Michigan Court of Appeals; Docket #355452; Unpublished
Judges Boonstra, Cavanagh, and Riordan; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion; Link to Concurrence
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Revised Judicature Act – Arbitration (MCL 600.5001, Et Seq.)
Assignment of Benefits – Validity and Enforceability
SUMMARY:
In this unanimous, unpublished, per curiam decision (Boonstra, concurring), the Court of Appeals affirmed the trial court’s order granting Defendant Suburban Mobility Authority for Regional Transportation’s (“SMART”) motion to strike and exclude certain of Plaintiff Alice Jenkins’ claims for no-fault PIP benefits—those she had assigned to various medical providers—from arbitration. The Court of Appeals held, first, that the trial court had jurisdiction to decide whether Jenkins’s assigned claims were subject to the arbitration agreement, and second, that Jenkins’s assigned claims were not arbitrable under the terms of the parties’ arbitration agreement, because those claims were no longer Jenkins's to pursue.
After Alice Jenkins was injured boarding a SMART bus, she received treatment from numerous medical providers. She executed assignments in favor of five of the providers, and at some point thereafter, filed a first-party action against SMART. Jenkins and SMART entered into an arbitration agreement, after which the trial court dismissed the case but retained limited jurisdiction regarding the arbitration. At arbitration, Jenkins included claims which she had assigned to her providers, prompting SMART to file a motion in the trial court under MCR 3.602 to exclude the assigned claims from arbitration. Jenkins argued that the trial court lacked jurisdiction to rule on the claims she submitted to arbitration because the arbitration agreement vested in the arbitration panel the exclusive authority to decide all factual and legal claims between the parties. The trial court disagreed with Jenkins and granted SMART’s motion.
The Court of Appeals affirmed the trial court’s order granting SMART’s motion, holding, first, that the trial court did have jurisdiction to strike the assigned claims from arbitration. In so holding, the Court of Appeals noted that SMART’s motion was brought pursuant to MCR 3.602: MCR 3.602(B)(1) allows a party to “bring a motion to stay arbitration ‘or for another order under this rule,’ ” while MCR 3.602(A) vests in the trial court the powers enumerated in the Uniform Arbitration Act, “one of which permits the trial court to decide the issue of whether a controversy is subject to an arbitration agreement. MCL 691.1686(2).”
“Plaintiff argues that the issue of whether her claims, which she assigned to various medical providers, should be subject to arbitration was exclusively an issue for the arbitration panel to decide. This argument is meritless. Under MCL 691.1686(2), ‘[t]he court shall decide whether . . . a controversy is subject to an agreement to arbitrate.’ Our Supreme Court recently reaffirmed this principle in Lichon v Morse, ___ Mich ___, ___; ___ NW2d ___ (2021) (Docket Nos. 159492; 159493); slip op at 10 (holding that the issue of ‘whether a dispute is subject to arbitration is for a court to determine’). In this case, defendant challenged whether some of plaintiff’s claims were subject to the arbitration agreement by bringing a motion to strike in the trial court under MCR 3.602(B)(1). Under that court rule, a party may bring a motion to stay arbitration ‘or for another order under this rule.’ MCR 3.602(B)(1). Moreover, MCR 3.602(A) specifically states the trial court has the powers enumerated in the Uniform Arbitration Act, one of which permits the trial court to decide the issue of whether a controversy is subject to an arbitration agreement. MCL 691.1686(2). Therefore, the trial court had jurisdiction to decide whether plaintiff’s claims in dispute—the ‘controversies’—were subject to the arbitration agreement.”
The Court of Appeals held, second, that irrespective of the foregoing jurisdictional analysis, Jenkins’s assigned claims were not arbitrable given the language of the arbitration agreement. The arbitration agreement provided, in pertinent part, “ ‘The parties hereby agree to submit all factual and legal claims, defenses, and relevant issues relating to Plaintiff’s claim for personal protection insurance (PIP) benefits arising out of an incident occurring on April 24, 2017. . . .’ ” The Court held that the assigned claims did not qualify as part of “Plaintiff’s claim” under the arbitration agreement because those claims no longer belonged to Jenkins, but rather to the assignees.
“Paragraphs 1 and 14 specifically allows the parties (i.e., plaintiff and defendant) to submit claims and defenses related to plaintiff’s overall claim for PIP benefits, and states that the contested issues include whether plaintiff is entitled to PIP benefits. Moreover, Paragraph 6 explicitly excludes from arbitration all claims related to providers who have already brought their own lawsuits or intervened in this lawsuit. Since the arbitration agreement: (1) allows the parties to submit claims and defenses; (2) states that the issues subject to arbitration include whether plaintiff is entitled to PIP benefits; and (3) exempts claims of medical providers that have already proceeded against defendant on their own accord, the most reasonable interpretation of the arbitration agreement is that it only covers all PIP claims that plaintiff could bring related to the motor vehicle accident. If the parties intended to subject any and all claims related to the underlying motor vehicle accident to arbitration regardless of whether those claims were possessed by plaintiff, the arbitration agreement would not specifically limit the contested issues to whether and to what extent plaintiff herself was entitled to PIP benefits. Therefore, the arbitration agreement governs claims that plaintiff herself may bring for PIP benefits.
To that end, plaintiff cannot arbitrate the claims related to the treatment provided by the identified medical providers because those claims are no longer hers to maintain. It is undisputed that plaintiff executed respective assignment of rights forms to the five medical providers at issue. It is also undisputed that the assignment of rights forms stated that plaintiff assigned all of her rights to receive or collect PIP benefits for the services rendered by the medical providers. Under Shah, 324 Mich App at 197, plaintiff was permitted to assign her claims for PIP benefits to her medical providers. Once plaintiff assigned her rights, however, the medical providers exclusively obtained those rights. See Cannon Twp v Rockford Pub Sch, 311 Mich App 403, 412; 875 NW2d 242 (2015) (explaining that an ‘assignment vests in the assignee all rights previously held by the assignor’). Since plaintiff assigned her rights to collect PIP benefits to the medical providers at issue in this case, plaintiff possesses no rights with respect to those claims. Thus, the disputed claims are not subject to arbitration agreement. Registered Nurses, 328 Mich App at 536. In other words, because the arbitration agreement governs only those claims that plaintiff herself may maintain for PIP benefits, and because the claims in dispute are no longer maintained by plaintiff herself but instead by the medical providers, the claims are not governed by the arbitration agreement.”
Judge Gleicher concurred, writing separately only to emphasize what he considered the determinative fact in this case: that "the assignments contained no qualification or reservation of rights by plaintiff."
