Michigan Court of Appeals; Docket #307253; Published
Judges Murphy, Donofrio, and Gleicher; Unanimous
Official Michigan Reporter Citation: Not applicable; Link to Opinion 
STATUTORY INDEXING:
Service Providers as Payees [3112]
TOPICAL INDEXING:
Release and Settlements
CASE SUMMARY:
In this unanimous published Opinion, the Michigan Court of Appeals reversed the trial court determination that plaintiff Michigan Head & Spine Institute was entitled to be paid the sum of $12,450 for medical expenses incurred by its patient, Pellumbesha Biba, who was insured by a policy of insurance with State Farm. The Court of Appeals held that a settlement agreement entered into between Biba and State Farm waiving entitlement to future no-fault benefits was binding as to plaintiff and also as to her medical providers for medical care provided after entry of the release document.
Biba was involved in a motor vehicle accident on January 20, 2008 and was insured by a no-fault policy with State Farm. On July 30, 2009, in exchange for $35,000 in settlement of ongoing litigation, Biba executed a release which released State Farm from any and all claims for no-fault insurance benefits “to date and/or which may be incurred at any time in the future.”
The release contained one exception that would allow for making a claim for expenses for accident-related medical care provided by the University of Michigan Health System, if that care is provided prior to July 6, 2010.
On February 26, 2010, more than six months after signing the release, but before the July 6, 2010 deadline to submit claims related to treatment at the University of Michigan, Biba began treating with plaintiff Michigan Head & Spine Institute. State Farm refused to reimburse the Michigan Head & Spine Institute for the cost of expenses incurred by Biba at that facility and asserted that the release was a binding release of all such claims. The district court held in favor of the plaintiff and awarded $12,450, including costs, attorney fees, and penalty interest on the award.
In reversing and remanding for entry of summary disposition in favor of State Farm, the Court of Appeals held that the plain language of the release indicated an intent to release all claims of any kind whatsoever, including claims in the future, with the narrow exception of claims related to treatment at the University of Michigan Health System.
The Court held that the release signed by the injured insured also barred a health care provider’s claim for reimbursement for medical services rendered to the insured after the release was executed. The Court acknowledged that the language of §3112, holding that personal protection insurance benefits are “payable to or for the benefit of an insured injured person” specifically contemplates the payment of benefits to someone other than the injured person. However, the court stated that it is well-settled that an injured person entitled to no-fault benefits may waive that entitlement and release an insurer from payment of future benefits in exchange for a settlement.
The Court noted that the language of the release referring to future expenses “by or on behalf of” Biba was language similar to §3112 referring to payment of PIP benefits “to or for the benefit of an injured person.” The Court held that the use of the term “or on behalf of” in the release is indicative of the parties’ intent that the release include health care providers’ claims for reimbursement.
The Court held that plaintiff’s remedy in this case was against Biba who had agreed to pay charges owing to the plaintiff, if such charges were not otherwise covered by insurance.
