Michigan Court of Appeals; Docket # 343573; Unpublished
Judges Cameron, Markey, and Borrello; 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In this unanimous unpublished per curiam opinion brought by a medical provider pursuant to an assignment agreement, summary disposition for defendant (on the basis of an anti-assignment clause) was REVERSED because the Defendant’s anti-assignment clause was invalid pursuant to the Court’s previous ruling in Jawad A. Shah, M.D., P.C., v. State Farm Mut. Auto. Ins. Co., 324 Mich. App. 182 (2018).
The plaintiff, Back in Motion Chiropractic DC, PLLC, provided medical treatment to an injured motorist, Sabrina Gater, who then assigned her rights to no-fault PIP benefits to the plaintiff. The plaintiff filed suit against the Gater’s automobile insurance company, State Farm Mutual Automobile Insurance Company, to recover payment for the treatments it provided to Gater, and State Farm moved for summary disposition, relying on the Supreme Court’s decision in Covenant Med. Ctr., Inc. v State Farm Mut. Auto. Ins. Co, 500 Mich 191 (2017) that medical providers do not possess an independent cause of action against no-fault insurers. The plaintiff then amended its complaint to reflect the assignment it obtained from Gater, but the trial court granted summary disposition for State Farm regardless, ruling that the anti-assignment clause in Gater’s policy was controlling.
The Court of Appeals reversed the trial court’s grant, citing its prior holding in Shah that a nearly identical anti-assignment clause was invalid because it violated public policy.
The factual scenario in Shah is nearly identical to the facts of this case. In Shah, the insured was injured in a car accident; he then assigned his right to payment of no-fault benefits for rendered medical services to the plaintiff, his healthcare provider. Shah, 324 Mich App at 186-188. The plaintiff then sued the defendant, the injured person’s insurance company. Id. After Covenant was issued, the plaintiff obtained an assignment of rights to pursue payment of no-fault benefits from the defendant. Id. at 187-188. The Shah Court determined that “Roger Williams [Ins Co v Carrington, 43 Mich 252; 5 NW2d 303 (1880)] essentially held that an accrued cause of action may be freely assigned after the loss and that an antiassignment clause is not enforceable to restrict such an assignment because such a clause violates public policy in that situation.” Shah, 324 Mich App at 200. Accordingly, the Shah Court determined that “the antiassignment clause in the instant case is unenforceable to prohibit the assignment that occurred here—an assignment after the loss occurred of an accrued claim to payment—because such a prohibition of assignment violates Michigan public policy that is part of our common law as set forth by our Supreme Court.” Id. Based on Shah, the trial court erred in this case when it granted defendant’s motion for summary disposition because, once a claim for payment is made after a cause of action has accrued, the antiassignment clause in defendant’s insurance policy contravenes public policy and so is void and unenforceable.
