UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTICT OF MICHIGAN 

SOUTHERN DIVISION 

STATE FARM MUTUAL AUTOMOBILE 

INSURANCE COMPANY, 

 

 Plaintiff, Case No. 15-10993 

 Honorable Victoria A. Roberts 

v. 

 

UNIVERSAL REHAB SERVICES, 

INC., et al., 

 

 Defendants. 

__________________________________/ 

ORDER: GRANTING PLAINTIFF’S MOTION FOR RECONSIDERATION [Doc. 224]; 

AND (2) DISMISSING SUMMIT MEDICAL GROUP’S COUNTERCLAIM [Doc. 45] 

I. INTRODUCTION 

State Farm Mutual Automobile Insurance Company (“State Farm”) filed this suit 

against Summit Medical Group, PLLC (“Summit”) and four others, alleging they 

engaged in a scheme to defraud State Farm by submitting fraudulent claims for no-fault 

benefits for individuals who were in auto accidents. 

Summit, a healthcare provider, filed a three-count counterclaim, alleging: (1) 

fraud/fraudulent misrepresentation; (2) civil conspiracy; and (3) declaratory relief. [Doc. 

45]. Summit alleges State Farm engaged in a scheme to fraudulently deny, delay and 

diminish payment on its claims for recovery of no-fault benefits. 

State Farm previously moved to dismiss Summit’s counterclaim. The Court 

denied the motion. Citing an intervening change in Michigan law, State Farm now 

moves for reconsideration of the order denying its motion to dismiss Summit’s 

counterclaim. [Doc. 224]. Summit opposes State Farm’s motion. 
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 For the following reasons, State Farm’s motion for reconsideration [Doc. 224] is 

GRANTED, and Summit’s counterclaim [Doc. 45] is DISMISSED. 

II. DISCUSSION 

“District courts have authority both under common law and Rule 54(b) to 

reconsider interlocutory orders . . . before entry of final judgment.” Rodriguez v. 

Tennessee Laborers Health & Welfare Fund, 89 Fed. Appx. 949, 959 (6th Cir. 2004). 

Justification for reconsidering an interlocutory order exists where there is: “(1) an 

intervening change of controlling law; (2) new evidence available; or (3) a need to 

correct a clear error or prevent manifest injustice.” Id. The Court has broad discretion 

in considering a motion for reconsideration under this standard. Id. at 959 n.7. 

The Michigan Supreme Court recently held that “[a] healthcare provider 

possesses no statutory cause of action under the no-fault act against a no-fault insurer 

for recovery of . . . benefits.” Covenant Med. Ctr., Inc. v. State Farm Mut. Auto. Ins. Co., 

500 Mich. 191, 895 N.W.2d 490, 505 (2017). The Michigan Court of Appeals 

subsequently found that Covenant applies retroactively. See W A Foote Mem’l Hosp. v. 

Michigan Assigned Claims Plan, No. 333360, 2017 WL 3836645, at *14 (Mich. Ct. App. 

Aug. 31, 2017). 

Although Summit’s counterclaims for fraud and civil conspiracy are distinct from a 

no-fault claim, reconsideration of the Court’s prior order denying State Farm’s motion to 

dismiss is justified based on the conclusion in Covenant that healthcare providers have 

no statutory entitlement to demand reimbursement from a no-fault insurer for services it 

provided to an insured. 
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Summit bases its fraud claim on a purported “statutory duty” owed by State Farm 

to pay no-fault benefits to healthcare providers who render treatment to insureds. [See 

Doc. 60, PgID 1549]. Based on Covenant and other persuasive authority, Summit’s 

assertion of this alleged statutory duty is insufficient to state a plausible fraud/fraudulent 

misrepresentation claim. 

In Covenant, the Supreme Court of Michigan clarified that healthcare providers 

have no statutory right to recover no-fault benefits directly from an insurer; it, therefore, 

follows that no-fault insurers do not have any statutory duty to reimburse healthcare 

providers directly for services it provided to an insured under the no-fault act. See 

Covenant, 895 N.W.2d at 500-05. Because Summit’s fraud counterclaim was based on 

its alleged right to recover no-fault benefits directly from insurers, the Covenant decision 

undermined the basis of Summit’s claim. In addition, to the extent Summit says it relied 

on/was injured by State Farm’s alleged misrepresentations by “delaying or foregoing 

legal action against State Farm to collect payment,” its fraud claim fails because it does 

not have a statutory right to sue a no-fault insurer for benefits under Covenant. 

 Moreover, even if Summit had a statutory right to collect no-fault benefits directly 

from State Farm, its fraud claim would fail because “a fraud claim does not arise from 

an insurer’s mere omission to perform a contractual or statutory obligation, such as its 

failure to pay all the [no-fault] benefits to which its insureds are entitled.” Cooper v. Auto 

Club Ins. Ass’n, 481 Mich. 399, 409 (2008). In this respect, Summit’s fraud claim “fails 

as a matter of Michigan law because the counterclaim does not allege a breach of duty 

that is separate and distinct from State Farm’s contractual [or statutory] obligations.” 

See State Farm Mut. Auto. Ins. Co. v. Radden, No. 14-13299, 2016 WL 695598, at *2 
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(E.D. Mich. Feb. 22, 2016) (dismissing fraud counterclaim against State Farm that is 

practically identical to the fraud claim alleged by Summit). 

 Summit’s civil conspiracy counterclaim also fails, as it is derivative of the fraud 

claim. See Knight Indus. & Assocs., Inc. v. Euro Herramientas, S.A.U., No. 2:12-CV14405, 2013 WL 3773373, at *5 (E.D. Mich. July 17, 2013) (“[A] plaintiff asserting civil 

conspiracy must demonstrate some underlying tortious conduct, as civil conspiracy is 

not an independently actionable tort.”). “Because there is no underlying tort upon which 

the civil conspiracy claim could be predicated,” Summit’s civil conspiracy counterclaim is 

dismissed. State Farm Mut. Auto. Ins. Co. v. Radden, No. 14-13299, 2016 WL 695598, 

at *2 (E.D. Mich. Feb. 22, 2016). 

 In Count III of its counterclaim, Summit requests that the Court: (1) “declare the 

actions of State Farm . . . to be illegal, unconstitutional, grossly negligent, in bad faith 

and malicious in fact”; and (2) “order either Kevin Clinton, Michigan Commissioner of 

Insurance, to suspend, revoke, or limit the authority of State Farm” or “order both Ruth 

Johnson, Michigan Secretary of State, and Kevin Clinton . . . to order State Farm to 

cease and desist their illegal, unconstitutional, wrongful . . . and malicious in fact actions 

toward Summit.” In Radden, the court dismissed a similar counterclaim because (1) the 

defendants lacked standing to bring the claim against non-parties Clinton and Johnson; 

(2) the Michigan Unfair Trade Practices Act (“MUTSA”) – which Summit cites as 

grounds for declaratory relief – does not permit recovery outside penalty interest. 

Radden, 2016 WL 695598, at *2 (citations omitted). For those same reasons, Summit’s 

counterclaim for declaratory relief under MUTSA fails. 
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III. CONCLUSION 

 State Farm’s motion for reconsideration [Doc. 224] is GRANTED. Summit’s 

counterclaim [Doc. 45] is DISMISSED. 

IT IS ORDERED. 

 S/Victoria A. Roberts 

 Victoria A. Roberts 

 United States District Judge 

Dated: December 21, 2017