No Fault Update: Assignments and the Real Party in Interest

Name: C-Spine Orthopedics, PLLC v. Progressive Michigan Ins. Co.

Court: Michigan Supreme Court

Issued: July 3, 2025

INTRODUCTION

This summer, we tracked several updates to No-Fault Act case law developments from across the Michigan Supreme Court and Court of Appeals. Included herein is a salient discussion of those updates.

ANALYSIS

In C-Spine, Progressive argued that C-Spine could not maintain an action because they assigned away their claims and hence, were not the parties in interest. The Supreme Court determined that while a failure to bring suit in the name of the real party in interest is grounds for dismissal, this defect does not necessarily mean that the suit should be dismissed. It is possible to cure this defect in some circumstances, but plaintiffs must take some action in the litigation that would allow the court to assess the effect of the change in parties. The Supreme Court addressed several potential cures, such as filing an amended complaint joining or substituting the proper plaintiff; filing an amended complaint reflecting that the original plaintiff has become the real party in interest through an assignment; or intervention by the real party in interest.

While C-Spine was not the real party in interest when the litigation commenced, C-Spine was restored as a real party in interest via a counter-assignment. The Court opined that despite attaining party in interest status, C-Spine was required to take some other action that would have allowed the trial court to consider their effect.

In the companion to C-Spine, Parie Wallace executed assignments transferring her right to collect PIP benefits for her treatment to her medical provider. After executing this assignment, Wallace filed suit for PIP benefits from Progressive. Progressive moved for summary judgment on the basis that Wallace was not the proper party in interest to litigate the claim. In response, Wallace argued that her and her medical providers "mutually rescinded" the assignments, rendering the assignment void ab initio and retroactively making her the real party in interest. However, the Supreme Court recognized that rescission is an equitable remedy that only a court may issue; individual parties may not unilaterally declare a rescission. Hence, whatever action was taken between Wallace and her providers, the action could not be given legal effect as to a third party without a ruling from a court. Therefore, the Supreme Court found that there was never the proper real party in interest analysis conducted.

The practice point from C-Spine is that while Michigan Court Rules require a claim to be filed by the real party in interest, and a claim by a party without an interest is generally grounds for dismissal, it is possible for a plaintiff to cure the defect by taking action that allows for the trial court to assess changing parties. Therefore, a claim brought by a party without an interest must take some affirmative action and seek a ruling from the court on the party-in-interest issue to regain status as the party in interest.