Michigan Court of Appeals; Docket # 342767; Unpublished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In this unanimous unpublished per curiam decision, the Court of Appeals reversed the trial court’s summary disposition order dismissing the plaintiff’s first-party action for no-fault PIP benefits and remanded for further proceedings. In reliance on its previous holding in Shah v State Farm Mut Auto Ins Co, 324 Mich App (2018), the Court of Appeals reaffirmed that anti-assignment clauses such as the one at issue in this case violate public policy and are therefore unenforceable. Furthermore, the Court of Appeals declined to declare a conflict with Shah, because that decision was based on the Supreme Court’s decision in Roger Williams Ins Co v Carrington, 43 Mich 252, which had not been overruled or superseded and was thus still controlling.
The plaintiff, American Anesthesia Associates (“AAA”) treated Constance Beden for injuries she sustained in a motor vehicle collision. AAA sought no-fault PIP benefits for the treatments it provided from Beden’s insurer, State Farm Mutual Automobile Insurance Company (“State Farm”), but State Farm denied the claims, arguing that Beden’s injuries were not caused by the subject collision. AAA then obtained an assignment of rights from Beden and commenced the instant action against State Farm. State Farm moved for summary disposition, arguing that the assignment was invalid because Beden’s policy contained an anti-assignment clause, and because AAA possessed no independent statutory cause of action against State Farm pursuant to the Supreme Court’s decision in Covenant. The trial court granted State Farm’s motion, and while AAA’s appeal was pending, the Court of Appeals issued its opinion in Shah. On appeal, AAA asserted that the Court of Appeals was bound to follow Shah, and State Farm conceded that Shah controlled, but also argued that Shah was wrongly decided and urged the Court of Appeals to declare a conflict with it.
The Court of Appeals reversed the trial court’s grant of summary disposition in favor of State Farm because the anti-assignment clause in Beden’s policy was essentially identical to the anti-assignment clause in Shah, which the Court held violated public policy and was therefore unenforceable.
Given the precedent of this Court’s decision in Shah, we are bound by Shah and reverse the trial court’s decision invalidating the assignment on the basis of the antiassignment clause. MCR 7.215(J)(1). Under Shah, the antiassignment clause in this case is unenforceable as violative of public policy to the extent it restricts the assignment of the insured’s accrued claim for PIP benefits. Shah, 324 Mich App at 196-201; see also Henry Ford Health, 326 Mich App at 410-411. Accordingly, AAA has a viable claim against State Farm pursuant to Beden’s valid assignment of her right to past and presently due PIP benefits. See Covenant, 500 Mich at 217 n 40 (stating that its holding was “not intended to alter an insured’s ability to assign his or her right to past or presently due benefits to a healthcare provider”).
The Court also declined to declare a conflict with Shah and convene a special panel under MCR 7.215(J), because Shah was based on the Supreme Court’s decision in Roger Williams, which had not been overruled or superseded and was therefore still controlling.
We decline State Farm’s request to declare a conflict with Shah and to convene a special panel under MCR 7.215(J). Shah was based on the Michigan Supreme Court’s decision in Roger Williams, 43 Mich at 254, where our Court held that contractual provisions prohibiting post-loss assignments of an accrued claim are unenforceable as contrary to our state’s public policy that “an accrued cause of action may be freely assigned after the loss.” Shah, 324 Mich App at 198- 200. This Court found that, because our Supreme Court has never explicitly rejected Roger Williams, nor has Roger Williams been clearly overruled or superseded, it is controlling. Shah, 324 Mich App at 199-201. While State Farm challenges the continued validity of Roger Williams and its applicability to post-loss assignments of no-fault PIP benefits, “[i]t is the Supreme Court’s obligation to overrule or modify its case law, and until and unless the Supreme Court takes such action, this Court and all lower courts are bound by the Supreme Court’s authority.” Auto-Owners Ins Co v Stenberg Bros, Inc, 227 Mich App 45, 51-52; 575 NW2d 79 (1997).”
