Tiffany Shantel Robinson v. Janet Elaine Szczotka ( 2023 )

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
TIFFANY SHANTEL ROBINSON, UNPUBLISHED
April 6, 2023
Plaintiff-Appellee,
v No. 359646
Wayne Circuit Court
JANET ELAINE SZCZOTKA, and THE ASU LC No. 20-012733-NI
GROUP-ASU RISK MANAGEMENT,
Defendants,
and
SUBURBAN MOBILITY AUTHORITY FOR
REGIONAL TRANSPORTATION, also known as
SMART.
Defendant-Appellant.
Before: K. F. KELLY, P.J., and MURRAY and SWARTZLE, JJ.
PER CURIAM.
Defendant-appellant, Suburban Mobility Authority for Regional Transportation (SMART),
appeals by leave granted1 the November 29, 2021 order granting in part and denying in part
SMART’s motion for partial summary disposition. In partially granting the motion, the court held
that plaintiff, Tiffany Shantel Robinson, had the right to pursue personal insurance protection (PIP)
benefits from SMART even though plaintiff had previously assigned her claims to several medical
providers because (1) SMART had no standing to enforce those assignments between plaintiff and
her medical providers, and (2) plaintiff and her medical providers executed valid revocations of
1
Robinson v Szczotka, unpublished order of the Court of Appeals, entered April 7, 2022 (Docket
No. 359646).
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those assignments, thereby returning the right to pursue those PIP benefits to plaintiff. We reverse
the trial court’s order and remand for further proceedings consistent with this opinion.
I. BACKGROUND
Plaintiff was injured in an automobile accident and subsequently accrued medical bills
related to her resulting injuries from Northland Radiology, Quest Physical Therapy, Aligned
Chiropractic, Dependable Transportation, Michigan Business Management, and Garden City
Hospital. Before plaintiff initiated this litigation, she assigned her rights to recover PIP benefits
to several of her medical providers, including Northland Radiology, Quest Physical Therapy,
Dependable Transportation, Aligned Chiropractic, and Elite Diagnostics.
Thereafter, on September 28, 2020, plaintiff filed a complaint to collect first-party no-fault
PIP benefits, underinsured motorist benefits, and uninsured motorist benefits from both SMART
and defendant ASU Risk Management. Two months later, the parties stipulated to the dismissal
of ASU Risk Management as well as the claims for underinsured and uninsured motorist benefits,
leaving at issue only plaintiff’s claim for PIP benefits against SMART.
SMART eventually moved for partial summary disposition pursuant to MCR 2.116(C)(7),
(C)(8), and (C)(10), arguing that plaintiff had no standing to pursue a cause of action to recover
claims that she had already assigned to her medical providers. SMART noted that one of plaintiff’s
medical providers, the Michigan Institute of Pain and Headache, PC, had already filed its own
lawsuit to collect on its bills related to plaintiff’s accident based on its assignment of benefits from
plaintiff, and that the other medical providers were also free to do so.
In responding, plaintiff did not contest the factual or legal premises of SMART’s motion
but instead asserted that after she filed her complaint, she and a number of her medical providers
executed “Mutual Revocation[s] of Assignment(s).” Plaintiff alleged that these contracts
“revoked, rescinded, and nullified” the assignments nunc pro tunc, or retroactively, such that
plaintiff recovered her rights to PIP benefits dating back to when she assigned them to her medical
providers.2 These assignments, plaintiff argued, should be considered to have never existed, and
the medical providers waived any independent causes of action. Plaintiff acknowledged that her
medical providers had failed to bring their claims to recover medical bills in a timely manner
pursuant to the one-year-back rule, see MCL 500.3145(1), and stated that the only fair avenue for
recovery of those medical bills was to revoke her assignments retroactively and litigate her own
timely filed claims.
SMART reply made several points. First, it argued that it had standing to challenge the
effect of the assignments because it had a real interest in claims that the medical providers might
2
Each of the revocations, dated September 20, 2020, contained the following language:
The assignments are revoked nunc pro tunc the date the assignment(s) was/were entered into and
should be considered as if it/they never existed and that both [parties of this revocation] wish to
revoke and rescind any and all Assignment of Rights as if it never existed by the execution of this
agreement.
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bring against it. Second, while admitting that it was not challenging the validity of the
assignments, SMART argued that a valid assignment is one manifesting a present intent to transfer,
where the assignor does not retain any power of revocation. Third, SMART asserted that when
plaintiff filed her complaint, she had already executed assignments to her medical providers, and
thus those claims belonged to those medical providers, who therefore bore responsibility for
pursuing their claims in a timely manner pursuant to the one-year-back rule, MCL 500.3145(1).
Because those medical providers failed to pursue their claims in a timely manner, their right to sue
for PIP benefits was extinguished by operation of the one-year-back rule. To this point, SMART
argued that these medical providers’ claims were extinguished before the revocations were
executed on September 20, 2020, and so there remained no claims to “give back” to plaintiff
through the revocations. Essentially SMART asserted that once plaintiff’s medical providers’
claims had expired, the parties could properly not thereafter work around the one-year-back rule
and effectively restore their expired rights by operating as though the assignments had never
existed.
As noted, the trial court granted SMART’s motion in part, concluding that plaintiff could
not properly claim compensation for the medical bills of Michigan Institute of Pain and Headache
(d/b/a Metro Pain Clinic), because that medical provider filed its own suit in district court. Relative
to the other providers, the court ultimately held that SMART did not have the authority to enforce
plaintiff’s assignments with her providers and that those parties to the assignments could, and did,
revoke those contracts:
But in the end, I do believe that the contract is between [plaintiff] and the
providers. And if they decide to revoke it, the Plaintiff can always get it.
Now, as I said earlier, the insurance company, or in this case, SMART
and/or Allstate, they’re only going to have to pay once, if any. They don’t have to
pay twice ‘cause two different entities are going after these bills.
But a lot of times, I mean, I can see today where you’re going to have a
Plaintiff going after the bills and a provider. And they’re going to duke it out at
trial.
And it could get confusing, I don’t know. It’s never happened before, but I
think theoretically, it could happen. They can both go after the bills. But I would
instruct the jury you only got to pay once, if you have to pay at all or something
like that.
So for those reasons, I think that I respectfully disagree with [defendant’s]
position, . . . but it was an interesting argument. And I will respectfully deny
summary at this time.
II. ANALYSIS
The dispositive question on appeal is whether the revocation of the assignments allowed
plaintiff to maintain her PIP claim that was filed prior to the revocation. This involves determining
the meaning and effect of the assignments and revocations of those assignments, as well as the
impact of those on plaintiff’s ability to bring this claim.
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A. STANDARDS OF REVIEW
“Construction and interpretation of a contract are questions of law that we review de novo,
meaning that we do so without deference to the trial court’s decision.” Calhoun Co v Blue Cross
Blue Shield Mich, 297 Mich App 1, 12; 824 NW2d 202 (2012), citing Comerica Bank v Cohen,
291 Mich App 40, 46; 805 NW2d 544 (2010). In Meagher v Wayne State Univ, 222 Mich App
700, 721-722; 565 NW2d 401 (1997), we explained:
Under ordinary contract principles, if contractual language is clear,
construction of the contract is a question of law for the court. If the contract is
subject to two reasonable interpretations, factual development is necessary to
determine the intent of the parties and summary disposition is therefore
inappropriate. If the contract, although inartfully worded or clumsily arranged,
fairly admits of but one interpretation, it is not ambiguous. The language of a
contract should be given its ordinary and plain meaning. [Citations omitted.]
This Court also reviews de novo a motion for summary disposition. Allen Park Retirees
Ass’n, Inc v Allen Park, 329 Mich App 430, 443; 942 NW2d 618 (2019). A motion under MCR
2.116(C)(7) is appropriate where there has been an “assignment or other disposition of the claim
before commencement of the action.” MCR 2.116(C)(7). In reviewing a motion under MCR
2.116(C)(7), “[t]he contents of the complaint must be accepted as true unless contradicted by the
documentary evidence, which must be viewed in a light most favorable to the nonmoving party.”
Allen Park Retirees Ass’n, Inc, 329 Mich App at 444. “If there is no factual dispute, the
determination whether a plaintiff’s claim is barred under a principle set forth in MCR 2.116(C)(7)
is a question of law.” Id.
Summary disposition is appropriate under (C)(8) when a party fails to state a claim on
which relief can be granted and is appropriate under (C)(10) when there is no genuine issue as to
any material fact, and the moving party is entitled to judgment or partial judgment as a matter of
law. Capitol Props Group, LLC v 1247 Ctr Street, LLC, 283 Mich App 422, 425; 770 NW2d 105(2009).
B. REAL PARTY IN INTEREST
Under MCR 2.201(B), “[a]n action must be prosecuted in the name of the real party in
interest[.]” “A real party in interest is the one who is vested with the right of action on a given
claim, although the beneficial interest may be in another.” Barclae v Zarb, 300 Mich App 455,
483; 834 NW2d 100 (2013) (quotation marks and citation omitted). The real party in interest rule
“ ‘requir[es] that the claim be prosecuted by the party who by the substantive law in question owns
the claim’ that is asserted in the complaint.” Estate of Maki v Coen, 318 Mich App 532, 539; 899
NW2d 111 (2017), quoting In re Beatrice Rottenberg Trust, 300 Mich App 339, 356; 833 NW2d
384 (2013). “A plaintiff must assert his own legal rights and interests and cannot rest his claim to
relief on the legal rights or interests of third parties.” Barclae, 300 Mich App at 483 (quotation
marks and citation omitted). The real party in interest doctrine is a “standing doctrine” that
“recognizes that litigation should be begun only by a party having an interest that will assure
sincere and vigorous advocacy” and “protects a defendant from multiple lawsuits for the same
cause of action.” Id. (quotation marks and citation omitted).
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“[A]lthough the principle of statutory standing overlaps significantly with the real-party-
in-interest rule, they are distinct concepts.” In re Beatrice Rottenberg Living Trust, 300 Mich App
at 355. Statutory standing is a jurisdictional principle, while “the real-party-in-interest rule is
essentially a prudential limitation on a litigant’s ability to raise the legal rights of another.” Id.
“[I]f a party lacks statutory standing, then the court generally lacks jurisdiction to entertain the
proceeding or reach the merits.” Id., citing Miller v Allstate Ins Co, 481 Mich 601, 608-612; 751
NW2d 463 (2008); see also Grady v Wambach, 339 Mich App 325, 330; 984 NW2d 463 (2021).
Jurisdiction is not an issue in this case.
With respect to assignments, the general rule is that “an assignee of a cause of action
becomes the real party in interest with respect to that cause of action, inasmuch as the assignment
vests in the assignee all rights previously held by the assignor.” Cannon Twp v Rockford Pub Schs,
311 Mich App 403, 412; 875 NW2d 242 (2015). Once a valid assignment occurs, the assignee
then stands in the shoes of the assignor and may enforce the rights assigned. “[A]n assignment
divests the assignor of any interest in the subject matter of the assignment.” 6A CJS, Assignments,
§ 88. Thus, because a legal assignment vests the right to enforce the rights in the assignee, an
assignor retains no rights to enforce the rights after they have been assigned, i.e., the assignor loses
the right that allows her to prosecute the claim.
C. FILING A LAWSUIT TO COLLECT ON MEDICAL BILLS WHEN THE RIGHT TO
COLLECT WAS PREVIOUSLY ASSIGNED
Pursuant to the no-fault act,3 insured individuals may recover PIP benefits for “[a]llowable
expenses consisting of reasonable charges incurred for reasonably necessary products, services
and accommodations for an injured person’s care, recovery, or rehabilitation.” MCL
500.3107(1)(a). Under this provision, plaintiff could have pursued her PIP claims against
SMART, but she did not. Instead, she assigned the right to bring those claims to her medical
providers. Although medical providers also have an independent statutory right to bring a claim
to recover for services rendered, under MCL 500.3112, that statute does not address the legal effect
of an assignment on an insured’s maintaining an action to collect benefits that were the subject of
an assignment.
Though plaintiff had a statutory right to seek payment of certain medical benefits, she
instead opted to transfer that right to the medical providers, an option she had and was free to
exercise. Covenant Med Ctr, Inc v State Farm Mut Auto Ins Co, 500 Mich 191, 217 n 40; 895
NW2d 490 (2017). “No particular form of words is required for an assignment, but the assignor
must manifest an intent to transfer and must not retain any control or any power of revocation.”
Burkhardt v Bailey, 260 Mich App 636, 655; 680 NW2d 453 (2004) (quotation marks and citation
omitted). SMART does not contest the validity of the assignments.
At the time plaintiff commenced this action, she was not the real party in interest because
plaintiff’s rights to recover the unpaid medical bills were divested by virtue of the assignments.
See Estate of Maki, 318 Mich App at 539 (providing that the real party in interest rule “requir[es]
that the claim be prosecuted by the party who by the substantive law in question owns the claim
3
MCL 500.3101 et seq.
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that is asserted in the complaint.”) (alteration in original; quotation marks and citation omitted).
As noted at the outset, following the assignment of these claims the “assignee of a cause of action
becomes the real party in interest with respect to that cause of action, inasmuch as the assignment
vests in the assignee all rights previously held by the assignor.” Cannon Twp, 311 Mich App at
412. “An assignee stands in the position of the assignor, possessing the same rights and being
subject to the same defenses.” Burkhardt, 260 Mich App at 653. That being the case, the medical
providers as assignees held the right to seek to recover the unpaid medical bills, and plaintiff no
longer had a cause of action to pursue, having transferred it away. Cannon Twp, 311 Mich App at
412 (“an assignee of a cause of action becomes the real party in interest with respect to that cause
of action, inasmuch as the assignment vests in the assignee all rights previously held by the
assignor.”).4
Although the medical providers, as the real parties in interest, owned the right to bring an
action to recover the unpaid medical bills, the record shows that, except for one provider, none of
the medical providers utilized the assignment by bringing suit within a year of providing the
services. MCL 500.3145(1). Thus, the medical provider’s rights under the assignment were
statutorily barred. While plaintiff timely sued to recover the cost of the medical services, she had
assigned those rights to the medical providers, who were now the real parties in interest. In order
to remedy that situation, the revocations were signed during the course of the trial court
proceedings and contained the “nunc pro tunc” language in an attempt to essentially eradicate the
original assignments. The attempt, though creative, did not have the intended effect.
Nunc pro tunc refers to a court’s inherent power to give modifications to its own orders
and judgments retroactive effect in order to make a record of what actually occurred but that had
been omitted from the order. Michigan Pleading & Practice (2d ed), § 19.43. See also Shifferd v
Gholston, 184 Mich App 240, 243; 457 NW2d 58 (1990) (“An entry nunc pro tunc is proper to
supply an omission in the record of action really had, but omitted through inadvertence or
mistake”) and Grand Rapids v Coit, 151 Mich 109, 109; 114 NW 880 (1908). “The function of
such an order is to supply an Omission in the record of action previously taken by the court but
not properly recorded; an order nunc pro tunc may not be utilized to supply previously omitted
action.” Sleboede v Sleboede, 384 Mich 555, 558-559; 184 NW2d 923 (1971).
The term “nunc pro tunc” has also been used in reference to licensing assignments in some
federal patent and trademark decisions, holding that a nunc pro tunc assignment may not be used
to cure a standing defect; rather, the party filing suit must have had standing to sue when the
complaint was filed. See Enzo APA & Son, Inc v Geapag AG, 134 F3d 1090, 1093 (CA Fed, 1998)
(one must hold legal title to the patent to sue for infringement of the patent; “nunc pro tunc
assignments are not sufficient to confer retroactive standing”) and Gaia Technologies, Inc v
Reconversion Technologies, Inc, 93 F3d 774, 777, 779-780 (CA Fed, 1996) (like other personal
4
Although a valid assignment is one in which the assignor “manifest[s] an intent to transfer and
must not retain any control or any power of revocation,” Burkhardt, 260 Mich App at 655, as a
matter of contract plaintiff was free to subsequently negotiate with the medical providers to revoke
the assignments or transfer the assignments to her to allow her to pursue those claims.
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property, patents, and trademarks may be assigned to others, and a nunc pro tunc assignment
executed after a lawsuit is filed may not retroactively confer standing).
The court in Enzo APA & Son, 134 F3d 1090, came to the same conclusion:
[A]s has been aptly stated, nunc pro tunc assignments are not sufficient to confer
retroactive standing on the basis that:
As a general matter, parties should possess rights before seeking to have
them vindicated in court. Allowing a subsequent assignment to automatically cure
a standing defect would unjustifiably expand the number of people who are
statutorily authorized to sue. Parties could justify the premature initiation of an
action by averring to the court that their standing through assignment is imminent.
Permitting non-owners and licensees the right to sue, so long as they eventually
obtain the rights they seek to have redressed, would enmesh the judiciary in abstract
disputes, risk multiple litigation, and provide incentives for parties to obtain
assignment in order to expand their arsenal and the scope of litigation. Inevitably,
delay and expense would be the order of the day. [Id. at 1093-1094, quoting Procter
& Gamble Co v Paragon Trade Brands, Inc, 917 F Supp 305, 310 (D Del, 1995).]
While the present case is not a patent or trademark case, the same logic applies: one must
be the real party in interest at the time the lawsuit is filed, and a retroactive, or nunc pro tunc,
revocation may not be used to correct a factual problem that existed when the lawsuit was filed.
While plaintiff and her medical providers were at liberty to mutually decide to revoke the
assignments, the revocations were effective as of the date that the revocations were executed and
could not essentially eliminate the fact that the assignments had occurred prior to plaintiff filing
suit. And, the medical providers had no timely claims to return to plaintiff as of the date of the
revocations because the revocations occurred more than a year after services were rendered. Thus,
the mutual revocations did not reassign any timely claims to plaintiff.
Plaintiff further argues that mutual revocation of an agreement returns the parties to the
status quo as it existed prior to the assignment. While this may be true in some cases, the same
cannot be said when the revocation occurs after the time for performance matures or the rights of
the parties become fixed. “An assignment may be revoked before the rights of the parties become
fixed.” 6A CJS, Assignments § 71. Thus, although the revocation may have some effect between
plaintiff and the medical providers, as to defendant and the court, it cannot impact how plaintiff
stood at the time the complaint was filed:
As an assignee, appellant can stand in no better position than the assignor.
And since the Fund was barred by the statute of limitations, so was appellant. Their
attempt to make the assignment retroactive to the date the complaint was filed may
have some meaning between them, but it is meaningless as to third parties.
[Stephens v Textron, Inc, 127 Ariz 227, 230; 619 P2d 736 (1980) (citation omitted).]
Here, it is undisputed that at the time she filed the complaint, plaintiff had assigned her rights to
recover the unpaid medical bills to her medical providers. Because the rights of plaintiff viz-a-viz
defendant and the court had essentially become fixed under the assignment agreements, the
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revocations could not impact plaintiff’s status at the time the complaint was filed. Because plaintiff
was not a real party in interest at the time she filed the lawsuit, the trial court erred in denying
defendant’s motion for summary disposition.
Reversed and remanded for further proceedings consistent with this opinion. We do not
retain jurisdiction.
/s/ Kirsten Frank Kelly
/s/ Christopher M. Murray
/s/ Brock A. Swartzle
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