344 Mich. App. 626
Mich. Ct. App.2022Background
- May 23, 2018 motor-vehicle accident; C‑Spine treated Jose Cruz‑Muniz and Sandra Cruz and obtained assignments from each to pursue PIP benefits against Progressive.
- C‑Spine entered into multiple factoring/purchase agreements with third‑party purchasers (Apogee, MedFinance/Well States, EzMed, MMD) that, on their face, conveyed C‑Spine’s rights, title, and interests in specified accounts receivable.
- C‑Spine later produced counter‑assignments and purchase‑agreement amendments that purported to re‑vest the factoring companies’ acquired rights back in C‑Spine (including the right to sue), but those documents were executed after C‑Spine filed the complaints and some had been backdated on their faces.
- Progressive moved for summary disposition arguing C‑Spine lacked standing/the real party in interest because it had sold its claims before filing; Progressive also argued some counter‑assignments were retroactive/backdated and ineffective and that statutory one‑year limits could apply.
- The trial court initially denied Progressive’s motions (finding counter‑assignments restored C‑Spine’s standing), but later, after discovery revealed late execution of the counter‑assignments, granted summary disposition for Progressive; Judge Markey dissented, arguing the trial court’s later dismissal was correct.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether C‑Spine was the real party in interest/ had standing when suits were filed | C‑Spine: It was the assignee (by patient assignments) and/or statutorily authorized to sue; counter‑assignments and amendments vested rights in C‑Spine | Progressive: C‑Spine had already sold its accounts (and thus its causes of action) to factoring companies before filing, so it lacked standing | Held (Markey): C‑Spine lacked standing at filing because it transferred rights to factoring companies; standing is assessed at filing and cannot be retroactively cured by post‑filing counter‑assignments |
| Whether the transactions with factors were sales (transfer of rights) or loans/security interests | C‑Spine: Transactions were loans/secured advances; C‑Spine retained the cause of action and only gave a security interest | Progressive: Agreements were purchases/factorings that conveyed full rights, title, and interests in accounts (including right to sue) | Held: The purchase‑agreement language unambiguously conveyed rights, title, and interests (including the right to litigate), so they were sales not mere security loans |
| Effect of counter‑assignments and amendments executed after complaints (including backdating) | C‑Spine: Counter‑assignments specified effective dates and thus conferred standing regardless of execution date; affidavits show intent that C‑Spine retained right to sue | Progressive: Counter‑assignments executed after filing could not retroactively confer standing; some documents were backdated and misleading | Held: Court accepts that standing is fixed at filing; post‑complaint counter‑assignments cannot cure a preexisting standing defect; backdating undermines C‑Spine’s position |
| Appropriate remedy if C‑Spine lacked standing: joinder vs dismissal | C‑Spine: Joinder of factoring companies (MCR 2.205/2.202) was the appropriate remedy to protect Progressive from double recovery | Progressive: Joinder is not a cure where plaintiff lacks standing at filing; dismissal is appropriate | Held: Joinder would not cure the underlying defect (C‑Spine was not a real party in interest at filing); dismissal was appropriate |
Key Cases Cited
- Lansing Sch. Ed. Ass’n, MEA/NEA v. Lansing Bd. of Ed., 487 Mich 349 (2010) (Michigan standing doctrine limited and prudential; litigant has standing where legal cause of action exists)
- League of Women Voters of Mich. v. Secretary of State, 506 Mich 561 (Michigan) (standing is determined at the time of filing)
- Girard v. Wagenmaker, 437 Mich 231 (Michigan) (standing measured at commencement of suit)
- Kearns v. Michigan Iron & Coke Co., 340 Mich 577 (Michigan) (assignee becomes real party in interest; assignment vests rights in assignee)
- Cannon Twp. v. Rockford Pub. Sch., 311 Mich App 403 (Mich. Ct. App.) (discussion of real‑party‑in‑interest and post‑complaint assignment procedures)
- Burkhardt v. Bailey, 260 Mich App 636 (Mich. Ct. App.) (assignment divests assignor of interest in the assigned claim)