July 27, 2015
In Garden City Rehab, LLC, v State Farm Mutual Automobile Ins Co, No 320543 (Mich App June 18, 2015), the Michigan Court of Appeals reversed the lower court’s denial of State Farm’s motion for partial summary disposition and determined that Garden City Rehab’s provider’s lawsuit for PIP benefits was precluded by both collateral estoppel and res judicata.
In Garden City Rehab, the Plaintiff provider sought to recover no-fault PIP benefits for physical therapy services provided to Ali Elchami from February 24, 2012 through April 5, 2012, which were allegedly necessitated by injuries that Elchami received in a 2009 motor vehicle accident. Elchami, however, had previously filed a lawsuit against State Farm to recover first-party PIP benefits. The court in that case concluded that Elchami had recovered from his injuries related to the accident and was not entitled to benefits after October 2010. Relying on that decision, State Farm sought dismissal of Garden City Rehab’s complaint for PIP benefits arguing that Garden City Rehab’s claims were barred by the doctrines of collateral estoppel and res judicata. The trial court denied State Farm’s motion.
On appeal, the Court of Appeals issued a unanimous decision reversing the trial court’s denial of summary disposition and determining that Garden City Rehab’s claim is barred under both collateral estoppel and res judicata.
With respect to collateral estoppel, the Court recognized that this doctrine precludes relitigation of an issue in a subsequent, different case between the same parties or their privies if the prior action resulted in a valid final judgment and the issue was actually and necessarily determined in the prior matter. In determining that Garden City Rehab’s claim was barred by the doctrine of collateral estoppel the Court of Appeals concluded that the issue of whether Garden City Rehab’s physical therapy services provided to Elchami in 2012 were reasonably necessary for Elchami’s care, recovery, and rehabilitation from the injuries he received in the 2009 accident was already litigated in the case brought by Elchami himself. In that action the court had held that Elchami’s condition had improved to the point that further medical services were no longer reasonably necessary after October 2010. Thus, the court in Elchami’s PIP case already decided that Elchami’s physical therapy services received in 2012 were not reasonably necessary as a result of the 2009 accident because no medical services were reasonably necessary after October 2010. The Court of Appeals also found that Elchami and Garden City Rehab were in privity because they shared a substantial identity of interests and a functional relationship and, as a result, collateral estoppels precluded Garden City Rehab’s medical provider PIP claim.
Not only was Garden City Rehab’s claim barred by collateral estoppel, the Court also found it was precluded by res judicata. Res judicata bars a subsequent action between the same parties when (1) the first action was decided on the merits, (2) the matter contested in the second action was or could have been resolved in the first, and (3) both actions involve the same parties or their privies. The Court relied on the published case of TBCI v State Farm Mut Auto Ins Co, 289 Mich App 39 (2010) to support its decision that Garden City Rehab’s claim was barred by res judicata because Garden City Rehab’s claim was “dependent upon a showing that Elchami continued to require medical treatment reasonably related to the 2009 accident after October 2010”, but the trial court had already decided this issue against Elchami in his PIP case where it determined that no medical services were reasonably necessary after October 2010. Moreover, Garden City Rehab was in privity with Elchami because it was required to “stand in his shoes” for purposes of entitlement to PIP benefits. Because Garden City Rehab was attempting to relitigate an issue already decided on the merits – whether medical services provided to Elchami after October 2010 were reasonably necessary – and it was in privity with Elchami, Garden City Rehab’s claim was precluded under res judicata.
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TROY BREAKFAST SEMINAR
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BASICS OF MICHIGAN AUTOMOBILE NO-FAULT INSURANCE LAW COURSE
Garan Lucow Miller, P.C. is pleased to once again offer this in-depth, educational course in the Fall of 2015. It will be taught each Tuesday evening, beginning September 29, 2015, and running through November 24, 2015, from 6:00 p.m. to 8:00 p.m.
In an effort to facilitate our clients in the Detroit Metro area, the course will be held at the Courtyard Marriott, located at 42700 W. 11 Mile Rd., Novi, MI 48375. 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.
2015 WOMEN IN THE LAW
Congratulations to Sarah Nadeau, a Shareholder in our Detroit office, selected by Michigan Lawyers Weekly as one of the 2015 Women in the Law.
The selection criteria included commitment to excellence in the practice of law, inspiring and accomplished leadership in the profession, mentoring and significant contributions of time and effort to volunteer and/or pro bono activities.
For inquires, upcoming seminars, or in-house seminar requests please contact Eileen Carty at firstname.lastname@example.org