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Citizens Insurance Company of Midwest v. Proben

United States District Court, E.D. Michigan, Southern Division

May 28, 2019

Citizens Insurance Company of the Midwest, Plaintiff,
v.
Thomas Proben, Defendant.

          OPINION & ORDER GRANTING IN PART, AND DENYING IN PART, DEFENDANT'S MOTION TO DISMISS

          Sean F. Cox, United States District Court Judge.

         On February 17, 2017, Defendant Thomas Proben (“Proben”) was involved in an automobile accident in Florida, while insured by an automobile insurance policy issued by Plaintiff Citizens Insurance Company of the Midwest (“Citizens”). Thereafter, Proben submitted an application for Michigan no-fault benefits for injuries he alleges to have sustained in the accident. On November 5, 2018, Citizens filed this action against Proben, seeking a declaration that: 1) Citizens has a statutory and contractual right to reimbursement from Proben as to his recovery against the third-party tort feasor in Florida; and 2) the hyperbaric oxygen therapy treatment Proben has been receiving is not covered under his policy because he has failed to establish that the treatment was reasonably necessary for his care, recovery, or rehabilitation. In lieu of an answer, Proben filed a Motion to Dismiss, pursuant to Fed.R.Civ.P. 12(b)(6). The motion was heard by the Court on May 23, 2019.

         For the reasons set forth below, the Court shall GRANT THE MOTION IN PART AND DENY IT IN PART. The Court shall GRANT the motion to the extent that the Court shall dismiss Count 1 without prejudice because it is undisputed that Proben has not obtained any recovery from the other driver. The motion is DENIED as to Count 2 and that count shall proceed in this action.

         BACKGROUND

         On November 5, 2018, Plaintiff Citizens filed this action against Defendant Proben, based on diversity jurisdiction.

         The Complaint alleges that Defendant Thomas Proben is a dual resident of Michigan and Florida and was insured under an automobile policy of insurance issued by Citizens. It is undisputed that on February 17, 2017, Proben was involved in an automobile accident in Florida. The Complaint alleges the other vehicle was owned by Powertown Line Construction and was operated by Travis Martin Burchard on the date of the accident.

         Citizens' Complaint includes two counts: 1) “Declaratory Judgment Regarding Plaintiff Citizens' Statutory And Contractual Right To Subrogation And Reimbursement” (Count 1); and 2) “Declaratory Judgment Regarding Defendant Thomas Proben's Claim For First-Party No-Fault Benefits” (Count II).

         As to Count 1, Citizens seeks equitable relief in the form of a declaration that Citizens has a statutory and contractual right to reimbursement against and as to Defendant Proben's “prospective recovery against the third-party tort feasor in the state of Florida, relative to the Accident.” (Compl. at ¶ 10) (emphasis added). The body of Count 1 alleges as follows:

21. Plaintiff CITIZENS incorporates by reference the allegations in paragraphs 1-20 of its Complaint as though fully set forth herein.
22. The Michigan no-fault act MCL 500.3101, et. seq., makes clear that Plaintiff CITIZENS possesses a statutory right to reimbursement as to Defendant PROBEN's recovery against the tortfeasor.
23. An insurer has a right to reimbursement from an insured's tort recovery paid in out-of-state accidents. The insurer has a lien on the tort recovery to the extent of the reimbursement amounts paid. MCL 500.3116(2).
24. The purpose of the statutory provision for reimbursement is to prevent an injured party from double recovery, and its purpose applies legal force to accidents occurring outside of Michigan. Allstate Insurance Company v Jewell, 182 Mich.App. 611 (1990).
25. In this instance, Plaintiff CITIZENS possesses a statutory right to reimbursement from Defendant PROBEN's tort recovery as Plaintiff CITIZENS was the Michigan no-fault insurer of Defendant PROBEN at the time Defendant PROBEN was involved in a motor vehicle accident on February 17, 2017, outside the state of Michigan, in the state of Florida.
26. Plaintiff CITIZENS also possesses a contractual right to reimbursement from Defendant PROBEN's tort recovery. With regard to no-fault ...

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