Court Opinion

ID: 4279777
Source: CourtListenerOpinion
Date Created: 2018-05-31 07:03:31.369502+00
Date Added: 2024-06-11T14:34:35.806995
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

UNIVERSITY OF MICHIGAN REGENTS,                                      UNPUBLISHED
                                                                     May 29, 2018
               Plaintiff-Appellant,

v                                                                    No. 339198
                                                                     Washtenaw Circuit Court
VICTOR VALENTINO, J.D., PC,                                          LC No. 16-001122-CK

               Defendant-Appellee.

Before: METER, P.J., and GADOLA and TUKEL, JJ.

PER CURIAM.

     Plaintiff appeals as of right the trial court’s order granting defendant’s motion for
summary disposition pursuant to MCR 2.116(C)(10). We affirm.

       Larry Reed was catastrophically injured in an automobile accident. He was transported
to the University of Michigan hospital, where he stayed for a lengthy period and was given
medical treatment. Reed had a valid no-fault insurance policy with the American Automobile
Association (AAA).

       Victor Valentino, a personal-injury attorney and the principal of defendant, met with
Reed in the hospital. Reed retained defendant to assist him with his no-fault insurance claim.
Defendant’s retainer for representation included a one-third contingency fee “of the net
recovery . . . received through suit, settlement, or in any other manner.” Defendant wrote to
AAA asserting an attorney’s lien on the proceeds of the no-fault insurance claim.

         Plaintiff began sending medical bills to AAA, and AAA initially sent payment for those
bills directly to plaintiff. Upon being reminded of defendant’s attorney’s lien, AAA then began
forwarding payments for healthcare expenses to defendant, using two-party checks listing both
plaintiff and defendant as payees. One check in particular was for $280,953.99 (Check 18).
Defendant tried to negotiate with plaintiff for a reduced amount for payment of Reed’s medical
bills, with the intention that defendant would retain the remainder as its attorney fee pursuant to
its contingency-fee agreement with Reed. Plaintiff indicated that it expected full payment of its
bills.

       Plaintiff then filed a five-count complaint alleging conversion, tortious interference with
a contract, claim and delivery, declaratory relief, and injunctive relief. After plaintiff initiated

                                                -1-
the lawsuit, defendant sent plaintiff a check for two-thirds of Check 18, retaining one-third of the
amount as its attorney fee.

       Defendant then filed a motion for summary disposition. The trial court granted
defendant’s motion, finding that plaintiff had no right to the payments from AAA and had no
cause of action against defendant.

      Plaintiff argues on appeal, among other things, that defendant had no right to the no-fault
payments made by AAA because plaintiff was entitled to the insurance proceeds.

        We review do novo a trial court’s decision regarding a motion for summary disposition.
Old Kent Bank v Kal Kustom, Inc, 255 Mich. App. 524, 528; 660 NW2d 384 (2003). A motion
for summary disposition pursuant to MCR 2.116(C)(10) tests whether there is factual support for
a claim, and summary disposition under this subrule is appropriate when there is no genuine
issue concerning any material fact. Universal Underwriter’s Group v Allstate Ins Co, 246 Mich
App 713, 720; 635 NW2d 52 (2001). When deciding a motion for summary disposition pursuant
to MCR 2.116(C)(10), a court considers all pleadings, affidavits, depositions, and other
documentary evidence in the light most favorable to the nonmoving party. Cowles v Bank West,
476 Mich. 1, 32; 719 NW2d 94 (2006). This Court also reviews de novo issues of statutory
interpretation. Ameritech Mich v Michigan PSC, 239 Mich. App. 686, 690; 609 NW2d 854
(2000).

        We find Covenant Med Ctr, Inc v State Farm, 500 Mich. 191; 895 NW2d 490 (2017),
dispositive. The Michigan Supreme Court recognized in Covenant that, although there is a
common practice of allowing insurers to pay a healthcare provider directly, the healthcare
provider is not entitled to direct payment. See id. at 204-205, 208-209. The Supreme Court
stated that the no-fault act “does not establish a . . . claim enforceable by an insured’s
benefactors.” Id. at 214. The Covenant Court indicated that the no-fault act does not refer to, or
even contemplate, allowing a healthcare provider to have a statutory entitlement to no-fault
insurance proceeds. Id. at 216. Applied to this case, Covenant makes clear that plaintiff does
not have a claim to the insurance proceeds under the no-fault act. Instead, Reed, as the injured
party, was the only person entitled to the insurance proceeds.

       Reed, as the injured party and person who received medical treatment from plaintiff,
incurred the charges for healthcare. See id. at 207. Therefore, Reed would still be liable for the
remainder of his medical bills, and plaintiff could theoretically still pursue the remainder from
him.1 Both Covenant, id. at 217, and Miller v Citizens, 490 Mich. 904; 804 NW2d 740 (2011),
support this course of action. But plaintiff, as a party not entitled to the insurance proceeds, does
not have a cause of action against defendant for retaining funds given to it by Reed pursuant to

1
    Unfortunately, Reed claimed Chapter 7 bankruptcy while this case was proceeding.

                                                -2-
their own, independent agreement. See, generally, id.2 Accordingly, we hold that the trial court
did not err in granting defendant’s motion for summary disposition.

       Affirmed.

                                                            /s/ Patrick M. Meter
                                                            /s/ Michael F. Gadola
                                                            /s/ Jonathan Tukel

2
  Plaintiff is correct in stating that there was no attorney-client agreement between itself and
defendant, and thus it is not liable for defendant’s attorney-fee charges. But what occurred in the
present case is not the ordering of plaintiff to pay for defendant’s fees. What occurred, in
essence, is that Reed paid defendant’s fees, and the simple reality is that plaintiff does not have
an entitlement, under Covenant, to the money that Reed received from AAA.

                                                -3-