November 10, 2021
In Downs v State Farm Mutual Automobile Ins. Co., Plaintiffs, Erika Tyler, Erik Downs, Ezsaia Hopson, and Ezyriah Hopson, were injured in a motor vehicle accident when they were rear-ended by Tashuan Woodley. Tyler’s vehicle was insured by Defendant State Farm. Plaintiffs sought treatment from various medical providers, including from intervening Plaintiffs.
Plaintiffs sought first-party no-fault benefits from Defendant. In April 2019, Defendant moved to dismiss Tyler’s claims for violation of a court order, obstruction of depositions, and inappropriate behavior. Tyler alleged that defense counsel was disrespectful, and Tyner had “blatantly obvious” psychiatric issues. The trial court initially denied Defendant’s motion to dismiss and warned Tyler “to behave” and to attend another deposition. In June 2019, Defendant renewed its motion to dismiss. During Tyler’s deposition in May 2019, Tyler “assaulted” defense counsel and disrespected the trial court. Tyler reminded the trial court of her mental illness and argued dismissal would be inappropriate. The trial court disagreed and granted Defendant’s motion, dismissing Tyler’s claims with prejudice. In the order, the trial court wrote: “[i]t is further ordered that this dismissal does not prevent [the] rights of medical providers to intervene.”
In July 2019, Tyler assigned her rights to her providers which immediately moved to intervene. Ultimately, the trial court allowed the providers to intervene with respect to their claims of account stated and unjust enrichment. The trial court denied intervention related to the providers’ claims for PIP benefits and breach of contract.
The providers filed their intervening complaint alleging account stated and unjust enrichment. Specifically, they alleged Defendant was conferred a benefit in the form of services provided to Plaintiffs, failed to remit payment to intervenors, and would be unjustly enriched if not required to pay for the services. Defendant moved for summary disposition and alleged the following: (1) intervenors’ exclusive remedy was within the no-fault act; (2) to the extent no-fault liability was pleaded, it was barred because intervenors’ claims were derivative of Tyler’s claim, which was dismissed with prejudice or barred by the one-year-back rule; (3) intervenors’ account-stated claim failed to state a claim because there was no contractual or implied contractual relationship between intervenors and Defendant; and (4) intervenors’ claim of unjust enrichment could not be sustained because there was no showing Defendant unjustly obtained a benefit.
The trial court granted summary disposition to Defendant of the account-stated claim but allowed the claim for unjust enrichment to proceed. The trial court found that the unjust enrichment claim did “not hinge upon the no-fault act” since the claim is equitable in nature and thus, the one-year-back rule did not apply. This appeal followed.
On appeal, Defendant argued the trial court erred when determining the intervening providers stated a cause of action for unjust enrichment to recover benefits for medical services provided to Plaintiffs. The Court of Appeals agreed. The Court further held the providers’ claims were controlled by an express contract between Defendant and its insureds, and that even if there was no applicable express contract, intervenors failed to state a cause of action for unjust enrichment. The Court in Mesiner Law Group PC v Weston Downs Condo Ass’n, 321 Mich App 702, 721; 909 NW2d 890 (2017) established that “[t]he essential elements of [an unjust enrichment] claim are (1) receipt of a benefit by the defendant from the plaintiff, and (2) which benefit it is inequitable that the defendant retain.” In this case, the intervening providers claimed Defendant received a benefit by not paying for the services provided because Tyler’s claims were dismissed. However, the Court of Appeals found the failure to remit payment related to services rendered to Plaintiffs for injuries as defined in MCL 500.3105 and therefore, the intervenors’ claim was one for no-fault benefits and not unjust enrichment.
The Court held the trial court should have granted Defendant’s motion for summary disposition of intervening providers’ claim for unjust enrichment and that the trial court erred when it recognized a “free-standing claim of unjust enrichment, independent of Michigan’s no-fault act.” Pursuant to the no-fault act applicable to this case, prior to the June 11, 2019 amendments, a medical provider has no independent statutory cause of action against a no-fault insurer for recovery of no-fault benefits.
The Court of Appeals agreed with Defendant that the intervening providers’ claim for unjust enrichment actually sought recovery of PIP benefits and thus, their claim arose out of the no-fault act. The intervening providers’ complaint even alleged that Plaintiffs “sustained bodily injuries within the meaning of MCL 500.3105.” Thus, the trial court erred when it denied Defendant’s motion for summary disposition of intervenors’ claim for unjust enrichment and the case was reversed and remanded for further proceedings.