Court Opinion

ID: 4253064
Source: CourtListenerOpinion
Date Created: 2018-03-09 10:11:43.053863+00
Date Added: 2024-06-11T14:43:46.528101
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

BRONSON HEALTHCARE GROUP, INC.,                                      FOR PUBLICATION
                                                                     March 8, 2018
               Plaintiff-Appellee,                                   9:00 a.m.

v                                                                    No. 336088
                                                                     Kalamazoo Circuit Court
MICHIGAN ASSIGNED CLAIMS PLAN and                                    LC No. 2016-000458-AV
MICHIGAN AUTOMOBILE INSURANCE
PLACEMENT FACILITY,

               Defendants-Appellants,
and

JOHN DOE INSURANCE COMPANY,

               Defendant.

Before: O’CONNELL, P.J., and HOEKSTRA and SWARTZLE, JJ.

HOEKSTRA, J.

        Defendants Michigan Assigned Claims Plan (MACP) and Michigan Automobile
Insurance Placement Facility (MAIPF) appeal by leave granted the circuit court order dismissing
their claim of appeal for lack of subject-matter jurisdiction.1 Because plaintiff is not statutorily
entitled to maintain an action for personal injury protection (PIP) benefits, we vacate the decision
of the circuit court, we reverse the district court’s grant of summary disposition to plaintiff, and
we remand to the district court for entry of summary disposition in favor of defendants.

        Plaintiff provided medical treatment to an individual injured in an automobile accident in
October 2014. According to plaintiff, the injured party was not covered by a no-fault insurance
policy, and plaintiff sought to have defendants assign the claim to an insurer. Defendants
refused to assign the claim. Thereafter, plaintiff filed a complaint in the district court against
defendants and John Doe Insurance Company, claiming that defendants had an obligation to
assign the claim to an insurer and that John Doe Insurance Company was liable for

1
  Because only MACP and MAIPF are parties to this appeal, our use of the term “defendants”
refers to them alone, not defendant John Doe Insurance Company.

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approximately $5,000 in no-fault benefits. With regard to defendants, the district court granted
summary disposition to plaintiff under MCR 2.116(I), concluding that defendants were
statutorily obligated to assign plaintiff’s claim for benefits. Defendants appealed in the circuit
court, but the circuit court dismissed the appeal for lack of jurisdiction based on the conclusion
that the order granting summary disposition to plaintiff was not a final order over which the
circuit court had jurisdiction under MCR 7.103(A)(1). Defendants filed an application for leave
to appeal in this Court, which we granted on May 8, 2017.2

        On appeal, defendants ask that we remand for entry of summary disposition in their favor
under Covenant Med Ctr, Inc v State Farm Mut Auto Ins Co, 500 Mich. 191; 895 NW2d 490
(2017). In contrast, plaintiff asserts that we should not grant defendants relief under Covenant
because defendants did not raise their Covenant arguments in the lower courts. Alternatively,
plaintiff argues that it should be given an opportunity to amend its pleadings to assert a claim for
benefits based on an assignment of rights from the injured party to plaintiff.

        Relevant to the parties’ arguments, on May 25, 2017, the Michigan Supreme Court
decided Covenant, wherein the Court held that healthcare providers do not have an independent
statutory cause of action against insurers to recover PIP benefits. Covenant, 500 Mich. at 195-
196, 217-218. Since Covenant was decided, this Court has determined that the rule announced in
Covenant applies equally to direct actions by healthcare providers against a state assigned claims
plan. W A Foote Mem Hosp v Mich Assigned Claims Plan, 321 Mich. App. 159, 172-173: __
NW2d __ (2017). We have also held that Covenant applies retroactively to cases pending on
direct appeal when Covenant was decided. Id. at 196. See also VHS Huron Valley Sinai Hosp v
Sentinel Ins Co (On Remand), __ Mich App __, __; __ NW2d __ (2018) (Docket No. 328005);
slip op at 2.

        In this case, Covenant is clearly dispositive with regard to plaintiff’s claims against
defendants. Quite simply, as a healthcare provider, plaintiff has no independent statutory claim
against defendants. Covenant, 500 Mich. at 195; W A Foote Mem Hosp, 321 Mich. App. at 172-
173. Under Covenant, defendants are entitled to summary disposition because plaintiff has no
cause of action against defendants, and thus, plaintiff has failed to state a claim on which relief
may be granted. See MCR 2.116(C)(8).

        On appeal, plaintiff does not offer a substantive challenge to defendants’ entitlement to
summary disposition under Covenant. Instead, plaintiff maintains that the Covenant question is
not properly before us because it was not raised and decided in the lower courts. In analogous
circumstances, we have previously rejected preservation arguments relating to Covenant and
exercised our discretion to review Covenant arguments that were not raised before, addressed
and decided by, the trial court. W A Foote Mem Hosp, 321 Mich. App. at 173-174. See also VHS
Huron Valley Sinai Hosp, slip op at 5. Specifically, we have recognized that a defense of
“failure to state a claim on which relief can be granted” cannot be waived, we have emphasized
our discretion to consider unpreserved questions of law, and we have acknowledged that, with

2
 Bronson Healthcare Group, Inc v Mich Assigned Claims Plan, unpublished order of the Court
of Appeals, entered May 8, 2017 (Docket No. 336088).

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regard to cases pending when Covenant was decided, a defendant should not be faulted for
failing to challenge a healthcare provider’s statutory right to bring a claim because pre-Covenant
caselaw would have rendered any such argument futile. W A Foote Mem Hosp, 321 Mich. App. at
173-174. Likewise, in this case, we find it appropriate to consider the questions of law posed by
defendants’ Covenant arguments, and we reject plaintiff’s assertions that these arguments are not
properly before us.3

        Alternatively, plaintiff argues that, if Covenant does apply to this case, plaintiff should be
given the opportunity to amend its complaint to pursue benefits on an assigned claim theory
because plaintiff can establish that the injured party treated by plaintiff assigned her claims to
plaintiff. In this regard, we note that an agreement to assign a “right to benefits payable in the
future is void.” MCL 500.3143. However, an injured person may assign “his or her right to past
or presently due benefits to a healthcare provider.” Covenant Med Ctr, Inc, 500 Mich. at 217 n
40. In Covenant, the Court expressly recognized that a healthcare provider’s inability to bring a
direct cause of action did not alter the injured party’s ability to assign past or presently due
benefits. Id. Given this fact, we agree that, in the circumstances presented in this case, plaintiff
should be given an opportunity to move the district court to amend its complaint. See W A Foote
Mem Hosp, 321 Mich. App. at 196.

         In sum, applying Covenant, we conclude as a matter of law that defendants are entitled to
summary disposition. Consequently, we vacate the decision of the circuit court, we reverse the
district court’s grant of summary disposition to plaintiff, and we remand to the district court for
entry of summary disposition in favor of defendants. On remand, plaintiff shall be given the
opportunity to file a motion to amend its complaint.

3
  We note that defendants’ application for leave to appeal and their supporting brief concerned
the circuit court’s jurisdictional decision and its conclusion that the district court order granting
summary disposition to plaintiff was not a final order. Defendants’ application for leave to
appeal to this Court did not raise defendants’ arguments relating to Covenant. Indeed, Covenant
was decided after we granted defendants’ application for leave to appeal. Typically, an appeal
“is limited to the issues raised in the application and supporting brief.” MCR 7.205(E)(4).
However, this Court has the discretionary power to “permit amendment or additions to the
grounds for appeal,” MCR 7.216(A)(3), and to “enter any judgment or order or grant further or
different relief as the case may require,” MCR 7.216(A)(7). In this case, we find it appropriate
to exercise this discretion to consider defendants’ dispositive Covenant arguments. Given our
conclusion that defendants are entitled to relief under Covenant, we find it unnecessary to
address the circuit court’s jurisdictional decision because, even if the district court order in
question was a final order, remand to the circuit court for further proceedings when defendants
are so clearly entitled to summary disposition would be a waste of judicial resources.

                                                 -3-
       Vacated in part, reversed in part, and remanded for proceedings consistent with this
opinion. We do not retain jurisdiction.

                                                        /s/ Joel P. Hoekstra
                                                        /s/ Peter D. O’Connell
                                                        /s/ Brock A. Swartzle

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