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Detroit Physical Therapy is not bound by injured patient's dismissal of no fault PIP claim, but sues too late

Detroit Physical Therapy provided $29,000.00 worth of care to Sarleatha Stove after she was hurt in a car wreck.  Because Stone did not own a car, Farm Bureau Insurance Company was randomly assigned to pay her PIP benefits under the no fault act.  Later, Stone sued to collect unpaid PIP benefits and settled her claim for $15,000.00.  Detroit Physical Therapy then sued separately to collect payment for its services.

Farm Bureau argued that DPT was bound by Stone's earlier settlement and the dismissal of her case.  It argued that  DPT was "in privity" with Stone, making her lawsuit a full payment of all PIP benefits owed to any and all providers.  Farm Bureau also argued that  DPT was barred from collecting for its work because it did not sue within one year of providing care. 

The Court held that DPT was not "in privity" with Stone and that it had an independent right to sue for benefits which Stone could not eradicate.  Therefore, Stone's dismissal was not res judicata with respect to DPT's claim.  Nevertheless, DPT had negotiated for too long without filing a separate lawsuit, and therefore it was barred by the no fault "one year back" rule from filing a separate legal action.  It could not avail itself of Stone's earlier suit to "toll" or extend the statute of limitations.

Thompson O’Neil, P.C.
309 East Front Street
Traverse City, Michigan 49684
Toll Free: 1-800-678-1307
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