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VHS of Michigan, Inc. v. Everest Nat’l Ins. Co. (COA – UNP 5/9/2019; RB #3904)

Michigan Court of Appeals; Docket # 341190; Unpublished
Judges Stephens, Gadola, and Letica; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion


STATUTORY INDEXING:
Prohibition Against Assigning Future Rights to Benefits
One-Year Back Rule Limitation [§500.3145(1)]

TOPICAL INDEXING:
Assignments of Benefits– Validity and Enforceability
Medical Provider Standing (Post-Covenant)


SUMMARY:

In this unanimous unpublished per curiam decision, the Court of Appeals affirmed the trial court’s summary disposition order dismissing the plaintiff’s first-party action, finding that the subject consent-to-treat forms signed by the plaintiff’s patient upon each admission to the hospital were not valid assignments of rights because they attempted to assign future rights.  The Court of Appeals also determined, however, that: (1) anti-assignment clauses are invalid; (2) in lieu of a contractual right to assign his benefits, the plaintiff’s patient was still entitled to assign his rights to payment under the No-Fault Act; and (3) the plaintiff would have been barred by the one-year-back rule from recovering payment for certain services provided to its patient that occurred more than one year before the assignment was executed.

The plaintiff, in this case, VHS of Michigan, Inc., provided medical treatment to an injured motorist who did not, himself, have a policy of no-fault insurance, nor resided with any relative who did.  The vehicle he was driving at the time of the accident, however, was owned by another individual who did have a policy of no-fault insurance with the Defendant.  After the accident, the injured motorist was treated by VHS in March and April of 2016, and prior to each admission, signed a consent-to-treat form, which provided:

Contract for Services: I agree to pay in full any and all charges for hospital and provider services not otherwise covered by insurance benefits. I assign and authorize payment to be made directly to the hospital and/or providers of all healthcare benefits otherwise payable to me, but not exceeding the charges for this period of hospitalization. . . .

The plaintiff filed the present action against Defendant in March of 2017 but didn’t actually receive a formal assignment from its patient until June 11, 2017.  In the interim, Defendant moved for summary disposition—which the trial court ultimately granted—arguing: (1) that the plaintiff lacked standing to bring its cause of action pursuant to Covenant; (2) that the consent-to-treat forms were not valid assignment; and (3) that the one-year-back rule barred The plaintiff from recovering any benefits because the treatments occurred more than one year before the assignment was executed.

The Court of Appeals affirmed the trial court’s grant of summary disposition for Defendant, despite determining (1) that the anti-assignment clause in the vehicle’s owner’s insurance policy with Defendant was invalid, and (2) that the patient could assign his statutory right to No-Fault Benefits to the plaintiff, despite not having a contractual right to assign.  The Court affirmed on two fronts, the first being that the one-year-back rule barred the plaintiff’s claims because the assignment was executed more than a year after the patient’s treatments.  Accordingly, the Court reasoned:

Applying the reasoning of Shah, the plaintiff, in this case, could not acquire any rights greater than what Ellis possessed at the time of the assignment. Had Ellis filed suit against defendants directly on June 11, 2017, the one-year-back rule would have precluded him from recovering benefits for any portion of the loss incurred more than one year before that date. MCL 500.3145(1); Shah, 324 Mich App at 204. That is, on June 11, 2017, Ellis no longer had a right to payment of benefits for medical services obtained in March and April 2016. Accordingly, the June 11, 2017 assignment from Ellis could not confer upon the plaintiff a right to recover benefits more than one year before that date because Ellis himself did not possess that right. See id. Because the plaintiff’s complaint, in this case, seeks to recover payment for medical services rendered before that date, the trial court did not err in determining that the one-year-back rule precludes recovery of the benefits sought in the plaintiff’s complaint by virtue of the June 11, 2017 assignment. See MCL 500.3145(1); Shah, 324 Mich App at 204.

Secondly, the Court determined that the consent-to-treat forms were not, in fact, valid assignments because they attempted to assign future rights, which is expressly disallowed by MCL 500. 3143.  As to that issue, the Court reasoned:

In this case, the language of the Consent-to-treat forms suggests that Ellis was assigning a future right, which would be void. He had not yet received any medical services at the time he signed each form, so assigning any right for the anticipated medical services would, of necessity, be the assignment of a future right. As in Starkey, which held that language attempting to convey benefits that “would become payable” was void as an assignment of future rights, Ellis’ assignments in the Consent-to-treat forms were invalid as an attempt to assign future rights. Starkey, 116 Mich App at 646. As an assignment of future rights, Ellis’ assignments on March 15, 2016 and April 13, 2016 are void under MCL 500.3143. The trial court therefore did not err in granting defendants summary disposition, concluding that the plaintiff did not have a valid assignment from Ellis under which it could proceed.


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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