Michigan Court of Appeals; Docket # 341200; Unpublished
Judges Kelly, Fort Hood, and Redford; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
§500. 3143: Prohibition Against Assigning Future Rights to Benefits
TOPICAL INDEXING:
Assignments of Benefits—Validity and Enforceability
SUMMARY:
In this unanimous unpublished per curiam decision involving five separate motor vehicle collisions, the plaintiff, Bronson Health Care Group, Inc., filed five claims for no-fault PIP benefits against the defendants, Farm Bureau Mutual Insurance Company of Michigan and Farm Bureau General Insurance Company of Michigan (referred to herein, collectively, as “Farm Bueau”), For treatments Bronson provided to individuals injured in each of the separate collisions. The trial court denied the defendants’ motion for summary disposition in regard to all five claims, but the Court of Appeals reversed as to four of the claims, and affirmed as to the other one. The Court of Appeals determined that four of Bronson’s claims were barred because Bronson obtained assignments from its patients before providing treatment, and without specifying the type of treatments that would be administered or the amount each treatment would cost. Those four assignments, therefore, violated MCL 500.3143, which prohibits assigning future rights to benefits. The one other assignment, however, was executed after treatment was provided, and was allowed to proceed.
Bronson treated five separate individuals injured in five separate motor vehicle collisions. Before providing treatment to four of the individuals, Bronson obtained a “Registration Release Form,” which included an assignment of rights. As for the one remaining individual, Bronson obtained an assignment of rights after it provided treatment, which stated that Bronson could pursue payment of the patient’s medical bills from any responsible insurance payer. Bronson then filed a lawsuit against Farm Bureau to recover reimbursement for the treatments it provided. Farm Bureau moved for summary disposition, arguing (1) that the assignments were invalid because they assigned benefits for treatments that had not yet been provided at the time the assignments were executed, in violation of MCL 500.3143, (2) that all the assignments were invalid because each patient’s policy contained an anti-assignment clause, and (3) that Bronson lacked status as a real party in interest. The trial court denied Farm Bureau’s motion on all counts.
The Court of Appeals reversed the trial court’s denial of Farm Bureau’s motion for summary disposition with regard to the four patients who executed their assignments before they received treatment, but affirmed the trial court’s denial with regard to the fifth patient, who executed his assignment after receiving treatment. Since MCL 500.3143 only allows a patient to assign past or presently due benefits, not future benefits, only Bronson’s patient who executed his assignment after receiving treatment did so properly.
The pretreatment assignments upon which Bronson relies, however, were executed before any treatment was provided. Bailey, Hollenbeck, Kiewiet, and Lininger only signed the registration release forms which plainly did not assign rights to pursue benefits for past or presently due services Bronson already provided. Instead, these insureds assigned their rights to PIP benefits for unknown services to be provided in future. The registration release forms did not render the insureds liable within the meaning of the no-fault act at the time of their execution because the insureds did not become legally responsible to pay for allowable expenses at that time. Because all of the rights to benefits contemplated by the assignments involved rights to benefits payable in the future, these assignments executed before treatment were void under MCL 500.3143. Consequently, the trial court erred by denying Farm Bureau’s motion for summary disposition regarding Bronson’s claims based upon the void pretreatment assignments executed by the insureds.
We affirm the trial court’s decision regarding Bronson’s claims based upon Burgan’s assignment of his rights to payment of PIP benefits; however, in all other respects, the trial court erred by denying Farm Bureau’s motion for summary disposition respecting the registration release forms’ assignments executed by the insureds because, in the absence of valid assignments, Bronson’s claim failed to state a claim upon which relief may be granted, and as a healthcare provider, Bronson had no independent statutory claim against Farm Bureau. See Bronson Healthcare Group, Inc v Mich Assigned Claims Plan, 323 Mich App 302, 305; 917 NW2d 682 (2018). Accordingly, Farm Bureau was entitled to summary disposition as a matter of law respecting Bronson’s claims based upon the pretreatment assignments by the insureds.
Next, the Court of Appeals affirmed the trial court’s ruling that the anti-assignment clauses in each of Bronson’s patient’s automobile insurance policies were unenforceable pursuant to the Court of Appeal’s prior decision in Shah. In Shah, the Court determined that a similar anti-assignment clause ran contrary to public policy, and was therefore unenforceable.
Lastly, the Court of Appeals agreed with Farm Bureau that the trial court erred by not dismissing Bronson’s claims for declaratory relief and a judgment that Farm Bureau owed Bronson PIP benefits, because Bronson had no direct claim against Farm Bureau pursuant to the Michigan Supreme Court’s decision in Covenant. Without valid assignments, “an action by a healthcare provider regarding coverage for PIP benefits is not an appropriate case for declaratory judgment, particularly when the insured individuals are not parties to the action.”
In Covenant, our Supreme Court rejected the conclusion that healthcare providers have standing to raise direct claims for PIP benefits. See id. at 195-195. The law of declaratory judgments incorporates the doctrine of standing, UAW, 295 Mich App at 495, and therefore, Bronson lacks standing to sue Farm Bureau in relation to the insurance policies between the insurer and the insureds for the matter at bar. Bronson’s legal right to recover payment from its patients does not create an actual controversy between itself and Farm Bureau that permits it to pursue a declaratory judgment on claims for PIP benefits which it personally does not possess. See Pontiac Police & Fire Retiree Prefunded Group Health & Ins Trust Bd of Trustees v Pontiac No 2, 309 Mich App 611, 624-625; 873 NW2d 783 (2015).
Specifically, Bronson is not a party to the contracts between Farm Bureau and the insureds, and Bronson has no legal rights under the insurance contracts requiring preliminarily determination. See Detroit, 262 Mich App at 550-551. Rather, Bronson’s legal rights are governed by its relationship with its patients and it has recourse against them for its reasonable charges. Covenant, 500 Mich at 217. Indeed, declaring Farm Bureau liable for PIP benefits owed to the injured persons will not resolve the rights and obligation of all interested parties; to the contrary, the injured persons—whose rights are perhaps most affected—have not been joined to the action, making it doubtful that declaratory judgment is appropriate. See Lansing Sch Ed Ass’n, 293 Mich App at 516-517 (“Our Supreme Court has long recognized the necessity of having all interested parties before it in order to have a case that is appropriate for declaratory judgment.”). Therefore, the trial court erred by denying summary disposition to Farm Bureau respecting Bronson’s claim for declaratory judgment because, in the absence of valid assignments from the insureds, no actual controversy exists between Farm Bureau and Bronson.
