September 10, 2021
In the recent published Court of Appeals case of Michigan Head & Spine Institute PC v Auto-Owners Ins Co et al, __ Mich App __; __ NW2d __ (2021), the Court reversed the Circuit Court’s dismissal of Plaintiff’s claims for lack of subject matter jurisdiction.
Plaintiff Michigan Head and Spine filed a no-fault provider suit against Auto-Owners Insurance Company and Home-Owners Insurance Company. The case involved the Plaintiff’s treatment of 39 patients, with a claim that over $200,000 in unpaid benefits was due and owing.
Defendants sought and received summary disposition on the grounds that the Plaintiff could not aggregate the 39 separate patient’s claims to satisfy the $25,000 amount in controversy requirement for circuit court jurisdiction. In Michigan, Circuit Courts are courts of general jurisdiction, and have jurisdiction over all matters not exclusively given to other courts. Const 1963, art 6, § 13; MCL 600.605. District Courts are vested with exclusive jurisdiction over “civil actions when the amount in controversy does not exceed $25,000.00.” MCL 600.8301(1). Absent bad faith in the pleadings, the amount in controversy is determined from the prayer for relief in the plaintiff’s pleadings. Hodge v State Farm Auto Ins Co, 499 Mich 211; 884 NW2d 238 (2016).
In granting summary disposition, the Circuit Court relied on a prior Michigan Supreme Court case that held that multiple plaintiffs could not aggregate separate claims against a single defendant to obtain Circuit Court jurisdiction. Boyd v Nelson Credit Ctrs, 132 Mich App 774; 348 NW2d 25 (1984). The Circuit Court also relied on an unpublished Court of Appeals case, Priority Patient Transp LLC v Farmers Ins Exch, unpublished per curiam opinion of the Court of Appeals, issued May 2, 2017 (Docket No. 329420), in which a medical transportation company filed a PIP provider suit in Circuit Court for the transportation of 14 separate individuals. The Circuit Court dismissed for lack of subject matter jurisdiction as none of the individuals’ claims satisfied the $25,000 amount in controversy requirement. The Court of Appeals in Priority Patient affirmed, holding that “plaintiff’s attempt to bring its claims within the circuit court’s jurisdiction by aggregating the claims of several individuals is not permissible” and would “subvert” the rule in Boyd.
The Michigan Head & Spine Court of Appeals majority reversed. The Court, distinguishing Boyd, noted that the present case involved a single plaintiff, Michigan Head & Spine, rather than multiple plaintiffs aggregating their claims together. The Court found the unpublished Priority Patient case unpersuasive given the “logical dissonance” of the case which recognized that a single plaintiff could aggregate its claims to meet jurisdictional limits, but then precluded the plaintiff from taking that action. The Court concluded that under Hodge, the amount in controversy is determined by reference to the pleadings, and under Boyd, a single plaintiff may aggregate it various claims to satisfy the jurisdictional limits of the Circuit Court. Michigan Head & Spine is a single plaintiff, although it has 39 separate claims, and thus may aggregate all of its various claims to reach the jurisdictional threshold of the Circuit Court.
Judge Riordan (who was on the panel in Priority Patient) issued a dissent in which he opined that the Circuit Court lacked jurisdiction for several reasons. First, Michigan Head & Spine’s prayer for relief did not include a particular amount in controversy or other monetary amount so it does not satisfy Hodge. Further, Judge Riordan reasoned that no-fault claims should be treated differently than other claims. Central to this idea is the fact that a provider’s claim is fundamentally derivative of and dependent on a patient’s claim (both before and after the statutory amendments vesting providers with an independent cause of action). Therefore, while a single patient is permitted to sue an insurer for services received from multiple healthcare providers because the consolidated claims are equivalent to a single plaintiff asserting multiple claims against a single defendant, in this case, Michigan Head & Spine’s claims are derivative of its patients and there are 39 patients, so Michigan Head & Spine is bringing separate claims of individual plaintiffs which is contrary to the holding in Boyd. In other words, the Boyd principle only applies when the single plaintiff is a patient, not a provider.