The Brady team recently had a Motion for Summary Disposition granted in a No-Fault Provider case. Plaintiff alleged it was owed No-Fault Benefits after providing various medical supplies to the underlying Claimant.

We filed a Motion for Summary Disposition in the underlying claim based upon extensive fraud in the wage loss and attendant care claims and this Motion was eventually granted as Plaintiff failed to respond. Therefore, the entire PIP claim was dismissed.

As a result of this decision, we filed a Motion for Summary Disposition in the provider suit based upon the doctrine of Res Judicata. Plaintiff predictably responded by relying upon the unpublished Mecosta County case. Plaintiff argued that the provider was not in privity with the Claimant and therefore, Claimant’s fraud could not be used as a defense in the provider suit.

We took the position that the Mecosta County case only prevents a defendant from using defenses that came about after the assignment. If the defense was available prior to or at the time of the assignment, then it could be used against the provider under the doctrine of Res Judicata. This argument was successful and the Motion was granted on the grounds that the defense was available prior to the assignment and therefore, the insurer could rely on the defense of fraud in the provider suit.

Although the dollar value of this claim was not particularly high, we believe this is a crucial ruling for provider suits moving forward. As of late, Courts have been limiting an insurer’s ability to rely on a fraud defense; however, we were able to successfully rely upon fraud and defeat the Mecosta County argument, which providers consistently rely upon.

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Kitch PIP Team Obtains Dismissal in Provider Suit Based Upon Res Judicata

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