Orchard Labs. Corp. v. Auto Club Ins. Ass'n

ORCHARD LABORATORIES CORPORATION, doing business as ORCHARD TOXICOLOGY, Plaintiff-Appellee, v. AUTO CLUB INSURANCE ASSOCIATION, Defendant-Appellant.

No. 356597

Court of Appeals of Michigan

May 26, 2022

UNPUBLISHED

Wayne Circuit Court LC No. 19-015519-NF

Before: Gleicher, C.J., and K. F. Kelly and Patel, JJ.

PER CURIAM

MCL 500.3145(1) requires "written notice of injury" within one year of an accident to claim first-party no-fault benefits. Defendant Auto Club argues on appeal that provider-plaintiff's action is barred by the statute of limitations because it was untimely. But within one year of the date of the accident, Auto Club learned of its occurrence and that injuries were sustained from several sources including the injured party's wife and a police report. And contrary to Auto Club's additional arguments, the doctrines of res judicata and collateral estoppel do not bar this action. For the reasons stated below, we affirm both of the trial court orders denying Auto Club's motions for summary disposition.

I. BACKGROUND

On December 17, 2017, Robert Dorey was standing outside of the Bad River Bar in St. Charles, Michigan when he and another patron, David Bean, were struck by a truck operated by Auto Club's insured, Aaron Briggs. Dorey received medical treatment for his injuries. The treatment included services provided by Orchard Laboratories Corporation from August 16 2018 through August 30, 2019, the payment of which is at-issue in this appeal.

On November 15, 2018, Bean reported the accident to Auto Club. Bean stated that he had been injured and that he had retained a lawyer to pursue his claim for no-fault benefits. This conversation is documented in Auto Club's claim file, which also reflects that other persons were injured in the accident.

On November 19, 2018, an Auto Club representative spoke with Briggs and obtained additional details of the accident. On the same date, a "Report of Loss for Claim 40102625" was generated. The report included the date and time of the loss, the cause of loss, the location of the loss, as well as a detailed narrative of the accident.

On or about November 20, 2018, Auto Club received a copy of the Saginaw County Sheriff's Office report.^[1] The sheriff's report contained a narrative of the accident, as well as the names, addresses and telephone numbers for Dorey, Bean, Briggs, and all of the witnesses. The report stated that Dorey received medical treatment at the accident scene and sustained a "[p]ossible internal injury." The report summarized Dorey's account of the accident:

INTERVIEW WITH ROBERT DOREY: (Struck by Vehicle)

I spoke to Robert in the Bad River Bar. Robert stated that it started earlier inside the bar. He said that "Briggs" started talking shit and was kicked out of the bar. Robert stated Briggs was kicked out of the back door and told to leave. Robert said that he went out front to smoke. He stated that the truck came up and that Briggs got out of the truck. Robert said he was running his mouth and yelling "Fuck You." Robert said that he began to leave and then "whips around" and comes directly at him. Robert said that the truck smashed the lights and wall. Robert said that it backed up and again came at the crowd and drove off. Robert said that the truck went straight through the light and almost hit someone.

Robert stated that he was struck by the truck. Robert said it hit his leg and the tire ran over his foot.

Robert described the truck as a "Chevy or GMC" that was dark green or black. He stated it was a diesel.

On December 10, 2018, Dorey's wife contacted Auto Club to report the claim. Auto Club's claim file states "[Dorey's] wife called and filed his claim with us on 12/10/18 and advised he has an attorney." Auto Club acted on the information that it received by sending an application for benefits to Dorey and opening a PIP claim that contained Dorey's name and address, the time and place of the injury, and the nature of his injury ("back/neck sprain, unknown").

On January 17, 2019, Dorey filed his own, separate lawsuit against Auto Club in Wayne Circuit Court. Dorey's lawsuit was later transferred to Saginaw Circuit Court and, ultimately, dismissed. On August 30, 2019, Dorey executed an assignment in favor of Orchard Laboratories. On November 19, 2019, Orchard Laboratories filed this action in Wayne Circuit Court for payment for the medical services that it rendered.

Auto Club moved for summary disposition in this case pursuant to MCR 2.116(C)(7), (8) and (10), asserting that MCL 500.3145(1) barred recovery because the action was filed more than one year after the accident and it did not receive written notice of Dorey's claim within one year of the date of the accident. Auto Club conceded that it received a copy of the Saginaw County Sheriff's report within one year of the date of the accident. Auto Club also relied on the sworn affidavit of one of its senior litigation specialists, who admitted that Auto Club received verbal notice of the claim from Dorey's wife on December 10, 2018. However, Auto Club maintained that it did not received sufficient written notice by Dorey or anyone on his behalf. Alternatively, Auto Club argued that, if the trial court concluded that the notice requirement was met, then any claims for services that were rendered before November 19, 2018 were barred by the one-year-back rule.

The trial court concluded that adequate notice was provided. However, the trial court barred Orchard Laboratories' claims for services that were performed before November 19, 2018. Auto Club filed a motion for reconsideration, which the trial court denied.

Just a few weeks before filing its motion for summary disposition in this action, Auto Club filed a motion for partial summary disposition in Dorey's Saginaw Circuit Court action, arguing that Dorey's no-fault claims were barred because they were filed more than one year after the accident and Auto Club did not receive timely written notice of the claim. The Saginaw Circuit Court granted partial summary disposition with regard to Dorey's first-party claims, but his third-party and dram shop claims remained pending.

Following the conclusion of Dorey's Saginaw Circuit Court action, Auto Club filed a second motion for summary disposition in this case, asserting that Orchard Laboratories' no-fault action was barred by res judicata. The trial court concluded that Orchard Laboratories and Dorey were not in privity. The trial court further determined that Dorey's assignment to Orchard Laboratories precluded Dorey from asserting a claim for Orchard Laboratory's bills in his own no-fault action. The trial court denied the motion, holding that the elements of res judicata were not met.

II. STANDARDS OF REVIEW

We review a trial court's determination on a motion for summary disposition de novo. El-Khalil v Oakwood Healthcare, Inc, 504 Mich. 152, 159; 934 N.W.2d 665 (2019).

Summary disposition is appropriate under MCR 2.116(C)(7) when a claim is barred by a statute of limitations. Whether a statute of limitations bars a claim is a question of law that this Court reviews de novo when the underlying facts are not disputed. O'Leary v O'Leary, 321 Mich.App. 647, 651; 909 N.W.2d 518 (2017).

A motion for summary disposition pursuant to MCR 2.116(C)(10) tests the factual sufficiency of the complaint. Woodring v Phoenix Ins Co, 325 Mich.App. 108, 113; 923 N.W.2d 607 (2018). Summary disposition under MCR 2.116(C)(10) is only appropriate when there is no genuine issue of material fact. El-Khalil, 504 Mich. at 160. "A genuine issue of material fact exists when the record, giving the benefit of reasonable doubt to the opposing party, leaves open an issue upon which reasonable minds might differ." Zaher v Miotke, 300 Mich.App. 132, 139-140; 832 N.W.2d 266 (2013).

Additionally, res judicata and collateral estoppel present questions of law that we review de novo. King v Munro, 329 Mich.App. 594, 599; 944 N.W.2d 198 (2019).

III. NO-FAULT STATUTE OF LIMITATIONS

Auto Club argues that the trial court erred in denying its first motion for summary disposition because Orchard Laboratories' action was commenced more than one year after the accident and the information received by Auto Club did not satisfy the notice provision of MCL 500.3145(1) to preserve the no-fault claim. We disagree.

At the time of the December 17, 2017 accident, MCL 500.3145(1) provided, in pertinent part:

An action for recovery of personal protection insurance benefits payable under this chapter for accidental bodily injury may not be commenced later than 1 year after the date of the accident causing the injury unless written notice of injury as provided herein has been given to the insurer within 1 year after the accident or unless the insurer has previously made a payment of personal protection insurance benefits for the injury . . . . The notice of injury required by this subsection may be given to the insurer or any of its authorized agents by a person claiming to be entitled to benefits therefor, or by someone in his behalf. The notice shall give the name and address of the claimant and indicate in ordinary language the name of the person injured and the time, place and nature of his injury.

It is undisputed that Orchard Laboratories' complaint was filed more than one year after the accident. It is further undisputed that Auto Club had not previously paid any PIP benefits for Dorey's injuries. Therefore, Orchard Laboratories' claim is barred unless Auto Club received appropriate notice under MCL 500.3145(1).

It is well-established that substantial compliance with the purpose of MCL 500.3145(1) is sufficient to preserve a claim for no-fault benefits. Perkovic v Zurich Am Ins Co, 500 Mich. 44, 52; 893 N.W.2d 322 (2017). The...