Court Opinion

ID: 4464048
Source: CourtListenerOpinion
Date Created: 2019-12-13 14:05:52.084414+00
Date Added: 2024-06-11T14:53:28.058468
License: Public Domain

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                 revision until final publication in the Michigan Appeals Reports.

                           STATE OF MICHIGAN

                            COURT OF APPEALS

KINGS HOME HEALTHCARE, INC., assignee of                             UNPUBLISHED
DARELL JOHNSON,                                                      December 12, 2019

               Plaintiff-Appellant,

v                                                                    No. 344808
                                                                     Oakland Circuit Court
ALLSTATE PROPERTY & CASUALTY                                         LC No. 2017-162241-NF
INSURANCE COMPANY and ALLSTATE
INSURANCE COMPANY,

               Defendants-Appellees.

Before: CAMERON, P.J., and CAVANAGH and SHAPIRO, JJ.

PER CURIAM.

        In this action for recovery of personal protection insurance (“PIP”) benefits under the no-
fault act, MCL 500.3101 et seq.,1 plaintiff, Kings Home Healthcare, Inc., as assignee of Darell
Johnson, appeals the trial court’s order granting summary disposition in favor of defendants,
Allstate Property & Casualty Insurance Company and Allstate Insurance Company
(“defendants”). We affirm.

                 I. BACKGROUND FACTS AND PROCEDURAL HISTORY

       Darell Johnson was injured in a motor vehicle accident and subsequently received
services from plaintiff in late 2016. According to a letter plaintiff mailed to defendants, plaintiff

1
 While this appeal was pending, the No-Fault Act was amended by 2019 PA 21, effective June
11, 2019. “Amendments of statutes are generally presumed to operate prospectively unless the
Legislature clearly manifests a contrary intent.” Tobin v Providence Hosp, 244 Mich. App. 626,
661; 624 NW2d 548 (2001), citing Selk v Detroit Plastic Products, 419 Mich. 1, 9; 345 NW2d
184 (1984). Therefore, the applicable provisions of the former no-fault act that were in effect
when this case commenced are referenced in this opinion where appropriate.

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provided Johnson with “extensive 24[-]hour care,” which included meals, medication review,
medication administration, personal care, hygiene, assistance with psychiatric care, walking
assistance, “Bedbound” assistance, and “Transfer Assistance.”

         In 2017, Johnson executed an assignment of his right to recover PIP benefits to plaintiff.
Plaintiff subsequently filed a complaint against defendants, alleging that it was entitled to
payment for the services it had provided to Johnson. Defendants filed a motion for summary
disposition, arguing in relevant part that because plaintiff was an unlicensed adult foster care
facility, it was ineligible to recover because it had unlawfully rendered its services. Plaintiff did
not dispute that it was operating an unlicensed foster care facility in its response to defendants’
motion, but instead alleged that defendants lacked standing to challenge its licensure. The trial
court ultimately granted defendants’ motion for summary disposition, and this appeal followed.

                                  II. STANDARD OF REVIEW

        This Court reviews a trial court’s decision on a motion for summary disposition de novo.
Zaher v Miotke, 300 Mich. App. 132, 139; 832 NW2d 266 (2013). “A motion for summary
disposition under MCR 2.116(C)(10) tests the factual support of the plaintiff’s claim and should
be granted, as a matter of law, if no genuine issue of any material fact exists to warrant a trial.”
Doe v Henry Ford Health Sys, 308 Mich. App. 592, 596-597; 865 NW2d 915 (2014). “When
evaluating a motion for summary disposition under MCR 2.116(C)(10), ‘a trial court considers
affidavits, pleadings, depositions, admissions, and other evidence submitted by the parties . . . in
the light most favorable to the party opposing the motion.’ ” Innovation Ventures v Liquid Mfg,
499 Mich. 491, 507; 885 NW2d 861 (2016), citing Maiden v Rozwood, 461 Mich. 109, 120; 597
NW2d 817 (1999). “ ‘Where the proffered evidence fails to establish a genuine issue regarding
any material fact, the moving party is entitled to judgment as a matter of law.’ ” Innovation, 499
Mich. at 507, citing Maiden, 461 Mich. at 120.

               III. STATUTORY STANDING TO CHALLENGE LICENSURE

        Plaintiff claims that the trial court erred when it considered defendants’ argument that
plaintiff operated an unlicensed adult foster care facility because defendants lacked standing to
raise that argument. Plaintiff’s contention fails.

        Whether a party has standing is a question of law that we review de novo. Groves v
Dep’t of Corrections, 295 Mich. App. 1, 4; 811 NW2d 563 (2011). Questions of statutory
standing require analyzing the statutory language to determine legislative intent. Miller v
Allstate Ins Co, 481 Mich. 601, 608-610; 751 NW2d 463 (2008). “The primary rule of statutory
construction is to effectuate the intent of the Legislature, and where the statutory language is
clear and unambiguous, it is generally applied as written.” Proudfoot v State Farm Mut Ins Co,
469 Mich. 476, 482; 673 NW2d 739 (2003).

       In Miller, 481 Mich. at 606-607, our Supreme Court explained:

               Our constitution requires that a plaintiff possess standing before a court
       can exercise jurisdiction over that plaintiff’s claim. This constitutional standing
       doctrine is longstanding and stems from the separation of powers in our
       constitution. Because the constitution limits the judiciary to the exercise of
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       judicial power, Const 1963, art 6, § 1, the Legislature encroaches on the
       separation of powers when it attempts to grant standing to litigants who do not
       meet constitutional standing requirements.

               Although the Legislature cannot expand beyond constitutional limits the
       class of persons who possess standing, the Legislature may permissibly limit the
       class of persons who may challenge a statutory violation. That is, a party that has
       constitutional standing may be precluded from enforcing a statutory provision, if
       the Legislature so provides. This doctrine has been referred to as a requirement
       that a party possess statutory standing. Statutory standing simply entails statutory
       interpretation: the question it asks is whether the Legislature has accorded this
       injured plaintiff the right to sue the defendant to redress his injury. [Quotation
       marks and alteration brackets omitted.]

“Statutory standing, which necessitates an inquiry into whether a statute authorizes a plaintiff to
sue at all, must be distinguished from whether a statute permits an individual claim for a
particular type of relief.” Id. at 608. “The principle of statutory standing is jurisdictional; if a
party lacks statutory standing, then the court generally lacks jurisdiction to entertain the
proceeding or reach the merits.” In re Beatrice Rottenberg Living Trust, 300 Mich. App. 339,
355; 833 NW2d 384 (2013).

        Plaintiff relies on our Supreme Court’s decision in Miller to argue that defendants lacked
statutory standing. In Miller, William Miller underwent physical therapy at PT Works, Inc., after
he was injured in two different motor vehicle accidents. Id. at 604. PT Works billed Miller’s
insurance company but the insurance company refused to pay. Id. at 605. Miller assigned his
claim to PT Works, which filed a claim against the insurance company. Id. The insurance
company moved for summary disposition, alleging that it did not have to pay PIP benefits
because PT Works was improperly incorporated under the Business Corporations Act (“BCA”),
MCL 450.1101 et seq. Id. at 605. According to the insurance company, PT Works was required
to incorporate under the Professional Services Corporations Act, MCL 450.221 et seq. Id. The
trial court denied the insurance company’s motion for summary disposition based on a
determination that PT Works could incorporate under the BCA. Id. Appellate proceedings
followed. Id. at 605-606.

        Ultimately, the matter reached our Supreme Court, which reasoned that the relevant
question was whether the BCA granted the insurance company statutory standing to challenge
PT Works’ corporate status. Miller, 481 Mich. at 610. The Miller Court, id., noted that MCL
450.1221 provides the following: “The corporate existence shall begin on the effective date of
the articles of incorporation . . . . Filing is conclusive evidence that . . . the corporation has been
formed under this act, except in an action or special proceeding by the attorney general.”

        The Miller Court held that the plain language of MCL 450.1221 “create[d] an irrebuttable
presumption of proper incorporation once the articles of incorporation have been filed,” and that
“[t]he statute then creates a single exception to this general rule by granting the Attorney General
the sole authority to challenge whether a corporation has been properly incorporated under the
BCA.” Miller, 481 Mich. at 611. “In essence, MCL 450.1221 prevents any person—other than
the Attorney General—from bringing any challenge to corporate status under the BCA: every

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such challenge would be doomed to failure, because the mere filing of articles of incorporation
constitutes ‘conclusive evidence’ of the corporation’s legality.” Id. at 611-612. Thus, the Miller
Court held that the insurance company lacked the requisite “statutory standing to assert that PT
Works was improperly incorporated[.]” Id. at 616. In so holding, the Miller Court held that
because the insurance company was barred from bringing an original suit against PT Works, then
it was “illogical” to permit the insurance company to challenge PT Works’ incorporation as an
affirmative defense. Id. at 610 n 5.

        In this case, plaintiff claims that defendants’ challenge to plaintiff’s lack of licensure as
an affirmative defense to payment of PIP benefits is barred because defendants do not have
standing to assert this defense. Plaintiff argues that, like the BCA, the provisions governing
licensure of facilities like the facility operated by plaintiff are enforced by the Department of
Licensing and Regulatory Affairs (“LARA”) and therefore plaintiff’s lack of licensure is not
subject to challenge by defendants. We disagree.

        Adult foster care is governed by the Adult Foster Care Facility Licensing Act
(“AFCFLA”), MCL 400.701 et seq. Regarding licensure, MCL 400.713(1) provides the
following: “A person, partnership, corporation, association, or a department or agency of the
state, county, city, or other political subdivision shall not establish or maintain an adult foster
care facility unless licensed by the department,” i.e., LARA. See MCL 400.704(3).
Additionally, MCL 400.709(1) provides: “The department shall administer this act and shall
require reports, establish procedures, make inspections, and conduct investigations pursuant to
law to enforce the requirements of this act and the rules promulgated under this act.”

        “If [LARA] determines that an unlicensed facility is an adult foster care facility, [LARA]
shall notify the owner or operator of the facility that it is required to be licensed under [the
AFCFLA].” MCL 400.713(12). If a person does not apply for a license within thirty days of
receiving notice from LARA, then the person is subject to a “misdemeanor, punishable by
imprisonment for not more than 2 years or a fine of not more than $50,000.00, or both.” MCL
400.713(13). The AFCFLA also allows individuals to request an investigation of a facility to
determine whether it is operating as an adult foster care facility without a license. See MCL
400.724(1). Finally, “the attorney general, on behalf of [LARA], may seek an injunction against
an adult foster care facility” that is “being operated without a license.” MCL 400.730(a).

        Thus, like the enforcement of corporate status under the BCA, the enforcement of
licensing requirements for adult foster care facilities is assigned to a regulatory agency and the
Michigan Attorney General. That is where the similarities between the BCA and the AFCFLA
end, however. As already stated, MCL 450.1221 of the BCA provides a presumption of legality
pertaining to the incorporation of an entity that may only be challenged by the Attorney General.
No provision of the AFCFLA provides a similar presumption of legality once certain documents
are filed. Although a person may request an investigation of an adult foster care facility and
there are certain procedures that LARA must follow once it determines that a facility is
improperly operating as an unlicensed adult foster facility, this does not demonstrate that
unlicensed adult foster care facilities are entitled to a presumption of legality under the AFCFLA
that may only be rebutted by LARA. Rather, unlike the BCA, there is no language within the
AFCFLA that prevents entities like defendants from asserting an affirmative defense of improper
licensure.

                                                -4-
        Moreover, the facts in Miller are distinguishable from the facts herein. In Miller, it was
undisputed that PT Works filed articles of incorporation under the BCA. Miller, 481 Mich. at
605. Consequently, PT Works was afforded a presumption that it was properly incorporated. Id.
at 611. Here, even if the AFCFLA afforded a presumption that a person or entity providing adult
foster care services was licensed once an application for a license accompanied by the
appropriate fee was provided to LARA, that presumption would not apply to plaintiff.2 There is
no evidence before this Court that plaintiff filed an application and paid the appropriate
application fee in compliance with the requirements outlined in the AFCFLA. Rather, the record
establishes that plaintiff operated its adult foster care facility without attempting to obtain a
license. Thus, unlike the plaintiff in Miller who filed the appropriate documents and was
afforded a presumption of proper incorporation as a result, plaintiff herein would not be entitled
to a presumption even if one was afforded by the AFCFLA. Consequently, plaintiff’s reliance
on Miller is misplaced, and we conclude that defendants have statutory standing to challenge
whether plaintiff is in violation of the AFCFLA.

                                IV. PLAINTIFF’S LICENSURE

       Plaintiff argues that the trial court improperly granted summary disposition based on its
finding that the undisputed record evidence established that the services provided by plaintiff
were not lawfully provided because plaintiff was not properly licensed under the AFCFLA. We
disagree.

       MCL 500.3157 provides, in pertinent part, the following:

       [A] physician, hospital, clinic or other person or institution lawfully rendering
       treatment to an injured person for an accidental bodily injury covered by personal
       protection insurance, and a person or institution providing rehabilitative
       occupational training following the injury, may charge a reasonable amount for
       the products, services and accommodations rendered.

       Consequently, “[i]f the treatment was not lawfully rendered, it is not a no-fault benefit
and payment for it is not reimburseable.” Cherry v State Farm Mut Auto Ins Co, 195 Mich. App.
316, 320; 489 NW2d 788 (1992).

        In Healing Place at North Oakland Med Ctr v Allstate Ins Co, 277 Mich. App. 51, 53; 744
NW2d 174 (2007), Edward Naylor was struck by a motor vehicle when he was riding his bicycle
in 1995. Naylor suffered a brain injury. Id. In addition to the brain injury, Naylor also had pre-
existing psychiatric disorders and a substance abuse issue. Id. at 54. Sometime after the
accident, Naylor was sentenced to a term of imprisonment for reasons that are unclear. Id. After
being released from prison in 2004, Naylor admitted himself to New Start, The Healing Place,
and The Healing Place at North Oakland Medical Center, where he received treatment for the

2
  MCL 400.713(2) provides that “[a]pplication for a license shall be made on forms provided and
in the manner prescribed by [LARA]. The application shall be accompanied by the fee
prescribed in [MCL 400.713a.]”

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brain injury, his substance abuse issue, and his psychological issues. Id. Claims arising from the
treatment were submitted to the insurance company, which denied the claims. Id. Litigation
ensued, and the trial court ultimately granted summary disposition in favor of the insurance
company after determining that the treatment was not compensable. Id. at 54-55.

        On appeal, this Court affirmed the trial court’s decision to grant summary disposition in
favor of the insurance company. Healing Place, 277 Mich. App. at 61. In doing so, this Court
cited Cherry, 195 Mich. App. at 318. In Cherry, this Court explained that “the Legislature
intended that only treatment lawfully rendered, including being in compliance with licensing
requirements, is subject to payment as a no-fault benefit.” Cherry, 195 Mich. App. at 320. The
Healing Place Court went on to explain that the services provided to Naylor were not “lawfully
rendered” because The Healing Place and New Start were not licensed. Healing Place, 277
Mich. App. at 58. This Court explained that “if both the individual and the institution were each
required to be licensed and either was not, the ‘lawfully render[ed]’ requirement [contained in
MCL 500.3157] would be unsatisfied.” Id. at 59. Because the facilities that provided services to
Naylor were not properly licensed, this Court held that the trial court properly granted summary
disposition in favor of the insurance company. Id. at 59-61.

        Here, like in Healing Place, the issue on appeal is whether plaintiff was properly
licensed. As already stated, if a facility meets the definition of an adult foster care facility, it
must be licensed by the State of Michigan. See MCL 400.713(1). Under the AFCFLA,
“ ‘[a]dult foster care facility’ means a home or facility that provides foster care to adults,” which
“includes facilities and foster care family homes for adults who are aged, mentally ill,
developmentally disabled, or physically disabled who require supervision on an ongoing basis
but who do not require continuous nursing care.” MCL 400.703(4). In pertinent part, “foster
care” is defined as “the provision of supervision, personal care, and protection in addition to
room and board, for 24 hours a day, 5 or more days a week, and for 2 or more consecutive weeks
for compensation.” MCL 400.704(8). The term “supervision,” as used in the AFCFLA, is
defined as:

       guidance of a resident in the activities of daily living, including 1 or more of the
       following:

       (a) Reminding a resident to maintain his or her medication schedule, as directed
       by the resident’s physician.

       (b) Reminding a resident of important activities to be carried out.

       (c) Assisting a resident in keeping appointments.

       (d) Being aware of a resident’s general whereabouts even though the resident may
       travel independently about the community. [MCL 400.707(7).]

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        MCL 400.706(1) defines “personal care” as “personal assistance provided by a licensee
or an agent or employee of a licensee to a resident who requires assistance with dressing,
personal hygiene, grooming, maintenance of a medication schedule as directed and supervised by
the resident’s physician, or the development of those personal and social skills required to live in
the least restrictive environment.” Under the AFCFLA, the term “protection” is defined as

       the continual responsibility of the licensee to take reasonable action to ensure the
       health, safety, and well-being of a resident, including protection from physical
       harm, humiliation, intimidation, and social, moral, financial, and personal
       exploitation while on the premises, while under the supervision of the licensee or
       an agent or employee of the licensee, or when the resident’s assessment plan
       states that the resident needs continuous supervision. [MCL 400.706(5).]

         In this case, the undisputed record evidence establishes that plaintiff provided Johnson
with “foster care” services as defined in MCL 400.704(8).3 More specifically, plaintiff admitted
that it provided “room,” “personal care,” “supervision,” and “daily meals” to Johnson on a daily
basis when he was a client. Plaintiff also admitted that it provided Johnson with “protection”
and “24/7 a day” “services” for “two or more consecutive weeks . . . .” As such, plaintiff’s
facility was required to be licensed under MCL 400.713(1), and it is undisputed that plaintiff’s
facility was not licensed.

      Plaintiff asserts that licensing is irrelevant because it did not provide “treatment” to
Johnson as referenced in MCL 500.3157. We disagree.

       As already stated, MCL 500.3157 provides, in pertinent part, the following:

       [A] physician, hospital, clinic or other person or institution lawfully rendering
       treatment to an injured person for an accidental bodily injury covered by personal
       protection insurance, and a person or institution providing rehabilitative
       occupational training following the injury, may charge a reasonable amount for
       the products, services and accommodations rendered. [Emphasis added.]

       Plaintiff relies on the dictionary definition of “treatment” to support its claim that it did
not apply medicines, perform surgery, or engage in therapy in treating Johnson’s injuries.
Rather, plaintiff argues that it merely provided “room, board, attendant care, and case

3
  We would reach the same conclusion if we considered plaintiff’s untimely response to
defendants’ request for admissions, which the trial court did not authorize plaintiff to file. We
note that the admissions provided definitions for the terms “personal care,” “supervision,” and
“protection” that corresponded with the definitions of those terms provided within the AFCFLA
under MCL 400.706(1), MCL 400.707(7), and MCL 400.706(5), respectively.

                                                -7-
management services” to Johnson,4 and that those “services” do not fall within the dictionary
definition of “treatment.”

         Contrary to plaintiff’s claim, however, this Court in Healing Place ultimately held that
the services provided by The Healing Place and New Start were not lawfully rendered under
MCL 500.3157 because the plaintiffs were not properly licensed to perform the services
rendered, which included services that would require a license to operate as an adult foster care
facility. Healing Place, 277 Mich. at 59-61. The Healing Place Court’s holding that unlicensed
adult foster care services were not compensable under MCL 500.3157 necessarily required the
Court to conclude that the services the adult foster care facility provided constituted “treatment”
under MCL 500.3157. We are bound by that conclusion. MCR 7.215(J)(1). Consequently,
plaintiff’s argument that it did not provide “treatment” to Johnson consistent with MCL
500.3157 is without merit. See also Another Step Forward v State Farm Mut Auto Ins Co, 367 F
Appx 648, 650 (CA 6, 2010) (“The evidence about [the insured’s] medical condition indicates
that he required attendant care twenty-four hours per day to help him carry out the basic
activities of daily life. This type of treatment falls squarely into the statutory definition of foster
care.”).5

        Finally, plaintiff claims that it was premature for the trial court to grant summary
disposition in favor of defendants because discovery was not yet complete. “Generally,
summary disposition is premature if it is granted before discovery on a disputed issue is
complete.” Marilyn Froling Revocable Living Trust v Bloomfield Hills Country Club, 283 Mich
App 264, 292; 769 NW2d 234 (2009). Nevertheless, summary disposition may be appropriate
where it is unlikely that further discovery will uncover factual support for the opposing party’s
position. See Liparoto Constr Co, Inc v Gen Shale Brick, Inc, 284 Mich. App. 25, 33-34; 772
NW2d 801 (2009). Thus, a “party opposing a motion for summary disposition because
discovery is not complete must provide some independent evidence that a factual dispute exists.”
Caron v Cranbrook Ed Community, 298 Mich. App. 629, 645-646; 828 NW2d 99 (2012)
(quotation marks and citation omitted). “Mere speculation that additional discovery might
produce evidentiary support is not sufficient.” Id. at 646 (citation omitted).

       Plaintiff argues that it would have sought documents and testimony from a LARA
representative to determine whether plaintiff required a license under the AFCFLA to further

4
   Although plaintiff argues that it provided Johnson with “attendant care” and “case
management,” plaintiff does so in a cursory manner and does not explain or rationalize how the
services that it provided to Johnson fit within the definition of “attendant care” and “case
management,” as opposed to foster care services as defined in MCL 400.704(8). Furthermore,
plaintiff does not cite to the record to support its cursory argument as required under MCR
7.212(7). Consequently, plaintiff has abandoned its argument that it is entitled to compensation
for providing Johnson “attendant care” and “case management” services. See Mitchell v
Mitchell, 296 Mich. App. 513, 524; 823 NW2d 153 (2012).
5
 Although lower federal court decisions are not binding on state courts, they may be considered
persuasive. Abela v Gen Motors Corp, 469 Mich. 603, 606-607; 677 NW2d 325 (2004).

                                                 -8-
“develop the facts at issue.” However, plaintiff has failed to provide any independent evidence
that a factual dispute exists regarding whether it was an unlicensed adult foster care facility.
Instead, plaintiff merely speculates that documents and testimony from LARA representatives
would produce evidentiary support for its position. Moreover, we fail to see how plaintiff could
uncover factual support for its position given that plaintiff admitted that it operated an unlicensed
adult foster care facility. See Liparoto Constr Co, 284 Mich. App. at 33-34. Therefore, plaintiff
has failed to demonstrate that the trial court’s grant of summary disposition was premature.

       In sum, the trial court did not err by granting summary disposition on the basis that the
services in question were not lawfully rendered. Because we conclude the trial court correctly
granted summary disposition on that basis, defendants’ argument that the trial court could have
granted summary disposition on an alternative ground is moot. See Healing Place, 277 Mich. at
60.

       Affirmed.

                                                              /s/ Thomas C. Cameron
                                                              /s/ Mark J. Cavanagh
                                                              /s/ Douglas B. Shapiro

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