STATE FARM MUTUAL INSURANCE CO V BROE REHABILITATION SERVICES INC
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STATE OF MICHIGAN
COURT OF APPEALS
STATE FARM MUTUAL INSURANCE
COMPANY,
FOR PUBLICATION
July 22, 2010
9:00 a.m.
Plaintiff-Appellee,
v
No. 289230
Oakland Circuit Court
LC No. 2007-087673-NF
BROE REHABILITATION SERVICES, INC,
Defendant-Appellant.
Before: HOEKSTRA, P.J., and MARKEY and DAVIS, JJ.
PER CURIAM.
Defendant appeals as of right an order denying its motion for summary disposition, and
an order denying reconsideration and granting plaintiff’s motion to compel discovery. We affirm
the denial of summary disposition and the denial of reconsideration, but we vacate the motion to
compel discovery and remand.
Plaintiff, an insurance company, commenced this suit with a “complaint for discovery”
seeking medical records for certain of its insureds who had been provided services by defendant.
For these people, plaintiff would like to ascertain whether defendant billed improperly and what
diagnoses and treatments were performed by defendants so that plaintiff can determine whether
present treatment by other providers is reasonable and necessary.1 However, plaintiff is not
currently in litigation with any of those six insured persons, and plaintiff, for the most part, has
paid bills submitted by defendant. Plaintiff filed its “complaint for discovery” when defendant
refused plaintiff’s request for the medical records and to have its employees submit to
examinations under oath.
1
Defendant has a history of fraudulently billing for its services. See Allstate Ins Co v Broe,
unpublished opinion per curiam of the Court of Appeals, issued August 21, 2008 (Docket No.
274809) (no lv sought; publication request den). And plaintiff was involved in an earlier lawsuit
where defendant’s allegedly erroneous diagnosis resulted in years of allegedly incorrect
treatment of one of its insureds.
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Defendant moved for summary disposition, arguing that the court had no jurisdiction
because there was no dispute between the parties. The trial court disagreed, as do we.
Jurisdictional issues and questions of standing are reviewed de novo. Estes v Titus, 481 Mich
573, 578; 751 NW2d 493 (2008); Nat’l Wildlife Federation v Cleveland Cliffs Iron Co, 471 Mich
608, 612; 684 NW2d 800 (2004). Statutory interpretation is a question of law that is also
considered de novo on appeal. Detroit v Ambassador Bridge Co, 481 Mich 29, 35; 748 NW2d
221 (2008).
We agree with defendant that there is no such thing as a “complaint for discovery,” but it
has long been the law in this state that it is the substance of the complaint that controls. Group
Ins Co v Czopek, 440 Mich 590, 605; 489 NW2d 444 (1992); Crown Technology Park v D&N
Bank, FSB, 242 Mich App 538, 554; 619 NW2d 66 (2000) (this Court will not “rely[] on the
superficial language of the complaint while ignoring its substance”). What plaintiff sought in
essence in its complaint was a declaratory judgment concerning the extent of the rights and
responsibilities of the parties under MCL 500.3138 and MCL 500.3159 under the no-fault act,
MCL 500.3101 et seq., and the equitable relief of an order compelling discovery.
The first, MCL 500.3158, reads in relevant part as follows:
A physician, hospital, clinic or other medical institution providing, before
or after an accidental bodily injury upon which a claim for personal protection
insurance benefits is based, any product, service or accommodation in relation to
that or any other injury, or in relation to a condition claimed to be connected with
that or any other injury, if requested to do so by the insurer against whom the
claim has been made, (a) shall furnish forthwith a written report of the history,
condition, treatment and dates and costs of treatment of the injured person and (b)
shall produce forthwith and permit inspection and copying of its records regarding
the history, condition, treatment and dates and costs of treatment. [MCL
500.3158(2).]
The second, MCL 500.3159, reads in its entirety as follows:
In a dispute regarding an insurer’s right to discovery of facts about an
injured person’s earnings or about his history, condition, treatment and dates and
costs of treatment, a court may enter an order for the discovery. The order may be
made only on motion for good cause shown and upon notice to all persons having
an interest, and shall specify the time, place, manner, conditions and scope of the
discovery. A court, in order to protect against annoyance, embarrassment or
oppression, as justice requires, may enter an order refusing discovery or
specifying conditions of discovery and may order payments of costs and expenses
of the proceeding, including reasonable fees for the appearance of attorneys at the
proceedings, as justice requires.
The constitutional test for standing in Michigan requires three elements:
First, the plaintiff must have suffered an injury in fact—an invasion of a
legally protected interest which is (a) concrete and particularized, and (b) actual
or imminent, not conjectural or hypothetical. Second, there must be a causal
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connection between the injury and the conduct complained of-the injury has to be
fairly traceable to the challenged action of the defendant, and not the result of the
independent action of some third party not before the court. Third, it must be
likely, as opposed to merely speculative, that the injury will be redressed by a
favorable decision. [Rohde v Ann Arbor Pub Schs, 479 Mich 336, 348; 737
NW2d 158 (2007) (edits, quotation marks, and citations omitted).]
Under the no-fault act, plaintiff has a statutory right to demand copies of medical records
from medical providers who have provided treatment or services “in relation to” an insured’s
claim. MCL 500.3158(2). The statute does not require that the services be billed or that
payment be outstanding. Once defendant refused to comply with the statutory mandate, that
gave rise to the “dispute” required by MCL 500.3159. Notably, the statute requires a “dispute
regarding an insurer’s right to discovery of facts,” not a dispute about payment of a claim, or a
dispute about an insured’s earnings, history, condition, or treatment, as defendant argues. Here,
there was a very concrete, actual dispute over the extent of plaintiff’s statutory right to obtain the
records, caused by defendant’s refusal to comply with MCL 500.3158, that can be redressed by a
discovery order from the trial court. This is very different than the “minute and generalized”
injury the plaintiffs alleged in Rhode, 479 Mich at 354.
Because there is an actual dispute between the parties, the trial court did not err in finding
it had jurisdiction to decide the case. See, e.g., Allstate Ins Co v Hayes, 442 Mich 56, 65-68; 499
NW2d 743 (1993). Additionally, we conclude that plaintiff met the “good cause” requirement
for the same reason that there is an actual case or controversy. We further observe that, given
defendant’s history of fraud and alleged misdiagnosis, plaintiff is not merely embarking on a
“fishing expedition.”
Nevertheless, we do not agree that the insureds are not interested parties entitled to
notice. Plaintiff asserts that the insureds’ policies require them to waive any medical records
privilege when they file a claim for benefits, and thus they have no interest in a cause of action
solely designed to obtain those records. We do not believe that the conclusion necessarily
follows the premise. The insureds have presumably waived any right to preclude plaintiff from
accessing those records, but given the potentially sensitive information therein, we conclude that
the insureds may have an interest in, at a minimum, simply knowing that plaintiff has accessed
them; furthermore, the insureds would obviously be interested in knowing that plaintiff is
investigating the reasonableness and necessity of their current treatment. The insureds have an
interest and must be given notice.
The trial court’s order denying summary disposition is affirmed. The trial court’s order
compelling discovery is vacated. We remand for further proceedings consistent with this
opinion. We do not retain jurisdiction.
/s/ Joel P. Hoekstra
/s/ Jane E. Markey
/s/ Alton T. Davis
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