Michigan Court of Appeals; Docket #356720; Unpublished
Judges Gleicher, Kelly, and Patel; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
Discovery Sanctions in First-Party Cases
In this unanimous, unpublished, per curiam decision, the Court of Appeals reversed the trial court’s dismissal of Plaintiff ISpine, PLLC’s (“ISpine”) first-party action against Defendant State Farm Mutual Automobile Insurance Company (“State Farm”) as a discovery sanction. The Court of Appeals held that a trial court cannot compel a provider—e.g., ISpine—to produce its patient’s medical authorizations for other providers. Furthermore, the Court of Appeals held that the trial court failed to balance the factors set forth in Vicencio v Ramirez, 211 Mich App 501 (1995) for determining whether dismissal is an appropriate sanction for a discovery violation.
Kathereen Winton was injured in a car crash in March 2016, after which she underwent spine surgery at ISpine. Winton assigned her right to pursue no-fault PIP benefits related to the surgery to ISpine, who in turn submitted a claim to State Farm for $87,920. State Farm denied ISpine’s claim, contending that Winton’s back injuries were not caused by the March 2016 crash. In ISpine’s subsequent first-party action against State Farm, State Farm requested that ISpine produce signed medical authorizations from Winton’s other healthcare providers. ISpine refused State Farm’s request, contending that “it did not have the power to require Winton to sign the authorizations, was not required by court rule to do so, and that any evidence from Winton’s other health care providers was irrelevant to ISpine’s treatment of Winton.” In the trial court’s scheduling order, it required ISpine to produce the authorizations within 28 days. When ISpine did not comply, State Farm filed a motion to compel ISpine to produce the authorizations, as well as to schedule depositions of Winton’s doctor at ISpine and another ISpine representative. The court granted State Farm’s motion to compel, ordering ISpine to produce the authorizations within 14 days and schedule the depositions within 30. ISpine sought reconsideration of the trial court’s order, but the trial court never ruled on ISpine’s motion for reconsideration. Rather, after ISpine failed to produce the authorizations within 14 days or schedule the depositions within 30, the trial court dismissed ISpine’s action without prejudice, without holding a hearing.
The Court of Appeals reversed the trial court’s order dismissing ISpine’s action, holding, first, that ISpine was not required to produce signed authorizations for Winton’s other providers. State Farm had argued that the authorizations were required under MCR 2.302(A)(2)(b) and (A)(3), but the Court of Appeals noted that (A)(2)(b) only requires that a party produce materials that are in its possession or control, and (A)(3) only requires a “ ‘party claiming damages’ for personal injury” to produce such authorizations. In this case, ISpine did not possess or control its patient’s—Winton’s—authorizations from Winton’s other providers, and ISpine was not claiming damages for personal injury for purposes of (A)(3). Thus, the trial court erred in ordering ISpine to produce the authorizations.
“ISpine produced the materials required by MCR 2.302(A)(2)(b)(i) and (ii). Medical authorizations, however, fall within item (iv)’s inclusion of MCR 2.302(A)(3). Subsection (A)(3) requires a “party claiming damages” for personal injury to produce “executed medical record authorizations” for all providers “in actual possession of medical information relating to the condition, unless the party asserts privilege pursuant to MCR 2.314(B).” As ISpine is seeking reimbursement for health care expenses and not claiming damages for personal injury, subsection (A)(3) does not apply. As it relates to the remainder of subsection (A)(2)(b), a first-party provider seeking reimbursement of its charges for medical care is unlikely to “possess” or “control” the patient’s medical record authorizations. Indeed, because a patient may assert a privilege regarding certain treatment, or that certain past encounters with medical professionals are irrelevant to a provider’s first-party claim, the court rule does not require a provider to supply medical authorizations.
By failing to acknowledge ISpine’s motion for reconsideration of the order compelling discovery and requesting a protective order, the circuit court missed the critical point that ISpine was not required to produce some of the requested materials. State Farm was not entitled to an order to compel discovery of the medical authorizations in the first place. The circuit court compounded its error by failing to explain its reasoning in relation to the motion to dismiss, limiting our ability to assess the need for sanctions in relation to other withheld materials.”
The Court next held that the trial court erred in dismissing ISpine’s action as a discovery sanction without first considering, on the record, all other available options. The Court noted that trial courts must balance the factors set forth in Vicencio v Ramirez, 211, Mich App 501 (1995) before deciding on an appropriate sanction for discovery violations. In this case, the trial court made its decision to dismiss without oral argument and without providing any reasoning or analysis.
“ ‘Dismissal is a drastic step that should be taken cautiously.” Swain v Morse, 332 Mich App 510, 518; 957 NW2d 396 (2020) (quotation marks and citation omitted). ‘Before imposing such a sanction, the trial court is required to carefully evaluate all available options on the record and conclude that the sanction of dismissal is just and proper.’ Vicencio v Ramirez, 211 Mich App 501, 506-507; 536 NW2d 280 (1995). To reach that decision, the court should consider:
(1) whether the violation was wilful or accidental; (2) the party’s history of refusing to comply with previous court orders; (3) the prejudice to the opposing party; (4) whether there exists a history of deliberate delay; (5) the degree of compliance with other parts of the court’s orders; (6) attempts to cure the defect; and (7) whether a lesser sanction would better serve the interests of justice. [Id. at 507.]
‘The record should reflect that the trial court gave careful consideration to the factors involved and considered all its options in determining what sanction was just and proper in the context of the case before it.’ Duray Development, LLC v Perrin, 288 Mich App 143, 165; 792 NW2d 749 (2010) (quotation marks and citation omitted). As stated in Kalamazoo Oil, 242 Mich App at 88, ‘because default is a severe sanction, it is imperative that the trial court balance the factors and explain its reasons for imposing such a grave sanction in order to allow for meaningful appellate review.’
No oral arguments were held in this case and the court made its decision in a short order with no reasoning or analysis. The circuit court committed plain error in assuming that ISpine was required to produce all the requested material in the first place. And in relation to other requested materials, we cannot determine if the circuit court considered other sanctions or how it viewed and weighed the factors of Vicencio. The law is clear that we must vacate the order dismissing ISpine’s complaint and remand to allow the circuit court to articulate its findings on the record based on an accurate application of the court rules.”