W a Foote Memorial Hospital v. Michigan Assigned Claims Plan
321 Mich. App. 159
| Mich. Ct. App. | 2017Background
- On Sept. 4, 2014 Zoie Bonner was a passenger in a vehicle insured by Citizens; she received emergency care and the provider (plaintiff) billed $9,113.
- Plaintiff sought PIP benefits from the Michigan Assigned Claims Plan (defendants) one day before the one-year deadline under MCL 500.3145, claiming no applicable insurer could be identified.
- Defendants requested more information; Citizens later was identified as the vehicle insurer, and Citizens denied plaintiff’s claim as untimely.
- Plaintiff sued defendants for assignment of the claim to an insurer; defendants moved for summary disposition arguing plaintiff lacked a statutory cause of action and could have identified primary coverage.
- The trial court granted defendants’ summary disposition; on appeal the Court of Appeals affirmed, holding Covenant Med. Ctr. v. State Farm controls and applies retroactively, meaning providers lack a statutory direct cause of action for PIP benefits.
- The Court remanded to allow plaintiff an opportunity to amend its complaint to pursue alternative theories (e.g., assignment of the insured’s rights).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a healthcare provider has a statutory cause of action under MCL 500.3112 to sue an assigned insurer for PIP benefits | Provider argues defendants had duty to promptly assign under MCL 500.3172(1) and plaintiff could sue the assigned insurer directly | Defendants argue Covenant precludes a provider’s direct statutory claim; provider has no standing to sue insurer for PIP | Court: Covenant bars a healthcare provider’s direct statutory action; plaintiff has no such cause of action |
| Whether Covenant should apply retroactively to this pending appeal | Plaintiff: retroactivity would be unfair due to reliance on prior Court of Appeals precedent; asks for prospective effect | Defendants: judicial statutory interpretations should apply retroactively; Supreme Court precedent (Spectrum Health) supports retroactivity; Harper persuasive | Court: Applies Covenant retroactively (following Spectrum Health rationale); the pre-Covenant cases “never were the law” |
| Whether plaintiff preserved the right to raise absence of statutory cause of action on appeal | Plaintiff contends defendants waived preservation | Defendants: defense was raised in pleadings and below and is not waivable; legal-question preserved | Court: Issue preserved and may be reviewed de novo |
| Appropriate next steps after finding no statutory cause of action | Plaintiff asks to treat pleadings as amended or allow amendment to assert assignment/alternative claims | Defendants oppose treating pleadings as amended without remand | Court: Remand to trial court so plaintiff may move to amend complaint to pursue assignment or other nonstatutory theories |
Key Cases Cited
- Covenant Med. Ctr., Inc. v. State Farm Mut. Ins. Co., 500 Mich. 191 (2017) (Michigan Supreme Court: healthcare providers lack a statutory cause of action to directly sue no-fault insurers for PIP benefits)
- Spectrum Health Hosps. v. Farm Bureau Mut. Ins. Co. of Mich., 492 Mich. 503 (2012) (Michigan Supreme Court: decisions overruling prior judicial constructions of statutes are generally retrospective; the earlier constructions "never were the law")
- Harper v. Virginia Dep't of Taxation, 509 U.S. 86 (1993) (U.S. Supreme Court: federal-law rules announced by the Court must be given full retroactive effect in cases still open on direct review)
- Pohutski v. City of Allen Park, 465 Mich. 675 (2002) (Michigan Supreme Court: articulated threshold/three-factor test for prospectivity of new judicial rules)
- Devillers v. Auto Club Ins. Ass'n, 473 Mich. 562 (2005) (Michigan Supreme Court: prospective application is an "extreme measure" and retroactivity is the norm)