Spectrum Health Hosps. v. Mich. Assigned Claims Plan

330 Mich.App. 21

944 N.W.2d 412

SPECTRUM HEALTH HOSPITALS, Plaintiff-Appellant,

v.MICHIGAN ASSIGNED CLAIMS PLAN, Michigan Automobile Insurance Placement Facility, and John Doe Insurance Company, Defendants-Appellees.

No. 343563

Court of Appeals of Michigan.

Submitted September 4, 2019, at Grand Rapids.

Decided September 24, 2019, 9:05 a.m.

Miller Johnson (by Joseph J. Gavin ) for plaintiff.

Hewson & Van Hellemont, PC (by Nicholas S. Ayoub ) for defendants.

Before: Swartzle, P.J., and Gleicher and M. J. Kelly, JJ.

Per Curiam.

The Michigan Assigned Claims Plan (MACP)/Michigan Automobile Insurance Placement Facility (MAIPF) rejected Spectrum Health Hospital's claim for assignment because the injured party did not sign the assignment application. The purpose of the MACP is to ensure prompt coverage for persons injured in motor vehicle accidents when coverage cannot be found or is unavailable. To achieve that end, the MACP/MAIPF has extremely limited authority to deny claims for assignment—it may only deny an "obviously ineligible" claim. The absence of a signature does not meet that threshold. We reverse the award of summary disposition in the MACP/MAIPF's favor and remand for entry of summary disposition in favor of Spectrum.

I. BACKGROUND

Robin Benoit was seriously injured on August 30, 2016, while a passenger in a vehicle involved in a single-car motor vehicle accident. Spectrum Health provided more than $129,000 in services to Benoit from August 30 through September 19, 2016. Benoit was not covered by any no-fault insurance policy. Upon Benoit's admission, Spectrum secured a "verbal consent" witnessed by two staff members for a general assignment of rights; however, Benoit was "unable to sign." The hospital did not secure a more specific assignment to apply to the MACP/MAIPF on Benoit's behalf. Spectrum allegedly misplaced the general assignment and then searched high and low for Benoit, but to no avail.

On August 10, 2017, almost a year after the accident, Spectrum filed an "application for personal injury protection [PIP] benefits"¹ with the MACP/MAIPF. Spectrum's agent signed as the "preparer," and the signature line for the "Injured Person or Representative" was left blank. Spectrum directed the MACP/MAIPF to the police report, which indicated that the driver of the vehicle did not have no-fault insurance. The preparer answered "unknown" to several application questions, including the names of persons with whom Benoit lived at the time of the accident and any vehicles owned by Benoit at that time. The preparer also answered "unknown" to the following questions: "At the time of the accident, did you have any auto insurance? If yes, list Name of Automobile Insurance Company & Policy Number," and "Are you filing this claim because there is a dispute between two or more insurance companies for your [PIP] coverage?" The application did include the address and phone number provided by Benoit in the hospital, her Medicaid policy number, and the vehicle operator's driver's license number. The preparer did not know if there was "automobile insurance in effect for this vehicle on the date of the accident" or whether "the driver [had] automobile insurance in effect on the date of the accident."

Spectrum provided the MACP/MAIPF a "list of steps taken to find Auto Insurance" along with the application. It described Spectrum's attempts to contact Benoit by phone and mail and to uncover additional contact information for its patient by searching various databases.

On August 14, 2017, the MACP/MAIPF sent Spectrum a generic form letter denying the application, stating:

We have received the application for benefits through the [MACP], which you submitted on 08/10/2017. After careful review it has been determined that your application is ineligible for assignment under Michigan No Fault Act. If you have any questions regarding this determination please contact a representative for the [MACP], operated by the [MAIPF].

Spectrum then hired a private investigator to continue the search for Benoit. The investigator learned that the address and phone number given by Benoit at the hospital actually belonged to a personal friend who refused to speak to the investigator. The investigator uncovered another address for Benoit that was a vacant lot. Benoit's former landlord had no forwarding information. On August 25, 2017, the investigator sent Benoit a private message on Facebook, and she telephoned him five minutes later. Benoit indicated that at the time of the accident, her ex-boyfriend was driving his personal vehicle, which he had neither registered nor insured. Benoit confirmed that at the time of the accident, she did not own a vehicle, did not have no-fault insurance, and did not live with anyone who carried no-fault insurance.

On August 28, 2017, Benoit met with the investigator in person and signed an "assignment of rights, benefits and causes of action" to permit Spectrum to seek PIP benefits on her behalf.² Spectrum forwarded the assignment to the MACP/MAIPF by fax on August 30, 2017, the final day to timely file a claim. The cover sheet informed the MACP/MAIPF that Spectrum had provided medical treatment to Benoit following her motor vehicle accident and that Spectrum had filed an application for assignment on August 10. Spectrum requested, "Please assign the claim, and notify us as to the assigned carrier."

The MACP/MAIPF immediately notified Spectrum that it was "unable to process the claim you have submitted on behalf of" Benoit and that it "require[d] additional information in order to move forward with [its] initial eligibility determination...." The MACP/MAIPF stated that the matter had been referred to its "legal counsel for further handling which may include, but is not limited to, examinations under oath of the appropriate individuals."

That same day, Spectrum filed suit for mandamus and declaratory relief, asserting that the MACP/MAIPF had a clear legal and ministerial duty to assign the claim to a no-fault insurer under MCL 500.3174, which, at the time of Spectrum's application and suit, provided:

A person claiming through the [MACP] shall notify the [MAIPF] of his or her claim within the time that would have been allowed for filing an action for [PIP] benefits if identifiable coverage applicable to the claim had been in effect. The [MAIPF] shall promptly assign the claim in accordance with the plan and notify the claimant of the identity and address of the insurer to which the claim is assigned [ MCL 500.3174, as amended by 2012 PA 204 (emphasis added).]^{[3 ]}

The MACP/MAIPF bucked discovery attempts, contending that Spectrum's application for assignment was facially deficient as Spectrum made inadequate efforts before filing to determine whether Benoit had available insurance coverage. At a motion-to-compel hearing, the MACP/MAIPF announced its intent to file a motion for summary disposition "to draw a line in the sand to prevent these efforts at obtaining assignment with little more than the most bare of information." In its subsequent summary disposition motion, the MACP/MAIPF added that Spectrum did not have an independent right to assert a claim in its own name after Covenant Med. Ctr., Inc. v. State Farm Mut. Auto. Ins. Co. , 500 Mich. 191, 895 N.W.2d 490 (2017).⁴ The MACP/MAIPF further contended that the application was invalid because although Spectrum signed it as the preparer, no one signed as the claimant or claimant's representative as required by the plan's internal operating procedures. Specifically, Michigan Assigned Claims Plan, § 5.1(A)(1)(a)⁵ provides that "[a] claim for [PIP] benefits under the Plan must be made on an application prescribed by the MAIPF" and that the application "must be complete and signed by the claimant," i.e., by "a person suffering accidental bodily injury arising out of the ownership, operation, maintenance or use of a motor vehicle as a motor vehicle in this state."

Spectrum replied that it was entitled to summary disposition because the MACP/MAIPF was only authorized to reject an application if from the outset the claim was obviously ineligible under the no-fault act. The standard did not require the applicant to conclusively prove that no insurance was available, only that it had made a good-faith effort to determine whether insurance was available. With its response, Spectrum included an affidavit from Benoit, avowing that she was merely a passenger in the vehicle involved in the accident and that she had had no ownership or control over it. "[T]o the best of [her] knowledge, neither the Vehicle nor the [driver] were covered by a no-fault insurance policy at the time of the accident," Benoit asserted. Benoit continued that she did not have a no-fault policy or reside with relatives maintaining policies at that time.

At the hearing on the countermotions for summary disposition, the MACP/MAIPF agreed that it now had sufficient information that Benoit did not have insurance available to her at the time of the accident.

However, it continued to insist that the application was invalid at its inception based on the absence of Benoit's signature as the claimant.

The circuit court agreed with the MACP/MAIPF and summarily dismissed Spectrum's action. The court acknowledged that Spectrum secured an assignment from Benoit after it filed its application. However, the court reasoned, the focus was on the application and whether it was valid when originally filed. The plan rules required that the application be signed by the claimant or her representative, and Spectrum did not sign in that capacity. And Spectrum did not file a new or amended application after locating Benoit. The court concluded, "I'm constrained to agree that while it's a technical point, the law is full of technicalities, and in this case, the statute requires a person entitled to claim because of accidental bodily injury to file the request for the MACP to assign a carrier, and that person did not do so...." The...