Southeast Rehab & Physical Therapy Inc v. Dimitrios Matsamakis

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.

STATE OF MICHIGAN

COURT OF APPEALS

SOUTHEAST REHABILITATION & UNPUBLISHED
PHYSICAL THERAPY, INC., September 10, 2019

Plaintiff-Appellant,

v No. 344497
Oakland Circuit Court
DIMITRIOS MATSAMAKIS and MARY LC No. 2017-160699-CK
KLADIS-MATSAMAKIS,

Defendants-Appellees.

Before: BORRELLO, P.J., and K. F. KELLY and SERVITTO, JJ.

PER CURIAM.

In this action for breach of contract, plaintiff, Southeast Rehabilitation & Physical
Therapy, Inc., sought as damages the unpaid amount of defendant Dimitrios Matsamakis’s1 bills
for physical therapy services plaintiff provided to defendant after defendant suffered injuries in a
car accident. Although the trial court correctly ruled that there was a contract between the
parties, the trial court nevertheless granted defendant summary disposition, ruling that MCL
500.3112 applied to bar plaintiff’s claim, notwithstanding the recent Supreme Court decision in
Covenant Med Ctr, Inc v State Farm Mut Auto Ins Co, 500 Mich 191; 895 NW2d 490 (2017),
which held that it does not. Accordingly, the trial court erroneously granted defendant summary
disposition, and we reverse.

I. BASIC FACTS AND PROCEDURAL HISTORY

Defendant sustained injuries in a December 2012 car accident. As part of his treatment
for those injuries, defendant sought and received physical therapy services from plaintiff. When

1
On October 11, 2017, the parties stipulated to dismiss the claims of defendant Mary Kladis-
Matsamakis, and she is not a participant in this appeal. Consequently, the singular “defendant”
refers to Dimitrios Matsamakis only.

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defendant began treating with plaintiff, he signed a “consent to treatment” document that
included the acknowledgment that “[defendant] understand[s] it is my primary responsibility to
pay [plaintiff] all charges for services rendered irrespective of any disputes or disagreement
between insurance companies and myself.” Defendant also signed a notice in which he was
informed, and acknowledged, that “your insurance policy is between you and your insurance
company and not the insurance company and [plaintiff].” Defendant acknowledged that he
signed those documents, although he now claims not to have read them before signing.
Defendant’s health and no-fault auto insurers paid approximately $35,000 to plaintiff during the
course of his treatment. Plaintiff asserted that, even after those payments, over $60,000 of
charges remained unpaid.

At some point, defendant sued his no-fault insurer for no-fault personal injury protection
(PIP) benefits. Several of defendant’s other healthcare providers intervened, but plaintiff,
despite having notice of it, did not. The PIP lawsuit eventually settled, and defendant filed a
motion seeking a distribution of the funds among defendant, his lawyers, and his various
providers. Defendant provided a copy of the motion to plaintiff, who was not named as a party
in that litigation and did not participate. Nonetheless, the trial court in the PIP case allocated the
settlement proceeds and designated “$0.00” to plaintiff.

Plaintiff filed this lawsuit seeking payment from defendant for his unpaid bills. Plaintiff
moved for summary disposition asserting that there was no reasonable dispute that plaintiff and
defendant had entered into a contract under which plaintiff promised to provide services,
defendant promised to pay for services plaintiff rendered irrespective of insurance payments, and
defendant failed to fully pay for the services rendered. Defendant also moved for summary
disposition, asserting that (1) the PIP settlement extinguished any obligation defendant owed
plaintiff because its failure to intervene in the PIP case foreclosed its ability to recover what
defendant owed; and (2) a valid contract did not exist between the parties because the signed
treatment forms did not contain a specific price term. Defendant relied on the (now-reversed)
opinion of this Court in Covenant Med Ctr, Inc v State Farm Mut Auto Ins Co, 313 Mich App
50; 880 NW2d 294 (2015) rev’d 500 Mich 191; 895 NW2d 490 (2017), for the proposition that
plaintiff was foreclosed from recovery for lack of participation.

With respect to plaintiff’s claim for breach of contract, the trial court ruled that, “as a
matter of law,” a “written contract existed between the parties.” But the trial court nevertheless
ruled that under MCL 500.3112, the PIP insurer’s settlement with defendant extinguished any
obligation by defendant to pay plaintiff, even though plaintiff was not a party to the settlement,
because the trial court asserted that plaintiff had notice of the proceeding. The trial court
acknowledged the Supreme Court’s decision in Covenant that explicitly affirmed a provider’s
right to sue an injured party for unpaid charges, but seemingly concluded that the intermediate
appellate decision must be applied because it could not “disturb” the settlement order in the PIP
case.2 The trial court granted defendant summary disposition, denied plaintiff’s request for

2
The trial court did not cite any authority for continuing to apply a reversed intermediate
appellate court decision or the court rules regarding joinder or intervention to penalize plaintiff
for failing to participate in the PIP case that settled.

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summary disposition pursuant to MCR 2.116(I)(2), and deemed plaintiff’s motion for summary
disposition to be moot.

II. STANDARD OF REVIEW

This Court reviews rulings on summary disposition motions under MCR 2.116(C)(10) de
novo. Corley v Detroit Bd of Ed, 470 Mich 274, 277-278; 681 NW2d 342 (2004).

III. ANALYSIS

Defendant argues that the parties did not have a contract. We disagree and instead agree
with the trial court’s determination that, as a matter of law, a contract did exist between the
parties.

Defendant relies on this Court’s opinion in Zurcher v Herveat, 238 Mich App 267, 282;
605 NW2d 329 (1999), for the proposition that “price of performance is an essential term” in a
contract, and submits that the absence of such a term here means that there is no contract. What
defendant fails to appreciate, however, is that while Zurcher does in fact identify price of
performance as an essential contract term, that case applies only to contracts for the purchase of
land and not contracts in general. The rule that is applicable to this case is articulated in Calhoun
Co v Blue Cross & Blue Shield Michigan, 297 Mich App 1, 14; 824 NW2d 202 (2012), which
emphasizes that “the absence of certain terms—including at times the price—does not
necessarily render a contract invalid . . . .” In Calhoun Co, this Court rejected an argument that a
contract failed for indefiniteness just because it failed to provide a specific dollar amount to be
paid. In so holding, this Court held that where a contract lacks a specific price term, a reasonable
price will be set for the services at issue:

“In an appropriate case an agreement may be enforced as a contract even though
incomplete or indefinite in the expression of some term, if it is established that the
parties intended to be bound by the agreement, particularly where one or another
of the parties has rendered part or full performance. Where the price is
indefinite, the purchaser may be required to pay and the seller to accept a
reasonable price.” [Calhoun Co, 297 Mich App at 15, quoting J W Knapp Co v
Sinas, 19 Mich App 427, 430-431; 172 NW2d 867 (1969), citing 1 Corbin on
Contracts, §§ 95, 96, 99, 102; 5 Williston on Contracts, § 1459; 1 Williston on
Contracts (3d ed.), §§ 36, 36A, 40, 41, 49; Restatement, Contracts, § 5 (Emphasis
added by this Court in Calhoun Co).]

In the present case, defendant claims that there is no contract because the documents
defendant signed do not specify a precise dollar amount to be paid. Defendant also asserts,
essentially, that plaintiff has presented excessive bills and has already received significant
payment from defendant’s insurers. The latter arguments have some relevance to the
reasonableness of the price to be paid under the contract, but they do not undermine the existence
of a contract. The argument that plaintiff has allegedly overbilled defendant, or that plaintiff has
billed too much money for the services rendered in light of the amount already paid is one that
defendant can present to the finder of fact to determine what the reasonable amount owed under
the contract is. See Calhoun Co, 297 Mich App at 14-15.

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 The alleged absence of a price term is the only basis defendant sets forth for arguing that
there was no meeting of the minds. Accordingly, the trial court was correct to conclude, as a
matter of law, that the parties had a contract under which plaintiff would provide defendant
services and defendant would pay plaintiff for them. Also, because there was a contract,
defendant’s arguments concerning unjust enrichment do not apply, and we decline to discuss
them. See Barber v SMH (US), Inc, 202 Mich App 366, 375; 509 NW2d 791 (1993).

Defendant next argues that MCL 500.3112 bars plaintiff from suing defendant for
defendant’s unpaid bills. Both defendant and the trial court placed significant emphasis on the
fact that plaintiff did not intervene in defendant’s PIP lawsuit against his no-fault insurer. None
of the authority defendant presents, however, actually requires a healthcare provider to do so.
Defendant relies on MCL 500.3112 for the proposition that his settlement with his no-fault
insurer extinguished his liability to plaintiff. MCL 500.3112 provides in relevant part that
“[p]ayment by an insurer in good faith of personal protection insurance benefits, to or for the
benefit of a person who it believes is entitled to the benefits, discharges the insurer’s liability to
the extent of the payments . . . .” (Emphasis added.) However, MCL 500.3112’s discharge of
the insurer’s liability for a provider’s bill to an injured person does not extinguish any liability of
the injured person for such a bill.3

Defendant relies heavily on this Court’s opinion in Covenant. In Covenant, the injured
party settled a PIP claim with the injured party’s no-fault insurer that purported to include
payments due to the plaintiff healthcare provider. Covenant, 313 Mich App at 51-52. The
insurer argued that the payment discharged any further liability to the plaintiff for any remaining
bills. But this Court held that because the insurer knew of the outstanding bill the plaintiff
claimed was still owed, but did not seek an order allocating payment, it could not claim that
MCL 500.3112 extinguished its liability to the healthcare provider. Id. at 53. Accordingly, the
plaintiff provider was permitted to seek payment from the defendant insurer. Id. Our Supreme
Court reversed this Court’s opinion, holding that a healthcare provider has no independent
statutory right to payment from a no-fault insurer under the No-Fault Act. Therefore, MCL
500.3112 does not allow healthcare providers to file a statutory cause of action against insurers
to recover the costs of providing products, services, and accommodations to an injured person.
Covenant, 500 Mich at 195-196. The Court explicitly held that MCL 500.3112 did not govern
whether payment by an insurer to an injured party had any effect on the amounts owed by the
injured party to a healthcare provider, and it explicitly stated that the provider could pursue its

3
In Miller v Citizens Ins Co, 490 Mich 904; 804 NW2d 740 (2011), a no-fault settlement
agreement pursuant to MCL 500.3112 was executed, and the benefits were paid to the plaintiff,
but her attorney asserted an attorney’s charging lien over the proceeds. Our Supreme Court held
that the effect of the lien was that the settlement occurred between the insurer, the plaintiff, and
her attorney. The Court concluded that the dismissal in light of the settlement “did not have the
effect of extinguishing [the medical service provider’s] right to collect the remainder of its bill
from plaintiff.” Id. Although this is only an order of the Supreme Court, such orders constitute
binding precedent when the rationale can be understood. Evans & Luptak, PLC v Lizza, 251
Mich App 187, 196; 650 NW2d 364 (2002).

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own action against the injured party to recover what it was owed. Covenant, 500 Mich at 218.
That is, in fact, precisely what plaintiff did here. The Covenant decision applied retroactively.
See WA Foote Mem Hosp v Michigan Assigned Claims Plan, 321 Mich App 159, 176; 909
NW2d 38 (2017). Because the trial court applied the intermediate appellate decision to uphold
the settlement agreement in the PIP case, to which plaintiff was not a party, the trial court
committed an error requiring reversal.

Accordingly, we reverse the trial court’s order granting defendant’s motion for summary
disposition and remand for further proceedings consistent with our opinion. We do not retain
jurisdiction.

/s/ Stephen L. Borrello
/s/ Kirsten Frank Kelly
/s/ Deborah A. Servitto

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