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
MIDWEST MEDICAL ASSOCIATES, INC., UNPUBLISHED
February 11, 2021
Plaintiff-Appellant/Cross-Appellee,
v No. 348806
Wayne Circuit Court
LIBERTY MUTUAL INSURANCE COMPANY, LC No. 17-007299-NF
Defendant-Appellee/Cross-Appellant.
Before: CAVANAGH, P.J., AND SERVITTO AND CAMERON, JJ.
PER CURIAM.
In this case concerning claims for personal injury protection (“PIP”) benefits under the No-
Fault Act, MCL 500.3101 et seq., plaintiff, Midwest Medical Associates, Inc. (“Midwest
Medical”), appeals the trial court’s decision to dismiss its claims with prejudice. Defendant,
Liberty Mutual Insurance Company (“Liberty Mutual”), cross-appeals the trial court’s order
denying Liberty Mutual’s motion for case evaluation sanctions. For the reasons set forth below,
we affirm the trial court’s orders.
I. BACKGROUND
This case stems from a motor vehicle accident that occurred on March 13, 2016, when
Latoya Williams struck a concrete barrier while driving her vehicle in Detroit, Michigan. Midwest
Medical was one of Williams’s medical providers after the accident. Midwest Medical sought
payment for the services that it had provided to Williams from Liberty Mutual, which Williams
purported was her no-fault insurance provider at the time of the accident. Liberty Mutual refused
to make payments. On May 15, 2017, Midwest Medical filed suit against Liberty Mutual, alleging
breach of contract and alleging that it was entitled to declaratory relief. On May 25, 2017, our
Supreme Court issued its opinion in Covenant Med Ctr, Inc v State Farm Mut Auto Ins Co, 500
Mich 191; 895 NW2d 490 (2017). Thereafter, Midwest Medical obtained an assignment of rights
from Williams and successfully moved to amend its complaint. Liberty Mutual answered the
amended complaint, generally denying liability. Discovery commenced.
In the month leading up to trial, Midwest Medical filed a motion for summary disposition
and a motion to compel a deposition, both of which were denied as untimely under the trial court’s
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scheduling orders. At the beginning of the first day of trial, Liberty Mutual made an oral motion
for a “directed verdict” or for “summary disposition,” arguing that Midwest Medical could not
“meet [its] burden of proof.”1 After hearing extensive oral argument from both parties, the trial
court held that Midwest Medical was precluded from calling its billing manager, Akilia Jackson,
to testify at trial because she was not listed on Midwest Medical’s witness list. The trial court also
held that Midwest Medical “failed to present a witness who could testify as to whether there was
a valid contract of no-fault insurance at the time of the accident, which is an element [Midwest
Medical] must prove for entitlement to PIP benefits.” Although the trial court acknowledged that
Midwest Medical intended to call Liberty Mutual’s claims adjuster, Patricia Marstellar, the trial
court noted that Marstellar was not available on the first day of trial because Midwest Medical had
not validly subpoenaed her. The trial court determined that, without either witness, Midwest
Medical could not present a prima facie case. Consequently, the trial court dismissed Midwest
Medical’s claims with prejudice. The trial court subsequently denied Liberty Mutual’s motion for
case evaluation sanctions, concluding that awarding no costs was in the interest of justice under
MCR 2.403(O)(11). These appeals followed.
II. MIDWEST MEDICAL’S APPEAL
A. DENIAL OF MIDWEST MEDICAL’S MOTION TO COMPEL AND MOTION FOR
SUMMARY DISPOSITION
Midwest Medical first challenges the trial court’s decisions concerning its motions to
compel and for summary disposition. Generally, we “review[] for an abuse of discretion a trial
court’s decision to decline to entertain motions filed after the deadline set forth in its scheduling
order.” Kermerko Clawson, LLC, v RXIV Inc, 269 Mich App 347, 349; 711 NW2d 801 (2005).
We also review for an abuse a discretion “a trial court’s decision to grant or deny a discovery
request[.]” Chastain v Gen Motors Corp, 254 Mich App 576, 593; 657 NW2d 804 (2002). “[A]n
abuse of discretion occurs when the decision results in an outcome falling outside the range of
principled outcomes.” In re Waters Drain Drainage Dist, 296 Mich App 214, 216; 818 NW2d
478 (2012) (quotation marks and citation omitted).
A trial court has the inherent authority to control its own docket and internal affairs.
Baynesan v Wayne State Univ, 316 Mich App 643, 651; 894 NW2d 102 (2016). “This power is
not governed so much by rule or statute, but by the control necessarily vested in courts to manage
their own affairs so as to achieve the orderly and expeditious disposition of cases.” Maldonado v
Ford Motor Co, 476 Mich 372, 376; 719 NW2d 809 (2006). The trial court has the authority to
issue and enforce scheduling orders controlling issues such as the time period for discovery. See
MCR 2.401(B)(2).
With respect to the trial court’s decision to decline to consider Midwest Medical’s motion
for summary disposition, under MCR 2.116(B)(2), a motion for summary disposition may be filed
by a party “at any time.” However, the court rule does not deprive the trial court of the “discretion
to set a limit on the time within which a motion under MCR 2.116 may be filed, as provided by
1
Although the parties and the trial court expected to move forward with a jury trial, it was later
discovered that Midwest Medical had not made a jury demand or paid a jury fee.
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MCR 2.401(B)(2).” Kemerko Clawson, 269 Mich App at 350. MCR 2.401(B)(2)(a)(ii) states that
a trial court shall, at any time that would facilitate the progress of the case, “establish times for
events . . . the court deems appropriate, including” the “filing of motions.”
In this case, discovery closed in May 2018, and trial was scheduled to commence on
January 28, 2019. The trial court stated its courtroom policy was that “motions for summary
disposition must be filed at least 60 days prior to trial.” However, Midwest Medical filed its
motion for summary disposition on January 8, 2019, which was 20 days before trial and in violation
of the trial court’s policy on motions for summary disposition. Importantly, the original scheduling
order required the parties to review the trial court’s online policies. Midwest Medical does not
dispute that the motion for summary disposition was not timely filed under the trial court’s policy.
Indeed, Midwest Medical conceded on the record that its motion was “late.” Moreover, Midwest
Medical did not seek leave from the trial court to file its motion past the date listed in the trial
court’s policy. Rather, Midwest Medical simply asked the trial court to consider the motion on
the day of trial. Because a trial court is not obligated to accept late motions for summary
disposition, we conclude that the trial court did not abuse its discretion when it ruled that it would
not consider Midwest Medical’s late-filed motion for summary disposition.
With respect to Midwest Medical’s motion to compel, although discovery closed in May
2018, Midwest Medical did not bring the motion to compel the deposition of Liberty Mutual’s
adjuster until December 28, 2018. This was one month before trial was scheduled to commence.
Although Midwest Medical also attempted to compel the deposition of Liberty Mutual’s “adjuster”
in February 2018, Liberty Mutual opposed the motion and the trial court denied that motion. The
reasons for the trial court’s decision are unknown. The order is silent as to the trial court’s
reasoning, and Midwest Medical did not provide this Court with the transcript of the hearing,
which it purports contains the reasons for the trial court’s decision. But the record does show that
Midwest Medical argued the merits of its position as early as February 23, 2018, as to why the
trial court should compel the deposition, and Midwest Medical’s requested relief was denied.
Midwest Medical has not appealed this ruling. Because Midwest Medical’s December 28, 2018
motion to compel was made after discovery closed under the trial court’s scheduling order, we
conclude that it was not an abuse of discretion for the trial court to deny the motion on that basis.
See Chastain, 254 Mich App at 593-594 (concluding trial court did not abuse its discretion denying
motion to compel after discovery closed).
B. DISMISSAL
Next, Midwest Medical challenges the trial court’s decision to dismiss its claims. In doing
so, Midwest Medical correctly points out that it is not entirely clear what authority the trial court
relied on to dismiss its claims with prejudice. However, Liberty Mutual appeared to request, and
the trial court appeared to grant, dismissal based on a lack of evidentiary support. This would
amount to an adjudication on the merits. ABB Paint Finishing, Inc v Nat’l Union Fire Ins Co, 223
Mich App 559, 563; 567 NW2d 456 (1997). Cf. Garrett v Washington, 314 Mich App 436, 450;
886 NW2d 762 (2016) (“A dismissal of a suit without prejudice is no decision of the controversy
on its merits, and leaves the whole subject of litigation as much open to another suit as if no suit
had ever been brought.”) (quotation marks and citation omitted).
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This case is similar to LaCourse v Gupta, 181 Mich App 293; 448 NW2d 827 (1989). In
LaCourse, the defendant argued in the trial court that the “plaintiff’s failure to provide a witness
list or comply with discovery barred [the plaintiff] from presenting the expert testimony necessary
to sustain her burden of proof.” Id. at 295. The trial court agreed and dismissed the plaintiff’s
complaint. Id. On appeal, the plaintiff argued that her case should not have been dismissed as a
sanction, to which this Court held that the plaintiff’s complaint was not in fact dismissed as a
sanction. Id. at 296-297. This Court explained that “the sanction imposed was to prohibit [the]
plaintiff from calling any expert witnesses,” and summary disposition was then “granted because,
in the absence of expert testimony, there was no genuine issue of material fact.” Id. at 297. Similar
to LaCourse, the trial court in this case precluded Jackson from testifying at trial and then appears
to have granted summary disposition in favor of Liberty Mutual because, absent Jackson and
Marstellar’s testimony, there was no genuine issue of material fact.
Under MCR 2.116(I)(1), “[i]f the pleadings show that a party is entitled to judgment as a
matter of law, or if the affidavits or other proofs show that there is no genuine issue of material
fact, the court shall render judgment without delay.” Thus, “[u]nder this rule, a trial court has
authority to grant summary disposition sua sponte, as long as one of the two conditions in the rule
is satisfied.” Al-Maliki v LaGrant, 286 Mich App 483, 485; 781 NW2d 853 (2009). “A genuine
issue of material fact exists when the record leaves open an issue upon which reasonable minds
might differ.” El-Khalil v Oakwood Healthcare, Inc, 504 Mich 152, 160; 934 NW2d 665 (2019)
(quotation marks and citation omitted). When deciding a motion for summary disposition, a trial
court should consider “the substantively admissible evidence actually proffered[.]” Maiden v
Rozwood, 461 Mich 109, 121; 597 NW2d 817 (1999).
On appeal, Midwest Medical argues that the trial court’s ruling was a “surprise” and notes
that it was not provided with the opportunity to file a brief or make a detailed argument on the
record. In short, Midwest Medical argues that it was deprived of due process.2 In Al-Maliki, 286
Mich App at 485-486, this Court held as follows:
Whether a party has been afforded due process is a question of law. Due
process is a flexible concept, the essence of which requires fundamental fairness.
The basic requirements of due process in a civil case include notice of the
proceeding and a meaningful opportunity to be heard. Where a court considers an
issue sua sponte, due process can be satisfied by affording a party an opportunity
for rehearing.
Under MCR 2.119(F), a trial court has discretion to grant rehearing or
reconsideration of a decision on a motion. The rule allows the court considerable
discretion in granting reconsideration to correct mistakes, to preserve judicial
economy, and to minimize costs to the parties. The trial court may even give a
party a second chance on a previously decided motion. Additionally, . . . any error
2
Because Midwest Medical did not make due process violation arguments before the trial court,
the issue would ordinarily not be preserved. However, by its nature, this issue is one that is
typically raised for the first time on appeal, and this Court has authority under MCR 7.216(A)(7)
to review this issue as if it was preserved.
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by a court in granting summary disposition sua sponte without affording a party an
adequate opportunity to brief an issue and present it to the court may be harmless
under MCR 2.613(A), if the party is permitted to fully brief and present the
argument in a motion for reconsideration. [Quotation marks and citations omitted.]
The trial court’s February 15, 2019 order dismissed Midwest Medical’s claims with
prejudice, but indicated that it was not a final order because Liberty Mutual would “be filing
Motions for taxable costs, case evaluation sanctions, and attorney fees under MCL 500.3148(2).”
Midwest Medical filed a motion for reconsideration. However, Midwest Medical did not address
the merits of the trial court’s decision to dismiss its claims in the motion for reconsideration.
Instead, Midwest Medical moved the trial court to enter a final order “so that [Midwest Medical
could] file its appeal as of right[.]” Midwest Medical stated: “It has been over twenty-one days
since entry of this order and [Liberty Mutual] has not filed its motions or in any way communicated
with [Midwest Medical’s] counsel regarding [its] intent or timeline in filing said motions.”
Before the trial court ruled on Midwest Medical’s motion for reconsideration, Liberty
Mutual filed a motion for case evaluation sanctions and costs. Thereafter, Midwest Medical
withdrew its motion for reconsideration, stating: “Now that [Liberty Mutual] has finally filed its
motion, [Midwest Medical] is no longer in need of the relief requested in its March 8, 2019 order
[sic].” Thus, because Midwest Medical was “permitted to fully brief and present [any] argument
in a motion for reconsideration,” any error on the part of the trial court for sua sponte granting
summary disposition in favor of Liberty Mutual was harmless. See Al-Maliki, 286 Mich App at
486. The fact that Midwest Medical elected not to address the merits of the trial court’s decision
to dismiss its claim in the motion for reconsideration is inapposite.
With respect to the merits of the trial court’s decision to dismiss Midwest Medical’s claims,
the trial court found that dismissal was appropriate because (1) Midwest Medical was precluded
from calling its billing manager, Jackson, to testify as to the authenticity of its billing records and
the reasonable and customary nature of its charges; and (2) Midwest Medical failed to properly
subpoena for trial Liberty Mutual’s claims adjuster, Marstellar, to testify as to the authenticity of
the claims file. According to the trial court, without the billing records and claims file, Midwest
Medical was unable to establish a prima facie case.
In Midwest Medical’s breach of contract claim, it alleged that Liberty Mutual breached its
obligation, under the policy of insurance and the No-Fault Act, to pay all no-fault benefits owed
to Williams. Under MCL 500.3107(1)(a), no-fault benefits include “[a]llowable expenses
consisting of reasonable charges incurred for reasonably necessary products, services and
accommodations for an injured person’s care, recovery, or rehabilitation.” For an allowable
expense to be compensable, three requirements must be met: (1) the charge must be reasonable,
(2) the expense must be reasonably necessary, and (3) the expense must be incurred. Nasser v
Auto Club Ins Ass’n, 435 Mich 33, 50; 457 NW2d 637 (1990). The burden of proving the
reasonable necessity of a service lies with the plaintiff. Id. “An expense is ‘reasonably necessary’
if (1) it is objectively reasonable and (2) it is necessary for the insured’s care, recovery, or
rehabilitation.” ZCD Transp, Inc v State Farm Mut Auto Ins Co, 299 Mich App 336, 342; 830
NW2d 428 (2012).
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Because Midwest Medical stood in the shoes of Williams, it was Midwest Medical’s
burden to establish that Williams was entitled to payment for the services that Midwest Medical
provided to her. See Coventry Parkhomes Condo Ass’n v Fed Nat’l Mtg Ass’n, 298 Mich App
252, 256-257; 827 NW2d 379 (2012) (“It is well established that an assignee stands in the shoes
of an assignor, acquiring the same rights and being subject to the same defenses as the assignor.”).
This required Midwest Medical to establish that a valid contract existed between Williams and
Liberty Mutual and that Williams was entitled to coverage under the policy.3 See Stanke v State
Farm Mut Auto Ins Co, 200 Mich App 307, 312-313; 503 NW2d 758 (1993).
As already stated, the trial court determined that dismissal of Midwest Medical’s claim was
proper, in part, because Midwest Medical did not have a witness present on the first day of trial to
authenticate Liberty Mutual’s claims file, which Midwest Medical indicated included the
insurance policy between Williams and Liberty Mutual. However, on appeal, Midwest Medical
argues that the claims file was admissible regardless of whether Marstellar testified because
Liberty Mutual had provided Midwest Medical with a copy during discovery. To support that the
copy was admissible without Marstellar’s testimony, Midwest Medical relies on MRE 1003 and
MRE 1004. However, even if MRE 1003 and MRE 1004 support that a copy of the claims file
could be admitted into evidence, Midwest Medical fails to explain or rationalize how the copy of
the file would automatically be admitted into evidence by virtue of these rules of evidence.
Importantly, Liberty Mutual refused to stipulate to admission of its claims file into evidence on
the first day of trial.
Midwest Medical also claims that it properly subpoenaed Marstellar for trial and was never
permitted to depose her during discovery. However, we agree with the trial court that the subpoena
was not properly served. Under MCR 2.506(C)(1), Midwest Medical was required to serve each
witness: “sufficiently in advance of the trial or hearing to give the witness reasonable notice of the
date and time the witness is to appear. Unless the court orders otherwise, the subpoena must be
served at least 2 days before the appearance[.]”
It appears that Midwest Medical directed the subpoena to “Patricia Marstellar, c/o her
attorney Briggite Chiroyan,” who was the attorney representing Liberty Mutual. Liberty Mutual
argued on the first day of trial that the subpoena was not timely. Liberty Mutual noted that e-mail
service was “attempted” on “Friday at 4:56 PM.” The trial court then clarified that Liberty Mutual
3
Contrary to Midwest Medical’s claim on appeal, the issue of whether a policy of insurance existed
between Williams and Liberty Mutual at the time of the accident does not constitute a matter of an
affirmative defense. That is, the issue does not allow for Midwest Medical establishing a prima
facie case, with Liberty Mutual coming forth with some other reason why Midwest Medical should
not prevail on that claim. See Stanke v State Farm Mut Auto Ins Co, 200 Mich App 307, 313; 503
NW2d 758 (1993). Rather, the argument directly controverts Midwest Medical’s entitlement to
prevail, and the argument directly denies that Midwest Medical can establish a prima facie case by
stating that Midwest Medical will be unable to prove that there exists a policy of insurance issued
by Liberty Mutual that provides coverage. See id.
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was referencing Friday, January 25, 2019. The following exchange then occurred:
The Trial Court: I don’t think they’re arguing that that was a valid notice.
Are you?
Midwest Medical: No.
Consequently, Midwest Medical agreed that it failed to properly serve the subpoena,
thereby waiving any argument to the contrary. See Hodge v Parks, 303 Mich App 552, 556; 844
NW2d 189 (2014). Instead, Midwest Medical argued before the trial court that Liberty Mutual
had failed to timely indicate that it was not calling Marstellar to testify at trial. However, if
Midwest Medical wanted to present Marstellar’s testimony at trial, it was Midwest Medical’s
responsibility to timely secure Marstellar’s presence at trial. Moreover, as noted by the trial court,
the January 23, 2019 pretrial order reflected that Liberty Mutual did not intend to call any witnesses
at trial, with the exception of a potential rebuttal witness. “Error requiring reversal cannot be error
to which the aggrieved party contributed by plan or negligence.” Phinney v Perlmutter, 222 Mich
App 513, 537; 564 NW2d 532 (1997), overruled in part on other grounds by Garg v Macomb Co
Community Mental Health Servs, 472 Mich 263 (2005).
We further conclude that the trial court did not err by dismissing Midwest Medical’s claims
based on its conclusion that Midwest Medical could not establish a prima facie case. As already
stated, in order to establish that it was entitled to relief, Midwest Medical had the burden of proving
that there was a valid policy of insurance and that its charges were payable under MCL
500.3107(1)(a). Specifically, Midwest Medical had to establish that the charges were incurred,
which required showing that Williams had become “liable to pay” Midwest Medical and that
Midwest Medical had “expected compensation for its services.” ZCD Transp, Inc, 299 Mich App
at 342. See also Karmol v Encompass Prop and Cas Co, 293 Mich App 382, 390; 809 NW2d 631
(2011) (“a claimant’s right to PIP benefits arises when the claimant finds himself or herself on the
hook for an expense”). “Any insured who incurs charges for services must present proof of those
charges in order to establish, by a preponderance of evidence, that he [or she] is entitled to PIP
benefits.” Douglas v Allstate Ins Co, 492 Mich 241, 269; 821 NW2d 472 (2012).
Midwest Medical was unable to meet this burden on the first day of trial. As already stated,
Midwest Medical was unable to authenticate Liberty Mutual’s claims file, which Midwest Medical
indicated included the insurance policy between Williams and Liberty Mutual, because Marstellar
was not present on the first day of trial as a result of Midwest Medical’s failure to properly serve
the subpoena. Moreover, Midwest Medical could not present its bills because Jackson was
precluded from testifying at trial. Although not specifically challenged by Midwest Medical on
appeal, we conclude that the trial court did not abuse its discretion by precluding Jackson from
testifying.
MCR 2.401(I)(1) provides that all parties must file and serve witness lists within the time
allotted by the trial court. “The witness lists must include . . . the name of each witness[.]” MCR
2.401(I)(1)(a). In this case, the trial court entered a scheduling order, which required the parties
to exchange witness lists by November 6, 2017. Although Midwest Medical filed a timely witness
list, Midwest Medical’s witness list did not name Jackson as a witness. In the parties’ joint final
pretrial order, Midwest Medical listed “Akilia Johnson,” which was an apparent error and meant
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to refer to Jackson. However, Midwest Medical admitted that Jackson was not specifically named
on its witness list. Based on this, the trial court precluded Midwest Medical from calling Jackson
as a witness at trial.
We conclude that the trial court’s ruling was not an abuse of discretion. Importantly, MCR
2.401(I)(2) provides that “[t]he court may order that any witness not listed in accordance with this
rule will be prohibited from testifying at trial except upon good cause shown.” As already stated,
Midwest Medical failed to list Jackson on its witness list and never moved to supplement the list
to include Jackson. Rather, Midwest Medical appeared on the first day of trial, apparently
intending to call a witness that it had never named. At no point during oral argument did Midwest
Medical indicate that it had good cause for failing to list Jackson as a witness. Instead, Midwest
Medical claimed that it had informed Liberty Mutual that it intended to call Jackson as a witness
on January 25, 2018. We fail to see how this established good cause, especially when considering
that Liberty Mutual claimed that this statement was “disingenuous” and that it did not learn about
Jackson was until the morning that trial was scheduled to commence. Based on this evidence, the
trial court’s decision to preclude Jackson from testifying was not outside the range of reasonable
and principled outcomes.
Because without Jackson and Marstellar’s testimony Midwest Medical could not
“establish, by a preponderance of evidence, that [it was] entitled to PIP benefits,” see Douglas,
492 Mich at 269, we conclude that the trial court did not err by dismissing Midwest Medical’s
claims, see Quinto v Cross & Peters Co, 451 Mich 358, 362; 547 NW2d 314 (1996) (“If . . . [a]
party cannot muster sufficient evidence to make out its claim, a trial would be useless
and . . . summary judgment as a matter of law” is proper.) (Quotation marks and citation omitted.)
III. LIBERTY MUTUAL’S CROSS-APPEAL
Liberty Mutual argues that the trial court abused its discretion by denying its motion for
case evaluation sanctions under MCR 2.403(O)(11). We disagree.
This Court reviews a trial court’s decision to invoke the MCR 2.403(O)(11) interest-of-
justice exception for an abuse of discretion. Derderian v Genesys Health Care Sys, 263 Mich App
364, 390-391; 689 NW2d 145 (2004). Any factual findings underlying the trial court’s decision
are reviewed for clear error. Hardrick v Auto Club Ins Ass’n, 294 Mich App 651, 660; 819 NW2d
28 (2011). “A finding is clearly erroneous when this Court is left with a definite and firm
conviction that a mistake has been made.” Id. (quotation marks and citation omitted).
Parties to case evaluation must “file a written acceptance or rejection of the panel’s
evaluation with the ADR clerk within 28 days after service of the panel’s evaluation.” MCR
2.403(L)(1). “If all the parties accept the panel’s evaluation, judgment will be entered in
accordance with the evaluation, unless the amount of the award is paid within 28 days after
notification of the acceptances, in which case the court shall dismiss the action with prejudice.”
MCR 2.403(M)(1). “If all or part of the evaluation of the case evaluation panel is rejected, the
action proceeds to trial in the normal fashion.” MCR 2.403(N)(1).
MCR 2.403(O)(1) explains when costs may be assessed for failure to accept a case
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evaluation award:
If a party has rejected an evaluation and the action proceeds to verdict, that party
must pay the opposing party’s actual costs unless the verdict is more favorable to
the rejecting party than the case evaluation. However, if the opposing party has
also rejected the evaluation, a party is entitled to costs only if the verdict is more
favorable to that party than the case evaluation.
The term “verdict” includes “a judgment entered as a result of a ruling on a motion after rejection
of the case evaluation.” MCR 2.403(O)(2)(c). “If the ‘verdict’ is the result of a motion as provided
by subrule (O)(2)(c), the court may, in the interest of justice, refuse to award actual costs.” MCR
2.403(O)(11).
In this case, the trial court explained, in relevant part, the following when denying Liberty
Mutual’s motion for case evaluation sanctions:
[A]t the time of the case evaluation, the case evaluation was $20,000. There were
recent Court of Appeals decisions [sic] that significantly affected [Midwest
Medical’s] cause of action [during the course of the proceeding]. So, for those
reasons, the Court finds, pursuant to MCR 2.403[(O)(11)], the Court may, in the
interest of justice, refuse to award actual costs. So, for those reasons, the Court is
going to deny [Liberty Mutual’s] request for case eval[uation] sanctions.
Thus, the trial court relied on the interest-of-justice exception contained in MCR
2.403(O)(11) when denying Liberty Mutual’s motion. This Court has explained how broadly to
read the interest of justice exception, such that the overarching policy to encourage settlement still
serves a purpose:
We believe that the exceptional nature of the “interest of justice” provision, the
settlement-encouraging purpose of MCR 2.405, and . . . precedents of the Court set
the broad parameters of the exception. Attempts to give meaning to the term
“interest of justice” must fit within these parameters. We are mindful that this term
is susceptible to broad readings that would consume the general rule of awarding
fees and nullify MCR 2.405’s purpose of encouraging settlement . . . . On the other
hand, it would be inappropriate to read the term so narrowly that the exception itself
would be effectively nullified. [Luidens v 63rd Dist Court, 219 Mich App 24, 33;
555 NW2d 709 (1996).]
In Stitt v Holland Abundant Life Fellowship (On Remand), 243 Mich App 461; 624 NW2d
427 (2000), this Court concluded that the trial court abused its discretion when it awarded the
defendant case evaluation sanctions in circumstances similar to this case. Specifically, in Stitt, we
determined that the trial court should have applied the interest-of-justice exception because the
relevant law was unsettled during the litigation and because the defendant appeared to be engaged
in gamesmanship with the award. Id. at 472-477.
Similarly, in this case, relevant caselaw upended Midwest Medical’s claims during
litigation. Specifically, when Midwest Medical filed its claim, it did so days before our Supreme
Court issued its opinion in Covenant. Before Covenant was decided, a medical provider could
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bring a direct cause of action against an insurer for no-fault benefits. See Covenant, 500 Mich at
200 (deciding, as a matter of first impression, that “a healthcare provider possesses no statutory
cause of action against a no-fault insurer for recovery of PIP benefits.”). As a result, Midwest
Medical had to obtain an assignment of rights and amend its complaint in order to maintain its
cause of action. Midwest Medical obtained the assignment from Williams on July 17, 2017, and
filed its amended complaint on August 7, 2017.
On May 8, 2018, this Court issued its opinion in Jawad A Shah, MD, PC v State Farm Mut
Auto Ins Co, 324 Mich App 182; 920 NW2d 148 (2018), which put Midwest Medical’s claim in
further jeopardy. Specifically, in Shah, this Court determined an assignee could not recover under
the No-Fault Act for claims that occurred more than one year before the date of assignment. Id. at
204. Case evaluation was conducted on May 21, 2018, and Midwest Medical had until June 18,
2018, to accept or reject case evaluation. The parties do not dispute that Midwest Medical did not
respond to the award, thereby rejecting it. Thereafter, on July 23, 2018, Liberty Mutual filed a
motion for summary disposition. In relevant part, it argued that it was entitled to partial summary
disposition on the basis of Shah. The trial court granted Midwest Medical’s motion for partial
summary disposition on the basis of Shah, thereby limiting Midwest Medical’s recovery.4
While Liberty Mutual criticizes Midwest Medical for failing to act in light of Shah, Liberty
Mutual itself took advantage of the situation by waiting until after Midwest Medical’s case
evaluation decision was due to file its motion for summary disposition. Although Liberty Mutual
argues that “Midwest Medical could and should have known on May 21st that the case evaluation
award of $20,000.00 was overly generous, and should have been accepted,” the case evaluation
award was less than Midwest Medical’s claimed damages of $29,650. As already stated, at the
time the case evaluation response was due, Liberty Mutual had not yet filed its motion for partial
summary disposition. Thus, it was not until after the decision was due that the trial court held that
Midwest Medical’s claim would be drastically reduced to $1,500. While there is no evidence that
Liberty Mutual was intentionally engaging in “gamesmanship,” the timing of Liberty Mutual’s
motion essentially placed Midwest Medical in a no-win situation. Therefore, the trial court did
not abuse its discretion when it denied Liberty Mutual’s motion in the interest of justice. See Stitt,
243 Mich App at 473. Based on this holding, we need not consider Midwest Medical’s claims that
Liberty Mutual’s motion was not timely filed.
Affirmed.
/s/ Mark J. Cavanagh
/s/ Deborah A. Servitto
/s/ Thomas C. Cameron
4
The trial court concluded that Midwest Medical could “only pursue claims incurred by the
claimant after August 7, 2016.” Thus, it appears that the trial court erroneously concluded that the
one-year-back rule applied from the date of the filing of Midwest Medical’s amended complaint,
as opposed to the date of the assignment. However, this erroneous holding is not relevant to any
issues presented on appeal.
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