North Shore Injury Center Inc v. Home-Owners Insurance Company ( 2019 )

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
NORTH SHORE INJURY CENTER, INC., UNPUBLISHED
EXCELLENT PAIN CONSULTANTS, INC., February 26, 2019
and RED WINGS MEDICAL
TRANSPORTATION LLC,
Plaintiffs-Appellees,
and
NORTHLAND RADIOLOGY, INC.,
Intervening Plaintiff-Appellee,
v No. 340357
Oakland Circuit Court
HOME-OWNERS INSURANCE COMPANY, LC No. 2016-153794-NF
Defendant-Appellant.
Before: CAVANAGH, P.J., and BORRELLO and REDFORD, JJ.
PER CURIAM.
Defendant appeals by leave granted1 an order denying its motion for summary disposition
in this action by healthcare providers to recover personal protection insurance (PIP) benefits
under the no-fault act, MCL 500.3101 et seq., for medical services provided to defendant’s
insured, Joys King. We affirm.
This case arises from a motor vehicle accident involving King, who was insured under a
no-fault policy issued by defendant. Following the accident, King obtained medical care and
transportation services from plaintiffs and intervening plaintiff, who thereafter sought payment
1
North Shore Injury Ctr, Inc v Home-Owners Ins Co, unpublished order of the Court of Appeals,
entered March 1, 2018 (Docket No. 340357).
from defendant. After defendant refused to pay, plaintiffs initiated this action and intervening
plaintiff also filed a complaint against defendant.
Defendant moved for summary disposition under MCR 2.116(C)(8), arguing that
plaintiffs and intervening plaintiff had failed to state a claim upon which relief could be granted.
Defendant argued that, under Covenant Med Ctr, Inc v State Farm Mut Auto Ins Co, 500 Mich
191; 895 NW2d 490 (2017), plaintiffs and intervening plaintiff did not have a statutory cause of
action.
The trial court denied the motion, holding that plaintiffs and intervening plaintiff “have
an assignment” and “therefore, by way of assignment they have their own cause of action.” The
trial court also concluded that their assignments and causes of action were not invalidated by the
insurance policy’s anti-assignment clause because “it’s an anti-transfer clause and not an anti-
assignment clause and doesn’t apply to benefits already incurred.” The trial court entered an
order denying the motion and granting plaintiffs and intervening plaintiff leave to amend their
complaints. The trial court also denied defendant’s motion for reconsideration. This appeal
followed.
On appeal, defendant argues that the trial court erred by denying its motion for summary
disposition because medical providers do not have a cause of action against insurers under the
no-fault act and King was prohibited from splitting his cause of action into separate damage
claims and assigning them to others. We disagree.
This Court reviews de novo a trial court’s decision to deny a motion for summary
disposition. Maiden v Rozwood, 461 Mich 109, 118; 597 NW2d 817 (1999). Summary
disposition is appropriate under MCR 2.116(C)(8) when the nonmoving party has failed to state
a claim upon which relief can be granted. Id. at 119. A motion under MCR 2.116(C)(8) tests the
legal sufficiency of the complaint and, therefore, this Court must base its decision on the
pleadings alone. Id. All well-pleaded allegations must be accepted as true and construed in a
light most favorable to the nonmoving party. Johnson v Pastoriza, 491 Mich 417, 434-435; 818
NW2d 279 (2012). The motion may be granted only when the allegations are “so clearly
unenforceable as a matter of law that no factual development could possibly justify recovery.”
Wade v Dep’t of Corrections, 439 Mich 158, 163; 483 NW2d 26 (1992), mod by Patterson v
Kleiman, 447 Mich 429, 433-435 (1994).
Defendant first argues that this action is precluded by Covenant. We disagree.
In Covenant, our Supreme Court held “that healthcare providers do not possess a
statutory cause of action against no-fault insurers for recovery of personal protection insurance
benefits under the no-fault act.” Covenant, 500 Mich at 196. The Covenant Court thereby
“rejected the notion that a medical provider had independent standing to bring a claim against an
insurer to recover no-fault benefits.” Jawad A Shah, MD, PC v State Farm Mut Auto Ins Co, 324
Mich App 182, 187; 920 NW2d 148 (2018). However, the Court clarified that its conclusion
was “not intended to alter the insured’s ability to assign his or her right to past or presently due
benefits to a healthcare provider.” Covenant, 500 Mich at 217 n 40.
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Under Covenant, plaintiffs and intervening plaintiff do not have a statutory cause of
action against defendant to pursue payment of no-fault benefits, but clearly Covenant does not
prevent their claims by way of assignment. King assigned his right to past or presently due
benefits to plaintiffs and intervening plaintiff. Intervening plaintiff obtained an assignment of
rights from King whereby King assigned his “right to collect no-fault insurance benefits for
services that have been rendered by [intervening plaintiff] to date.” Plaintiffs also obtained
assignments of rights from King to seek recovery of PIP benefits for services provided by
plaintiffs “on or before the date of execution.” These assignments of rights specified that they
allowed plaintiffs “to enforce payment of benefits due or past due for the Services.” Thus, the
question is whether the assignments afforded plaintiffs and intervening plaintiff a legally
sufficient cause of action such that they could state a claim upon which relief can be granted in
their amended complaints.
Defendant next argues that King is prohibited from using assignments to split his single
cause of action for PIP benefits into multiple claims brought by several providers. We disagree.
This Court’s decision in Henry Ford Health Sys v Everest Nat’l Ins Co, ___ Mich App
___; ___ NW2d ___ (2018) (Docket No. 341563), supports our conclusion. Henry Ford
involved an action for recovery of PIP benefits under the no-fault act. Id. at ___; slip op at 1.
The defendant insurer argued that an assignment was unenforceable because the insured only
assigned a portion of her claim instead of the entire cause of action. Id. at ___; slip op at 4. The
Henry Ford Court disagreed with the defendant, stating
defendant’s argument rests on the mistaken presumption that [the insured’s] claim
can only be viewed as one for all PIP benefits that she may be entitled to recover
as a result of her motor vehicle accident, which is inconsistent with MCL
500.3142’s requirement of prompt payment of claims as they accrue. [Id. at __;
slip op at 5.]
As a result, the Court concluded that the no-fault act “contemplates and requires a multitude of
performances (i.e., payments) by the insurer . . . ” and, therefore, the assignment “was not
unenforceable as a partial assignment.” Id. at ___; slip op at 4-5 (quotation marks omitted). The
Court further noted that to hold the assignment unenforceable as a partial assignment “would
effectively render the insured’s right to assign a claim for past or presently due benefits
meaningless.” Id. at ___; slip op at 5. Here, defendant’s claim-splitting argument “rests on the
mistaken presumption that [King’s] claim can only be viewed as one for all PIP benefits.” Id.
Thus, King’s assignments of rights to plaintiffs and intervening plaintiff are enforceable.
Defendant also argues that claim splitting should be disallowed because it could create
“multiple expensive proceedings for both the insurers and the courts, not to mention the
likelihood of inconsistent results.” For the reasons discussed above, this argument lacks merit
under Henry Ford. The no-fault act clearly provides for “a multitude of performances (i.e.,
payments) by the insurer[.]” Henry Ford, ___ Mich App at ___; slip op at 4. Because each
payment presents a new claim, the no-fault act necessarily permits multiple suits to enforce the
payments. See id. at ___; slip op at 4-5.
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Defendant next argues that the anti-assignment clause in the insurance policy prevents the
assignments that occurred. We disagree.
Although the trial court found the clause to be an “anti-transfer clause,” we conclude that
it is actually an anti-assignment clause. The clause appears under a section titled “Assignment,”
and states, in pertinent part: “No interest in this policy may be assigned without our written
consent.” Furthermore, the parties clearly consider the clause to be an anti-assignment clause.
Thus, the question is whether the anti-assignment clause should be enforced.
In Shah, this Court recognized that contracts are to be enforced “as written absent some
highly unusual circumstance such as a contract in violation of law or public policy.” Shah, 324
Mich App at 197 (quotation marks and citations omitted). Thus, the anti-assignment clause must
be enforced unless it violates the law or public policy. Id. at 198. This Court has determined
that Roger Williams Ins Co v Carrington, 43 Mich 252; 5 NW 303 (1880), is controlling on the
matter since no authority has been found explicitly rejecting its analysis. Shah, 324 Mich App at
198-200. In Roger Williams, our Supreme Court “held that an accrued cause of action may be
freely assigned after the loss and that an anti-assignment clause is not enforceable to restrict such
an assignment because such a clause violates public policy in that situation.” Id. at 200, citing
Roger Williams 43 Mich at 254. In this case, King had accrued claims against defendant for
payment of services that had already been provided by plaintiffs and intervening plaintiff before
King made the assignments. Under Roger Williams, the insurance policy’s prohibition against
King assigning his claims is unenforceable because it is against public policy. See Shah, 324
Mich App at 200, citing Roger Williams, 43 Mich at 254. Therefore, the anti-assignment clause
is unenforceable to prohibit the assignments that were executed. See Shah, 324 Mich App at
200.
Defendant’s final argument is that MCL 500.3143 prohibits the assignments because the
PIP benefits are disputed and have not yet been paid. We disagree.
MCL 500.3143 states that “[a]n agreement for assignment of a right to benefits payable
in the future is void.” Prof Rehab Assoc v State Farm Mut Auto Ins Co, 228 Mich App 167, 172;
577 NW2d 909 (1998). This statutory language clearly and unambiguously draws a distinction
between “a right to benefits payable in the future” and “a right to past due or presently due
benefits.” Id. The statute only bans “the assignment of benefits payable in the future and not
those that are past due or presently due[.]” Id. Here, the pleadings allege that the assignments
involved benefits that were past due or presently due. The language of the assignments in this
case unambiguously provide: “right to collect no-fault insurance benefits for services that have
been rendered . . . to date” and “on or before the date of execution.” Thus, King’s assignments
of the right to recover payment for past services, and therefore, past due or presently due PIP
benefits are not invalidated by MCL 500.3143. See id. at 173-174.
In addition, like the insured parties in Shah and Henry Ford, King “was injured in an
automobile accident and received treatment that was alleged to fall within the scope of allowable
expenses for which [he] could seek PIP benefits under the no-fault act.” Henry Ford, ___ Mich
App at ___; slip op at 3. After the services were provided, King assigned his right to payment
for those services to his providers, just as the insured parties did in Shah and Henry Ford.
Because the Shah and Henry Ford assignments were enforced despite the providers’ refusal to
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pay benefits, King’s assignments are enforceable too, even though defendant disputes the
payment of benefits.
Affirmed. Plaintiffs and intervening plaintiff are entitled to tax costs. See MCR
7.219(A).
/s/ Mark J. Cavanagh
/s/ Stephen L. Borrello
/s/ James Robert Redford
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