Michigan Court of Appeals; Docket # 340656; Unpublished
Judges Swartzle, Jansen, and O’Brien per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Not applicable
TOPICAL INDEXING:
Medical Provider Standing (Post-Covenant)
CASE SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals reversed the grant of summary disposition for Defendant Hasting Mutual Insurance (“Hasting”) regarding the assignment-of-benefits theory and upheld the grant of summary disposition for Hasting regarding the third-party beneficiary theory. The Court of Appeals reversed the lower court regarding the assignment-of-benefits theory because it had previously decided in Shah v. State Farm Mutual Insurance Co, , ___ Mich App ___,(2018) (Docket No. 340370), that anti-assignment provisions in no-fault contracts were unenforceable. The Court upheld the lower court regarding the third-party beneficiary theory because Plaintiff Michigan Head & Spine (“MHS”) were not identified as a beneficiary in the no-fault policy.
Kelly Potocki (“Potocki”) received medical services from MHS after she was involved in an automobile accident. Potocki assigned her right to payment to MHS. MHS allegedly did not receive full payment for its services from Hasting. Hasting asserted that MHS’s claim was barred by the anti-assignment-of-benefits and third-party beneficiary theories. The trial court granted summary disposition for Hasting under both theories. MHS appealed.
The Court of Appeals reversed summary disposition under the anti-assignment-of-benefits theory. The Court noted that it had recently ruled anti-assignment provisions in no-fault policies to be unenforceable in Shah for past or present no-fault benefits. Because Potocki’s assignment was only for past or presently due benefits, the Court ruled that the trial court’s order for summary disposition under the anti-assignment-of-benefits theory conflicted with its earlier Shah decision. Thus, the Court reversed the lower court.
“Here, Potocki’s assignment to plaintiff was for past or presently due benefits. Under Shah, the anti-assignment provision in defendant’s policy is void as against public policy and presents no obstacle to plaintiff’s claim under an assignment-of-benefits theory. The trial court erred by concluding otherwise.”
The Court also rejected Defendant’s argument that prohibiting assignment would be consistent with Michigan’s prohibition against splitting causes of action. Hasting cited to General Accident Fire & Life Assurance Corp. v Sircey, 354 Mich 478, 482; 93 NW2d 315 (1958), which stated that in Michigan “the rule against splitting of causes of action is strictly enforced.” However, the Court found that subsequent to General Accident, “MCR 2.205 has replaced the common-law rule against splitting a cause of action.” Thus, the Court rejected Defendant’s argument.
Next, the Court upheld the lower court’s order for summary disposition regarding the third-party beneficiary theory. The Court cited to Schmalfeldt v North Pointe Ins Co, 469 Mich 422, 427 (2003), which stated: “[t]he plain language of this statute reflects that not every person incidentally benefitted by a contractual promise has a right to sue for breach of that promise.” The Court explained that the contract itself will explain if a third-party is an intended third-party beneficiary and therefore able to bring an action. In this case, Plaintiff failed to identify any language in the no-fault policy that would make it an intended beneficiary. Thus, the Court upheld the order for summary disposition because Plaintiff was not described as an intended beneficiary.
“Here, plaintiff has not identified any language in the no-fault insurance policies that directly refers to plaintiff or that sufficiently describes a class of which plaintiff is a member. Thus, plaintiff has not shown than an issue of fact exists regarding whether it was an intended beneficiary of the PIP policies. The trial court thus properly granted summary disposition to defendant on plaintiff’s third-party-beneficiary claim.”
Ultimately, the Court vacated the lower court’s order for summary disposition regarding the anti-assignment theory and it upheld the lower court’s order for summary disposition regarding the third-party beneficiary doctrine.
