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Weisman, M.D. v State Farm Mutual Auto Ins. Co; (COA-UNP, 12/15/1988; RB #1208)

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Michigan Court of Appeals; Docket No. 92643; Unpublished  
Judges Walsh, Weaver, and Warshawsky; 2-1 (with Judge Weaver Dissenting); Per Curiam    
Official Michigan Reporter Citation:  Not Applicable; Link to Opinion alt   


STATUTORY INDEXING:  
Service Providers as Payees [§3112]  
Prohibition Against Assigning Future Right to Benefits [§3143]

TOPICAL INDEXING:
Intervention by Service Providers and Third Party Payors in PIP Claims   


CASE SUMMARY:  
In this 2-1 per curiam Opinion, the Court of Appeals reversed the trial court decision that a physician could not seek enforcement of an agreement between himself and the insured whereby payments made to the insured by the insurance company would be paid to the physician.

The insureds were injured in an automobile accident, and entitled to no-fault insurance benefits. When medical treatment began, Dr. Weisman requested that the insureds sign an insurance payment authorization certifying that "State Farm will pay Dr. Weisman ... upon receipt of his itemized statement for services rendered." The insureds apparently signed such an agreement at the beginning of treatment, and this agreement was attached to several medical bills which were submitted to State Farm by Dr. Weisman as the expenses were incurred.

A dispute arose between State Farm and the insureds regarding eligibility for medical benefits, and a suit filed regarding this dispute was settled by payment of $4,500 to the insureds. Dr. Weisman was not notified of the suit or settlement negotiations, and did not receive the payment. He brought suit against State Farm for payment of his medical services to the insureds. State Farm defended the claim on the basis that the "payment authorization" was void under §3143 as "an assignment of a benefit payable in the future." Dr. Weisman contended that the agreement was not an "assignment of future benefits," but was for past benefits due. In addition, Weisman claimed that State Farm had no right to settle the claim with the insureds without protecting his interests in accordance with §3112.

The Court of Appeals, reversing the trial court, held that Dr. Weisman was not an "assignee" within the meaning of §3143. An examination of the purported assignment of benefits agreement disclosed that it was in fact a lien agreement. Therefore, §3143 was not applicable to this case.
In remanding this case for further proceedings, the Court of Appeals held that State Farm had written notice of Dr. Weisman's claims to payment under the insured's policy. The provisions of §3112 discharging an insurer's liability to the extent of payments made in "good faith" to a person believed entitled to benefits, did not protect State Farm in this case.

Applying §3112 to this case, the court held Dr. Weisman "may" receive payments under the policy directly from State Farm in lieu of payment to the insureds. Although State Farm had a right to enter into a settlement with the insureds, it did so at its peril. To protect itself from having to possibly pay twice for identical claims, State Farm should have sought declaratory relief pursuant to §3112.

In a dissent, Judge Weaver stated that the "insurance payment authorization" signed by the insureds was an assignment of the insureds' right to receive future claim benefits, and as such, was void under §3143. Judge Weaver would not address the question of whether the agreement was a "lien agreement," since it was not raised below. However, even if it were determined to be a lien agreement, Judge Weaver would hold that the agreement was breached by the insureds, not by State Farm.


Michigan auto accident attorney Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit SinasDramis.com.

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