On March 27, 2018, the Michigan Court of Appeals vacated and remanded orders and judgments entered in favor of No-Fault medical providers based upon Covenant Med Ctr, Inc v State Farm Mut Auto Ins Co, 500 Mich 191; 895 NW2d 490 (2017). In all three cases, Covenant was decided during the appellate process. In two of the cases, a jury had reached a verdict in favor of the providers. The Michigan Court of Appeals found support for its decisions in WA Foote Mem Hosp v Michigan Assigned Claims Plan, 321 Mich App 159 (2017), which found the Covenant decision must be given retroactive application. The Court of Appeals found, in all three cases, that Covenant and its progeny mandated that the medical provider did not have an independent statutory cause of action, and remanded the cases in order to ferret out post-Covenant issues such as non-assignment clauses, assignments of benefits payable in the future prohibited by MCL 500.3143, no relation back of supplemental pleadings, declaratory judgment and real party in interest.
In Spectrum Health Hosps v Wolverine Mut Ins Co, ___NW2d___; 2018 Mich. App. LEXIS 889 (Ct App, Mar. 27, 2018), Spectrum sought unpaid No-Fault benefits as to medical treatment rendered to two claimants. Wolverine previously issued partial payments in both claims. Spectrum initiated suit seeking the balance and attorney fees under MCL. 500.3148(1). A jury returned a verdict in favor of Spectrum. Wolverine appealed the judgment, and argued that there was a reasonable dispute as to what criteria could be used to determine reasonableness under the statute. The Court of Appeals remanded, and held that Spectrum did not have a statutory right to bring an action pursuant to Covenant.
In Bronson Health Care Group v Farm Bureau Mut Ins Co, ___NW2d___; 2018 Mich. App. LEXIS 896 (Ct App, Mar. 27, 2018), Bronson sought unpaid No-Fault benefits, including penalty interest and attorney fees, as to two parties, Courtney and Lamson, in two separate cases. In both the Courtney and Lamson matters, the parties stipulated to enter orders against Farm Bureau. Farm Bureau filed a consolidated appeal as to both claims. The Court of Appeals vacated the orders on the basis of Bronson’s lack of standing.
In Bronson Methodist Hosp v Farm Bureau Mut Ins Co, ___NW2d___; 2018 Mich. App. LEXIS 944 (Ct App, Mar. 27, 2018), Bronson sought unpaid No-Fault benefits pertaining to consolidated claims for medical treatment rendered, which included implant products. Bronson sought the difference between what it billed Farm Bureau for the implant products and what Farm Bureau paid. The matters were jointly tried before a jury. A directed verdict was entered for Bronson as to whether Bronson provided Farm Bureau with reasonable proof of the fact and amount of loss, and whether its charges were its “customary” charges. The jury concluded Bronson’s charges were reasonable, and Farm Bureau paid the amount issued in the judgment. Bronson subsequently sought attorney fees under MCL 500.3148(1), arguing Farm Bureau unreasonably refused to pay its claim. The trial court awarded attorney’s fees and Farm Bureau appealed. Farm Bureau contended that the award of attorney’s fees was inappropriate, and the lower courts erred by failing to consider certain expert testimony. However, the Court of Appeals declined to address Farm Bureau’s arguments on appeal finding Bronson lacked statutory standing to bring the action under Covenant.
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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
