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North Shore Injury Center, Inc v Home-Owners Ins Co (COA – UNP 2/26/2019; RB #3856)

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Michigan Court of Appeals; Docket # 340357; Unpublished
Judges Cavanagh, Borrello, and Redford;  per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion


STATUTORY INDEXING:
Prohibition Against Assigning Future Rights to Benefits [§3143]
General / Miscellaneous [§3143]

TOPICAL INDEXING:


SUMMARY:
In this unanimous unpublished per curiam decision, the Court of Appeals affirmed the trial court’s denial of Defendant Home-Owners’ motion for summary disposition on the issue of assignments of rights.  The Court held that an injured motorist could “split his cause of action for PIP benefits into separate claims” and assign them to multiple medical providers, that an anti-assignment clause in the motorist’s no-fault insurance policy was not valid, and that the motorist could assign his rights to disputed, unpaid PIP benefits.

Defendant Home Owners’ insured was injured in an accident, and received treatment from Plaintiffs North Shore Injury Center, Inc., Excellent Pain Consultants, Inc., Red Wings Medical Transportation LLC, and Northland Radiology, Inc.  Following the treatment, a claim for no-fault benefits was submitted to Home-Owners, which Home-Owners denied.  Plaintiffs then brought suit, and Home-Owners moved for summary disposition, arguing (1) that an insured could not “split his single cause of action for PIP benefits into multiple claims brought by several providers”; (2) that the anti-assignment clause in the policy prevented him from assigning his rights in the first place; and (3) that the assignments were prohibited because the PIP benefits were disputed and had not yet been paid.  The Court of Appeals rejected all three arguments.

In rejecting Home-Owners’ first argument, the Court of Appeals held that partial assignments were not unenforceable because the No-Fault Act “‘contemplate[s] a multitude of performances (i.e., payments) by the insurer . . . .’”

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.

In rejecting Home-Owners’ second argument, the Court followed the recent published opinion in Shah, which held that, “an accrued cause of action may be freely assigned after the loss and that an anti-assignment clause is not enforceable because such a clause violates public policy.”

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.

In rejecting Home-Owners’ third argument, the Court of Appeals found King’s assignments to be for benefits “past due or presently due,” as opposed to “payable in the future,” which would be disallowed by MCL 500.3143.

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.

The Court of Appeals thus affirmed.

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