Healthcare provider’s action for no-fault personal injury protection (PIP) benefits; Real party in interest; Effect of assignment of accounts receivable & counter-assignments; C-Spine Orthopedics, PLLC v Progressive MI Ins Co

On remand from the Supreme Court, the court rejected plaintiff-C-Spine’s contention that it was still the real party in interest when the suit was filed, given its assignments of accounts receivable. But it agreed that subsequent “counter-assignments could restore C-Spine’s status, subject to proper procedural action in the trial court.” Thus, it vacated the trial court’s order granting defendant-insurer summary disposition, and remanded. C-Spine, which had provided healthcare services to plaintiff-Hammock, intervened in his suit for PIP benefits, as a purported assignee of his rights. While it “had entered into numerous bulk purchase and sale agreements for accounts receivable with” factoring companies that included Hammock’s, it later agreed to counter-assignments of his claims with the companies. The case was now before the court on remand for reconsideration in light of the Michigan Supreme Court’s decision in another case involving C-Spine (C-Spine Orthopedics). Here, C-Spine first asserted “that it retained the right to pursue payment of PIP benefits under MCL 500.3112,” despite its assignments to the factoring companies. The court noted “a plaintiff may have statutory standing to sue under MCL 500.3112 but nevertheless fail to qualify as the real party in interest if it has transferred away its ownership of the claim through assignment.” It concluded that, as “in C-Spine Orthopedics, C-Spine fully assigned away its rights and was not the real party in interest at the time it filed suit, notwithstanding its statutory standing under MCL 500.3112.” But the court agreed to a limited extent with its alternative argument. A “real-party-in-interest defect cannot be cured by unilateral, out-of-court action alone.” Some action must be taken “within the litigation, such as amending the complaint, substituting or joining the proper party, or otherwise invoking the court’s authority, so that the trial court may assess the legal effect of the asserted cure.” C-Spine had the burden to show “the counter-assignments were legally effective to restore its right to litigate the claims, and that it took appropriate procedural action within the litigation to invoke the trial court’s authority to recognize that cure.” Given that the trial court “did not consider whether C-Spine could cure the real-party-in-interest defect through appropriate procedural mechanisms, remand” was required.