Michigan Court of Appeals; Docket # 343683; Unpublished
Judges Letica, Kelly, and Boonstra; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Assignments of Benefits—Validity and Enforceability
SUMMARY:
In this unanimous unpublished per curiam decision involving an assignment of rights to no-fault PIP benefits, the Court of Appeals reversed the trial court’s summary disposition order dismissing the plaintiff’s first-party action and remanded for further proceedings. The Court of Appeals reaffirmed that anti-assignment clauses in automobile insurance policies are unenforceable because they violate public policy. Since the insureds in this action assigned their rights to no-fault PIP benefits for charges they had already incurred, the subject assignments were valid.
In this case, Geico’s insureds, James and Roneica Johnson, were injured in a motor vehicle collision and received treatment for their injuries from Spine Specialists of Michigan. Spine Specialists filed an action to recover no-fault PIP benefits from Geico for treatments it provided to the Johnsons, under a theory of assignment. Geico successfully moved for summary disposition, arguing that the anti-assignment clause in the Johnson’s policy barred the assignments because Geico did not consent to them.
The Court of Appeals reversed the trial court’s grant of summary disposition, reaffirming its prior holding in Shah that such anti-assignment clauses violate public policy and are therefore invalid. Since the Johnsons assigned their rights to PIP benefits for healthcare services they had already received, the assignments were valid.
Our Supreme Court recently held “that healthcare providers do not possess a statutory cause of action against no-fault insurers for recovery of [PIP] benefits under the no-fault act.” Covenant Med Ctr Inc, 500 Mich at 196. The Court, however, clarified that its opinion 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. “Under general contract law, rights can be assigned unless the assignment is clearly restricted.” Jawad A Shah, MD, PC v State Farm Mut Auto Ins Co, 324 Mich App 182, 197; 920 NW2d 148 (2018), lv pending (quotation marks and citation omitted). When an “antiassignment clause is unambiguous, it must be enforced unless it violates the law or public policy.” Id. at 198. A copy of the Johnsons’ no-fault policy is not included in the lower court record, so we cannot discern whether the antiassignment clause at issue in this case is unambiguous. Yet, even if the language in the Johnsons’ policy unambiguously prohibits the assignment of rights under the present circumstances, antiassignment clauses in nofault insurance policies are unenforceable if they prohibit “an assignment after the loss occurred of an accrued 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; see also Henry Ford Health Sys v Everest Nat’l Ins Co, 326 Mich App 398, 405; 927 NW2d 717 (2018) (accord), lv pending.
In this case, it is undisputed that the Johnsons had an accrued claim against their insurer for payment for healthcare services that had already been provided by plaintiffs before the Johnsons executed the assignments. Accordingly, assuming arguendo that the antiassignment clause is unambiguous, it is nevertheless unenforceable because it is contrary to public policy. Shah, 324 Mich App at 200. Although Geico requests that this Court find Shah was wrongly decided and call for a conflict panel under MCR 7.215(K)(3), we decline to do so because Shah’s holding is currently on appeal to the Michigan Supreme Court. See Jawad A Shah, MD, PC v State Farm Mut Auto Ins Co, 503 Mich 882 (2018).
