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.
MEMORANDUM AND ORDER GRANTING DEFENDANT'S MOTION
TO DISMISS FIRST AMENDED COMPLAINT (Doc. 67) AND DISMISSING
DEFENDANT'S MOTION FOR SUMMARY JUDGMENT (Doc. 52) AS
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 insurance protection
(PIP) benefits under Michigan's No-Fault Act from
defendant. The PIP benefits are for the care of Stephanie
Rudd (Rudd), the insured. Amica filed a counterclaim seeking
recoupment of benefits.
the Court is Amica's motion to dismiss EDS's First
Amended Complaint (Doc. 67) on the grounds that the September
2017 assignments of Rudd's rights to EDS and DeLuca are
invalid. For the reasons that follow, the motion will be
granted. As will be explained, the assignments are valid;
however, recovery is limited to recovering PIP benefits from
one year back from the date of the assignment, or September
2016. Because EDS is seeking benefits incurred prior to that
time, the complaint must be dismissed for failure to state a
claim. In light of the dismissal, Amica's pending summary
judgment motion (Doc. 52) is moot.
dispute arose from an automobile accident that occurred on
December 26, 2002 in which 14 year old Rudd suffered what was
later to be determined a traumatic brain injury. At the date
of the accident, Rudd was insured under an automobile policy
held with Amica, through her father.
2007, Rudd's mother sued Amica on behalf of Rudd in state
court, seeking PIP benefits through April 18, 2008. The case
settled for $200, 000; a Stipulation and Order for Dismissal
was entered. In 2010, Rudd's mother filed a second case
against Amica for PIP benefits incurred after April 18, 2008.
The parties went to arbitration on this claim; Rudd was
awarded $178, 593.96. This award covered the period April 18,
2008 through October 26, 2011.
2012, DeLuca was appointed Rudd's legal guardian. DeLuca
owns EDS, the facility that provided care for Rudd. EDS says
that it has incurred reasonable expenses in caring for Rudd
during her recovery from the accident and seeks payment from
Amica for these expenses. Amica has negotiated payment with
EDS in the amount of $268, 555.50 for the period of August
19, 2012 through July 31, 2013, and $41, 815.88 with DeLuca
for the period of February 15, 2012 through October 31, 2013.
At some point, Amica stopped paying.
and EDS sued Amica in state court seeking to recover
guardianship, conservatory, and trustee expenses, as well as
expenses associated with residential and attendant care
services supplied to Rudd.
removed the case to federal court based on diversity
jurisdiction and filed a counterclaim seeking to recoup the
funds that it claims have been erroneously paid to EDS. In
seeking this recoupment, Amica says that Rudd did not in fact
suffer a traumatic brain injury or that her injuries are not
related to the accident. Amica's counterclaim asserts the
following claims: mistake of fact (Count I); unjust
enrichment (Count II) against EDS; and breach of fiduciary
duty (Count III) against both DeLuca and EDS.
filed a motion for summary judgment on Amica's
counterclaims, contending that (1) Amica does not have
standing and/or is not the real party in interest to pursue
these claims since it has been reimbursed for any payments
exceeding $300, 000 by the Michigan Catastrophic Claims
Association, and (2) Amica's claims are barred by res
judicata of prior litigation between Rudd and Amica. The
Court has denied EDS's motion for summary judgment on
Amica's counterclaims. (Doc. 31).
then, the parties have engaged in discovery which has been
contentious. During discovery, Amica says it became aware
that EDS is not a licensed care facility. Amica said that
this information provided it with a plausible defense to
non-payment. Amica moved to amend its answer to add this as
an affirmative defense and amend its counterclaim based on
EDS not being a licensed adult foster care facility. (Doc.
43). The Court granted the motion. (Doc. 47).
Amica filed a motion for summary judgment based on its
amended answer and counterclaim, i.e. 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. 52).
has also filed a motion to dismiss on the grounds that EDS,
as a service provider, is not entitled to seek benefits on
behalf of Rudd. (Doc. 55) The motion was essentially based on
the Michigan Supreme Court's decision in Covenant
Med. Ctr., Inc. v. State Farm Mut. Auto. Ins. Co., 500
Mich. 191 (2017) which held that medical service providers,
such as EDS, have no statutory cause ...