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Mutual Service Casualty Insurance Co. v. Midway Massage

March 29, 2005

MUTUAL SERVICE CASUALTY INSURANCE COMPANY, APPELLANT,
v.
MIDWAY MASSAGE, INC., ET AL., RESPONDENTS, MINNESOTA INSTITUTE OF NEUROLOGY, P.A., RESPONDENT, TRANG NGUYEN, ET AL., RESPONDENTS.



Ramsey County District Court File No. C6-03-6609.

Considered and decided by Toussaint, Chief Judge; Hudson, Judge; and Crippen, Judge.*fn1

SYLLABUS BY THE COURT

The Minnesota Professional Firms Act, Minn. Stat. §§ 319B.01-.12 (2004), does not create an express or implied private cause of action.

The opinion of the court was delivered by: Toussaint, Chief Judge

Affirmed

OPINION

On appeal from a judgment dismissing appellant Mutual Service Casualty Insurance Company's (MSI) declaratory action for failure to state a claim, MSI argues that respondents Midway Massage, Inc., Full Circle Physical Therapy, Inc., and Minnesota Institute of Neurology, P.A. are incorporated in contravention to the Minnesota Professional Firms Act, Minn. Stat. §§ 319B.01-.12 (2004). Because the Minnesota Professional Firms Act does not create an express or implied private cause of action, we affirm.

FACTS

Appellant Mutual Service Casualty Insurance Company (MSI) is a no-fault insurer. Following a motor vehicle accident in March 2002, respondents Thai Dinh and Trang Nguyen sought treatment for their injuries from respondents Midway Massage, Inc. (Midway Massage), Full Circle Physical Therapy, Inc. (Full Circle), and Minnesota Institute of Neurology, P.A. (MIN) (collectively the clinics). Dinh and Nguyen submitted claims to MSI for medical insurance benefits, but MSI denied payment. Consequently, Dinh and Nguyen petitioned for no-fault arbitration.

MSI filed a rule 5(f) statement with the American Arbitration Association opposing Dinh and Nguyen's petition, arguing that MSI's defense to the arbitration incorporated legal issues and the arbitrator lacked jurisdiction. Shortly thereafter, MSI filed a complaint for declaratory relief in Ramsey County District Court, requesting a judgment dismissing or staying the arbitration until the legal issues involved in the declaratory relief action were resolved. The complaint alleges that the treatment expenses submitted by the clinics are barred by the clinics' violation of the Minnesota Professional Firms Act (MPFA)*fn2 and the Corporate Practice of Medicine Doctrine (CPMD). MSI also made a separate motion to dismiss or stay Dinh and Nguyen's upcoming arbitration.

According to the complaint, Full Circle and Midway Massage are incorporated under Minn. Stat. ch. 302A (2002) and they are operated by individuals who are not licensed in massage or physical therapy. MSI argued that Midway Massage and Full Circle were professional firms and, therefore, must elect to incorporate under the MPFA. MIN is incorporated under chapter 302A and the MPFA by a licensed chiropractor. Because MIN employs licensed physicians, MSI argued that MIN was invalidly incorporated under the MPFA. Ultimately, MSI argued that it was absolved from making payments to the insureds who sought treatment from clinics incorporated in contravention to statute, MPFA and the CPMD.

In lieu of filing an answer, the clinics moved to dismiss MSI's action for failure to state a claim upon which relief can be granted under Minn. R. Civ. P. 12.02(e). Dinh and Nguyen moved to dismiss MSI's complaint against them for insufficiency of process under Minn. R. Civ. P. 12.02(d). The district court denied MSI's motion to stay the arbitration in July 2003.

On January 16, 2004, the district court granted the clinics' motion to dismiss, awarded costs and disbursements, and directed the clinics' counsel to submit affidavits regarding attorney fees. Additionally, the district court held that the MPFA does not create an express or implied private cause of action and, therefore, MSI had failed to state a claim under rule 12.02(e).

On May 24, 2004, the district court dismissed MSI's complaint against Dinh and Nguyen for insufficiency of process, incorporated its January 16, 2004 order, and awarded attorney fees to ...


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