9 N.W.3d 104
Mich. Ct. App.2023Background
- In July 2018 Nicholas Randall was injured; Centria Home Rehabilitation provided 24-hour attendant care beginning December 22, 2018 and billed $33.20/hr.
- Centria billed $15,767.77 (Dec. 22, 2018–Jan. 12, 2019); Philadelphia Indemnity paid less based on a market survey and issued a reduced payment.
- Centria sued Philadelphia (and previously joined ACIA) as assignee of Randall’s PIP rights and also relied on the 2019 amendatory statute (MCL 500.3112) creating a limited direct cause of action for providers for post-amendment services.
- Philadelphia moved for summary disposition under MCR 2.116(C)(10), arguing (inter alia) McGill and LaMothe preclude an insured (and thus an assignee) from suing the insurer over disputed “balance” charges; trial court granted dismissal.
- After facilitation Philadelphia accepted a $35,000 award but Centria rejected it; trial court later awarded case-evaluation sanctions to Philadelphia after dismissing the complaint.
- The Court of Appeals reversed the summary disposition, held a provider (as assignee or under MCL 500.3112) may sue an insurer over disputed reasonableness of charges, vacated the sanctions award, and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May a health-care provider (as assignee or under MCL 500.3112) sue an insurer for the unpaid balance when reasonableness of charges is disputed? | Provider: Yes—assignment gives the right to collect incurred reasonable medical expenses; MCL 500.3112 also provides a direct cause of action for post-amendment services. | Insurer: No—under McGill/LaMothe insureds suffer no compensable injury (insurer will indemnify/defend), so assignor had no claim to convey; provider must sue the insured. | Held: Yes—when reasonableness is disputed provider has standing to sue insurer either by assignment or under MCL 500.3112; summary disposition was erroneous. |
| Do McGill and LaMothe control and bar this suit because they found insureds had no injury? | Provider: Distinguishes those cases—both lacked an assignment and providers there did not challenge partial payments; factual distinctions make them inapplicable. | Insurer: Those precedents are controlling and dispositive; insureds cannot sue until they suffer injury. | Held: McGill/LaMothe are not dispositive here; the assignment and a genuine dispute about reasonableness distinguish the present case. |
| Are plaintiff’s claims barred by the one-year-back rule (MCL 500.3145) or by the prohibition on assignments of future benefits (MCL 500.3143)? | Provider: Limits its claim to post–March 2, 2019 services and relies on MCL 500.3112 for post–June 11, 2019 services, so statutory bars do not preclude its claim as pleaded. | Insurer: Argues statutory time and assignment restrictions bar portions of the claim. | Held: One-year-back issue moot because Centria limited its claim; MCL 500.3112 allows providers to bring direct claims for services after the statute’s effective date, so assignment restriction does not prevent recovery for post-amendment services. |
| Were case-evaluation sanctions properly awarded after plaintiff rejected the facilitator’s award? | Provider: Trial court erred in dismissing plaintiff’s claim; law was unsettled and recent appellate authority favored plaintiff, so sanctions were improper or should be denied in interest of justice. | Insurer: Plaintiff rejected an award that insurer accepted; under MCR 2.403(O) insurer is entitled to costs and fees. | Held: Vacated sanctions—because the underlying dismissal was reversed, there is no “verdict” supporting sanctions; award vacated and remanded. |
Key Cases Cited
- McGill v. Auto Ass'n of Mich, 207 Mich App 402 (insurers’ promise to defend/indemnify made plaintiffs’ alleged injuries hypothetical)
- LaMothe v. Auto Club Ins. Ass'n, 214 Mich App 577 (followed McGill; insured had no compensable injury where insurer paid reasonable charges and agreed to defend)
- Covenant Med. Ctr., Inc. v. State Farm Mut. Auto. Ins. Co., 500 Mich 191 (clarifies PIP payment right vests with insured but assignment of currently due benefits is permitted)
- Auto-Owners Ins. Co. v. Compass Healthcare PLC, 326 Mich App 595 (providers may not recover against insured under contractual-liability theory; disputes over reasonableness must proceed under no-fault framework)
- Meemic Ins. Co. v. Fortson, 506 Mich 287 (fraud is not a blanket defense to PIP coverage; intent is typically a jury question)
- Chouman v. Home Owners Ins. Co., 293 Mich App 434 (vacating a case-evaluation award when no supporting verdict exists)