Michigan Court of Appeals; Docket # 350498; Unpublished
Judges Fort Hood, Gadola and Letica; 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In this unanimous unpublished per curiam opinion, the Court of Appeals affirmed the trial court’s holding that a medical provider did not have standing to assert a claim against an insured’s insurer when the insured entered into an arbitration agreement with the insured prior to assigning his right to payment to the medical provider. In doing so, the Court noted that an assignee obtains only the rights the assignor possessed at the time of the assignment.
This case arose from a motor vehicle accident in which William Ford II was injured. Ford received treatment for his injuries from plaintiff Michigan Spine & Brain Surgeons, PLLC. Following the accident, Ford filed a claim for no fault benefits with the Michigan Automobile Insurance Placement Facility, which assigned the claim to defendant Citizens Insurance Company through the Michigan Assigned Claims Plan. Ford Subsequently brought suit against defendant and others seeking no fault PIP benefits. Ford and defendant resolved the litigation by entering into an arbitration agreement. The agreement provided that “the arbitration covered all claims for PIP benefits and all money due and owing to Ford, then or in the future, related to the accident,” and that the arbitration would include “any and all medical billings known to either party,” except for certain specified medical providers who had either intervened, settled privately, or filed independent causes of action.” Plaintiff was not among these providers. The agreement further contained an anti-assignment clause, which stated:
"Claimant shall not sign any assignments for any No-fault benefits. Should Claimant assign any of the Michigan No-fault benefits to be included in this arbitration, Claimant shall indemnify and hold harmless the Respondent Insurer now and in the future for the medical bills assigned and for the costs of having to defend against any such assignment[.]"
After entering into the agreement, Ford underwent surgery with plaintiff, incurring additional medical expenses. Ford assigned to plaintiff his right to payment for the surgery from defendant. After defendant declined to pay plaintiff for Ford’s new medical expenses, plaintiff filed the instant action. Defendant moved for summary disposition, contending that at the time of the assignment, Ford did not have the right to reimbursement from defendant because he had already entered into an arbitration agreement with defendant and therefore no longer had an interest against defendant to assign to plaintiff. Defendant further argued that the agreement specifically barred Ford from assigning claims. In response, plaintiff argued that defendant had not acted in good faith, and that Ford had breached the arbitration agreement. The trial court granted defendant’s motion for summary disposition, holding that because Ford had “no right to payment from [defendant] to assign to plaintiff at the time of the purported assignment,” the assignment was not valid, and plaintiff lacked standing.
On appeal, the Court first examined plaintiff’s claim that the trial court erred by granting defendant’s motion for summary disposition on the basis that plaintiff lacked standing to maintain a claim against defendant for medical care provided to Ford. In analyzing this claim, the Court noted that the Michigan Supreme Court’s decision in Covenant Med Ctr, Inc v State Farm Mut Auto Ins Co, 500 Mich 191, 196; 895 NW2d 490 (2017) provided that a healthcare provider lacked standing to bring a direct cause of action for PIP benefits against an insurer. However, the Court noted that an insured may assign his or her right to past or presently due benefits to a healthcare provider. In doing so, the assignee would stand in the shoes of the assignor, acquiring “the same rights and being subject to the same defenses . . . at the time of the assignment.” Thus, the Court found that
"When Ford assigned to MSBS his right to payment by Citizens for his surgery, he had already agreed to submit all claims for PIP benefits that stemmed from the accident to a neutral arbitrator and had stipulated to the dismissal of his lawsuit against Citizens with prejudice. Therefore, at the time Ford assigned his right to payment of PIP benefits to MSBS, he had no right to assert a legal action against Citizens for these claims, and could not assign to MSBS more rights than he possessed."
Accordingly, the Court held that the trial court did not err in its holding that plaintiff did not have standing to assert a claim against Citizens for payment of PIP benefits for medical care provided to Ford. Further, the Court held that because plaintiff lacked standing in this respect, plaintiff also lacked the ability to challenge the validity of the arbitration agreement between Ford and defendant Citizens.
