One-Year Back Rule Limitation [§3145(1)]
Assignment of Benefits – Validity and Enforceability
In this unanimous, unpublished, per curiam decision (Gleicher, concurring), the Court of Appeals affirmed the trial court’s summary disposition order dismissing Plaintiff Premier Medical Movement, LLC’s (“Premier”) first-party action against Defendant Auto-Owners Insurance Company (“Auto-Owners”). The Court of Appeals held that the trial court did not err in dismissing Premier’s first-party action—which Premier filed after obtaining an assignment from its patient, Natalian Ringo—because the assignment was executed in favor of a different entity altogether, Operation Wellness Group LLC (“OWG”). Therefore, under Miller v Chapman Contracting, 477 Mich 102 (2007), an amendment to substitute OWG for Premier would not relate back to the filing date of Premier’s original complaint.
Natalian Ringo was injured in a motor vehicle collision on March 9, 2018, and on February 24, 2020, Premier filed a first-party action against Auto-Owners pursuant to an assignment it claimed to have obtained from Ringo. Premier attached an assignment dated August 9. 2019 to its complaint, but the assignment identified OWG, not Premier, as the assignee. In June of 2020, counsel for Premier sent correspondence to counsel for Auto-Owners, seeking a stipulated order allowing it to amend the complaint and caption and substitute OWG as the plaintiff, but Auto-Owners’ counsel refused. On June 11, 2020, Premier filed a motion to amend its complaint and the case caption, and Auto-Owners opposed the motion, arguing that Premier was not seeking to merely correct a misnomer, but rather to add a new party altogether. Furthermore, Auto-Owners argued that any amendment to the caption and complaint would not relate back to the filing date of Premier’s original complaint, and that any claims based on the August 9, 2019 assignment, therefore, would therefore be barred by the one-year-back rule. The trial court granted Premier’s motion to file an amended complaint—giving Premier seven days to do so—but also ruled that the amendment would not relate back to the filing date of the original complaint. Premier failed to amend its complaint within seven days, instead waiting more than two months to file a second motion to amend the caption and complaint. Premier acknowledged that this second motion was essentially a motion for reconsideration, but that it could not be labeled as such because it was “untimely in light of ‘clerical issues.’ ” In this second motion, Premier argued that, since Auto-Owners was on notice that OWG was the correct plaintiff, the trial court erred in ruling that OWG’s substitution would not relate back to the filing date of the original complaint. The trial court denied Premier’s motion, and Auto-Owners moved for summary disposition, arguing that Plaintiff did not have standing to pursue the assigned claims. The trial court granted Auto-Owners' motion.
The Court of Appeals affirmed the trial court’s summary disposition order, first rejecting Premier’s argument that the trial court erred in refusing to allow it to amend its complaint to reflect the proper party seeking relief. The Court of Appeals noted that the trial court did grant Premier’s motion to amend the complaint and caption, but that Premier simply failed to do so.
“Despite the trial court’s grant of the motion, albeit with the limitation on the relation back, plaintiff never filed the amended complaint substituting OWG for plaintiff. Thus, regardless of the limitation on the amendment of the complaint, the filing of the amended complaint to substitute OWG for plaintiff would have reflected the real party in interest and afforded OWG standing. Indeed, OWG was the entity that received the assignment for no-fault benefits from Ringo. Because plaintiff did not comply with the trial court’s ruling and formally file an amended complaint to substitute OWG in its place, the trial court did not err in granting defendants’ motion for summary disposition.”
The Court of Appeals next rejected Premier’s argument that the amendment was to correct a mere misnomer in its original complaint, and that it should, therefore, relate back to the filing date of the original complaint. Relying on the Supreme Court’s decision in Miller—“Where a plaintiff ‘seeks to substitute or add a wholly new and different party to the proceedings, the misnomer doctrine is not applicable’ ”—the Court of Appeals held that the misnomer doctrine did not apply to this case. The Court highlighted the fact that Auto-Owners searched corporate records and found no correlation between Premier and OWG, and thus, because Premier was seeking to add a new and different party altogether to the proceedings, any such substitution would not relate back to the filing date of Premier’s original complaint.
“We reject plaintiff’s contention that the misnomer doctrine applies because the error in the naming of plaintiff was an inconsequential deficiency. In the present case, the complaint identified plaintiff as Premier Medical Movement, LLC. Yet, the assignment submitted with the complaint indicated the insured, Ringo, assigned his claim to no-fault benefits to OWG. Defendants searched corporate records, but were unable to discover any correlation between plaintiff and OWG. Thus, plaintiff’s attempt to distinguish this case from Miller is without merit. The trial court did not err in concluding that the relation back doctrine did not apply to the addition of new party OWG even if plaintiff had filed the amended complaint as directed by the trial court.”
Judge Gleicher concurred, but took exception with Miller’s “formalistic approach to the relation-back doctrine,” which she argued, “does not serve the general philosophy of our court rules, which favors merit-based adjudication.” She noted that Auto-Owners “knew from the inception of the case that the proper plaintiff was [OWG],” and “would have suffered no prejudice whatsoever by amending the pleadings to reflect the proper plaintiff.” Therefore, she encouraged the Supreme Court to adopt a new approach to misnomers—to wit, that which is encapsulated in FR Civ P 15(c)(1)(C).
“Defendants knew from the inception of the case that the proper plaintiff was Operation Wellness Group, LLC. Miller’s formalistic approach to the relation-back doctrine does not serve the general philosophy of our court rules, which favors merit-based adjudication. I would urge our Supreme Court to adopt the approach to misnomers encapsulated in FR Civ P 15(c)(1)(C). See Arthur v Maersk, Inc, 434 F3d 196, 209 (CA 3, 2006) (‘An amendment naming a new party will relate back to the original complaint if the party had adequate notice of the action and should have known that it would have been named in the complaint but for a mistake—whether the mistake is based on lack of knowledge or mere misnomer.’)”