ZMC Pharmacy, LLC v. State Farm Mut. Auto. Ins. Co.

307 F.Supp.3d 661

ZMC PHARMACY, LLC, Intervenor Plaintiff,

v.STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.

Case No. 16–cv–10508

United States District Court, E.D. Michigan, Southern Division.

Signed March 29, 2018

Joseph Dedvukaj, Bloomfield Hills, MI, Timothy M. Hartner, Khurana Law Firm, Troy, MI, for Intervenor Plaintiff.

Peter Bottenhorn, Kevin J. Bacon, Julie A. Taylor & Associates, Southfield, MI, for Defendant.

OPINION AND ORDER GRANTING DEFENDANT STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY'S MOTION TO DISMISS (ECF NO. 24)

PAUL D. BORMAN, UNITED STATES DISTRICT JUDGE

This case involves various parties' claims for the payment of no-fault insurance benefits stemming from an August 19, 2014 motor vehicle accident in which a car driven by Tamika R. Burrell, the original Plaintiff in this action, was struck in the rear by a hit and run driver and sustained accidental bodily injuries. Intervenor Plaintiff ZMC Pharmacy, LLC ("ZMC"), the only remaining plaintiff, provided services and/or products to Ms. Burrell allegedly related to her August 19, 2014 automobile accident. ZMC intervened in this action attempting to recover no-fault insurance benefits from Defendant State Farm Mutual Automobile Insurance Company ("State Farm") for the products/services it provided to Ms. Burrell. State Farm now moves for summary judgment based on the Michigan Supreme Court's decision in Covenant Medical Center, Inc. v. State Farm Mut. Auto. Ins. Co. , 500 Mich. 191, 895 N.W.2d 490 (2017), which established that medical providers such as ZMC do not have a statutory claim under the Michigan No–Fault Act to recover personal protection insurance benefits from no-fault insurers. (ECF No. 24, Motion for "Summary Judgment".) ZMC filed a Response (ECF No. 26) and State Farm filed a Reply (ECF No. 27). For the reasons that follow, the Court GRANTS State Farm's motion and DISMISSES Plaintiff's Complaint WITH PREJUDICE.

I. BACKGROUND

A. Procedural History

Ms. Burrell originally filed her claims in Wayne County Circuit Court on or about September 3, 2015. On or about November 18, 2015, ZMC, an entity that claims to have provided Plaintiff with products and services (pharmaceuticals) related to her care and recovery from the August 19, 2014 accident, sought to intervene in the state court action and filed an Intervening Complaint in that court on November 18, 2015. ZMC's Intervenor Complaint claimed a right to payment from State Farm under the Michigan No–Fault statute based upon services/products (pharmaceuticals) rendered to Ms. Burrell between September 22, 2015 to October 30, 2017, allegedly in connection with her August 19, 2014 motor vehicle accident. On February 11, 2016, Defendant State Farm removed the case to this Court, based upon diversity jurisdiction, after Burrell filed an amended complaint in state court on or about February 4, 2016, adding a claim for uninsured motorist benefits up to the policy limits of $50,000. The newly asserted claim for uninsured motorist benefits, when combined with Plaintiff's original claim of damages in excess of $25,000, resulted in an amount in controversy in excess of $75,000. (ECF No. 1, Notice of Removal ¶¶ 2–15, Exs. 5, 6.) Intervenor Plaintiff MMT Integrative Services, Inc. ("MMT"), an entity that claims to have provided Plaintiff with products and services (physical therapy) related to her care and recovery from the August 19, 2014 accident, was granted permission to intervene by this Court and filed an Intervenor Complaint in this Court on June 21, 2016. (ECF Nos. 10, 12.) On July 19, 2017, both Ms. Burrell and MMT were dismissed from this action by Stipulated Order of Dismissal after participating in a state court case evaluation proceeding and accepting their respective awards. (ECF Nos. 22, 23.) Intervening Plaintiff ZMC participated in the case evaluation process, but did not accept an award or dismiss its claims against State Farm.

B. Factual Background

On August 19, 2014, Ms. Burrell was involved in a motor vehicle accident in which she sustained accidental bodily injuries. Ms. Burrell was insured with Defendant State Farm under a no-fault insurance policy at the time of the accident. (ECF No. 1, Notice of Removal Ex. E, Amended Compl. ¶¶ 14, 16.) Ms. Burrell was struck in the rear of her vehicle by a hit and run driver, pushing her into the vehicle in front of her, and seeks uninsured motorist benefits in the amount of the policy limits of $50,000. (Id. ¶ 17.) Ms. Burrell claims to have suffered permanent disfigurement that has affected her ability to lead a normal life, specifically but not limited to post-concussion syndrome, disc herniation at multiple levels compressing the thecal sac, myofascial syndrome in the spine, closed head injury, cervical and lumbar radiculopathy, anxiety, and depression. (Id. ¶ 21.) Ms. Burrell also claims to have lost wages and suffered diminished earning capacity, as well as having incurred economic expenses and medical expenses. (Id. ¶¶ 22–23.)

Intervenor Plaintiff ZMC claims to have provided products and services to Ms. Burrell in the amount of $8,685.71, which were reasonable and necessary products and services for Ms. Burrell's care and recovery, and to have incurred all reasonable charges for those products and services. (ECF No. 1, Notice of Removal Ex. 6, ZMC Intervening Complaint ¶ 7.) ZMC claims in its Intervening Complaint that State Farm has failed to pay for the outstanding $8,685.71, in violation of the Michigan No–Fault Act. (Id. ¶ 12.) ZMC now claims to have incurred a total of $221,260.09 in unpaid charges for pharmaceuticals provided to Ms. Burrell beginning on September 22, 2015 and continuing through May 8, 2017. Because the unpaid no-fault benefits are overdue, ZMC claims entitlement to interest at the rate of 12% per annum and reasonable attorney fees, both as provided under the Michigan No–Fault statute.

On February 2, 2017, the parties to this action stipulated to submit the matter to State Court Case Evaluation. (ECF No. 20.) On May 9, 2017, a case evaluation hearing was held in state court. Plaintiff Burrell and Intervening Plaintiff MMT accepted the case evaluation awards and dismissed their claims against State Farm on July 19, 2017, pursuant to stipulated orders of dismissal. (ECF Nos. 22, 23.) Intervenor Plaintiff ZMC participated in, but did not accept, the case evaluation award and did not dismiss its claims against State Farm.¹

On July 27, 2017, State Farm filed this motion to dismiss ZMC's claims against it based upon Covenant , which established that medical providers such as ZMC do not have a statutory cause of action under the Michigan No–Fault Act to recover personal protection insurance benefits from no-fault insurers. ZMC responded that Covenant left open a healthcare provider's right to proceed against an insurer based upon an assignment of rights from an insured. ZMC argues that it has obtained such an assignment from Ms. Burrell, dated June 12, 2017, which ZMC claims entitles it to recover payment from State Farm for pharmaceuticals provided to Burrell, allegedly in connection with her August 19, 2014 motor vehicle accident, from September 22, 2015 through May 8, 2017, which totals $221,260.09. State Farm disputes both the validity of the June 12, 2017 Assignment and its timeliness with respect to ZMC's claims.

II. STANDARD OF REVIEW

State Farm would do well to study Federal Rules of Civil Procedure 12 and 56 and understand the important differences between a motion to dismiss (either for failure to state a claim 12(b)(6) or for judgment on the pleadings 12(c) ) under Rule 12 and a motion for summary judgment under Rule 56. The differences are important and of dispositive significance to this Court's standard of review of State Farm's motion. This is not the only case presently before this Court in which State Farm has failed to state and apply the appropriate standard of review. Further filings by State Farm in this Court that fail to specify the exact Federal Rule of Civil Procedure under which they move, and fail to present argument and evidence appropriate to that standard of review, will be stricken by this Court.

While State Farm captions its motion as one "for summary judgment," seemingly invoking Fed. R. Civ. P. 56, it proceeds to cite in the Standard of Review section of its brief only Fed. R. Civ. P. 12, in specific, two subsections of that rule, 12(b)(1) and 12(b)(6), neither of which is applicable here. First, a motion under Fed. R. Civ. P. 12(b)(1), which State Farm first lists in its Standard of Review, applies to challenges to the Court's subject matter jurisdiction. State Farm does not articulate a challenge to the Court's subject matter jurisdiction and this subsection of Rule 12 is inapt. Second, it is axiomatic that a motion to dismiss under Fed. R. Civ. P. 12(b)(6) can only be filed before an answer is filed. "A motion asserting any of these defenses [under 12(b) ] must be made before pleading if a responsive pleading is allowed." Fed. R. Civ. P. 12(b). State Farm answered ZMC's Intervening Complaint in state court on or about November 30, 2015. (ECF No. 1–7, Defendant's Answer to Intervening Plaintiff's Complaint, PgID 130.) Therefore, Rule 12(b)(6), also cited by State Farm in its Standard of Review section, is likewise inapplicable and an inappropriate procedural vehicle for the relief State Farm seeks, i.e. dismissal of Plaintiff's Complaint. The appropriate procedural vehicle for a motion under Rule 12 to dismiss after an answer has been filed is Fed. R. Civ. P. 12(c) for judgment on the pleadings. Regrettably, State Farm does not even mention Rule 12(c), and continues throughout its briefing to refer to its motion as one for "summary judgment," despite the fact that State Farm does not mention or refer to Fed. R. Civ. P. 56 and its applicable standards of review at all.

Perplexed by this procedural puzzle, the Court asked State Farm's counsel at the hearing on the motion to...