Michigan Court of Appeals; Docket #355681; Unpublished
Judges Gleicher, Kelly, and Ronayne Krause; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
Assignments of Benefits – Validity and Enforceability
In this unanimous unpublished per curiam decision, the Court of Appeals reversed the trial court’s partial summary disposition order dismissing some of Plaintiff Larcheri Winfield’s first-party claims against Defendant State Auto Property and Casualty Insurance Company (“State Auto”). The Court of Appeals held that, because Winfield assigned her right to pursue certain no-fault PIP benefits to various medical providers, and because there was no indication that Winfield retained any power to revoke the assignments, Winfield could not pursue the assigned claims in her own, separate first-party action against State Auto, because she was no longer the real party in interest with respect to those claims.
Larcheri Winfield and her minor children were injured in a motor vehicle collision and thereafter received treatment from various medical providers, to whom Winfield assigned her and her children’s right to pursue no-fault PIP benefits related to their treatments. Winfield then filed her own first-party action against State Auto, in which she pursued the same PIP benefits to which she assigned her providers the right to pursue. State Auto moved for summary disposition, arguing that Winfield was no longer the real party in interest with respect to those benefits, and that only her assignee providers could pursue them. The trial court disagreed and denied State Auto’s motion.
The Court of Appeals reversed the trial court’s denial of State Auto’s motion for summary disposition, holding that the assignments vested in Winfield's and her children’s providers the sole right to collect PIP benefits related to the treatments at issue, especially considering that there was no indication that Winfield retained any power to revoke the assignments. Thus, the assignee providers became the real parties in interest and Winfield no longer possessed any ability to enforce their assigned rights, herself.
“Before filing her complaint on November 18, 2019, plaintiff assigned to various medical providers her right to collect PIP benefits from defendants. While the language of the assignments varied, each assignment vested in the medical providers the right to collect PIP benefits from defendants for medical services rendered to plaintiff and her minor children. Furthermore, there was no indication that plaintiff retained any power to revoke the assignments. Accordingly, the assignments were valid such that the medical providers stood in the position of plaintiff, possessed the same rights as plaintiff, and were subject to the same defenses as plaintiff. Indeed, ‘an assignee of a cause of action becomes the real party in interest with respect to that cause of action, inasmuch as the assignment vests in the assignee all rights previously held by the assignor.’ Cannon Twp, 311 Mich App at 412 (emphasis added and citations omitted). In other words, after plaintiff executed the assignments, the medical providers became the real parties in interest, and only the medical providers had the ability to enforce the acquired rights.”
There was one provider that obtained its assignment after Winfield filed her first-party action, however, and thus the Court of Appeals held that, under MCR 2.202(B), Winfield could still pursue her claim for those benefits.
“However, plaintiff may still pursue her claim against defendants for services rendered by Comprehensive Neuropsychological Services, PC, because plaintiff assigned to this provider her right to collect PIP benefits from defendants after she filed the instant action. Indeed, plaintiff filed the instant complaint on November 18, 2019, and plaintiff assigned to Comprehensive Neuropsychological Services, PC, her right to collect PIP benefits from defendants on December 14, 2019. MCR 2.202(B) address party substitution and provides in relevant part as follows:
If there is a change or transfer of interest, the action may be continued by or against the original party in his or her original capacity, unless the court, on motion supported by affidavit, directs that the person to whom the interest is transferred be substituted for or joined with the original party, or directs that the original party be made a party in another capacity.
Here, no motions for substitution or joinder were made, and the trial court did not direct plaintiff to be made a party in another capacity. Accordingly, under the plain language of MCR 2.202(B), plaintiff may still pursue her claim against defendants for services rendered by Comprehensive Neuropsychological Services, PC, in light of her assignment to this provider her right to collect PIP benefits from defendants after she filed the instant action.”
The Court also held that MCL 500.3112 simply “does not address the legal effect of an assignment on an insured’s ability to collect benefits that were the subject of an assignment,” and rejected Winfield’s additional public policy argument: that State Auto raised the assignments merely in an attempt to avoid paying PIP benefits.
“Although plaintiff correctly notes that a health care provider may assert a direct cause of action against an insurer, and MCL 500.3112 insulates insurers from the threat of double payment for services rendered, MCL 500.3112 does not address the legal effect of an assignment on an insured’s ability to collect benefits that were the subject of an assignment.
Lastly, we reject plaintiff’s public policy argument. There is no indication that defendant raised the assignments to avoid paying PIP benefits. Moreover, defendant moved for partial summary disposition pertaining to specific medical providers. Although a holding that only an assignee may enforce the rights acquired by way of an assignment has the potential to increase litigation, this Court has recognized the policy underlying the real party in interest doctrine. Indeed, the doctrine ‘recognizes that litigation should be begun only by a party having an interest that will assure sincere and vigorous advocacy’ and ‘protects a defendant from multiple lawsuits for the same cause of action.’ Barclae, 300 Mich App at 483 (citation omitted). Moreover, there is nothing to preclude plaintiff from negotiating with the medical providers to revoke the assignments or transfer the assignments to her to allow her to pursue those claims.”