August 07, 2019
In a recent unpublished decision the Michigan Court of Appeals held that the burden of showing good cause for Protective Orders under MCR 2.302(C) shifts to the insurer in a PIP case who wishes to conduct ex parte interviews of the insured’s treating physician(s). In doing so, the Court of Appeals explained that good cause is shown through “a particular and specific demonstration of fact,” rather than “stereotyped and conclusory statements.”
Newby v Zurich involved Felisha Newby’s claim for PIP benefits against Zurich as a result of injuries to her neck, back, shoulders, and knees, which she sustained in a motor vehicle accident occurring on September 25, 2016. As not uncommon discovery practice, Zurich submitted a proposed Qualified Protective Order (QPO) to Plaintiff, in which she would be authorizing the disclosure of her personal health information protected under the Health Insurance Portability and Accountability Act (HIPAA). Zurich sought a QPO in order to be able to have ex parte meetings with Newby’s physicians to discuss her injuries and treatment. Newby refused to agree to Zurich’s proposed QPO, which led Zurich to file a motion to obtain the same. The Macomb County Circuit Court denied Zurich’s motion without prejudice, as well as Zurich’s subsequent motion for reconsideration. Zurich then filed an application for leave to appeal, which the Michigan Court of Appeals granted.
Basing its arguments on the Holman and Domako decisions, Zurich contended that the trial court had abused its discretion by denying Zurich’s motion for a QPO to have ex parte communications with Newby’s treating physicians, noting that Michigan has traditionally favored open, broad, and informal discovery methods. Holman, a medical malpractice case, reiterated the holding in Domako, and solidified Michigan’s practice of allowing ex parte interviews of a plaintiff’s treating physicians, once the physician-patient privilege has been waived by the plaintiff. These ex parte interviews are not reserved exclusively for medical malpractice actions; rather, the Domako decision is applicable to all kinds of civil litigation.
The Court of Appeals agreed with Zurich’s position insofar as it asserted a right to seek a QPO to conduct these interviews in a PIP action. Zurich’s downfall was nonetheless a result of its argument that the Michigan Court Rules, and not the Michigan No-Fault Act, govern the procedure in obtaining a QPO. The Court of Appeals cited to the Michigan Supreme Court’s decision in Muci, where it was declared that the No-Fault Act prevails over the Michigan Court Rules unless the Act is silent on an issue. While MCR 2.302(C) regulates the issuance of protective orders in most civil litigation cases, the Newby Court then looked to its No-Fault counterpart, MCL 500.3159:
In a dispute regarding an insurer’s right to discovery of facts about an injured person’s earnings or about his history, condition, treatment and dates and costs of treatment, a court may enter an order for the discovery. The order may be made only on motion for good cause shown and upon notice to all persons having an interest, and shall specify the time, place, manner, conditions and scope of the discovery. A court, in order to protect against annoyance, embarrassment or oppression, as justice requires, may enter an order refusing discovery or specifying conditions of discovery and may order payments of costs and expenses of the proceeding, including reasonable fees for the appearance of attorneys at the proceedings, as justice requires.
In noting the similarities between MCL 500.3159 and MCL 2.302(C), the Court of Appeals made one important distinction: in a PIP action, the burden of showing good cause in seeking an order for discovery falls on the insurer. The court continued to find that Zurich had to demonstrate specific facts as to why it needed a QPO, using as an example the holding in Broe Rehab Servs, in which good cause was shown where there was a history of fraud and alleged misdiagnoses of patients by one of the insured’s healthcare providers. The court highlighted the rationale behind the requirement of showing good cause: “[a]llowing discovery on the basis of conjecture would amount to allowing an impermissible fishing expedition.” Thus, the court concluded that the trial court had not abused its discretion in denying Zurich’s motion because Zurich had “presented no evidence that [Newby] attempted to conceal any facts about her medical condition that would necessitate [Zurich] conducting ex parte interviews with [Newby’s] physicians, and it failed to provide any other reason supporting the QPO.”
 Newby v American Zurich Ins Co, unpublished opinion per curiam of the Michigan Court of Appeals, decided August 1, 2019 (Docket No 342741), available at: http://publicdocs.courts.mi.gov/OPINIONS/FINAL/COA/20190801_C342741_39_342741.OPN.PDF
 Holman v Rasak, 486 Mich 429 (2010).
 Domako v Rowe, 438 Mich 347 (1991).
 Davis v Dow Corning Corp, 209 Mich App 287, 293 (1995).
 Muci v State Farm Mut Auto Ins Co, 478 Mich 178 (2007).
 State Farm Mut Ins Co v Broe Rehab Svcs, 289 Mich App 277 (2010).
 Augustine v Allstate Ins Co, 292 Mich App 408, 420 (2011).
 Newby, supra at 6.
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