Michigan Court of Appeals; Docket # 344461; Unpublished
Judges Kelly, Markey, and Gleicher; Per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
One-Year Back Rule Limitation [§3145(1)]
In this majority unpublished per curiam decision (Gleicher, concurring), the Court of Appeals reversed the trial court’s summary disposition order dismissing the plaintiff’s first-party action to recover no-fault PIP benefits and remanded for further proceedings. The Court of Appeals held that (1) an incomplete application for PIP benefits through the Michigan Assigned Claims Plan, in and of itself, is not sufficient to preclude a claimant from recovering PIP benefits, (2) that the plaintiff’s action was not barred by the Supreme Court’s decision in Covenant Med Ctr, Inc v State Farm Mut Auto Ins, 500 Mich 19 (2017), because the plaintiff obtained a valid assignment from its patient, and (3) that the plaintiff provided timely notice of its claim to the Michigan Automobile Insurance Placement Facility by filing a lawsuit within one year of the subject motor vehicle collision.
The plaintiff, Michigan Head & Spine Institute, PC (“the Institute”) provided treatment to Avake Bell, for injuries he suffered in a motor vehicle collision that occurred on February 28, 2017. Shortly thereafter, the Institute submitted an application for PIP benefits to the MAIPF, but the MAIPF denied the application because several questions on the application were left unanswered. Then, on February 23, 2018, the Institute filed a complaint against the MAIPF. The MAIPF moved for summary disposition under MCR 2.116(C)(10), arguing for dismissal because the Institute did not submit a complete application for benefits. The trial court then ruled sua sponte that the Institute’s claim must be dismissed in light of the Supreme Court’s decision in Covenant and the Court of Appeals’ decision in Jawad A Shah, MD, PC v State Farm Mut Auto Ins Co, 324 Mich App 182 (2018), because the Institute did not obtain an assignment from its patient until March 8, 2018, and any subsequent, amended complaints would not relate back to the date of the original filing.
The Court of Appeals reversed the trial court’s summary disposition order, finding firstly that the filing of a lawsuit constituted sufficient notice under MCL 500.3145(1).
Notably, “MCL 500.3145(1) does not require a claimant to give written notice of injury if an action is commenced within one year of the accident.” Linden v Citizens Ins Co of America, 308 Mich App 89, 95; 862 NW2d 438 (2014). Here, Michigan Head & Spine was required to provide notice within 1 year of the accident. It satisfied that obligation by commencing the instant suit on February 23, 2018. The accident occurred on February 28, 2017.
The Court of Appeals further held that the Institute’s failure to submit a complete application through the MACP did not warrant dismissal of the Institute’s claim in its entirety. The MAIPF is only permitted to deny obviously ineligible claims, not deny claims based on a failure to satisfactorily complete the application forms.
However, unlike the requirement to provide timely notice within 1 year of the accident, which is, a statute of limitations, see Linden, 308 Mich App at 95, the requirement to complete the application does not mandate the dismissal of this suit just because Michigan Head & Spine did not satisfactorily complete the form. Further, defendants have offered no explanation as to why Michigan Head & Spine’s failure to complete the application would require such a result. And it is clear that summary disposition under MCR 2.116(C)(10) would be warranted if Michigan Head & Spine’s claim was properly denied under MCL 500.3173a. Pursuant to MCL 500.3173a, the MAIPF must make an initial determination of eligibility for benefits through the MACP, and it “shall deny an obviously ineligible claim.”5 Under this statute, if Michigan Head & Spine’s claim were obviously ineligible for benefits through the MACP, then defendants would be entitled to summary disposition.
Lastly, the Institute argued that “amending its complaint would not be futile because the one-year-back rule does not bar its complaint as Bell executed a valid assignment of benefits to [Plaintiff] and the dates of service were within one year of the date of the assignment.” The Court of Appeals agreed, holding that the assignment date should have been compared to the date of service—which was within one year of the assignment’s execution—not the date of the subject collision. Therefore, the Institute’s claims were not barred by the one-year-back rule.
The trial court determined that Michigan Head & Spine’s claim was barred by Covenant because the assignment was executed after the complaint was filed, and allowing Michigan Head & Spine to amend its complaint to attach the assignment would be futile because its claim was barred by the one-year-back rule. The trial court erred when it determined that the one-year-back rule barred Michigan Head & Spine’s claim. The one-year-back rule “is a damages-limiting provision because it limits a claimant’s recovery to those losses incurred during the year before the filing of the action.” Joseph, 491 Mich at 214. Instead of comparing the date of the assignment or the potential date of an amended complaint with the date of the accident, the trial court should have compared the assignment date to the dates of services that Michigan Head & Spine provided to Bell. Shah, 324 Mich App at 209. If a service was rendered more than one year before the date of the assignment, plaintiff could not recover for such service. MCL 500.3145(1). Accordingly, the trial court erred when it determined that summary disposition was warranted on the basis of an erroneous application of the one-year-back rule.
Justice Gleicher concurred with the majority’s opinion, and argued that the Court’s previous decision in Shah was “fundamentally incorrect."