September 6, 2017
Volume XXIX, No. 20

 

COVENANT APPLIES RETROACTIVELY, EVEN TO CASES ALREADY PENDING AT THE TIME OF THE SUPREME COURT’S DECISION

 By Sarah Nadeau

In a newly released, published decision of the Michigan Court of Appeals, W.A. Foote Memorial Hospital v Michigan Assigned Claims Plan, ___ Mich App ___ (8/31/17) (concurrence), the Court of Appeals held that the Michigan Supreme Court’s decision in Covenant Medical Center, Inc v State Farm Mutual Ins Co, ___ Mich ___; 895 NW2d 490 (2017) applied retroactively to the case before it, and to all cases open on direct review.

In Foote, Zoie Bonner was a passenger in a vehicle driven by her boyfriend when she was involved in a motor vehicle accident and suffered injuries. The vehicle was owned by Bonner’s aunt or uncle, and was insured under a no-fault automobile policy issued by Citizens Insurance Company of the Midwest. Bonner was treated for her injuries at plaintiff hospital but plaintiff hospital never inquired of Bonner whether she was covered under a no-fault insurance policy. One day before the one-year anniversary of the accident, plaintiff hospital filed a claim with defendant MACP seeking to recover PIP benefits on Bonner’s behalf. The following day, plaintiff hospital filed suit seeking a declaratory judgment that defendant MACP had a duty to promptly assign plaintiff’s claim to an insurer and that, upon assignment, the insurer would be responsible to process and pay the claim.

MACP filed a motion for summary disposition which was granted by the Circuit Court because plaintiff had failed to demonstrate that it could not have identified applicable insurance at the time it submitted its application for PIP benefits to defendant. Plaintiff appealed.

On appeal, the Foote Court of Appeals determined that Covenant applied to the facts of its case and therefore affirmed the Circuit Court’s granting of summary disposition, albeit for different reasons. The Court determined that Covenant makes clear that healthcare providers such as plaintiff cannot pursue a statutory cause of action for PIP benefits directly from an insurer, and nothing in Covenant or the language of MCL 500.3172(1) suggests a different outcome where a healthcare provider seeks benefits from an insurer assigned by defendants as opposed to a known insurer. The Foote Court then turned to the question whether Covenant applies retroactively, or prospectively.

Finding that defendant MACP had not waived, and had in fact preserved, the issue of whether plaintiff had stated a claim upon which relief could be granted, the Foote Court then noted the long-standing general rule that judicial decisions are to be given complete retroactive effect. The Court further noted that if a rule of law announced in an opinion is held to operate retroactively, it applies to all cases still open on direct review. The Foote Court acknowledged that not all Michigan Supreme Court decisions will be applied retroactively, but relied upon Spectrum Health Hospitals v Farm Bureau Mutual Ins Co of Michigan, 492 Mich 503; 821 NW2d 117 (2012), to find that the Covenant decision was retroactive in its operation. The Spectrum Court found that the general principal is that decisions of a court of supreme jurisdiction overruling a former decision is retrospective in its operation, and the effect is not that the former decision is bad law, but that it never was the law. Applying that analysis to its own case, the Foote Court determined that judicial decisions of statutory interpretation must apply retroactively because retroactivity is the vehicle by which “the law” remains “the law.” “[I]ntervening judicial decisions that may have misinterpreted existing statutory law simply are not, and never were, “the law.”"

Finally, the Foote Court noted that the Supreme Court not only remanded the Covenant case to the Circuit Court for entry of summary disposition in favor of defendant, but also has subsequently remanded at least two cases, in lieu of granting leave to appeal, to the Court of Appeals for reconsideration in light of Covenant. Thus, the Supreme Court already applied the rule of law it announced in Covenant, and directed the Court of Appeals to consider Covenant’s application to cases pending on direct appeal. Therefore, the Foote Court held that Covenant is to be applied retroactively.

In light of this decision, action should be taken in all cases currently pending in District Courts, Circuit Courts, and the Court of Appeals to insure that the Covenant decision is applied retroactively.

Sarah is a Partner in our Detroit Office.She can be reached at (313) 446-5534 or snadeau@garanlucow.com

 

 

SEMINARS

 

LAST MINUTE REGISTRATION STILL OPEN

TROY BREAKFAST SEMINAR

 

The TROY BREAKFAST SEMINAR will take place on Friday, September 8, at the Marriott in Troy. This is a complimentary seminar for our clients. Click HERE for the Agenda.

Please RSVP to Eileen Carty:  ecarty@garanlucow.com

BASICS OF MICHIGAN AUTOMOBILE
NO-FAULT INSURANCE LAW COURSE

Garan Lucow Miller, P.C. is pleased again to offer this in-depth, educational course to our clients. It will be taught each Tuesday evening, from September 19, 2017 through November 21, 2017, from 6:00 p.m. to 8:00 p.m.

This year the 9 week course will take place at the Crowne Plaza Hotel, 925 South Creyts Road, Lansing, MI 48917

The cost of the 9 week course is $350.00 per person, with a discount of $50.00 per person for more than 2 registrants from the same company.

Please contact Eileen Carty to register at ecarty@garanlucow.com or (248) 641-7600.

 

 

ARTPRIZE NINE EVENT

Please join us at our Grand Rapids office, the perfect location to enjoy all of the downtown ArtPrize venues, including a new installation this year on our outdoor plaza. Live music will be performed in the lobby by select musicians from the Grand Rapids Symphony. Hors d’oeuvres and refreshments will be provided. Free underground parking for all guests. Families are welcome.

Wednesday, September 27, 2017

300 Ottawa Ave. N.W.

Downtown Grand Rapids

5:00 p.m. to 8:00 p.m.

Please RSVP to Eileen Carty: ecarty@garanlucow.com

 

 

SAVE THE DATE

RIVALRY SEMINAR

The RIVALRY SEMINAR will take place on Friday, October 6th, at Weber’s Inn, in Ann Arbor.  This is a complimentary seminar for our clients. An Agenda will be posted soon.

 

 

SAVE THE DATE

BUCKEYE SEMINAR

The BUCKEYE SEMINAR will take place on Thursday, November 2, at The Greater Columbus Convention Center in Columbus, Ohio. This is a complimentary seminar for our clients. An Agenda will be posted soon.

 

 

For inquires, upcoming seminars, or in-house seminar requests please contact Eileen Carty at ecarty@garanlucow.com

Sarah Nadeau, Editor of the Law Fax Publication,

is a Shareholder in our Detroit Office.

Sarah can be reached at 313.446.1530 or snadeau@garanlucow.com

 

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