June 14, 2022
In Orchard Laboratories Corporation v Auto Club Insurance Association, unpublished per curiam opinion of the Court of Appeals, issued May 26, 2022 (Docket No. 356597), the Court of Appeals considered the following issues arising from a medical provider suit brought against Auto Club for the recovery of PIP benefits: (1) whether Auto Club received sufficient “written notice of injury” within the statute of limitations for purposes of MCL 500.3145(1), and (2) whether Orchard Laboratories’ subsequent action is barred under the doctrines of res judicata and collateral estoppel when the underlying claimant’s separate no-fault action was dismissed on statute of limitations grounds in a separate action.
MCL 500.3145(1) provides, in pertinent part, that notice “may be given to the insurer or any of its authorized agents by a person claiming to be entitled to benefits therefor, or by someone in his behalf.” Further, the written notice must contain “the name and address of the claimant and . . . the name of the person injured and the time, place and nature of his injury.” See MCL 500.3145(1) (emphasis added). In other words, the statute provides the method and substance of written notice that an insurer must receive within the one-year time frame.
In a 2-1 split, the Court of Appeals majority, Judges Gleicher and Patel, held that Auto Club received sufficient written notice within the statutory period because it received a police report which provided the underlying claimant’s name and address, as well as the time, place and a general statement of the nature of the injury. Additionally, the majority noted the underlying claimant’s wife contacted Auto Club and filed a claim on his behalf within one year of the accident. The majority did not address how or from whom Auto Club received the police report, and remained silent as to the fact that Orchard Laboratories was not mentioned in the police report. Instead, the majority focused on the content contained within the police report finding that the underlying claimant’s claimed injury – a back injury – was traceable to the police report’s mention that a truck hit the claimant’s leg, and that the claimant sustained a “possible internal injury.” The Court noted that Auto Club generated a written claim record that the claimant sustained a “back/neck sprain” and other “unknown” injuries. Thus, the majority concluded Auto Club received sufficient notice for purposes of MCL 500.3145(1).
In dissent, Judge Kirsten Frank Kelly explained that she would not find that sufficient written notice was given to Auto Club because Auto Club never received written notice of the actual alleged injury. Instead, the police report only contained references to unrelated injuries, and therefore, in her view, the police report was insufficient as it lacked any indication of symptoms which could be even be traceable to the alleged injury. Judge Kelly also pointed out that besides the police report, the only written notice Auto Club ever received was a medical bill after the expiration of the statute of limitations.
Regarding Auto Club’s argument of res judicata and collateral estoppel, the majority held that res judicata did not bar Orchard Laboratories’ subsequent actions because privity between the medical provider and the injured party was destroyed upon the execution of the assignment. The majority further noted that an assignee is not bound by a judgment that the assignor obtained after the execution of an assignment. The majority found that Orchard Laboratories was not a party to the prior lawsuit between the underlying claimant and Auto Club, and therefore Orchard Laboratories did not have a full and fair opportunity to litigate its claim so the doctrine of collateral estoppel was inapplicable
The motor vehicle accident occurred on December 17, 2017, and therefore, the Court of Appeals examined the former version of the statute in existence before the 2019 no-fault amendment. You can now find the written notice requirement set forth in MCL 500.3145(4).