Michigan Court of Appeals; Docket # 343189; Unpublished
Judges O’Brien, Fort Hood, and Cameron; Per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Assignments of Benefits—Validity and Enforceability
SUMMARY:
In this unanimous unpublished per curiam decision, the Court of Appeals affirmed the trial court’s summary disposition order dismissing the plaintiff’s first-party action to recover no-fault PIP benefits on the basis of assignments. The Court of Appeals found that the subject assignments were invalid because the language therein did not actually assign the plaintiff the right to pursue no-fault benefits from the defendant—they only provided that insurance payments could be made directly to the plaintiff. Moreover, the subject assignments only assigned future, not past or presently due, benefits, in contravention of MCL 500.3143. An alternative theory of recovery presented by the plaintiff—that both the plaintiff and the defendant entered into a contract with an entity known as Cofinity, which provided that “auto insurers paying medical benefits are to pay 80% of the fees that plaintiff charges”—was also rejected by the Court of Appeals, in part because the defendant did not actually have a contract with Cofinity.
On October 2, 2004, Auto-Owners’ insured, Daniel Dothsuk, was injured in a motor vehicle collision, and in 2016 and 2017, Dothsuk received treatment for his injuries at Oaklawn Hospital. The charges for these treatments amounted to $482,209.98, and for which Auto-Owners refused to reimburse Oaklawn. Oaklawn brought a first-party complaint against Auto-Owners, and Auto-Owners moved for summary disposition, arguing that Oaklawn did not have an independent cause of action against it pursuant the Michigan Supreme Court’s decision in Covenant.
The trial court ultimately granted Oaklawn leave to amend its complaint to attach consent-to-treat forms that Oaklawn argued constituted assignments of rights. Oaklawn also amended its complaint to include a count that Auto-Owners breached a contract it had signed onto with an entity known as Cofinity, which allegedly entitled Oaklawn to payment for the treatments it provided to Dothsuk. Auto-Owners responded by arguing that the assignments were invalid for multiple reasons: first, the assignments were mere consent-to-treat forms, and did not actually assign any rights to Oaklawn to pursue payment of PIP benefits against Auto-Owners; second, the assignments were for future benefits, in violation of MCL 500.3143; third Dothsuk’s policy prohibited any assignment to which Auto-Owners did not consent; and fourth, Michigan law does not allow for a single cause of action to be split into multiple causes of action—i.e. partial assignments. Auto-Owners further argued that the Cofinity contracts only set forth the rates that Oaklawn could charge for medical services; they did not guarantee payment, and Auto-Owners reserved the right to determine if benefits should be paid pursuant to the insurance policy.
The trial court ultimately granted Auto-Owners motion for summary disposition, and the Court of Appeals affirmed.
The Court of Appeals first dispensed with Auto-Owners’ argument that the anti-assignment cause in Dothsuk’s policy barred him from assigning his claims to Oaklawn. Pursuant to the Court of Appeals’ decision in Shah, such anti-assignment clauses are invalid because they violate public policy.
The Court of Appeals determined next, however, that the subject assignments were not actually assignments at all. Rather, as Auto-Owners argued, they were merely consent-to-treat forms. They did not assign to Oaklawn the right to pursue recovery of no-fault benefits directly against Auto-Owners.
In our view, the consent to treatment form, even though in pertinent part captioned “Assignment of Interest[,]” and stating Dothsuk’s intention that payment of benefits be paid directly to Oaklawn, does not demonstrate that Dothsuk intended that plaintiff would be assigned the right to pursue recovery of no-fault benefits directly against defendants. Rather, the language in the consent for treatment form reflects that Dothsuk intended to allow that insurance payments be made directly to plaintiff.
The Court of Appeals next determined that the consent-to-treat forms, even if they were construed as assignments, contravened MCL 500.3143 because they assigned future benefits, not past or presently due benefits. When Dothsuk executed the forms, he had not yet actually incurred any charges for his medical treatment, “he was merely requesting and providing consent to in fact receive medical treatment as a general matter.”
When Dothsuk signed the consent for treatment forms, he had not yet incurred allowable expenses for his medical treatment, at that point he was merely requesting and providing consent to in fact receive medical treatment as a general matter. Notably, the consent for treatment form provides that Dothsuck was “request[ing] and consent[ing] to health care provided by [plaintiff], its physicians, and health care providers.” The consent to treatment form also specified that health care could include “examinations, diagnostic procedures and treatment considered appropriate by my attending physician(s) or other health care providers at Oaklawn.” The consent for treatment form also specified that Dothsuk reserved the right to refuse any medical treatment, and that “unless an emergency or extraordinary circumstances” arose, “no substantial procedures will be performed upon me” unless Dothsuk had discussed the proposed treatment, to his personal satisfaction, with his physician or other appropriate health care providers. Accordingly, when he signed the consent to treatment forms, while Dothsuk requested that plaintiff provide medical treatment and he consented to health care being provided by plaintiff, PIP benefits had not accrued because allowable expenses had not yet been incurred. MCL 500.3110(4). Under such circumstances, the trial court correctly granted summary disposition in favor of defendants, because even if the consent for treatment forms were construed to be valid assignments, they contravened the prohibition against the assignment of future benefits set forth in MCL 500.3143.
As to the issue of partial assignments, the Court of Appeals rejected Auto-Owners contention that
