United States District Court, E.D. Michigan, Southern Division
ELIZABETH DeLUCA, and EDS CARE MANAGEMENT, INC., Plaintiffs/Counter-Defendants,
AMICA MUTUAL INSURANCE COMPANY, Defendant/Counter-Plaintiff.
ORDER DENYING DEFENDANT'S MOTION TO DISMISS AS
MOOT (Doc. 55) AND HOLDING MOTION FOR SUMMARY JUDGMENT IN
ABEYANCE (Doc. 52) AND SETTING DEADLINES FOR FILINGS
COHN UNITED STATES DISTRICT JUDGE
an insurance dispute. Plaintiffs/Counter-defendants,
Elizabeth DeLuca (DeLuca) and EDS Care Management, LLC (EDS)
(collectively, where appropriate, EDS) sued
defendant/counter-plaintiff Amica Mutual Insurance Company
(Amica) seeking payment of personal protection insurance
(PIP) benefits under Michigan's No-Fault Act from
defendant. The PIP benefits are for the care of Stephanie
Rudd, the insured.
the Court is Amica's motion for summary judgment on the
grounds that EDS is not a licensed “adult foster care
facility” as required under the Adult Foster Care
Facility Licensing Act, M.C.L. § 400.701 and is
therefore not entitled to payment of PIP benefits for the
“adult foster case services” it provided. (Doc.
before the Court is Amica's motion to dismiss on the
grounds that EDS, as a service provider, is not entitled to
seek benefits on behalf of the insured. (Doc. 55) This motion
is based on the Michigan Supreme Court's decision in
Covenant Med. Ctr., Inc. v. State Farm Mut. Auto. Ins.
Co., 500 Mich. 191 (2017) that medical service
providers, such as EDS, have no statutory cause of action to
collect PIP benefits directly from no-fault insurers, such as
reasons that follow, Amica's motion to dismiss is DENIED
AS MOOT. Amica's motion for summary judgment is HELD IN
ABEYANCE. The parties shall file additional papers as
dispute arises from an automobile accident that occurred on
December 26, 2002 in which then 14 year old Stephanie Rudd
(Rudd or the insured) suffered what was later to be
determined as a traumatic brain injury. Rudd requires around
the clock care. At the time of the accident, Rudd was insured
under an automobile policy held with Amica, through her
father. As an insured, Rudd is entitled to PIP benefits.
DeLuca was appointed Rudd's legal guardian. DeLuca owns
EDS. At some point, Amica stopped paying EDS's claims for
then filed the instant motion for summary judgment based on
its amended answer and counterclaim. (Doc. 52) and a separate
motion to dismiss based on Covenant. (Doc. 55).
Motion to Dismiss
contends that EDS cannot make out a plausible claim against
it in light of the decision in Covenant. The Court
recently explained the holding in Covenant.
The Michigan Supreme Court explicitly stated in
Covenant that “our conclusion today is not
intended to alter an insured's ability to assign his or
her right to past or presently due benefits to a healthcare
provider.” Covenant, 500 Mich. at 217 n.40.
Thus, while a health care provider no longer has a statutory
cause of action against insurers, it may still have a
contract-based cause of action if there has been a valid
assignment of rights. See Id. at 217 n.39
(acknowledging that contractual causes of action may still
exist). An insurer has standing to “challenge an
assignment if that challenge would render[ ] the assignment
absolutely invalid or ineffective, or void.” Conlin
v. Mortg. Elec. Registration Sys., Inc., 714 F.3d ...