Lucia Zamorano Md Plc v. State Farm Mutual Auto Insurance Co ( 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
LUCIA ZAMORANO, M.D., PLC, UNPUBLISHED
March 28, 2019
Plaintiff,
and
OMIC, LLC, doing business as OAKLAND MRI,
Intervening Plaintiff-Appellant,
v No. 341327
Wayne Circuit Court
STATE FARM MUTUAL AUTOMOBILE LC No. 17-000744-NF
INSURANCE COMPANY,
Defendant-Appellee.
Before: MURRAY, C.J., and GADOLA and TUKEL, JJ.
PER CURIAM.
Intervening plaintiff, OMIC, LLC, appeals as of right the trial court’s order granting
defendant, State Farm Mutual Automobile Insurance Company, summary disposition of
intervening plaintiff’s claim under MCR 2.116(C)(10). We reverse.
I. FACTS
This is an action by a health care provider seeking payment of personal protection
insurance (PIP) benefits assigned to the provider by an insured motorist. On September 27,
2015, Sergio Machado allegedly was injured in an automobile accident. Machado’s treating
physician, plaintiff, Lucia Zamorano, M.D., referred Machado to intervening plaintiff, who
allegedly performed MRIs for Machado in 2016 and 2017. Machado was insured under a no-
fault insurance policy with defendant. The policy contains an anti-assignment provision stating,
in relevant part, that “[n]o assignment of benefits or other transfer of rights is binding upon us
unless approved by us.” Nonetheless, without defendant’s approval, Machado assigned to
intervening plaintiff his right to payment under the policy of PIP benefits for the medical
services he had received; Machado made one assignment in November 2016 and another
assignment in August 2017.
Defendant thereafter allegedly failed to fully reimburse plaintiff and intervening plaintiff
for the services provided to Machado. Plaintiff initiated this action against defendant, and
intervening plaintiff intervened in the action before the trial court, seeking payment of the
assigned benefits. The trial court granted summary disposition of intervening plaintiff’s claim in
favor of defendant, concluding that Machado’s assignments were barred by the anti-assignment
clause in defendant’s policy, and further concluding that the assignment was invalid because it
was a partial assignment. Intervening plaintiff now appeals to this Court.1
II. DISCUSSION
Intervening plaintiff contends on appeal that the trial court erred in finding that the anti-
assignment provision of defendant’s insurance policy precluded the insured from assigning the
PIP benefits under the policy to intervening plaintiff. We agree.
We review a trial court’s decision on a motion for summary disposition de novo.
Johnson v Vanderkooi, 502 Mich. 751, 761; 918 NW2d 785 (2018). When reviewing a trial
court’s decision granting summary disposition under MCR 2.116(C)(10), we consider all
documentary evidence submitted by the parties in the light most favorable to the nonmoving
party. Dawoud v State Farm Mut Auto Ins Co, 317 Mich. App. 517, 520; 895 NW2d 188 (2016).
Summary disposition under MCR 2.116(C)(10) is warranted when there is no genuine issue as to
any material fact and the moving party is entitled to judgment as a matter of law. Id. We also
review de novo issues involving the proper interpretation of statutes and contracts. Titan Ins Co
v Hyten, 491 Mich. 547, 553; 817 NW2d 562 (2012).
Generally, insurance policies are contracts subject to the same construction principles that
apply to any contract. Titan Ins Co, 491 Mich. at 554. Unless a provision of a contract violates
the law or a traditional defense to the enforceability of the contract, we construe an unambiguous
contract as written. Henry Ford Health System v Everest Nat’l Ins Co, ___ Mich App ___, ___;
___ NW2d ___ (2018) (Docket No. 341563), slip op 2. A contract is considered ambiguous
when it is equally susceptible to more than one meaning. Id. When, as here, the contract at issue
involves the assignment of PIP benefits under a policy of no-fault insurance, we read the contract
and the no-fault act, MCL 500.3101 et seq., together, as if the act were part of the contract. Titan
Ins Co, 491 Mich. at 554.
In Covenant Med Ctr, Inc v State Farm Mut Auto Ins Co, 500 Mich. 191; 895 NW2d 490
(2017), the Michigan Supreme Court held that healthcare providers lack standing to bring a
direct cause of action against insurers for PIP benefits. The Court also noted that its holding in
that case was “not intended to alter an insured’s ability to assign his or her right to past or
presently due benefits to a healthcare provider.” Id. at 217 n 40. Thereafter, in Jawad A Shah
MD, PC v State Farm Mut Auto Ins Co, 324 Mich. App. 182; 920 NW2d 148 (2018), this Court
1
Plaintiff Zamorano is not a party to this appeal.
-2-
held that an anti-assignment clause in a no-fault policy is unenforceable to prohibit an
assignment that occurred after the loss or the accrual of the claim to payment “because such a
prohibition of assignment violates Michigan public policy that is part of our common law as set
forth by our Supreme Court.” Id. at 200. In Shah, this Court quoted the Michigan Supreme
Court’s decision in Roger Williams Ins Co v Carrington, 43 Mich. 252; 5 N.W. 303 (1880):
The assignment having been made after the loss, did not require consent of the
company. The provision of the policy forfeiting it for an assignment without the
company’s consent is invalid, so far as it applies to the transfer of an accrued
cause of action. It is the absolute right of every person—secured in this State by
statute—to assign such claims, and such a right cannot be thus prevented. It
cannot concern the debtor, and it is against public policy. [Shah, 324 Mich. App. at
199, quoting Roger Williams, 43 Mich. at 254.]
This Court concluded that, because our Supreme Court has never rejected the analysis from
Roger Williams, it is controlling and, as a result, assignments made after a loss are valid and
enforceable. Shah, 324 Mich. App. at 199-200. In accord, Henry Ford, ___ Mich App at ___,
slip op 3, concluding that the anti-assignment clause of the defendant insurer’s policy was
unenforceable under the facts of that case, which this Court noted were identical to those of
Shah.
The facts of this case are remarkably similar to those in Shah and Henry Ford. The
insured in this case was allegedly injured in an automobile accident, allegedly received medical
treatment from a health care provider, and the treatment allegedly represented allowable
expenses under the policy and the act. Thereafter, the insured assigned his right to payment
under his insurance policy to the healthcare provider, though the policy included an anti-
assignment provision. That provision, as it relates to an agreement assigning a claim that has
already accrued, is unenforceable as violative of Michigan public policy. Shah, 324 Mich. App. at
200. Following the precedent of Shah and Henry Ford, we conclude in this case that the anti-
assignment provision in the policy issued to the insured by defendant does not operate to bar
assignment of the insured’s accrued cause of action. To the extent that defendant invites this
Court to declare a conflict with Shah, we decline to do so for prudential reasons.
Intervening plaintiff also contends that the trial court erred in concluding that the
assignment of PIP benefits was an impermissible partial assignment, and therefore invalid.
Again, we agree. In Henry Ford, this Court addressed whether an assignment of less than an
entire cause of action for PIP benefits is invalid as a partial assignment in light of the prohibition
at common law against splitting a cause of action. Henry Ford, ___ Mich App at ___; slip op at
4-5. This Court concluded that the court rule governing the necessary joinder of parties, MCR
2.205, “replaced the common-law rule against splitting a cause of action[,]” and it does not
require an insured to assign an entire cause of action in order for an assignment to be
enforceable. Id. at ___; slip op at 4, quoting United Servs Auto Ass’n v Nothelfer, 195 Mich. App.
87, 89; 489 NW2d 150 (1992). This Court further reasoned that this analysis is supported by
MCL 500.3142, which provides that PIP benefits are payable as the loss accrues, and therefore,
the no-fault act “contemplates and requires a multitude of performances (i.e., payments) by the
insurer[.]” Henry Ford, ___ Mich App at ___; slip op at 4. Joinder, rather than dismissal, is the
proper remedy if “a proper disposition of the benefits sought by the healthcare provider requires
-3-
the presence of an additional party or parties[.]” Id. at ___; slip op at 4. We therefore conclude
in this case that intervening plaintiff’s cause of action is not invalid merely because Machado did
not assign his entire cause of action to intervening plaintiff. 2 Henry Ford, ___ Mich App at ___;
slip op at 4-5.
Reversed and remanded for further proceedings consistent with this opinion. We do not
retain jurisdiction.
/s/ Christopher M. Murray
/s/ Michael F. Gadola
/s/ Jonathan Tukel
2
Because Shah and Henry Ford control the disposition of this case in favor of intervening
plaintiff, it is unnecessary for us to reach intervening plaintiff’s alternative contentions that
defendant lacks standing to challenge the assignments, that intervening plaintiff is an intended
third party beneficiary under the policy, and that MCL 440.9408 renders ineffective any
restriction on the assignment of health care insurance receivables.
-4-