March 15, 2018
In a recent published decision, Bronson Healthcare Group, Inc. v Michigan Assigned Claims Plan, et al, ___ Mich App ___; ___ NW2d ___ (Docket No. 336088, 03/08/18), the Michigan Court of Appeals simultaneously preserved the retroactive application of Covenant Med. Ctr., Inc. v State Farm Mutual Auto. Ins. Co., 500 Mich 191 (2017), while implicitly affirming the right of a medical provider to assert standing under an assignment theory. The Court found a defendant’s failure to raise any “Covenant” defenses (i.e., that Plaintiff lacks an independent statutory cause of action) in the lower court, or even in the appeal, did not result in Defendant waiving those defenses.
In Bronson, the underlying claimant sustained injuries arising out of a motor vehicle accident that occurred in October 2014. At that time, he was not covered by his own policy of insurance, and therefore, Plaintiff provider sought to have the Michigan Assigned Claims Plan assign the matter to an insurer. The Plaintiff then filed its complaint in District Court, seeking to recover approximately $5,000.00 in no-fault PIP benefits.
The District Court granted summary disposition in favor of Plaintiff, finding that the MACP was obligated to assign the claim to an insurer, and that the not-yet identified insurer was liable for the benefits. When Defendants appealed this decision to the Circuit Court, the circuit court found that it lacked subject matter jurisdiction, as the order was not a final order pursuant to MCR 7.103(A)(1).
Defendants filed an application for leave to appeal in the Michigan Court of Appeals, which the Court granted on May 8, 2017. On appeal, Defendants requested that the Court of Appeals remand the claim for dismissal in their favor under Covenant. Notably, Defendants did not raise these issues in the lower courts, which Plaintiff argued should bar Defendants’ relief. Moreover, Plaintiff sought the opportunity to amend its claim pursuant to an assignment of rights from the injured party.
In reaching its decision, the Michigan Court of Appeals affirmed the retroactive application of Covenant to both insurers and the Michigan Assigned Claims Plan. The Court found Covenant mandated that Plaintiff did not have an independent statutory cause of action, and Plaintiff did not have a substantive challenge to a dismissal under Covenant. The Court confirmed that the defense of “failure to state a claim on which relief can be granted’ cannot be waived, and the Court has discretion to consider unpreserved questions of law.
While disagreeing with Plaintiff as it relates to Defendants’ entitlement to dismissal post-Covenant, the Court did agree that Plaintiff should be given the opportunity to amend its complaint to include any alleged assignment. Therefore, it remanded the claim to the District Court.