Whether assignees were in privity with the assignor-injured person as to the judgment rendered against him after he assigned his PIP claim to plaintiffs; Aultman, Miller & Co v Sloan; Howell v Vito’s Trucking & Excavating Co; Doctrines of res judicata & collateral estoppel

The court concluded that plaintiffs-assignees were not in privity with Myers (the assignor) as to the judgment rendered against him after he assigned his PIP claim to plaintiffs. Thus, they could not be bound by that judgment under the doctrines of res judicata or collateral estoppel. Therefore, the court affirmed the judgment of the Court of Appeals and remanded to the trial court. Myers was injured in a car crash and received medical treatment from plaintiffs-Mecosta County Medical Center and Mary Free Bed Rehabilitation Hospital. Myers assigned them his right to seek PIP benefits from the insurer responsible for making those payments. After the assignment, Myers sought PIP benefits for separate services he received after the crash. In that lawsuit, where “plaintiffs here were not party, the trial court held that Myers had not properly insured the vehicle and was therefore not entitled to any benefits.” The issue on appeal was whether that holding applied “to plaintiffs and precludes them, under the doctrines of res judicata or collateral estoppel, from succeeding on the present assigned claim against the defendant insurers.” Because they were not parties to the earlier suit, the court held that “they are bound by the judgment only if they were in privity with Myers when the earlier judgment against him was entered.” The Court of Appeals properly concluded that “plaintiffs were not bound by the earlier judgment because it was entered after they were assigned the claim.” Thus, because they “were neither parties to the earlier suit nor privies with respect to the subsequently entered judgment, the doctrines of res judicata and collateral estoppel” were inapplicable in this case.