Lakeland Neurocare Ctrs. v. Everest Nat'l Ins. Co., 340346

• Decision Date: 08 October 2019
• Docket Number: No. 340346,No. 340349,340346,340349
• Citation: Lakeland Neurocare Ctrs. v. Everest Nat'l Ins. Co., No. 340346, No. 340349 (Mich. App. Oct 08, 2019)
• Parties: LAKELAND NEUROCARE CENTERS and VHS OF MICHIGAN, INC, doing business as DETROIT MEDICAL CENTER, Plaintiffs-Appellants, and JACULYN GORDON, Intervening Plaintiff, v. EVEREST NATIONAL INSURANCE COMPANY, ARROWHEAD GENERAL INSURANCE AGENCY, and NDS INSURANCE AGENCY, INC, doing business as PREMIER INSURANCE AGENCY XXV, Defendants-Appellees. LAKELAND NEUROCARE CENTERS and VHS OF MICHIGAN, INC, doing business as DETROIT MEDICAL CENTER, Plaintiffs, and JACULYN GORDON, Intervening Plaintiff-Appellee, v. EVEREST NATIONAL INSURANCE COMPANY, Defendant-Appellant, and ARROWHEAD GENERAL INSURANCE AGENCY and NDS INSURANCE AGENCY, INC, doing business as PREMIER INSURANCE AGENCY XXV, Defendants.
• Court: Court of Appeal of Michigan

LAKELAND NEUROCARE CENTERS and VHS OF MICHIGAN, INC,doing business as DETROIT MEDICAL CENTER, Plaintiffs-Appellants,andJACULYN GORDON, Intervening Plaintiff, v. EVEREST NATIONAL INSURANCE COMPANY, ARROWHEAD GENERAL INSURANCE AGENCY,and NDS INSURANCE AGENCY, INC, doing business as PREMIER INSURANCE AGENCY XXV, Defendants-Appellees.

LAKELAND NEUROCARE CENTERS and VHS OF MICHIGAN, INC,doing business as DETROIT MEDICAL CENTER, Plaintiffs,andJACULYN GORDON, Intervening Plaintiff-Appellee, v. EVEREST NATIONAL INSURANCE COMPANY, Defendant-Appellant,andARROWHEAD GENERAL INSURANCE AGENCY and NDS INSURANCE AGENCY,INC, doing business as PREMIER INSURANCE AGENCY XXV, Defendants.

No. 340346

No. 340349

STATE OF MICHIGAN COURT OF APPEALS

October 8, 2019

If this opinion indicates that it is "FOR PUBLICATION," it is subject to revision until final publication in the Michigan Appeals Reports.

UNPUBLISHED

Wayne Circuit Court

LC No. 17-005081-NF

Before: JANSEN, P.J., and CAMERON, and TUKEL, JJ.

PER CURIAM.

In Docket No. 340346, plaintiffs Lakeland Neurocare Centers (Lakeland) and VHS of Michigan (VHS), doing business as Detroit Medical Center (DMC)(collectively, "plaintiffs"), appeal by leave granted¹the trial court order granting defendantEverest National Insurance Company(Everest) summary disposition in this third-party no-fault matter.²Plaintiffs argue on appeal that the trial court erred when it granted Everest summary disposition because plaintiffs had valid assignments, antiassignment clauses are void, the assignments made a present transfer of rights, the antiassignment clause is unenforceable to postloss claims, the assignments were permitted under the no-fault act, MCL 500.3101 et seq., and the antiassignment clause is ineffective under the Uniform Commercial Code(UCC), MCL 440.1101 et seq.Plaintiffs also argue that the trial court erred when it denied their request to file an amended complaint.We agree that Everest was not entitled to summary disposition, but the trial court did not commit plain error affecting substantial rights when it declined plaintiffs' request to file an amended complaint.Accordingly, we reverse, and remand for further proceedings consistent with this opinion.

In Docket No. 340349, Everest appeals by leave granted³the trial court order granting intervening plaintiffJaculyn Gordon's motion to intervene in this no-fault matter.⁴Everest argues on appeal that the trial court erred in determining that Gordon's complaint related back to plaintiffs' complaint.Additionally, Everest argues that Shah v State Farm Mut Auto Ins Co, 324 Mich App 182; 920 NW2d 148(2018), was wrongly decided, but if it is upheld, Gordon lacked standing to intervene, and if Shah is reversed, and the antiassignment clause is upheld, plaintiffs had no standing, and the court lacked subject-matter jurisdiction.We disagree in part because the trial court did not abuse its discretion in allowing Gordon to intervene, but we agree with Everest's contention that Gordon's claims did not relate back to the filing of plaintiffs' complaint.Accordingly, we affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.

I.RELEVANT FACTUAL BACKGROUND

This case arises from an automobile accident involving Gordon on June 27, 2016, from which she sustained injuries.Gordon struck a pot hole at a high speed, and sustained a broken arm, dislocated hip, and multiple pelvic fractures that required surgery.Plaintiffs provided medical services to Gordon in relation to her injuries in the amount of $288,073.52.At the time of the accident, Gordon had an insurance policy with Everest.When plaintiffs tried to claim benefits under Gordon's policy for the services that they provided to Gordon, Everest attempted to rescind Gordon's auto insurance policy, claiming that Gordon did not disclose a licensed driver of her household on her application for insurance.

Gordon initially executed an assignment of benefits to plaintiffs on March 18, 2017, and plaintiffs filed suit on March 30, 2017, alleging their assignee status.The Michigan Supreme Court issued its opinion in Covenant Med Ctr, Inc v State Farm Mut Auto Ins Co, 500 Mich 191; 895 NW2d 490(2017), on May 27, 2017, holding that medical providers have no direct cause of action against insurers for personal protection insurance (PIP) benefits.On June 14, 2017, Everest filed a motion for summary disposition seeking to dismiss plaintiffs' claims under Covenant.Gordon executed a second assignment of benefits to plaintiffs on June 17, 2017, because she was still receiving treatment for her accident-related injuries.On July 28, 2017, Gordon filed an emergency motion to intervene as a partyplaintiff.The trial court granted Everest summary disposition under Covenant, and upheld the antiassignment clause in Gordon's insurance policy.The trial court also granted Gordon's motion to intervene, and determined that her claims related back to the date that plaintiffs filed their complaint.Plaintiffs and Everest filed applications for leave to appeal these orders in this Court, which were denied.⁵Plaintiffsand Everest filed for leave to appeal in the Michigan Supreme Court, which remanded both cases to this Court as on leave granted.⁶We consolidated these cases for appeal on remand.

II.DOCKET NO. 340346

A. EVEREST'S MOTION FOR SUMMARY DISPOSITION

Plaintiffs argue on appeal that the trial court erred in granting Everest summary disposition because they had valid assignments from Gordon that reflected an intent to make a present transfer, the antiassignment clause in the policy was void and unenforceable as to postloss claims, the assignments were valid under the no-fault act, and the antiassignment provision was ineffective under the UCC.We agree that the trial court erred in granting Everest summary disposition because plaintiffs had valid assignments from Gordon.

This Court reviews de novo a trial court's grant of summary disposition.Lowrey v LMPS & LMPJ, Inc, 500 Mich 1, 5-6; 890 NW2d 344(2016).Everest moved for summary disposition under MCR 2.116(C)(8), arguing that plaintiffs failed to state a claim upon which relief could be granted under Covenant.However, the trial court considered materials outside of the pleadings that the parties attached to their briefs, so the motion should be evaluated on appeal under MCR 2.116(C)(10).Shah, 324 Mich App at 206.See also, El-Khalil v Oakwood Healthcare, Inc, ___ Mich ___, ___; ___ NW2d ___(2019)(Docket No. 157846); slip op at 9-11, 10 n 5(where the trial court considered evidence attached to pleadings as substantive evidence, review under MCR 2.116(C)(8) was improper).

The court determined that there was an antiassignment clause in the Everest insurance policy, which it upheld.The policy was attached to Everest's reply to plaintiffs' response to Everest's motion for summary disposition.The assignments that plaintiff relied on were attached to its response to Everest's motion for summary disposition.Although a written instrument forming the basis for a claim or defense attached or referred to in a pleading may be treated as "part of the pleading for all purposes,"MCR 2.112(F), neither the insurance policy, nor the assignments were attached or referred to in a pleading.A "pleading" includes only a "complaint, cross-claim, counterclaim, third-party complaint, an answer to any of the aforementioned pleadings, or a reply to an answer."MCR 2.110(A).SeeShah, 324 Mich App at 206-207.The insurance policy and the assignments were not attached to the complaint, or to Everest's answer to plaintiffs' complaint.

Thus, the standard of review for MCR 2.116(C)(10) applies:

A motion for summary disposition brought pursuant to MCR 2.116(C)(10) tests the factual support for a claim.Summary disposition is appropriate under MCR 2.116(C)(10) if there is no genuine issue regarding any material fact and the moving party is entitled to judgment as a matter of law.A motion pursuant to MCR 2.116(C)(10) is reviewed by considering the pleadings, admissions, andother evidence submitted by the parties in the light most favorable to the nonmoving party.A genuine issue of material fact exists when the record, giving the benefit of reasonable doubt to the opposing party, leaves open an issue upon which reasonable minds might differ.It is well settled that the circuit court may not weigh the evidence or make determinations of credibility when deciding a motion for summary disposition.Moreover, a court may not make findings of fact; if the evidence before it is conflicting, summary disposition is improper.[Patrick v Turkelson, 322 Mich App 595, 605; 913 NW2d 369(2018)(citations, quotation marks, emphasis and brackets removed).]

In addition, "[t]he interpretation of contractual language, as well as the determination of whether that contractual language is ambiguous, is a question of law that we review de novo."Kyocera Corp v Hemlock Semiconductor, LLC, 313 Mich App 437, 445; 886 NW2d 445(2015)(citations and quotation marks omitted).

In Covenant, the Michigan Supreme Court held that "healthcare providers do not possess a statutory cause of action against no-fault insurers for recovery of personal protection insurance benefits under the no-fault act," but rather, "a provider that furnishes healthcare services to a person for injuries sustained in a motor vehicle accident may seek payment from the injured person for the provider's reasonable charges."Covenant, 500 Mich at 196, 217.Therefore, the trial court did not err when it determined that, as an initial matter, Covenant applied to preclude plaintiffs' claims because they were medical providers.Plaintiffs did not have a direct cause of action against Everest for Gordon's bills.Id."[A] provider simply has no statutory cause of action of its own to directly sue a no-fault insurer."Id. at 217-218.Plaintiffs' cause of action would be against Gordon, the patient, rather than the...