Michigan Court of Appeals; Docket #357080; Unpublished
Judges Shapiro, Rick, and Garrett; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
Assignments of Benefits – Validity and Enforceability
In this unanimous, unpublished, per curiam decision, the Court of Appeals affirmed the trial court’s denial of Defendant Suburban Mobility Authority for Regional Transportation’s (“SMART”) motion or summary disposition, seeking dismissal of a portion of Plaintiff David Perkins’s claim for no-fault PIP benefits. The Court of Appeals held that Perkins and two of his providers, Renew Physical Therapy (“Renew”) and Farmbrook Interventional Pain & EMG (“Farmbrook”), could mutually rescind an assignment Perkins executed in favor of Renew and Farmbrook, such as would allow Perkins to pursue the formerly-assigned benefits, himself. Notably, the Court of Appeals reached this holding despite the fact that Renew and Farmbrook would have been precluded from pursuing the assigned benefits in a separate action of their own because of the one-year-back rule.
David Perkins was injured in a motor vehicle accident, after which he received treatment from multiple providers, including Renew and Farmbrook. He assigned his right to pursue no-fault PIP benefits to various of his providers, executing an assignment in favor of Renew on June 28, 2019, and an assignment in favor of Farmbrook on July 29, 2019. In early October 2020, Perkins, Renew, and Farmbrook entered into agreements to rescind the assignments—which Renew and Farmbrook could no longer pursue because of the one-year-back rule—and then on November 11, 2019, Perkins filed a first-party action against SMART, seeking, in part, the formerly assigned benefits. SMART moved for summary disposition, arguing that Perkins could not pursue benefits related to his treatment from Renew and Farmbrook because the right to do so had been assigned to Renew and Perkins and the revocation agreements were invalid for want of consideration. The trial court disagreed, finding that the revocations were valid.
The Court of Appeals affirmed the trial court’s denial of SMART’s motion, holding that the revocations executed by Perkins, Renew, and Farmbrook were valid and that Perkins could seek to recover the formerly assigned benefits in this action. In so holding, the Court rejected SMART’s argument that the revocations should be deemed void because they were entered into more than one year after the assignments were originally executed, and thus “did not transfer anything to plaintiff” because Renew and Farmbrook were precluded from recovering any benefits by virtue of the one-year-back rule. The Court found that the revocations were “most akin to a mutual rescission of a contract,” and that, since they did not function as new assignments or transfer any rights back to Perkins, they were valid.
“In this case, the revocations signed by both plaintiff and the respective provider expressly ‘revoke[d] and nullif[ied] any executed assignments.’ The parties do not identify, and we are not aware of, any caselaw or authority discussing the legal effect of a mutual revocation of an assignment. However, for the reasons discussed below, we conclude that the revocations in this case are most akin to a mutual rescission of a contract.
In this case, plaintiff and the providers clearly stated their intent to mutually release each other from the assignments and return to the status quo that existed prior to the assignments. The key word in our view is that the revocations “nullif[ied]” the assignments. ‘Nullify’ means ‘[t]o make void; to render invalid.’ Black’s Law Dictionary (10th ed). And a ‘void contract’ is one ‘that is of no legal effect, so that there is really no contract in existence at all.’ Black’s Law Dictionary (10th ed). Accordingly, the word ‘nullify’ demonstrates the parties’ intent to treat the assignments as having never been made. Conversely, there is no language in the revocations indicating that the parties intended the revocations to function as a new assignment, or that the providers were affirmatively transferring rights back to plaintiff.
Defendant does not argue that the assignments in this case were irrevocable. Nor does defendant identify any caselaw or legal authority suggesting that a mutual revocation of an assignment must be viewed as a new assignment or an assignment back to the assignor. And we see no basis to reach that conclusion. To the contrary, general principles of contract law establish that plaintiff and the providers were free to undo their contractual relationship and proceed as if the assignments had never been made. See Bazzi, 502 Mich at 409; Tuomista, 310 Mich at 384; Johnson, 292 Mich App at 374 n 5. Accordingly, the trial court correctly ruled that the mutual revocations were valid.”