the injured party could pursue such a claim. On February 4, 2014, the district court denied State Farm's motion for reconsideration.

         The circuit court denied State Farm's application for leave to appeal, finding that State Farm had failed to show that it would suffer substantial harm by awaiting final judgment. This Court thereafter granted leave to appeal.

         II

         In both appeals, State Farm argues that the lower courts erred by denying its motions for summary [313 Mich.App. 121] disposition. We review de novo a trial court's decision on a motion for summary disposition, Gorman v American Honda Motor Co, Inc, 302 Mich.App. 113, 115; 839 N.W.2d 223 (2013), as well as a circuit court's affirmance of a district court's decision on a motion for summary disposition, First of Am Bank v Thompson, 217 Mich.App. 581, 583; 552 N.W.2d 516 (1996). When reviewing a motion for summary disposition brought under MCR 2.116(C)(10), this Court must consider, in the light most favorable to the party opposing the motion, " the 'affidavits, together with the pleadings, depositions, admissions, and documentary evidence then filed in the action or submitted by the parties' . . . ." Calhoun Co v Blue Cross Blue Shield Michigan, 297 Mich.App. 1, 11; 824 N.W.2d 202 (2012), quoting MCR 2.116(G)(5). " Summary disposition is appropriate under MCR 2.116(C)(10) if there is no genuine issue regarding any material fact and the moving party is entitled to judgment as a matter of law." Dillard v Schlussel, 308 Mich.App. 429, 444-45, 865 N.W.2d 648 (2014) (quotation marks and citation omitted). " There is a genuine issue of material fact when reasonable minds could differ on an issue after viewing the record in the light most favorable to the nonmoving party," Allison v AEW Capital Mgt, LLP, 481 Mich. 419, 425; 751 N.W.2d 8 (2008), or " when the evidence submitted 'might permit inferences contrary to the facts as asserted by the movant,'" Dillard, 308 Mich.App. at 445, quoting Opdyke Investment Co v Norris Grain Co, 413 Mich. 354, 360; 320 N.W.2d 836 (1982).

         A

         State Farm first argues in Docket No. 322317 that healthcare providers do not have standing under the [313 Mich.App. 122] no-fault act to bring an action against an insurer to obtain no-fault PIP benefits. We disagree.

         This issue is not properly preserved because State Farm raised this argument for the first time in a motion for reconsideration. Vushaj v Farm Bureau Gen Ins Co of Michigan, 284 Mich.App. 513, 519; 773 N.W.2d 758 (2009). However, we will review this issue because it is an issue of law and all of the relevant facts are available. Id.

          Whether a party has standing to bring an action is a question of law reviewed de novo on appeal. Gyarmati v Bielfield, ...


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