Michigan Court of Appeals; Docket # 339740 Unpublished
Judges O’Connell, Cavanaugh, and Servitto per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
Medical Provider Standing (Post-Covenant)
In this unanimous unpublished per curiam opinion the Court of Appeals upheld the trial court’s grant of summary disposition denying Plaintiff Insight Institute of Neurosurgery and Neuroscience (“Insight”) and others a statutory cause of action and reversed the trial court’s grant of summary disposition denying Insight a cause of action based on an anti-assignment contract clause. The Court of Appeals upheld the trial court’s grant of summary disposition denying Insight a statutory cause of action because of the Michigan Supreme Court’s ruling in Covenant Med. Ctr., Inc. v State Farm Mut. Auto Ins. Co., 500 Mich 191, 196, (2017) disallowed independent statutory actions by medical providers. The Court of Appeals reversed the trial court’s grant of summary disposition denying Insight a cause of action based on an anti-assignment contractual provision because of the Court’s prior ruling in Shah v. State Farm Mut Auto Ins Co, ___ Mich App ___, (2018) (Docket No. 340370); slip op at 9, which found anti-assignment claims to be against public policy.
Insight provided medical treatment to Antwan Johnson (“Johnson”) after he was involved in an automobile accident. Defendant State Farm Auto Mutual Insurance Company (“State Farm”) did not fully pay Insight for treatment it provided, and Insight brought an action to recover for the unpaid bills. During the pendency of the trial, the Michigan Supreme Court decided Covenant, holding that medical providers did not have an independent cause of action under the no-fault statutory scheme. The trial court granted summary disposition for State Farm because (1) medical providers do not have a statutory cause of action against an insurance company and (2) the auto no-fault policy contained an anti-assignment provision.
The Court of Appeals upheld summary disposition regarding the statutory cause of action. Insight argued that Covenant did not apply retroactive; however, the Court of Appeals had previously held that Covenant did apply retroactively. Therefore, the Court upheld the lower court’s grant of summary disposition.
“This Court has held that Covenant applies retroactively. W A Foote, 321 Mich App 159. Accordingly, we affirm the trial court’s ruling that Covenant applies retroactively to bar plaintiffs’ claim.”
The lower court also reversed summary disposition based on the anti-assignment clause in the no-fault contract. Johnson had assigned his right to collection to Insight; however, the lower court found that this assignment was faulty because of the contract provision disallowing it. The Court of Appeals noted that it had previously held in Shah, that anti-assignment provisions were unenforceable because they were against public policy. Therefore, it reasoned that this anti-assignment clause was unenforceable. In light of this decision, the Court vacated the order of summary disposition and remanded the case.
After the trial court issued its final ruling in this case, this Court held that a post-loss anti-assignment clause was unenforceable because it violated public policy. Shah, ___ Mich App at ___; slip op at 9. Accordingly, we reverse the trial court’s ruling that the antiassignment clause in the insurance policy barred Johnson’s assignment of rights.
Thus, the Court remanded the case back to the lower court to reconsider it in light of Shah.