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Southeast Michigan Surgical Hospital, LLC v. Little

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

August 13, 2019




         In this lawsuit Plaintiffs Southeast Michigan Surgical Hospital, LLC, Spine PLLC, Summit, Summit Medical Group, PLLC, Summit Physicians Group, PLLC, Getter Done Transportation, LLC, and Kevin T. Crawford, D.O., PC seek to recover payment from Defendant Maurice Little for medical services they allegedly provided to him. Plaintiffs allege that Defendant owes $1, 075, 871.14 for unpaid medical services he received after an automobile accident.

         Pending before the Court are two dispositive motions: Defendant's motion to dismiss (ECF No. 8) and Plaintiffs' motion for summary judgment (ECF No. 10). Defendant seeks dismissal of Plaintiffs' claims pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing that the one-year statute of limitations provided in Michigan's No-Fault Act bars Plaintiffs' claims. In their motion, Plaintiffs seek summary judgment in their favor and assert that there are no genuine issues of material fact concerning their entitlement to payment from Defendant. On July 31, 2019, the Court held a hearing in connection with the motions. For the reasons set forth below, both motions are DENIED.

         I. Background

         This action is the offshoot of a no-fault insurance dispute between Defendant and non-party Farm Bureau Insurance Company. On February 14, 2015, Defendant was injured in a motor vehicle accident. He was a passenger in the vehicle at the time of the accident. After the accident, Defendant sought medical treatment from a number of healthcare providers including Plaintiffs.[1]

         The owner and driver of the vehicle was insured by a Farm Bureau auto insurance policy. Plaintiff submitted a claim for PIP benefits under the policy, which was denied by Farm Bureau. On February 12, 2016, Defendant filed suit against Farm Bureau in Michigan state court asserting claims under Michigan's No-Fault Act. Defendant's various healthcare providers, including Plaintiffs, intervened in Defendant's lawsuit asserting claims for their unpaid medical bills.

         During the course of that litigation, the Michigan Supreme Court held as a matter of first impression that healthcare providers do not possess statutory claims under Michigan's No-Fault Act directly against insurance companies. See Covenant Med. Ctr., Inc. v. State Farm Mut. Auto. Ins. Co., 500 Mich. 191, 895 N.W.2d 490 (2017). The Wayne County circuit court, relying on Covenant, dismissed Plaintiffs' third-party claims against Farm Bureau. Defendant's claims, including his claims for the unpaid medical bills submitted by Plaintiffs, proceeded against Farm Bureau.[2]

         On April 20, 2018, Farm Bureau and Defendant entered into an agreement to settle all claims arising out of the accident. Farm Bureau agreed to pay Defendant $35, 000 in full satisfaction of all his claims, including his claims for unpaid medical bills. But Farm Bureau also agreed to defend and indemnify Defendant if the healthcare providers, i.e. Plaintiffs, brought suit against him individually to recover on their unpaid medical bills. According to Plaintiffs, in order to entice Defendant to enter into the settlement, Farm Bureau told Defendant it was unlikely his medical providers would actually pursue their bills against him.

         As it turns out, Farm Bureau was wrong. On November 6, 2018, Plaintiffs filed suit in state court against Defendant seeking to collect on their unpaid medical bills. Defendant removed the case to this Court asserting diversity jurisdiction. Upon removal, both parties filed motions seeking dispositive resolution of the case. Defendant moves to dismiss Plaintiffs' complaint pursuant to Federal Rule of Procedure 12(b)(6) arguing that Plaintiffs' claims are barred by the one-year statute of limitations provided in Michigan's No-Fault Act. Plaintiffs conversely seek summary judgment pursuant to Federal Rule of Civil Procedure 56. Plaintiffs contend the summary judgment evidence establishes that Defendant is liable for the full amount of their medical bills and therefore they are entitled to judgment as a matter of law. Both motions have been fully briefed by the parties. On July 31, 2019, the Court held a hearing in connection with the motions.

         II. Standards

         A. Motion to Dismiss

         Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a case where the complaint fails to state a claim upon which relief can be granted. When reviewing a motion to dismiss under Rule 12(b)(6), a court must “construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff.” DirectTV, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007). But the court “need not accept as true legal conclusions or unwarranted factual inferences.” Id. (quoting Gregory v. Shelby County, 220 F.3d 433, 446 (6th Cir. 2000)). “[L]egal conclusions masquerading as factual allegations will not suffice.” Eidson v. State of Tenn. Dep't of Children's Servs., 510 F.3d 631, 634 (6th Cir. 2007). Dismissal is appropriate if the plaintiff failed to offer sufficient factual allegations that make the asserted claim plausible on its face. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007).

         The Supreme Court clarified the concept of “plausibilty” in Ashcroft v. Iqbal, 556 U.S. 662 (2009):

To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” [Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ]. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. at 556. The plausibility standard is not akin to a “probability requirement, ” but it asks for more than a sheer possibility that a defendant has acted unlawfully. Ibid. Where a complaint pleads facts that are “merely consistent with” a defendant's liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.' ” Id., at 557 (brackets omitted).

Id. at 678. A plaintiff's factual allegations, while “assumed to be true, must do more than create speculation or suspicion of a legally cognizable cause of action; they must show entitlement to relief.” LULAC v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007). Thus, “[t]o state a valid claim, a complaint must contain either direct or inferential allegations respecting all the material ...

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