Alexis Jeriesha Perryman v. Farm Bureau Mutual Insurance Company, 328582

Background

In June 2013 Alexis Perryman was injured in a motor-vehicle accident and submitted a PIP claim; Farm Bureau was assigned the claim. Intervening plaintiffs Physioflex and GL Transportation provided medical/transport services and intervened seeking reimbursement.
Perryman’s counsel moved to withdraw after losing contact with her; the trial court granted withdrawal and ordered Perryman to retain counsel or notify the court she would proceed pro se within 30 days.
Perryman did not notify the court or retain counsel and failed to appear for a rescheduled deposition. Farm Bureau moved to dismiss for failure to comply with court orders and for discovery violations.
The trial court dismissed Perryman’s claim with prejudice for noncompliance and also dismissed the intervening plaintiffs’ claims.
The intervening plaintiffs appealed, arguing they have independent standing as medical providers and that dismissal of Perryman’s claim with prejudice was an abuse of discretion because the trial court failed to consider lesser sanctions on the record.
The Court of Appeals reversed, holding the dismissal with prejudice was an abuse of discretion because the trial court did not evaluate lesser sanctions or consider the impact on intervening plaintiffs, and remanded for further proceedings.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether intervening medical providers have independent standing to sue insurer for PIP reimbursement after insured’s claims are dismissed	Intervenors: providers have independent standing under MCL 500.3112 and Wyoming to sue insurer directly	Farm Bureau: providers’ claims depend on insured’s entitlement; insured’s merits dismissal bars providers	Held: Providers generally have standing, but they “stand in the shoes” of the insured and cannot recover if the insured’s claim was adjudicated on the merits; here providers’ claims were affected by insured’s dismissal but dismissal was improper.
Whether the trial court properly dismissed Perryman’s claim with prejudice for failing to retain counsel and for failing to appear at deposition	Intervenors: dismissal was an abuse of discretion; court failed to consider lesser sanctions and did not evaluate factors on record	Farm Bureau: dismissal is authorized by MCR 2.504 and MCR 2.313 for failure to comply with orders and to appear at deposition; notice was proper	Held: Dismissal with prejudice was an abuse of discretion because the court did not carefully evaluate alternatives or articulate consideration of lesser sanctions and impact on other parties.
Effect of a merits dismissal under MCR 2.504(B)(3) on derivative provider claims	Intervenors: even if dependent, dismissal should not have been with prejudice; without merits adjudication providers could proceed	Farm Bureau: MCR 2.504(B)(3) makes dismissal an adjudication on the merits and bars derivative claims	Held: A dismissal with prejudice under MCR 2.504(B)(3) operates as an adjudication on the merits and would bar provider claims, but here the merits dismissal was improper.
Whether Farm Bureau was prejudiced by allowing providers to proceed without Perryman’s deposition testimony	Intervenors: Farm Bureau is no worse off than if Perryman never sued; providers complied with orders	Farm Bureau: inability to depose Perryman impedes defenses and is prejudicial	Held: Court rejected prejudice argument as insufficient to justify the blanket dismissal; providers could proceed and Farm Bureau’s situation comparable to defending a provider-only suit.

Key Cases Cited

Cruz v. State Farm Mut. Auto. Ins. Co., 466 Mich. 588 (review standard; interpretation of No-Fault Act reviewed de novo)
Washington v. Sinai Hosp. of Greater Detroit, 478 Mich. 412 (order of dismissal operates as adjudication on the merits absent limiting language)
Maldonado v. Ford Motor Co., 476 Mich. 372 (trial court has inherent authority to sanction, including dismissal)
Wyoming Chiropractic Health Clinic, P.C. v. Auto-Owners Ins. Co., 308 Mich. App. 389 (healthcare providers have direct standing to recover PIP benefits)
Bahri v. IDS Prop. Cas. Ins. Co., 308 Mich. App. 420 (providers “stand in the shoes” of insured and cannot recover if insured cannot)
Chiropractors Rehab Group, P.C. v. State Farm Mut. Auto. Ins. Co., 313 Mich. App. 113 (provider standing exists but depends on claimant’s entitlement; suspension of benefits differs from merits adjudication)
Vicencio v. Jaime Ramirez, M.D., P.C., 211 Mich. App. 501 (dismissal is drastic; courts must evaluate factors and alternatives on record before dismissing)