Advanced Surgery Center LLC v. Allstate Insurance Company
OPINION AND ORDER granting in part and denying in part 2 defendant's Motion to Dismiss. Signed by District Judge George Caram Steeh. (MBea)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
ADVANCED SURGERY CENTER, LLC,
And SOUTHEAST MICHIGAN
ANESTHESIA GROUP, PLLC, as
Assignees of Terry Minor,
Case No. 17-CV-12492
HON. GEORGE CARAM STEEH
ALLSTATE INSURANCE CO.,
OPINION AND ORDER GRANTING IN PART AND
DENYING IN PART DEFENDANT’S MOTION TO DISMISS [DOC. 2]
This is a claim for Michigan No-Fault benefits stemming from a
September 16, 2016 motor vehicle collision wherein Terry Minor sustained
multiple accidental injuries. Plaintiff Advanced Surgery Center is an
ambulatory surgical center that provided the situs for reasonably necessary
medical treatment that was rendered to Mr. Minor. Plaintiff Southeast
Michigan Anesthesia Group provided anesthesia services for one of the
procedures that was performed at Advanced Surgery Center.
No responsible no-fault insurer could be identified, so plaintiffs initially
filed a lawsuit on April 28, 2017 against the Michigan Automobile Insurance
Placement Facility (“MAIPF”) to compel it to name a servicing insurer that
would act as Mr. Minor’s no-fault insurance carrier. This lawsuit was filed in
Macomb County Circuit Court and was subsequently voluntarily dismissed
after plaintiffs’ counsel learned that MAIPF had named Allstate Insurance
Company to act as Mr. Minor’s insurer. Plaintiffs then filed the present
action against defendant Allstate, as the servicing insurer, in Oakland
County Circuit Court on July 18, 2017. The complaint alleges two counts:
a Personal Injury Protection (“PIP”) claim and breach of contract. Allstate
removed the matter to federal court based on diversity jurisdiction. The
matter is before the court on Allstate’s Rule 12(b)(6) motion to dismiss for
failure to state a claim upon which relief can be granted.
STANDARD FOR SUMMARY JUDGMENT
Rule 12(b)(6) allows the Court to make an assessment as to whether
the plaintiff has stated a claim upon which relief may be granted. Under the
Supreme Court=s articulation of the Rule 12(b)(6) standard in Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 554-56 (2007), the Court must construe
the complaint in favor of the plaintiff, accept the allegations of the complaint
as true, and determine whether plaintiff=s factual allegations present
plausible claims. A=[N]aked assertion[s]= devoid of >further factual
enhancement=@ are insufficient to Astate a claim to relief that is plausible on
its face@. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly,
550 U.S. at 557, 570). To survive a Rule 12(b)(6) motion to dismiss,
plaintiff=s pleading for relief must provide Amore than labels and
conclusions, and a formulaic recitation of the elements of a cause of action
will not do.@ D=Ambrosio v. Marino, 747 F.3d 378, 383 (6th Cir. 2014)
(quoting Twombly, 550 U.S. at 555) (other citations omitted). Even though
the complaint need not contain Adetailed@ factual allegations, its Afactual
allegations must be enough to raise a right to relief above the speculative
level on the assumption that all the allegations in the complaint are true.@
New Albany Tractor, Inc. v. Louisville Tractor, Inc., 650 F.3d 1046, 1051
(6th Cir. 2011) (citing Twombly, 550 U.S. at 555).
I. No Statutory Right to Sue No-Fault Insurers for Reimbursement
The Michigan Supreme Court recently held that healthcare providers
do not have a statutory right to sue a No-Fault insurer to recover No-Fault
PIP benefits incurred by an injured person. Covenant Med. Ctr., Inc. v.
State Farm Mut. Auto. Ins. Co., __ Mich. __; 895 N.W.2d 490 (2017). The
court specifically limited its holding to whether the No-Fault Act conferred
an independent statutory cause of action to healthcare providers, noting
that its decision was “not intended to alter an insured’s ability to assign his
or her right to past or presently due benefits to a healthcare provider.” Id.,
slip op. at 24 n.40.
The Michigan Court of Appeals reiterated post-Covenant that
“providers have always been able to seek . . . assignment of an injured
party’s rights to past or presently due benefits . . . .” W. A. Foote Memorial
Hosp. v. MACP and MAIPF, Docket No. 333360, (August 31, 2017), slip
op. at 19-20. The decision emphasized that it was not intended to alter the
ability of the injured person to assign his or her right to pursue an action for
medical bills owed to the medical provider that provided the services, in
accordance with MCL 500.3134, which only prohibits the assignment of a
right to a future benefit.
To the extent that plaintiffs rely on the No-Fault Act itself to recover
under their PIP Claim alleged in Count I, they do not have such a statutory
claim. For example, in paragraph 18 of the complaint plaintiffs allege:
Pursuant to MCL 500.3157, Plaintiffs are entitled to recover the
outstanding balance for the products, services and/or
accommodations to the injured party from Defendant.
MCL 500.3157 provides that a health care provider may charge a
reasonable amount for medical services rendered to a person insured by a
no-fault insurance carrier and such charges may not exceed the amount
customarily charged for like services. Of course this statute, along with the
others cited by plaintiffs in Count I, do not provide a basis for recovery, but
they do provide the categories of recovery plaintiffs may seek to recover
from defendant Allstate.
In paragraph 24 of the complaint, plaintiffs allege:
Plaintiffs, as assignees of the injured party, are the real parties
of interest and as such Plaintiffs have the right to prosecute this
action against Defendant pursuant to MCL 600.2041.
This allegation makes it clear that plaintiffs are not seeking to recover for a
cause of action stemming from the No-Fault Act itself, but rather from an
assignment of rights from Mr. Minor. This is consistent with the holding of
“An assignee stands in the shoes of the assignor and acquires the
same rights as the assignor possessed.” Professional Rehab. Assoc. v.
State Farm Mut. Auto Ins. Co., 228 Mich. App. 167, 177 (1998). It follows
that the healthcare provider “stands in the shoes of [the claimant] and
possesses whatever right [he] would have to collect past due or presently
due benefits from defendant.” Id.
Signature of Advanced Surgery Center
Plaintiff Advanced Surgery Center alleges that it has a valid
assignment of rights from Mr. Minor. In response, defendant contends that
the purported assignment submitted by plaintiff does not contain any
signature, let alone Mr. Minor’s signature. In support, defendant provides
the court with a copy of Mr. Minor’s signature from his driver’s license.
Indeed, the assignment appears to contain only the printed name of Terry
Minor. Plaintiff responds by stating that the authenticity of the signature on
the assignment, as well as Mr. Minor’s intent, is the proper subject of
discovery. For purposes of this motion to dismiss for failure to state a claim
for relief, the court presumes that all factual allegations are true and will not
go beyond the pleadings to determine if a party has stated a cause of
Signature of Southeast Michigan Anesthesia Group
Plaintiff Southeast Michigan Anesthesia Group admittedly does not
have an assignment of rights from Mr. Minor. Therefore, its action against
defendant is dismissed without prejudice.1
Partial or Piecemeal Assignment Invalid
Defendant argues that the assignment is invalid because it does not
assign all no-fault PIP claims which Mr. Minor may have. Rather, because
Mr. Minor only purports to assign a subset of his PIP benefits (charges for
medical services provided by plaintiff), it is a limited partial assignment and
the No-Fault claimant maintains a vested right in the remainder of his NoFault benefits claim.
Defendant contends that the doctrines of res judicata and collateral
estoppel would theoretically prohibit Mr. Minor from filing a subsequent
lawsuit seeking all other No-Fault benefits which had accrued at the time
he filed a lawsuit strictly seeking plaintiff’s bills. Furthermore, he would be
prohibited from filing separate, concurrent lawsuits against Allstate seeking
all other No-Fault benefits. According to defendant, if Mr. Minor does not
For the remainder of the opinion, when the court refers to “plaintiff” it is referring to
Advanced Surgery Center.
have a right to bring piecemeal litigation against Allstate, then he cannot
assign the right to an assignee.
Plaintiff responds that the Michigan No-Fault Act contemplates that
an injured person may be entitled to various types of benefits, including
wage loss, replacement services, or medical bills, and not all of those
benefits may accrue at the same time. For example, the Act provides that
wage loss benefits are payable for the first three years after an accident,
whereas there is no such limitation on medical expenses. An injured
person remains free to file suit at any time in his life for unpaid medical
expenses, so long as suit is filed within one year after the last unpaid
expense. MCL 500.3145 (“one year back rule”). The Act contemplates
that a complaint may be filed seeking no-fault benefits from time to time. In
this case, plaintiff seeks to recover payment for all of its past and present
claims in one lawsuit. Neither the partial nor piecemeal nature of the
assignment made by Mr. Minor renders the assignment invalid.
Next, defendant argues the assignment is invalid because this lawsuit
will not fully discharge Allstate and preclude any further lawsuits by Mr.
Minor or another assignee. The Michigan Supreme Court has recognized
that an assignee is the “real party in interest” in an action and may bring the
action in its own name where the assignment is such that satisfaction of the
judgment obtained by the assignee will discharge the defendant from his
obligation to the assignor. Kearns v. Michigan Iron & Coke Co., 340 Mich.
577 (1954). According to defendant, an adjudication of plaintiff’s bills in this
case will not fully discharge Allstate or preclude any further lawsuit by Mr.
Minor for the remainder of his No-Fault benefits claim.
Plaintiff responds by pointing to the purpose of the No Fault Act,
referring back to its inception as the Uniform Motor Vehicle Accident
Reparations Act (1972), which “’mandates the full payment of medical
expense, without temporal or dollar limits’ and the only sure way to enforce
this rule is to have the insurer pay all actual allowable expenses as they are
incurred.” Manley v. Detroit Auto Inter. Ins. Exchange, 425 Mich. 140, 166
(1986). Plaintiff contends that one of the objectives of the No Fault Act is to
pay benefits periodically to sustain the injured person’s suffering loss as
expenses accrue. As contemplated by the No-Fault Act, satisfaction of any
judgment obtained by Advanced Surgery Center will discharge Allstate
from its obligation as to the bills Mr. Minor incurred for the services he
received at Advanced Surgery Center.
The court finds that the assignment to Advanced Surgery Center is
not rendered invalid for any of the reasons argued by defendant in its
motion to dismiss.
For the reasons stated above, defendant’s motion to dismiss is
granted without prejudice as to Southeast Michigan Anesthesia Group and
denied as to Advanced Surgery Center.
Dated: October 24, 2017
s/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE
CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
October 24, 2017, by electronic and/or ordinary mail.
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