Mise en place: Court of Appeals Organizes Post-Covenant Decisions

In an unpublished decision, Ricky Lewis, et al. v City of Detroit, Docket No. 341538, issued February 21, 2019, the Michigan Court of Appeals cleans up a mess created by the trial court. In a series of confusing decisions, the trial court denied Defendant’s Motion for Summary Disposition (based on Covenant) and ordered judgment in favor of a medical provider based on Defendant’s disregard of the medical provider’s lien when the Defendant distributed funds to the underlying claimants in a separate action for no-fault PIP benefits. Defendant appealed the trial court’s order denying its Motion for Summary Disposition and the order for judgment in favor of the medical provider.

Based on the Michigan Supreme Court’s holding in Covenant Med Ctr, Inc v State Farm Mut Auto. Ins Co, 500 Mich 191 (2017), the medical provider could not maintain a direct cause of action against Defendant. The Michigan Court of Appeals, therefore, vacated the trial court’s orders and ordered the trial court to enter summary disposition to Defendant.

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