Bronson Healthcare Group Inc v. Michigan Assigned Claims Plan

917 N.W.2d 682, 323 Mich. App. 302

Opinion

Hoekstra, J.

*303 Defendants Michigan Assigned Claims Plan (MACP) and Michigan Automobile Insurance Placement Facility (MAIPF) appeal by leave granted the circuit court order dismissing their claim of appeal for lack of subject-matter jurisdiction. 1 Because plaintiff is not statutorily entitled to maintain an action for personal protection insurance (PIP) benefits, we vacate the decision of the circuit court, we reverse the district court's grant of summary disposition to plaintiff, and we remand to the district court for entry of summary disposition in favor of defendants.

Plaintiff provided medical treatment to an individual injured in an automobile accident in October *304 2014. According to plaintiff, the injured party was not covered by a no-fault insurance policy, and plaintiff sought to have defendants assign the claim to an insurer. Defendants refused to assign the claim. Thereafter, plaintiff filed a complaint in the district court against defendants and John Doe Insurance Company, claiming that defendants had an obligation to assign the claim to an insurer and that John Doe Insurance Company was liable for approximately $5,000 in no-fault benefits. With regard to defendants, the district court granted summary disposition to plaintiff under MCR 2.116(I), concluding that defendants were statutorily obligated to assign plaintiff's claim for benefits. Defendants appealed in the circuit court, but the circuit court dismissed the appeal for lack of jurisdiction, reasoning that the order granting summary disposition to plaintiff was not a final order over which the circuit court had jurisdiction under MCR 7.103(A)(1). Defendants filed an application for leave to appeal in this Court, which we granted on May 8, 2017. 2

On appeal, defendants ask that we remand for entry of summary disposition in their favor under Covenant Med. Ctr., Inc. v. State Farm Mut. Auto. Ins. Co. , 500 Mich. 191 , 895 N.W.2d 490 (2017). In contrast, plaintiff asserts that we should not grant defendants relief under Covenant because defendants did not raise their Covenant arguments in the lower courts. Alternatively, plaintiff argues that it should be given an opportunity to amend its pleadings to assert a claim for benefits based on an assignment of rights from the injured party to plaintiff.

*305 Relevant to the parties' arguments, on May 25, 2017, the Michigan Supreme *684 Court decided Covenant , wherein the Court held that healthcare providers do not have an independent statutory cause of action against insurers to recover PIP benefits. Id. at 195-196, 217-218, 895 N.W.2d 490 . Since Covenant was decided, this Court has determined that the rule announced in Covenant applies equally to direct actions by healthcare providers against a state assigned claims plan. W A Foote Mem. Hosp. v. Mich. Assigned Claims Plan , 321 Mich.App. 159 , 172-173, 909 N.W.2d 38 (2017). We have also held that Covenant applies retroactively to cases pending on direct appeal when Covenant was decided. Id. at 196 , 909 N.W.2d 38 . See also VHS Huron Valley Sinai Hosp. v. Sentinel Ins. Co. (On Remand) , 322 Mich.App. 707 , 713-714, 916 N.W.2d 218 (2018).

In this case, Covenant is clearly dispositive with regard to plaintiff's claims against defendants. Quite simply, as a healthcare provider, plaintiff has no independent statutory claim against defendants. Covenant , 500 Mich. at 195 , 895 N.W.2d 490 ; W A Foote Mem. Hosp. , 321 Mich.App. at 172-173 . Under Covenant , defendants are entitled to summary disposition because plaintiff has no cause of action against defendants, and plaintiff has therefore failed to state a claim on which relief may be granted. See MCR 2.116(C)(8).

On appeal, plaintiff does not offer a substantive challenge to defendants' entitlement to summary disposition under Covenant . Instead, plaintiff maintains that the Covenant question is not properly before us because it was not raised and decided in the lower courts. In analogous circumstances, we have previously rejected preservation arguments relating to Covenant and exercised our discretion to review Covenant arguments that were not raised before, addressed, and *306 decided by the trial court. W A Foote Mem. Hosp. , 321 Mich.App. at 173-174 . See also VHS Huron Valley Sinai Hosp. , 322 Mich.App. at 716, 719-720 . Specifically, we have recognized that a defense of "failure to state a claim on which relief can be granted" cannot be waived, we have emphasized our discretion to consider unpreserved questions of law, and we have acknowledged that, with regard to cases pending when Covenant was decided, a defendant should not be faulted for failing to challenge a healthcare provider's statutory right to bring a claim because pre- Covenant caselaw would have rendered any such argument futile. W A Foote Mem. Hosp. , 321 Mich.App. at 173-174 . Likewise, in this case, we find it appropriate to consider the questions of law posed by defendants' Covenant arguments, and we reject plaintiff's assertions that these arguments are not properly before us. 3 *685 Alternatively, plaintiff argues that if Covenant does apply to this case, plaintiff should be given the opportunity *307 to amend its complaint to pursue benefits on an assigned-claim theory because plaintiff can establish that the injured party treated by plaintiff assigned her claims to plaintiff. In this regard, we note that an agreement to assign a "right to benefits payable in the future is void." MCL 500.3143. However, an injured person may assign "his or her right to past or presently due benefits to a healthcare provider." Covenant Med. Ctr., Inc. , 500 Mich. at 217 n. 40, 895 N.W.2d 490 . In Covenant , the Court expressly recognized that a healthcare provider's inability to bring a direct cause of action did not alter the injured party's ability to assign past or presently due benefits. Id. Given this fact, we agree that, in the circumstances presented in this case, plaintiff should be given an opportunity to move the district court to amend its complaint. See W A Foote Mem. Hosp. , 321 Mich.App. at 196 .

In sum, applying Covenant , we conclude as a matter of law that defendants are entitled to summary disposition. Consequently, we vacate the decision of the circuit court, we reverse the district court's grant of summary disposition to plaintiff, and we remand to the district court for entry of summary disposition in favor of defendants. On remand, plaintiff shall be given the opportunity to file a motion to amend its complaint.

Vacated in part, reversed in part, and remanded for proceedings consistent with this opinion. We do not retain jurisdiction.

O'CONNELL, P.J., and SWARTZLE, J., concurred with HOEKSTRA, J.

1 Because only MACP and MAIPF are parties to this appeal, our use of the term "defendants" refers to them alone and does not include defendant John Doe Insurance Company.

2 Bronson Healthcare Group, Inc. v. Mich. Assigned Claims Plan , unpublished order of the Court of Appeals, entered May 8, 2017 (Docket No. 336088).

3 We note that defendants' application for leave to appeal and their supporting brief concerned the circuit court's jurisdictional decision and its conclusion that the district court order granting summary disposition to plaintiff was not a final order. Defendants' application for leave to appeal in this Court did not raise defendants' arguments relating to Covenant . Indeed, Covenant was decided after we granted defendants' application for leave to appeal. Typically, an appeal "is limited to the issues raised in the application and supporting brief." MCR 7.205(E)(4). However, this Court has the discretionary power to "permit amendment or additions to the grounds for appeal,"MCR 7.216(A)(3), and to "enter any judgment or order or grant further or different relief as the case may require," MCR 7.216(A)(7). In this case, we find it appropriate to exercise this discretion to consider defendants' dispositive Covenant arguments. Given our conclusion that defendants are entitled to relief under Covenant , we find it unnecessary to address the circuit court's jurisdictional decision because, even if the district court order in question was a final order, remand to the circuit court for further proceedings when defendants are so clearly entitled to summary disposition would be a waste of judicial resources.