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Massengale v. State Farm Mutual Automobile Insurance Company

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

September 24, 2019

JENNESE MASSENGALE, Plaintiff,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.

          ORDER GRANTING DEFENDANT’S MOTION FOR LEAVE TO FILE AMENDED AFFIRMATIVE DEFENSES AND DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

          TERRENCE G. BERG UNITED STATES DISTRICT JUDGE.

         When Jennesse Massengale went to a chiropractor after getting in an auto accident, she assigned her insurance rights to recover the costs of treatment to the chiropractor. Later the chiropractor sued the insurance company to recover the costs of treatment, but the insurance company won the case, the jury finding no injury. Massengale also brought suit against the insurance company to recover many other costs, and the insurance company is now seeking summary judgment in its favor based on the fact that it won the previous case.

         Before the Court then is Defendant State Farm Mutual Automobile Insurance Company (“State Farm”)’s motion for summary judgment, ECF No. 10, and motion for leave to file first amended notice of affirmative defenses pursuant to Fed.R.Civ.P. 15(a)(2), ECF No. 11. Plaintiff Jennese Massengale has responded to both. See ECF No. 17; ECF No. 15. State Farm argues that summary judgment is warranted because it prevailed by obtaining a jury verdict and judgment of “no cause of action” in a prior action brought by Plaintiff’s assignee, nonparty Spine Rehab, PLLC. State Farm argues that the prior court’s decision bars Plaintiff’s claims in the instant case under the doctrines of res judicata and collateral estoppel. Somewhat alternatively, Defendant moves for leave to file amended affirmative defenses in the event that summary judgment is not granted. For the reasons stated herein, the Court will GRANT Defendant’s motion for leave to file first amended notice of affirmative defenses but DENY Defendant’s motion for summary judgment.

         I. Facts

         On March 3, 2017, Plaintiff’s “entire right side, right knee, right shoulder, back, neck and head” suffered injuries when she was riding as a passenger in a 2017 Ford Fusion owned and driven by Anita Touchstone and the car was rear-ended by a 2005 Chevy, driven by Ana Trejo-Sandoval. Plaintiff’s Answers to Defendant’s First Interrogatories, ECF No. 17-5, PageID.479. Defendant asserts the Ford Fusion was merely “bumped, ” and sustained “very minor damage to the rear.” ECF No. 10, PageID.75. Plaintiff contests this, saying that even though the damage did not look extensive, Touchstone had to replace the entire rear end of the car. ECF No. 17, PageID.405–06; ECF No. 17-6 (photos of car damage). Touchstone’s Ford Fusion had insurance through Defendant State Farm. ECF No. 10, PageID.75.

         Following the accident, Plaintiff received treatment from many healthcare providers, including Spine Rehab, PLLC, a facility that provides chiropractic services. See ECF No. 17-5, PageID.480–81 (answer to interrogatory no. 6, listing every health provider). When she obtained treatment from Spine Rehab, Plaintiff signed papers assigning to Spine Rehab her statutory rights to collect no-fault personal injury protection (“no-fault PIP”) benefits for the services she received for that treatment. ECF No. 10, PageID.76; Spine Rehab Assignment, ECF No. 10-7.

         On February 6, 2018, Plaintiff filed a lawsuit against State Farm and Trejo-Sandoval in state court. ECF No. 1-2. Her lawsuit included claims for negligence against Trejo-Sandoval[1] and claims seeking no-fault PIP benefits and underinsured motorist (“UIM”) benefits from State Farm through Touchstone’s policy with State Farm. It also included a claim under the Medicare Secondary Payer Act (42 U.S.C. § 1395y), a federal question. ECF No. 10, PageID.76. State Farm removed the case to this Court. ECF No. 10, PageID.76.

         On March 13, 2018, Spine Rehab-as an assignee of Plaintiff-filed a separate lawsuit against State Farm in state court, seeking to collect payment of no-fault PIP benefits for the chiropractic services they rendered to Plaintiff from September to December 2017. ECF No. 10, PageID.76–77. Spine Rehab’s case against State Farm proceeded to trial in the 40th Judicial District Court in December 2018 (“Spine Rehab trial”). Transcript, ECF No. 24-3. Plaintiff was not called as a witness in the Spine Rehab trial and claims she was not involved in the case at all. ECF No. 23, PageID.621. Counsel for State Farm represented to the state court that it attempted to subpoena Plaintiff for the purposes of appearing in the Spine Rehab trial, but her counsel at the time refused to honor the subpoena. Transcript, ECF No. 24-3, PageID.639.

         The Spine Rebab trial concluded in a judgment of “no cause of action” in favor of State Farm. ECF No. 10-10, PageID.151-52. The jury verdict form for the trial, attached as an exhibit to Defendant’s motion for summary judgment, shows that in response to the question: “Did the [sic] Jennese Massengale sustain an accidental bodily injury?” the jury answered “no.” Jury Verdict Form, ECF No. 10-9, PageID.148. Because the jury found that Massengale did not sustain an accidental bodily injury, the jury did not consider whether her injury arose out of the ownership, operating, maintenance, or use of a motor vehicle, or whether allowable expenses were incurred by Spine Rehab arising out of that injury. Id. The court’s judgment of “no cause of action” was entered on January 7, 2019, approximately one week before Defendant filed its motion for summary judgment and motion for leave to file amended affirmative defenses asserting that the Spine Rehab jury verdict and judgment served as res judicata and collateral estoppel bars to Plaintiff’s claims against State Farm before this Court. ECF No. 10-9, PageID.149; ECF No. 10-10, PageID.151-52.

         The Court held a hearing on Defendant’s motions. See May 16, 2019 Minute Entry. At the hearing, the Court directed Defendants to file the transcript of the Spine Rehab trial with the Court. Id. Defendants complied. See ECF No. 24-3 (Spine Rehab trial transcript); ECF Nos. 24-4, 5, 6 (depositions of independent medical experts that were read into the record at the Spine Rehab trial).

         II. Standards of Review

         a. Amended pleadings

         When justice so requires, a court “should freely give leave” to amend. Fed.R.Civ.P. 15(a)(2). The decision as to whether justice requires the amendment is within the district court’s sound discretion. Forman v. Davis, 371 U.S. 178, 182 (1962). However, a court may deny leave to amend for “undue delay in filing, lack of notice to the opposing party, bad faith by the moving party, repeated failure to cure deficiencies by previous amendment, undue prejudice to the opposing party, and futility of the amendment.” Seals v. General Motors Corp., 546 F.3d 766, 770 (6th Cir. 2008).

         b. Motion for Summary Judgment

         Plaintiff argues that Defendant’s motion is a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) because Defendant cites to Wysocki v. International Business Machine Corporation, 607 F.3d 1102 (6th Cir. 2010) in its motion for the general proposition that a motion to dismiss may be converted to a motion for summary judgment where the court considers matters outside of the pleadings. See Defendant’s motion for summary judgment, ECF No. 10, PageID79; Plaintiff’s response to defendant’s motion for summary judgment, ECF No. 17, PageID.409. Defendant cites Wysocki before providing the standard of review for Rule 56. Id. Plaintiff argues Wysocki supports her position that Defendant’s motion ...


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