United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER DENYING FARMERS INSURANCE
EXCHANGE'S MOTION FOR SUMMARY JUDGMENT
BERNARD A. FRIEDMAN SENIOR UNITED STATES DISTRICT JUDGE.
matter is before the Court on Farmers Insurance
Exchange's motion for summary judgment [docket entry 69].
This motion is fully briefed. Pursuant to E.D. Mich. LR
7.1(f)(2), the Court shall decide it without a hearing.
2011, six-year-old Jaden Sears was in a terrible car accident
when a car going seventy miles per hour smashed into his
family's car. He was thrown from the back seat underneath
the dashboard. He suffered skull and sacral fractures and a
hemorrhagic contusion in his right temporal lobe. Medics
unsuccessfully tried to resuscitate him several times. He was
airlifted to the University of Michigan Hospital, where he
spent a week in a coma and was diagnosed with a severe
traumatic brain injury. Because Jaden still suffers many side
effects, his physicians prescribed 24-hour attendant care
services, primarily for supervision purposes.
October 2011, Jaden's mother Velma Sears-Roddy
(“Sears”)-acting on Jaden's behalf-assigned
to Health Call “any rights [Jaden] may have as a result
of Health Call providing services.” Def.'s Mot. Ex.
2. This included the right to “collect any and all
2012, Sears-acting as Jaden's next friend-filed a
complaint against Farmers, who was refusing to pay no-fault
benefits. In January 2014, the case was settled, and
Sears-acting on Jaden's behalf-signed a partial release
of claims against Farmers. The release explicitly did not
apply to Health Call's services. For the next year,
Farmers paid for Jaden's attendant care. But in January
2015, Farmers sent a letter to Sears, stating that based on
the analysis of its physician, Dr. O'Leary, it would no
longer pay for Jaden's attendant care. In response,
Jaden's longtime physician, Dr. Pelshaw, wrote to
Farmers, explaining Jaden's need for attendant care, but
to no avail.
February 2015, Health Call began providing services to Jaden.
In February 2016, Health Call filed the instant complaint
against Farmers, asserting a violation of Michigan's No.
Fault Act (“the Act”). Health Call claimed the
right to sue under the Act based on two theories: a
contractual theory grounded in the 2011 assignment and a
statutory theory grounded in the Act itself. Health
Call's statutory cause of action had been recognized by
the Michigan Court of Appeals for decades. In May 2017,
however, the Michigan Supreme Court overruled that line of
cases in Covenant Med. Ctr., Inc. v. State Farm Mut.
Auto. Ins. Co., 895 N.W.2d 490, 493 (Mich. 2017),
stating “that healthcare providers do not possess a
statutory cause of action against no-fault insurers for
recovery of personal protection insurance benefits under the
no-fault act.” In June 2017, Sears signed another
assignment of benefits to Health Call, which states:
“In consideration for the services provided to [Jaden]
by Health Call, [Jaden] assigns and transfers to Health Call
all of [his] rights and interest in his insurance benefits
for services rendered by Health Call” and
“further grants to Health Call the full power and
authority . . . to pursue claims directly against”
Farmers. Def.'s Mot. Ex. 1.
case was scheduled for trial in late March 2018. The morning
of trial, however, the parties agreed that rather than try
the case, they would file a “Stipulated Order and
Partial Judgment” and have the Court decide the case on
a motion for summary judgment. They stipulated that the
motion would “argue the applicability of the ‘one
year back' rule [and] . . . whether HealthCall is
entitled to interest . . . and/or attorney fees.”
Partial J. ¶ 3.
the stage, Farmers stipulated to failing to pay invoices
“more than 30 days past due from the date Farmers
received reasonable proof”; to a “partial
judgment in the amount of $252, 158.00 . . . in favor of
Health Call and against Farmers, which represents the full
amount of Health Call's principal damages for its claim
brought pursuant to the No-Fault Act”; and to penalty
interest and attorney fees, if the Court held that they were
recoverable. Id. ¶¶ 1, 2, 5-6.
Farmers also stipulated that Health Call's “claim
was raised pursuant to valid assignments from Velma Sears on
behalf of Jaden Sears, ” that all of the Court's
prior rulings “stand, ” and that the 2011 and
2017 assignments are “valid.” Id.
¶¶ 1, 7.
Rule of Civil Procedure 56(a) states that any party moving
for summary judgment must identify “each claim or
defense . . . on which summary judgment is sought. The court
shall grant summary judgment if the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”
is no genuine dispute as to the material facts-Farmers admits
that it did not remit insurance benefits to Health Call for
reasonably necessary medical services Health Call provided.
They disagree only about whether Farmers is entitled to
judgment as a matter of law.
law establishes a system of mandatory no-fault automobile
insurance. Mich. Comp. Laws §§
500.3101-3179. One subset of this insurance is
personal protection insurance. Id. §
500.3105(1). “Under personal protection insurance an
insurer is liable to pay benefits for accidental bodily
injury arising out of the ownership, operation, maintenance
or use of a motor vehicle as a motor vehicle . . . without
regard to fault.” Id. § 500.3105(1)-(2).
Personal protection benefits cover “reasonable charges
incurred for reasonably necessary products, services and
accommodations for an injured person's care, recovery, or
rehabilitation.” Bronson Methodist Hosp. v.
Auto-Owners Ins. Co., 814 N.W.2d 670, 677-78 (Mich.
2012) (discussing § 500.3107(1)(a)).