The White House Services v. Allstate Insurance Company
Filing
47
ORDER granting 42 defendant's Motion for Summary Judgment. Signed by District Judge George Caram Steeh. (MBea)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
THE WHITE HOUSE SERVICES,
(Edwin Broadus),
Plaintiff,
Case No. 17-CV-12672
vs.
HON. GEORGE CARAM STEEH
ALLSTATE INSURANCE CO.,
Defendant.
_____________________________/
ORDER GRANTING DEFENDANT’S
MOTION FOR SUMMARY JUDGMENT [ECF No. 42]
Plaintiff, The White House Services, provides medical services to
Edwin Broadus, who sustained catastrophic brain injuries in a motor vehicle
collision occurring November 1, 1982. In this action, plaintiff seeks to
collect no-fault personal protection insurance benefits from defendant
Allstate Insurance under Michigan’s No-Fault Automobile Insurance Act
(“No-Fault Act” or “Act”) and an automobile insurance policy. Specifically,
plaintiff seeks to recover for services provided to Mr. Broadus while he was
a resident in a single person apartment from January 21, 2016 through
January 31, 2018.
The matter is presently before the court on defendant’s motion for
summary judgment. Defendant argues that plaintiff did not provide lawfully
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rendered services to Mr. Broadus for which it is entitled to Michigan no-fault
benefits. Specifically, defendant alleges that plaintiff did not possess the
required license to provide adult foster care services in a single apartment
setting and therefore its services are not compensable under the No-Fault
Act. Oral argument was heard by the court on October 7, 2019.
FACTUAL BACKGROUND
The White House Services is owned by Jacquelyn Vaughn. She
started operating The White House Services in 2006 by offering geriatric inhome services and then transitioned into offering services for people who
suffered traumatic brain injuries in motor vehicle accidents. The White
House Services is licensed as an adult foster care home for services
provided at 5466 Greenbriar (“Group Home”) and is restricted to having six
clients at a time at the home.
The White House Services also offers a “residential program” for
individuals who live offsite. In 2012, the Michigan Department of Human
Services Bureau of Children and Adult Licensing (“Department”) undertook
an investigation into The White House Services. The investigation focused
on the services provided to “Resident A” who lived in one of plaintiff’s single
person apartments. On April 23, 2012, the Department concluded that
adult foster care was being provided to Resident A at the apartment without
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a license. The Department also found that “Resident A’s care plan is
directed towards total rehabilitation, full independence and eventual release
from the support of the servicing insurance company.” PageID 825. After
concluding that Resident A did not require the adult foster care services
normally provided by plaintiff’s Group Home, the Department directed Ms.
Vaughn to form a new entity to service rehabilitative clients who are
working toward independent living. This new entity was White House
Custom Services, and its purpose was “[t]o clarify the differences [between
adult foster care services provided by the Group Home and rehabilitative
services provided in the single apartment setting], avoid the appearance of
impropriety and maintain services and funds apart from the licensed group
home . . . .” PageID 825. The Department required a doctor’s statement
supporting a high probability for rehabilitation in order for rehabilitative
services to be provided in the single apartment setting without a license.
Following the investigation, Vaughn established The White House Custom
Services as the entity that services “[a]ny future business outside White
House Services group home . . . .” PageID 825.
Vaughn affirmed in her deposition that The White House Services’
adult foster care license does not cover the services provided offsite for the
residential program. (Vaughn Dep., p. 19). Susan Schmidt is the
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accountant for The White House Services and The White House Custom
Services. Schmidt explained that the two entities file joint tax returns and
the accounts receivable for the two entities are commingled. Further, the
staff providing the services is shared by the two entities. In their
depositions, plaintiff’s employees often referred to the two entities generally
as “The White House”.
On January 21, 2016, Edwin Broadus moved into a single resident
apartment located at 29700 Citation Circle, Farmington Hills, Michigan (the
“Citation Circle Apartment”). The rent for the apartment is included in the
per diem rate plaintiff charged for services provided to Broadus. Plaintiff
identified employees Dara Ladd and Mia Banks as Broadus’ two primary
caregivers. Ladd provided services at the Citation Circle Apartment on
Mondays through Fridays from 8:00 a.m. to 4:00 p.m. These services
included: attending Broadus’ medical appointments; preparing meals with
food purchased by The White House; administering medications; assisting
while out in the community; ensuring someone at The White House is
aware of his whereabouts; overseeing dressing and hygiene; assuring his
health, safety and well-being; and protecting him against physical harm,
humiliation and intimidation. These services were offered and available to
Broadus 24 hours a day, seven days a week. Ladd further explained that
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Broadus spent nights at the Citation Circle Apartment but regularly went to
the Group Home during the day, so he could interact with other clients.
Mia Banks testified she provided services to Broadus on Monday,
Wednesday and Friday from 4:00 p.m. to 9:00 p.m. at the Citation Circle
Apartment. During her shift she provided the following services: assistance
with showering, dressing and hygiene; meal preparation; administering
medications; activities such as taking walks and going out in the
community; reminding him of activities to be completed; protecting his
health, safety and well-being; and making sure someone from The White
House always knows of his whereabouts.
Paulette Boggs is the human resources and account manager for The
White House. She confirmed that The White House is always aware of Mr.
Broadus’ whereabouts, and that services are available to him 24 hours a
day, seven days a week. As a rule, caregivers were to provide assistance
with: meal preparation; activities of daily living; dressing in proper clothing;
development of personal and social skills; and ensuring his health, safety
and well-being.
The caregivers document the services they provide on records that
comprise each resident’s chart. For Mr. Broadus, these records document
the following services: grooming support; administration of medications;
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preparation of meals; assessments regarding behavior; household chores;
and attendance at doctor appointments. Plaintiff produced records titled
“Rolling Rehab Recreation,” which show that caregivers provided “social
integration activity” for Mr. Broadus. This includes taking Broadus on
outings in the community, so he could work on developing personal and
social skills.
The job description for Care Specialist/Home Health Aide at The
White House Services lists the following services provided to clients:
medication reminders; escorts to appointments; meal planning and
preparation; assistance with bathing, dressing and grooming; running
errands; and engaging in physical and mental exercise. Each of these
services was provided to Mr. Broadus.
Plaintiff seeks to recover for services provided to Mr. Broadus while
he was a resident at the Citation Circle Apartment from January 21, 2016
through January 31, 2018. Mr. Broadus moved into the Group Home on
February 1, 2018 and the parties agree that defendant has paid plaintiff for
services provided and billed since that date. Defendant moves for
summary judgment, contending that plaintiff is not entitled to
reimbursement under the No-Fault Act because it was operating as an
unlicensed adult foster care facility and was therefore not lawfully rendering
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treatment under Michigan’s No-Fault Act. Plaintiff responds by arguing that
defendant has not offered any proof that The White House Custom
Services was required to have a license under the Adult Foster Care
Facilities Licensing Act to lawfully provide its services and accommodations
to Mr. Broadus in a single apartment setting.
STANDARD FOR SUMMARY JUDGMENT
Federal Rule of Civil Procedure 56(c) empowers the court to render
summary judgment "forthwith if the pleadings, depositions, answers to
interrogatories and admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of law." See Redding v. St.
Eward, 241 F.3d 530, 532 (6th Cir. 2001). The Supreme Court has
affirmed the court's use of summary judgment as an integral part of the fair
and efficient administration of justice. The procedure is not a disfavored
procedural shortcut. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986);
see also Cox v. Kentucky Dept. of Transp., 53 F.3d 146, 149 (6th Cir.
1995).
The standard for determining whether summary judgment is
appropriate is "'whether the evidence presents a sufficient disagreement to
require submission to a jury or whether it is so one-sided that one party
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must prevail as a matter of law.'" Amway Distributors Benefits Ass’n v.
Northfield Ins. Co., 323 F.3d 386, 390 (6th Cir. 2003) (quoting Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986)). The evidence and all
reasonable inferences must be construed in the light most favorable to the
non-moving party. Tolan v. Cotton, 572 U.S. 650, 660 (2014); Matsushita
Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986);
Redding, 241 F.3d at 532 (6th Cir. 2001). "[T]he mere existence of some
alleged factual dispute between the parties will not defeat an otherwise
properly supported motion for summary judgment; the requirement is that
there be no genuine issue of material fact." Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original); see also National
Satellite Sports, Inc. v. Eliadis, Inc., 253 F.3d 900, 907 (6th Cir. 2001).
If the movant establishes by use of the material specified in Rule
56(c) that there is no genuine issue of material fact and that it is entitled to
judgment as a matter of law, the opposing party must come forward with
"specific facts showing that there is a genuine issue for trial." First Nat'l
Bank v. Cities Serv. Co., 391 U.S. 253, 270 (1968); see also McLean v.
988011 Ontario, Ltd., 224 F.3d 797, 800 (6th Cir. 2000). Mere allegations
or denials in the non-movant's pleadings will not meet this burden, nor will
a mere scintilla of evidence supporting the non-moving party. Anderson,
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477 U.S. at 248, 252. Rather, there must be evidence on which a jury
could reasonably find for the non-movant. McLean, 224 F.3d at 800 (citing
Anderson, 477 U.S. at 252).
ANALYSIS
It is uncontested that neither The White House Services nor The
White House Custom Services has a license to provide adult foster care at
the Citation Circle Apartment. It is also uncontested that the services
provided to Mr. Broadus at the apartment meet the definition of foster care.
The issue for this court to decide is whether a license was required for
plaintiff to provide adult foster care to Mr. Broadus at the Citation Circle
Apartment. Stated another way, did the Citation Circle Apartment met the
statutory definition of adult foster care facility? If that is the case, then the
services provided by plaintiff at the single resident apartment were not
lawfully rendered treatment under the No-Fault Act and therefore are not
compensable. Healing Place at N. Oakland Med. Ctr. v. Allstate Ins. Co.,
277 Mich. App. 51, 57-58 (2007). It is plaintiff’s burden to prove that the
services it provided are compensable. Id. at 57.
Michigan’s Adult Foster Care Facilities Licensing Act (“AFCFLA”),
MCL 400.701 et seq. requires a license to operate an adult foster care
facility. An “adult foster care facility” is defined as:
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[a] governmental or nongovernmental establishment that
provides foster care to adults. Subject to section 26a(1), adult
foster care facility includes facilities and foster care family
homes for adults who are aged, mentally ill, developmentally
disabled, or physically disabled who require supervision on an
ongoing basis but who do not require continuous nursing care.
MCL 400.703(4). The AFCFLA further requires that “[a] person,
partnership, corporation, association . . . shall not establish or
maintain an adult foster care facility unless licensed by the
department.” MCL 400.713(1). Further, “[a] license shall be issued
to a specific person for a facility at a specific location and is
nontransferable.” MCL 400.713(7).
Under the No-Fault Act, personal protection insurance benefits are
payable for all “reasonable charges incurred for reasonably necessary
products, services and accommodations for an injured person’s care,
recovery, or rehabilitation.” MCL 500.3107(1)(a). The section of the NoFault Act addressing the amount that can be charged for treatment
provides:
A physician, hospital, clinic or other person or institution lawfully
rendering treatment to an injured person for an accidental
bodily injury covered by personal protection insurance . . . may
charge a reasonable amount for the products, services and
accommodations rendered.
MCL 500.3157.
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The Michigan Court of Appeals has read section 3107 in conjunction
with section 3157 to conclude that “the Legislature intended that only
treatment lawfully rendered, including being in compliance with licensing
requirements, is subject to payment as a no-fault benefit.” Healing Place,
277 Mich. App. at 57 (citing Cherry v. State Farm Mut. Automobile Ins. Co.,
195 Mich. App. 316, 320 (1992)); accord Perrin v. State Farm Mut. Auto
Ins. Co., 2019 U.S. Dist. Lexis 100506, Eastern District of Michigan
Southern Division, Case No. 17-cv-10558, (June 25, 2109) (Court reviewed
serviced offered by plaintiff to determine if a license was required under
AFCFLA and, if so, affirmed it would be fatal to the provider’s no-fault
claim).
Plaintiff argues that it is not required to have a license for its single
resident apartments because the AFCFLA uses the plural “adults” in its
definition of an adult foster care facility. MCL 400.713(4). According to
plaintiff, a single resident apartment cannot be covered by the definition of
an adult foster care facility, and therefore is not required to be licensed, if it
is only providing services to a single adult. In support of this position,
plaintiff attaches the Affidavit of Gregory J. Bator, an attorney whose
practice includes licensing matters under the AFCFLA. Mr. Bator states
that he is not aware of the State of Michigan, Department of Licensing and
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Regulatory Affairs (“LARA”) concluding that a facility or provider is required
to have a license to provide adult foster care services when such services
are provided to a single individual in a single-person residence. (Bator Aff.,
¶ 3)
Attorney Bator describes a specific investigation in which LARA
initially determined that Innovative Lifestyles, a provider of adult foster care
services to a single person in a single residence, was required to have a
license, but then reversed itself and determined that a license was not
required. The basis of LARA’s ultimate determination in that case was that
providing care to one resident in a single residence does not meet the
definition of adult foster care facility since care is not being provided to
multiple “adults”. MCL 400.703(4) provides that a license is required under
AFCFLA when adult foster care services are provided to “adults.” (Bator
Aff., ¶ 4) Bator contends that “[i]n choosing to pluralize the word ‘adults,’ it
is clear the Legislature intended the requirement to only apply to situations
in which services that constitute adult foster care services were being
provided to more than one individual in a given setting or residence.”
(Bator Aff., ¶ 4)
Attorney Bator does not discuss the Department’s previous
investigation of The White House Services in 2012. The Department found
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a violation of AFCFLA where The White House Services was a licensed
facility providing adult foster care services to an individual at a single
resident apartment for which it did not have a license. This is precisely the
situation presented with Mr. Broadus. After finding the violation, the
Department require that Jacquelyn Vaughn distinguish the care being
provided at the licensed adult foster care facility from the care being
provided to individuals in single apartment residences by creating a
separate corporation, The White House Custom Services, and that “any
future business outside White House Services group home will be serviced
by this entity.” The Corrective Action Plan made it clear that the new entity
is designed to service rehabilitative clients working toward independent
living. “The criteria will be a doctor’s statement that concludes a high
probability for rehabilitation.” (Defendant’s Exhibit K)
The 2012 State investigative report focused on the care being
provided and concluded that The White House Services met the definition
of providing foster care. Instead of revoking plaintiff’s license or requiring
the single-bed apartment to be licensed, the Department offered a
Corrective Action Plan which permitted plaintiff to provide rehabilitative
services, not qualifying as adult foster care services, to individuals in the
single resident apartments. However, the evidence presented in this case
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demonstrates that The White House Custom Services is not maintained as
a separate entity from The White House Services. Furthermore, Mr.
Broadus is not a client who is expected to return to full independence.
Plaintiff agreed that Mr. Broadus received foster care services in the
apartment setting.
The Michigan Court of Appeals addressed a situation similar to the
one before this court in Keys of Life v. Auto-Owners Ins. Co., 2016 WL
7493759 (Dec. 27, 2016) (unpublished). In Keys of Life, plaintiff began
providing adult foster care services to Mr. Mowrer in a licensed group home
before moving him to an apartment leased for him as part of its residential
apartment program. Plaintiff did not have a license to operate the
apartment as an adult foster care facility. The insurance company
defendant argued that plaintiff was not entitled to reimbursement for 24hour attendant care under the No-Fault Act because it was not licensed to
provide adult foster care in the single apartment setting and was thus not
lawfully rendering treatment under the act. The court undertook the
analysis laid out in Healing Place and concluded that plaintiff was providing
adult foster care services to Mr. Mowrer in the residential apartment. As
such, the apartment facility was required to be licensed as an adult foster
care facility. Id. at *4.
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Plaintiff urges the court to defer to the interpretation of the
administrative agency charged with enforcing the statute at issue.
However, the standard of review for questions of statutory construction
provides that “[t]he judiciary is the final authority on issues of statutory
construction and must reject administrative construction which are contrary
to clear congressional intent.” INS v. Cardoza-Fonseca, 480 U.S. 421,
447-48 (1987) (citing Chevron U.S.A. Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837, 843 n.9 (1984)).
The court starts its analysis with the text of the AFCFLA, looking to
the structure and language of the statute and the context in which that
language is used. The title of Section 400.701 of Michigan’s Social
Services statute is the “Adult Foster Care Facility Licensing Act”. Other
Sections of the statute address “Youth Adults”1, and still others deal with
children2. A rational explanation for why the definition section uses the
word “adults” in defining an “adult foster care facility” is to distinguish such
facility from one providing care to children or to youth adults. MCL
400.703(4).
1
“Youth” in this Section is defined as an individual who is at least 18 years of age but
less than 21 years of age. MCL 400.643(c).
2
See e.g., MCL 400.18c.
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Plaintiff’s proposed reading of the word “adults” is further undermined
at the end of the definition, which lists categories of facilities that are not
adult foster care facilities. The statute excludes certain nursing homes,
hospitals, infirmaries, child caring institutions, foster family homes, and
establishments providing alcohol or substance use rehabilitation or mental
health services. MCL 400.703(4)(a) – (k). Importantly for purposes of this
analysis, the list does not exclude single resident dwellings from the
definition of adult foster care facility just because they house a single adult.
Furthermore, in the case of a private residence with the capacity to receive
one to four adults who all receive benefits from a community mental health
services program, in order to be excluded from the definition of adult foster
care facility there is the additional requirement that the services provided
be monitored by the community health services program. 3 The common
requirement is that where certain services are being provided, the
legislature requires monitoring by an appropriate agency.
The court finds that the LARA decision relied on by plaintiff is contrary
to clear congressional intent and therefore is not binding on this court.
3
MCL 400.703(4)(k) excludes “[a] private residence with the capacity to receive at least
1 but not more than 4 adults who all receive benefits from a community mental health
services program if the local community mental health services program monitors the
services being delivered in the residential setting.”
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Consistent with Michigan caselaw, the Citation Circle Apartment meets the
definition of an adult foster care facility based on the services provided to
Mr. Broadus at the apartment. Plaintiff was therefore required to be
licensed to provide adult foster care services at the Citation Circle
Apartment. Because plaintiff was not licensed, the services provided to Mr.
Broadus were not lawfully rendered as required by the No-Fault Act.
Plaintiff argues that it provided other non-foster care services to Mr.
Broadus, such as “rehabilitative therapies, social integration activities, and
other life care and support services,” for which it should be paid. Plaintiff
requests time for additional fact-finding determine whether a portion of the
per diem rate billed relates to recoverable services. However, the
testimony of plaintiff’s employees supports a finding that these other
services fall within the definition of foster care. For example, taking clients
out into the community to go to church or the library so they can work on
their communication skills meets the definition of “personal care” under
AFCFLA which includes “the development of those personal and social
skills required to live in the least restrictive environment.” MCL 400.706(1).
Furthermore, it is undisputed that Mr. Broadus does not have a high
probability for rehabilitation from his catastrophic brain injuries. The court
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concludes that further discovery is not warranted under the circumstances
presented in this case.
CONCLUSION
For the reasons stated above, defendant’s motion for summary
judgment is GRANTED.
Dated: October 15, 2019
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 15, 2019, by electronic and/or ordinary mail.
s/Marcia Beauchemin
Deputy Clerk
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