Effect of an assignment of the right to recover personal protection insurance (PIP) benefits; C-Spine Orthopedics, PLLC v Progressive MI Ins Co; Wallace v Suburban Mobility Auth for Reg’l Transp; Rescission or revocation of the assignments; Motion to reinstate claim for benefits

On remand from the Supreme Court, the court held that the Supreme Court’s decision in C-Spine Orthopedics, particularly its resolution of the companion Wallace case, was “directly on point and controlling.” Thus, it vacated the trial court’s order denying plaintiff-insured’s (Aja) motion to reinstate his claim for PIP benefits, and remanded for further proceedings consistent with C-Spine. As in the Wallace case, Aja “was injured in a motor-vehicle accident. After the accident, [he] assigned some of his rights to pursue PIP benefits to two medical providers.” A year after the accident, he sued to collect PIP benefits. But, as with the plaintiff in “Wallace, at the time the complaint was filed, plaintiff was not the real party in interest because he had assigned away his rights. Yet, if [he] could show that he cured his real party in interest defect, his lawsuit could survive.” He and the two medical providers subsequently “allegedly entered into agreements whereby they agreed to revoke and rescind the assignments so as to be in the same position as if the assignments had never been made. Similar to the Wallace case, defendant filed a partial motion for summary disposition arguing, in relevant part, that plaintiff was not the real party in interest and had no standing to pursue his claims because he had already assigned his claims to his medical providers. In response, plaintiff relied on the revocation/rescission agreements. Although the documents on their face purport to be a rescission, the trial court treated [them] as revocations and then found that the revocations were not valid because of the questionable signatures. Given the understanding of the legal issues before it, the trial court did not engage in a rescission analysis.” The court noted that “the Supreme Court in C-Spine Orthopedics emphasized that because rescission in a remedy that rests within the sound discretion of the trial court, ‘the trial court ought to consider this issue in the first instance.’” The court stated that on “remand, the trial court should ‘balance the equities and determine whether equitable rescission is warranted under the facts of this case’ and whether the real party in interest defect that existed at the filing of the complaint can be cured.”