Michigan Head & Spine Institute Pc v. Mich Assigned Claims Plan
331 Mich App 262
Mich. Ct. App.2019Background
- MHSI and DMC (healthcare providers) and intervenor Jesse Garrett sued the Michigan Assigned Claims Plan (MAIPF/MACP) after MAIPF failed to assign Garrett’s no-fault (PIP) claim to a servicing insurer for benefits from a 2016 vehicle accident.
- Plaintiffs alleged MAIPF breached statutory duties to assign under MCL 500.3171–3175 and sought recovery for medical services; MHSI/DMC later sought leave to amend to assert standing by assignment (post-Covenant guidance).
- MAIPF moved for dismissal under MCR 2.116(C)(8), arguing Covenant barred direct provider suits and that MAIPF (not an insurer) cannot be held liable for paying PIP benefits; the trial court denied leave to amend as untimely.
- The trial court granted MAIPF’s (C)(8) motion, holding (1) Covenant barred MHSI/DMC from direct actions against insurers, (2) MAIPF cannot be liable for monetary damages as it is not an insurer, and (3) plaintiffs had not pled a discrete count for declaratory relief compelling assignment; it refused further amendment.
- On appeal the Court of Appeals reversed: it held MAIPF may be sued for benefits where it has not assigned the claim, plaintiffs’ complaints adequately alleged MAIPF’s failure to assign (thus put MAIPF on notice to compel assignment), and the trial court abused its discretion by denying leave to amend to allege assignment-based standing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Covenant bars providers from pursuing PIP benefits when they hold an assignment | Assignment from the insured permits providers to pursue PIP despite Covenant | Covenant prohibits healthcare providers from direct actions against no-fault insurers | Court: Covenant does not defeat a provider’s action when standing is based on an assignment; dismissal on that basis was erroneous |
| Whether MAIPF/MACP can be held liable for PIP benefits or only required to assign claims | MAIPF processes claims and may be liable or must be compelled to assign; statutes and plan make MAIPF responsible when no assignment exists | MAIPF is not an insurer and cannot be liable to pay PIP benefits as a matter of law | Court: MAIPF can be the proper defendant for PIP recovery where it has not assigned the claim; (C)(8) dismissal on that ground was error |
| Whether the pleadings adequately sought relief to compel MAIPF to assign the claim | Complaints alleged breach of statutory duty to assign and put MAIPF on notice to defend assignment claim | Plaintiffs sought only monetary damages and failed to plead a separate declaratory-count to compel assignment | Court: Complaints, read as a whole under notice-pleading rules, sufficiently alleged entitlement to an order compelling assignment; form over substance not allowed |
| Whether the trial court abused its discretion by denying leave to amend to allege assignment-based standing | Delay was reasonable (plaintiffs awaited naming an insurer) and no actual prejudice or bad faith; amendment would not be futile | Amendment was untimely, prejudicial, and futile | Court: Denial was an abuse of discretion; absent showing of bad faith or actual prejudice, mere delay does not justify denial; plaintiffs should have been allowed to amend |
Key Cases Cited
- Covenant Med. Ctr., Inc. v. State Farm Mut. Auto. Ins. Co., 500 Mich 191 (Supreme Court) (healthcare providers lack statutory direct cause against no-fault insurers; assignments unaffected)
- El-Khalil v. Oakwood Healthcare, Inc., 504 Mich 152 (Supreme Court) (standard for MCR 2.116(C)(8) dismissal)
- Dalley v. Dykema Gossett, 287 Mich App 296 (Court of Appeals) (notice-pleading principles in Michigan)
- Agnone v. Home-Owners Ins. Co., 310 Mich App 522 (Court of Appeals) (statutory interpretation de novo)
- Allstate Ins. Co. v. State Farm Mut. Auto. Ins. Co., 321 Mich App 543 (Court of Appeals) (statutory construction principles)
- Candler v. Farm Bureau Mut. Ins. Co. of Mich., 321 Mich App 772 (Court of Appeals) (claims processed through MAIPF; servicing insurers act on MAIPF’s behalf)
- Wiggins v. City of Burton, 291 Mich App 532 (Court of Appeals) (declaratory relief is a remedy, not a claim; read pleadings as whole)
- Jawad A. Shah, MD, PC v. State Farm Mut. Auto. Ins. Co., 324 Mich App 182 (Court of Appeals) (standards for denying leave to amend)
- Ben P. Fyke & Sons, Inc. v. Gunter Co., 390 Mich 649 (Supreme Court) (mere delay without bad faith or actual prejudice insufficient to deny amendment)