Jurisdiction in PIP Cases
In this 2-1 published decision authored by Justice Kelly (Riordan, dissenting), the Court of Appeals reversed the trial court’s summary disposition order dismissing Plaintiff Michigan Head & Spine Institute PC’s (“Michigan Head & Spine”) first-party action against Defendants Auto-Owners Insurance Company and Home-Owners Insurance Company (“defendants,” collectively). The Court of Appeals held that Michigan Head & Spine could aggregate 39 unrelated claims for unpaid no-fault PIP benefits in order to meet the jurisdictional threshold of $25,000 for Michigan circuit courts.
Michigan Head & Spine filed suit against the defendants in the Oakland County Circuit Court for unpaid no-fault PIP benefits Michigan Head & Spine alleged were owed to it by the defendants for treatments Michigan Head & Spine provided to 39 separate patients. In its complaint, Michigan Head & Spine alleged that the amount in controversy exceeded $25,000, and in support of that allegation, attached documentation which showed that, in the aggregate, the 39 separate claims exceeded $200,000. The defendants moved for summary disposition, arguing that the Circuit Court did not have subject matter jurisdiction because Plaintiff could not aggregate 39 “completely different claims” in order to meet the jurisdictional threshold of $25,000. The trial court agreed, and dismissed Michigan Head & Spine’s action.
The Court of Appeals reversed the trial court’s summary disposition order and held that a single plaintiff can aggregate multiple, unrelated claims in order to satisfy the $25,000 jurisdictional threshold for circuit courts. In so holding, the Court relied on Hodge v State Farm Mut Auto Ins Co, 449 Mich 211 (2016) and Boyd v Nelson Credit Ctrs, 132 Mich App 774 (1984). The Court observed that, in Hodge, the “Supreme Court held that, absent bad faith in the pleadings, the amount in controversy is determined from the prayer for relief in the plaintiff’s pleadings.” In this case, Plaintiff alleged in its complaint that the amount in controversy exceeded $25,000 and that there was no evidence of bad faith. The Court observed that, in Boyd, it held that, while multiple plaintiffs cannot aggregate separate claims to meet the jurisdictional threshold, a single plaintiff can. That was precisely the scenario in this case, where a single plaintiff, Michigan Head & Spine, aggregated multiple claims against the defendants. Thus, under Hodges and Boyd, the Oakland Circuit Court did have subject matter jurisdiction over the underlying action.
"Under Hodge, the amount in controversy is determined by reference to the pleadings. Hodge, 499 Mich at 223-224. Under Boyd, a single plaintiff may aggregate its various claims to satisfy the jurisdictional limits of the circuit court. Here, although Michigan Head & Spine has 39 separate claims, it is still just a single plaintiff aggregating its various claims. Therefore, under Hodge and Boyd, it may aggregate all of its various claims to reach the jurisdictional threshold of the circuit court. The trial court erred by holding otherwise."
Justice Riordan dissented, arguing that Boyd is not applicable to the instant case because Plaintiff was a provider, not the patient/insured. He argued that the salient takeaway from Boyd is that the “ ‘aggregation of various claims of a single plaintiff’ is permitted to establish the jurisdictional minimum [only] when the ‘single plaintiff’ at issue is the patient, not the healthcare provider.” He pointed to the Court’s holding in Moody v Home-Owners Ins Co, 304 Mich App 415 (2014), that “a healthcare provider’s claim against a no-fault insurer is derivative of the patient’s underlying claim.” Because of this, he argued, “a single healthcare provider bringing claims against a no-fault insurer for multiple patients is, in essence, bringing ‘the separate claims of individual plaintiffs,’ contrary to Boyd.” He went on to write:
"Simply put, a no-fault action is materially distinguishable from the ordinary case in which a single plaintiff seeks to aggregate multiple, if unrelated, claims against a single defendant to satisfy the jurisdictional minimum of the circuit court. In that case, the majority is correct that aggregation of claims is a question of permissive joinder under MCR 2.203(B), not a threshold question of subject-matter jurisdiction determined from the pleadings alone. But a no-fault action, in contrast, presents an unusual case in which the amount in controversy for the purposes of subject-matter jurisdiction is determined by identifying the amount in controversy alleged with respect to a single patient. See Moody, 304 Mich App at 443. Again, because a healthcare provider’s claim against a no-fault insurer is derivative of the patient’s underlying claim, a healthcare provider bringing claims against no-fault insurers for multiple patients based upon multiple and presumably distinguishable insurance policies, essentially is bringing the claims of multiple plaintiffs."