INSURANCE-RELATED COURT CASES
Digested from case reports published online
Bad news for provider
Mecosta County Medical Center, d/b/a Spectrum Health Big Rapids (and others), sued Metropolitan Group Property and Casualty Insurance Company and State Farm Mutual Automobile Insurance Company in the Kent circuit court, seeking personal injury protection insurance (PIP) benefits related to a single-car crash involving Jacob Myers. Myers was injured in the crash and was treated at Mecosta.
Myers co-owned with his girlfriend the vehicle involved in the crash; his girlfriend’s grandmother had purchased a no-fault policy on the vehicle through Metropolitan Group.
Myers assigned Mecosta his right to collect PIP benefits in the amount of his treatment bills. After the assignment, Myers sued Metropolitan Group and State Farm in the Wayne circuit court for PIP benefits related to other costs arising from the crash.
Mecosta sued the insurers in the Kent court to recover on the assigned claim. The insurers moved for summary judgment against Myers in the Wayne court. State Farm argued that because Myers did not live with the State Farm policyholders he was not covered by their policy. Metropolitan Group asserted that Myers was not entitled to coverage because he did not personally maintain coverage on the vehicle.
coverage because he did not personally maintain coverage on the vehicle.
The Wayne court granted both motions and dismissed Myers’ PIP claim with prejudice. Myers did not appeal. While the insurers’ motions were pending with the Wayne court, Metropolitan Group also moved for summary judgment in the Kent court on the same basis as its motion in the Wayne court. The Wayne court, however, granted the insurers’ motions before the Kent court considered Metropolitan Group’s motion.
After the Wayne court granted summary judgment for the insurers, they filed additional motions for summary judgment in the Kent court, arguing that Mecosta’s claims were barred under the doctrines of res judicata (the issue has already been resolved and cannot be relitigated) and collateral estoppel because the Wayne court had concluded that Myers was ineligible for PIP benefits.
The Kent court granted the motion, holding that Mecosta’s claims were barred by res judicata and collateral estoppel. Mecosta appealed.
The court of appeals reversed in a split opinion. The appellate majority held that an assignee was not bound by a judgment against an assignor in an action commenced after the assignment occurred. The Michigan supreme court affirmed, finding that Mecosta was not in privity with Myers with respect to the judgment entered subsequent to the assignment and therefore Mecosta could not be bound by that judgment under the doctrines of res judicata and collateral estoppel.
Mecosta County Medical Center v. Metropolitan Group Property and Casualty Insurance Company et al.—Michigan Supreme Court—June 10, 2022—No. 161650.