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Lawyers’ Corner: Uncooperative Injured Party in Perryman v Farm Bureau Mut Ins Co

When you represent a medical provider, an uncooperative injured party can make everyone’s case more difficult. But is there anything you can do when the injured plaintiff drops out of the case? A new Michigan Court of Appeals decision has some suggestions.

In a no-fault auto insurance claim, the relationship between the injured party and his or her medical providers can be complicated. Both are on the same side and are seeking the same thing – no-fault benefits from the auto insurance company. But if things go wrong these parties could quickly find themselves at odds.

When injured parties give up on their personal injury lawsuits mid-case it can cause headaches for everyone. A recent string of cases including Bahri v IDS Prop Cas Ins Co, and Dawoud v State Farm Mut Auto Ins Co, even say that a dismissal against the injured plaintiff can destroy related medical provider claims altogether. So as a medical provider’s attorney, is there anything you can do to protect your case? Or are you at the mercy of an uncooperative injured plaintiff?

Uncooperative Injured Party Gets Case Dismissed

Alexis Perryman was in a car accident on June 9, 2013. She was injured while operating her mother’s uninsured vehicle. Farm Bureau was assigned to the case by the Michigan Assigned Claims Plan. But the insurer refused to pay her PIP benefits, including the medical expenses, physical therapy and medical transportation claims of intervening plaintiffs Physioflex, PLLC, and GL Transportation, LLC, and Summit Physicians Group, PLLC.

Perryman’s attorney filed a lawsuit under the no-fault act on June 25, 2014. The intervening plaintiffs came into the case two months later.

But then Perryman disappeared. On December 2, 2014, her attorney told Farm Bureau he had not been in contact with her since the case was filed. He cancelled her deposition and filed a motion to withdraw. Farm Bureau’s attorneys countered with a motion to extend discovery to allow them to reschedule the deposition. Both motions were granted. The court ordered:

It is further hereby ordered that [Perryman] shall retain counsel within thirty (30) days. [Perryman] must notify the [c]ourt in writing within thirty (30) days of her new counsel or her intention of proceeding pro per.

She did neither. She did not appear after Farm Bureau send a her notice of her rescheduled deposition, either. So the defendant asked that the case be dismissed. The trial court agreed saying:

Yeah, [Perryman] hasn’t complied with the court orders, the [c]ourt’s granting the motion. The case is dismissed. . . . [Perryman has] been given notice of the deposition, she had 30 days to obtain counsel and didn’t do [sic], so the case is dismissed.”

Dismissal With Prejudice Applies to Medical Providers Too

In doing so, the trial court also dismissed the medical providers’ independent, derivative claims to no-fault benefits. So the medical providers appealed in Perryman v Farm Bureau Mut Ins Co.

The court reviewed Bahri, Dawoud, and Chiropractors Rehab Group, PC v State Farm Mut Auto Ins CoIn Bahri and Dawoud, the courts had struck down medical providers claims after an injured party’s claim was dismissed. In Chiropractors Rehab, the medical provider claims survived, but it was because the insurance company had suspended the claim, rather than a court dismissing it.

Because Perryman’s claims were dismissed as a discovery sanction, the court said the dismissal was an adjudication on the merits, which also terminated the medical providers’ claims – just like in Dawoud.

Dismissal As a Discovery Sanction

Dismissal is one of a number of possible sanctions for failing to complete discovery. MCR 2.504(B) says:

“If a party fails to comply with these rules or a court order, upon motion by an opposing party, or sua sponte, the court may enter a default against the noncomplying party or a dismissal of the noncomplying party’s action or claims. . . . Unless the court otherwise specifies in its order for dismissal, a dismissal under this subrule or a dismissal not provided for in this rule . . . operates as an adjudication on the merits.” 

When it comes to depositions, MCR 2.313(D)(1)(a) says:

“If a party fails . . . to appear before the person who is to take his deposition, after being served with a proper notice . . . on motion, the court in which the
action is pending may order such sanctions as are just.”

This includes dismissal. But the court noted that:

“Dismissal is, however, a drastic sanction and our legal system favors disposition of litigation on the merits.” (Internal quotes omitted.)

Before ordering dismissal, a court must consider several factors to ensure that the sanction is just and proper:

  • Whether the violation was willful or accidental;
  • The party’s history with previous court orders;
  • The prejudice to the opposing party;
  • Whether there is a history of deliberate delay;
  • How well the party complied with other court orders;
  • Attempts to correct the problem; and
  • Whether a lesser sanction would better serve the interests of justice.

This last factor gave the court concern. Finding that the medical providers had standing to challenge the injured party’s dismissal because they were “aggrieved” by it, the court said the trial judge had failed to consider lesser sanctions. The court said:

Moreover, the trial court’s dismissal included all parties. Therefore, it should have at least considered the impact of the sanction on all affected parties and whether a lesser sanction
would have better served the interests of justice.”

The court recommended a dismissal without prejudice. This would allow the intervening plaintiffs to maintain their medical provider claims while still removing the uncooperative injured party from the case.

Medical provider attorneys would do well to follow the Perryman court’s advice. By objecting to the sanctions of an uncooperative injured party and arguing for a dismissal without prejudice, you may be able to save your case, even when the plaintiff disappears.

David Christensen is an auto accident attorney with over 25 years of no-fault experience. If your client has a difficult no-fault issue, contact Christensen Law in Southfield, Michigan for a referral today.