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STATE OF MICHIGAN 

COURT OF APPEALS 

KEVIN DAWOUD and MIKHO ESSA by Next 

Friend BILBIL MANO and RASHA KAMEL, 

 Plaintiffs, 

and 

GRACE TRANSPORTATION, INC., 

 Intervening Plaintiff, 

and 

UTICA PHYSICAL THERAPY, 

 Intervening Plaintiff-Appellant, 

FOR PUBLICATION 

October 18, 2016 

9:05 a.m. 

v No. 327915 

Wayne Circuit Court 

STATE FARM MUTUAL AUTOMOBILE 

INSURANCE COMPANY, 

LC No. 13-01037-NF 

 Defendant-Appellee. 

KEVIN DAWOUD and MIKHO ESSA by Next 

Friend BILBIL MANO and RASHA KAMEL, 

 Plaintiffs, 

and 

GRACE TRANSPORTATION, INC., 

 Intervening Plaintiff-Appellant, 

and 

UTICA PHYSICAL THERAPY, 
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 Intervening Plaintiff, 

v No. 327927 

Wayne Circuit Court 

STATE FARM MUTUAL AUTOMOBILE 

INSURANCE COMPANY, 

LC No. 13-01037-NF 

 Defendant-Appellee. 

Before: SAAD, P.J., and JANSEN and M. J. KELLY, JJ. 

PER CURIAM. 

 In this consolidated appeal,1 Grace Transportation, Inc. and Utica Physical Therapy 

(collectively, “the service providers”) appeal the trial court’s order that granted summary 

disposition in favor of defendant, State Farm, and dismissed their claims on the grounds that the 

service providers’ claims were barred because the insureds were precluded from recovery, as 

their underlying claims had been dismissed for discovery violations. For the reasons provided 

below, we affirm. 

I. BASIC FACTS 

 On November 28, 2012, Kevin Dawoud, Rasha Kamel, and Mikho Essa (“plaintiffs”) 

were allegedly involved in a motor vehicle accident. They applied for no-fault benefits through 

the Michigan Automobile Insurance Placement Facility. State Farm was assigned the claim, and 

plaintiffs filed a lawsuit seeking personal protection insurance (“PIP”) benefits from State Farm. 

The service providers, who provided therapy and transportation services to plaintiffs, were 

allowed to intervene by stipulation of all parties to pursue direct payment of their bills by State 

Farm. Plaintiffs, who failed to comply with discovery orders and failed to attend three scheduled 

depositions, had their claims dismissed with prejudice.2

 Plaintiffs had no further involvement in 

this case and are not involved in this appeal. 

 Thereafter, State Farm moved for summary disposition and argued that the dismissal of 

the underlying plaintiff’s case operated as an adverse adjudication on the merits pursuant to 

MCR 2.504, which bars the service providers from proceeding with their derivative claims. The 

service providers argued that their claims should be allowed to proceed because Michigan law 

 

1

 Although appellants filed separate claims of appeal from the same case, this Court consolidated 

the two claims. Dawoud v State Farm Mut Auto Ins Co, unpublished order of the Court of 

Appeals, entered July 22, 2015 (Docket Nos. 327915 & 327927). 

2

 The trial court also originally dismissed the service providers’ claims, but later set aside the 

dismissal with respect to the service providers. 
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allows for such providers to bring a cause of action in their own name. Following a hearing, the 

trial court granted State Farm’s motion. The service providers then filed a motion for 

reconsideration, which the court also denied. 

II. ANALYSIS 

 On appeal, the service providers argue that the trial court erred when it granted State 

Farm’s motion for summary disposition and dismissed the case. We disagree. 

 Although the trial court did not specify the court rule it relied on when it granted State 

Farm’s motion for summary disposition, MCR 2.116(C)(10) is the applicable rule. This Court 

reviews de novo a trial court’s ruling on a motion for summary disposition. Marilyn Froling 

Revocable Living Trust v Bloomfield Hills Country Club, 283 Mich App 264, 279; 769 NW2d 

234 (2009). A motion under this subrule is properly granted if there is no genuine issue with 

respect to any material fact and the moving party is entitled to judgment as a matter of law. Id. at 

278. All documentary evidence submitted by the parties is considered, and it is considered in the 

light most favorable to the nonmoving party. Id. 

 The parties agree, or at least the service providers concede, that if the elements of an 

injured party’s no-fault act claim fails substantively, based on the merits (for example, if the 

individual’s injury is not the result of an automobile accident), any providers of services would 

have no claim against the insurer, because their claims are derivative. At issue here is whether 

the same principle applies when the injured party’s no-fault claim “fails,” as it did here, due to 

the injured party’s failure to attend depositions and otherwise comply with discovery orders and 

obligations. 

 The service providers rely only on MCL 500.3112 and Wyoming Chiropractic Health 

Clinic, PC v Auto-Owners Ins Co, 308 Mich App 389; 864 NW2d 598 (2014), to support their 

argument that the lower court’s decision should be reversed. MCL 500.3112 states as follows: 

 Personal protection insurance benefits are payable to or for the benefit of 

an injured person or, in case of his death, to or for the benefit of his dependents. 

Payment by an insurer in good faith of personal protection insurance benefits, to 

or for the benefit of a person who it believes is entitled to the benefits, discharges 

the insurer’s liability to the extent of the payments unless the insurer has been 

notified in writing of the claim of some other person. If there is doubt about the 

proper person to receive the benefits or the proper apportionment among the 

persons entitled thereto, the insurer, the claimant or any other interested person 

may apply to the circuit court for an appropriate order. The court may designate 

the payees and make an equitable apportionment, taking into account the 

relationship of the payees to the injured person and other factors as the court 

considers appropriate. In the absence of a court order directing otherwise the 

insurer may pay: 

 (a) To the dependents of the injured person, the personal protection 

insurance benefits accrued before his death without appointment of an 

administrator or executor. 
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 (b) To the surviving spouse, the personal protection insurance benefits due 

any dependent children living with the spouse. 

Clearly, the text of this statute does not in any way address the issue presented in this appeal. It 

says nothing about whether a provider can proceed against an insurer when the injured party’s 

claim has been dismissed because of a discovery violation. It merely states that an “interested 

party may apply to the circuit court for an appropriate order” if there is doubt about the proper 

allocation of PIP benefits, and that PIP benefits “are payable . . . for the benefit of an injured 

person.” 

 In Wyoming Chiropractic, this Court affirmed the trial court’s order that entered 

judgment in favor of Wyoming Chiropractic and held that a provider has standing to bring a 

direct cause of action against an insurer. Wyoming Chiropractic, 308 Mich App at 396-397. 

After discussing MCL 500.3112 and relevant case law, this Court held that MCL 500.3112, and 

specifically the phrase “or for the benefit of” in that statute, allowed a provider to bring a claim 

against an insurer for PIP benefits. Id. at 392-397. However, the Court only addressed whether 

a provider had standing under MCL 500.3112 to sue an insurer for PIP benefits. Id. at 390, 392. 

The parties agree that the service providers here have standing under MCL 500.3112 to sue State 

Farm for PIP benefits. However, the narrow legal issue is whether the service providers’ claims 

for PIP benefits can survive when plaintiffs’ underlying claim for PIP benefits was dismissed 

with prejudice because plaintiffs failed to attend depositions and otherwise comply with 

discovery orders and obligations. 

 In regard to the argument that their claims for PIP benefits is “derivative” of plaintiffs’ 

claim for PIP benefits, the service providers assert without further explanation that “[t]he 

‘derivative’ argument is precisely the standing argument [in Wyoming Chiropractic] under a 

different cloak, especially here where the ‘failure’ of the injured parties’ claim was due to 

litigation misconduct and not any substantive validity of the claim for no fault benefits.” The 

service providers also assert that an injured individual may ultimately be precluded from 

pursuing a cause of action for PIP benefits where he or she fails to abide by a court order, but 

that such preclusion does not invalidate the claim for benefits on substantive grounds. 

 These arguments are not persuasive. As already noted, the standing issue in Wyoming 

Chiropractic has little to do with the issue in this appeal. Additionally, the service providers 

agree that if an injured party’s claim fails for “substantive” reasons, the provider is precluded 

from obtaining PIP benefits. Thus, they inherently recognize that a provider’s claim to PIP 

benefits, at least in some circumstances, is derivative of the injured party’s claim to PIP benefits. 

Accordingly, this case boils down to the specific question of whether the dismissal of plaintiffs’ 

underlying claims with prejudice due to discovery violations should be treated differently than a 

“substantive” dismissal “on the merits.” We hold that it should not be treated differently. 

 Although the trial court did not specify the court rule under which it dismissed plaintiffs’ 

claims, it stated that it was dismissing them “for the reasons stated in the brief and on the 

record.” State Farm’s brief referenced, among other things, MCR 2.313, which pertains to the 

failure to provide or to permit discovery. MCR 2.313(B)(2)(c) provides that, for failing to 

comply with a court’s discovery order, a court may enter 
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an order striking pleadings or parts of pleadings, staying further proceedings until 

the order is obeyed, dismissing the action or proceeding or a part of it, or 

rendering a judgment by default against the disobedient party. [Emphasis added.] 

And the court rules describe the effect given to such an involuntary dismissal in MCR 

2.504(B)(3): 

Unless the court otherwise specifies in its order for dismissal, a dismissal 

under this subrule or a dismissal not provided for in this rule, other than a 

dismissal for lack of jurisdiction or for failure to join a party under MCR 2.205, 

operates as an adjudication on the merits. [Emphasis added.] 

 And, because the court did not provide otherwise in its order for dismissal, its dismissal 

of plaintiffs’ claims operated “as an adjudication on the merits” with regard to their rights to PIP 

benefits under the clear language of the applicable court rule. Further, as the service providers 

have acknowledged, if an insured’s claim is substantively barred on the merits, any derivative 

claims necessarily fail as well. See Covenant Med Ctr v State Farm Mut Auto Ins Co, 313 Mich 

App 50, 54; 880 NW2d 294 (2015); Moody v Home Owners Ins Co, 304 Mich App 415, 440-

441; 849 NW2d 31 (2014), rev’d on other grounds 499 Mich 211 (2016). Accordingly, the trial 

court did not err when it granted State Farm’s motion for summary disposition with respect to the 

service providers’ derivative claims.3

 

3

 The service providers also appear to argue that the trial court’s decision violated due process. 

Their actual “argument” consists of the following: 

 The Court Rules and statutes clearly give authority for sanctions to 

disobedient parties, but there is nothing that allows punishment for the acts of 

others (such punishment would seem to raise constitutional issues as well), 

Mich Const, Art I, § 16 (prohibiting cruel and unusual punishment); Art I, § 17 

(deprivation of property without due process). 

 The service providers do not develop any argument with respect to this purported 

“constitutional issue[].” Accordingly, we treat that issue as abandoned. See Mitcham v Detroit, 

355 Mich 182, 203; 94 NW2d 388 (1959) (“It is not enough for an appellant in his brief simply 

to announce a position or assert an error and then leave it up to this Court to discover and 

rationalize the basis for his claims, or unravel and elaborate for him his arguments, and then 

search for authority either to sustain or reject his position.”). As the trial court noted, it appears 

that the service providers’ remedy is to recover the costs of the therapy and transportation 

services from plaintiffs. 
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 Affirmed. State Farm, as the prevailing party, may tax costs pursuant to MCR 7.219. 

/s/ Henry William Saad 

/s/ Kathleen Jansen 

/s/ Michael J. Kelly