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VHS Detroit Receiving Hospital, Inc. v. City of Detroit (COA – UNP 5/21/2019; RB #3911)

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Michigan Court of Appeals; Docket # 341628; Unpublished
Judges Redford, Markey, and Kelly; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion


STATUTORY INDEXING:
Not Applicable

TOPICAL INDEXING:
Assignments of Benefits—Validity and Enforceability
Medical Provider Standing (Post-Covenant)


SUMMARY:
In this unanimous unpublished per curiam decision regarding an assignment of rights, the Court of Appeals determined that Covenant disposed of Plaintiff medical provider’s cause of action against Defendant, the City of Detroit.  Before the Covenant decision was issued, Plaintiff’s patient executed a release pursuant to a settlement agreement with Defendant whereby she released Defendant “from any and all due and owing first-party no-fault benefits.”  Plaintiff sought to recover payment for treatments it provided to its patient against Defendant separately, but Covenant was decided in the interim, and Plaintiff no longer had standing to do so.

In September of 2014, Letrisha Snider was injured in a motor vehicle accident while traveling as a passenger on a bus owned and self-insured by Defendant.  In 2015, Snider received medical treatment from Plaintiff for her injuries, in excess of $265,000.00.  In 2016, Snider and the city entered into a settlement agreement, and also in 2016, Plaintiffs filed a separate action against Defendant directly for payment of services it provided to Snider.   In 2017, Snider executed a release in consideration for payment of the settlement amount by Defendant.  Defendant was released “from any and all due and owing first party no-fault benefits . . . through June 8, 2016, which [Snider] has or may have against the City arising out of the events referenced above . . .”  The trial court formally approved the settlement, and stated that its order “in no way affects Plaintiffs[’] . . . pending claims for independently submitted claims.

Later in 2017, the Supreme Court issued its opinion in Covenant, prompting Plaintiff to receive an assignment from Snider, and prompting Defendant to move for summary disposition, based on both Snider’s release and Covenant.  The trial court granted Defendant’s motion, and the Court of Appeals affirmed. 

The Court of Appeals determined that Plaintiff’s actions were eminently understandable given the pre-Covenant landscape.  Before Covenant, medical providers could recover no-fault PIP benefits directly from insurers.  Therefore, at the time the release was executed by Snider, it had no effect on Plaintiff’s independent cause of action for PIP benefits covering the treatments it provided.  After Covenant, however, medical providers could no longer recover PIP benefits directly from insurers, absent and assignment.  Thus, since Plaintiff had already released all her rights for PIP benefits in 2016, she effectively had no rights left to assign in 2017.

The actions and legal maneuverings of Snider, the city, and plaintiffs in this case are explainable and understandable when examined in the context of a pre-Covenant legal environment.

. . .

There are some inescapable conclusions that we reach upon consideration of the record and the circumstances that existed before Covenant was issued by our Supreme Court. First, it is clear to us that when the trial court entered the order approving the settlement agreement in March 2017, the parties expected to fully litigate plaintiffs’ claims for no-fault benefits related to medical treatment provided to Snider in 2015. Summary disposition was plainly not a consideration at that time because under existing caselaw, plaintiffs still possessed a statutory cause of action against the city under the no-fault act regardless of Snider’s release.

Next, the release plainly and unambiguously released all of Snider’s claims to PIP benefits with respect to medical expenses incurred through June 8, 2016, necessarily including any claims that Snider may have had for benefits to cover the expenses of the medical care provided by plaintiffs in 2015.4 There is no other reasonable or viable construction of the release, and plaintiffs’ reliance on extrinsic evidence in an effort to establish an ambiguity is unavailing. Kyocera Corp v Hemlock Semiconductor, LLC, 313 Mich App 437, 446; 886 NW2d 445 (2015) (“When contract language is clear, unambiguous, and has a definite meaning, courts do not have the ability to write a different contract for the parties, or to consider extrinsic testimony to determine the parties' intent.”). Moreover, at the time of the release and the order approving the settlement agreement, it is fair to surmise that plaintiffs were not concerned with Snider’s releasing her rights to no-fault benefits. Rather, plaintiffs merely wished to preserve their then statutory right to pursue no-fault benefits from the city. This goal was accomplished with the order approving the settlement agreement when the trial court included language that the order “in no way” affected plaintiffs’ “pending claims for independently submitted claims.” (Emphasis added.) At that point, it is clear that the parties and the trial court were all on the same page—the settlement, release, and order did not preclude plaintiffs from going forward with their complaint for PIP benefits.


Michigan auto accident attorney Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit SinasDramis.com.

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