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STATE OF MICHIGAN
COURT OF APPEALS


KATE SPRAGUE, Individually and as Next Friend of RYAN SPRAGUE, a minor, Plaintiff-Appellee, v FARMERS INSURANCE EXCHANGE, Defendant-Appellant.

FOR PUBLICATION May 10, 2002 9:10 a.m.

No. 227400 Kalamazoo Circuit Court LC No. 99-000720-AV Updated Copy August 16, 2002

Before: Owens, P.J., and Markey and Murray, JJ. MURRAY, J. Defendant appeals by leave granted the circuit court's reversal of the district court's order granting defendant's motion for summary disposition brought pursuant to MCR 2.116(C)(10). The issue presented in this case is one of first impression and requires us to determine whether, under the no-fault act, MCL 500.3101 et seq., a coordinated benefits clause in a contract of insurance relieves a no-fault insurer from liability for services received by an insured where those services were not offered by the health care provider and the insured did not first exhaust any available medical treatments offered by that same health care provider. We hold under the facts of this case that defendant is statutorily obligated to pay the "allowable expenses" incurred by plaintiff. Accordingly, we affirm the circuit court's decision and remand this case to the district court for further proceedings consistent with this opinion. I. Basic Facts and Procedural History The material facts are not in dispute. In November, 1997, plaintiff and her son Ryan1 were injured in an automobile accident. At the time of the accident plaintiff had health care coverage through her employer with Physicians Health Plan (PHP), a health maintenance organization (HMO). Plaintiff also had no-fault automobile insurance with defendant. Plaintiff elected to coordinate these two insurance plans, thereby receiving a reduced premium for her nofault insurance benefits. Ryan was an insured person under both plans.
1

Ms. Sprague and her son both received the chiropractic services at issue under the same set of circumstances and Ms. Sprague sued on her own behalf and on behalf of her son.

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After the accident, plaintiff received treatment from her PHP primary care physician, Dr. Nayana Patel. Dr. Patel's physician's assistant first examined plaintiff, found her to have upper back strain, and placed plaintiff on pain medications. Almost one month later, plaintiff saw Dr. Patel, who diagnosed plaintiff with musculoskeletal neck pain. Dr. Patel continued the medications, scheduled plaintiff for physical therapy, and had her temporarily taken off work. After two weeks of physical therapy, plaintiff returned to Dr. Patel, indicating to him that most of the discomfort in her neck had subsided. After conferring, plaintiff and Dr. Patel decided that plaintiff could return to work. The record indicates, however, that plaintiff and Dr. Patel agreed that plaintiff would return for further treatment if she had additional problems. Approximately one month later, plaintiff began treatment with a chiropractor. Plaintiff did not receive any referrals to a chiropractor from PHP, nor did she return to Dr. Patel or any other authorized PHP physician for any further treatment or medical services. Plaintiff subsequently submitted the chiropractor bills to PHP, which declined coverage on the basis that no PHP referral existed (a requirement of the PHP contract) and because chiropractic services were not covered by PHP.2 Plaintiff then submitted the bills to defendant, which also denied coverage on the basis that plaintiff had not made reasonable efforts to obtain medical services from PHP. This suit followed. In the district court, defendant filed a motion for summary disposition pursuant to MCR 2.116(C)(10), which the district court granted in a written opinion and order. Plaintiff appealed that decision to the circuit court, which upon review de novo reversed the entry of judgment for defendant and remanded to the district court for further proceedings. We granted leave to appeal, and we now affirm. II. Standard of Review We review de novo the trial court's decision on a motion for summary disposition. Spiek v Dep't of Transportation, 456 Mich 331, 337; 572 NW2d 201 (1998). A motion for summary disposition brought under MCR 2.116(C)(10) tests the factual support for a claim. Id. In recent years the Supreme Court has clarified the standards governing review of motions under this subrule: "In reviewing a motion for summary disposition brought under MCR 2.116(C)(10), a trial court considers affidavits, pleadings, depositions, admissions, and documentary evidence filed in the action or submitted by the parties, MCR 2.116(G)(5), in the light most favorable to the party opposing the motion. A trial court may grant a motion for summary disposition under MCR 2.116(C)(10) if the affidavits or other documentary evidence show that there is no genuine issue in respect to any material fact, and the moving party is entitled to judgment as a matter of law. MCR 2.116(C)(10), (G)(4).
2

Although the insurance contract between plaintiff and PHP was not made a part of the lower court record, the parties agreed that PHP did not have a contractual obligation to provide chiropractic services.

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"In presenting a motion for summary disposition, the moving party has the initial burden of supporting its position by affidavits, depositions, admissions, or other documentary evidence. Neubacher v Glove Furniture Rentals, 205 Mich App 418, 420; 522 NW2d 335 (1994). The burden then shifts to the opposing party to establish that a genuine issue of disputed fact exists. Id. Where the burden of proof at trial on a dispositive issue rests on a nonmoving party, the nonmoving party may not rely on mere allegations or denials in pleadings, but must go beyond the pleadings to set forth specific facts showing that a genuine issue of material fact exists. McCart v J Walter Thompson, 437 Mich 109, 115; 469 NW2d 284 (1991). If the opposing party fails to present documentary evidence establishing the existence of a material factual dispute, the motion is properly granted. McCormic v Auto Club Ins Ass'n, 202 Mich App 233, 237; 507 NW2d 741 (1993)." [Smith v Globe Life Ins Co, 460 Mich 446, 454-455; 597 NW2d 28 (1999), quoting Quinto v Cross & Peters Co, 451 Mich 358, 362-363; 547 NW2d 314 (1996).] "A litigant's mere pledge to establish an issue of fact at trial cannot survive summary disposition under MCR 2.116(C)(10)." Maiden v Rozwood, 461 Mich 109, 121; 597 NW2d 817 (1999). Instead, a litigant opposing a properly supported motion for summary disposition under this subrule must present substantively admissible evidence to the trial court before its decision on the motion, which creates a genuine issue of material fact. Id. III. Analysis By the time this case reached our Court, both sides were, in baseball jargon, "batting .500," because both had successfully convinced a different learned trial judge that their position was the legally correct one. Defendant argues on appeal, and the district court held, that under Tousignant v Allstate Ins Co, 444 Mich 301; 506 NW2d 844 (1993), plaintiff 's failure to utilize reasonable efforts to obtain available medical treatment from PHP precluded her from obtaining from defendant the reasonable cost of her chiropractic services. Plaintiff, on the other hand, convinced the circuit court on review de novo to accept her argument, holding that Tousignant and its reasoning were not applicable and that because PHP did not provide chiropractic services, defendant was required under the act to pay for the reasonable costs of the chiropractic services.3 Although the parties have agreed throughout this proceeding that the outcome of this case is controlled by case law, we must first seek guidance from the statutory language itself. The statute is, after all, the "rule book" for deciding issues surrounding the awarding of benefits under the act. Cruz v State Farm Mut Automobile Ins Co, 241 Mich App 159, 164; 614 NW2d 689

3

On the basis of its holding on this issue, the circuit court remanded the case to the district court for a determination whether the chiropractic services were reasonably necessary as required by MCL 500.3107(1)(a).

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(2000), lv gtd 464 Mich 873 (2001). Resolution of this dispute primarily involves application of three sections of the act, MCL 500.3105, 500.3107, and 500.3109a.4 Section 3105 contains the legislative liability determination that, subject to the other provisions of the act, "an insurer is liable to pay benefits for accidental bodily injury arising out of the ownership, operation, maintenance or use of a motor vehicle . . . ." MCL 500.3105(1). Subsection 3107(1)(a) sets forth the type of benefits a no-fault insurer is liable for under

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