927 N.W.2d 717
Mich. Ct. App.2018Background
- Jennifer Quinn was injured in a July 30, 2016 automobile accident and received over $200,000 in medical treatment from Henry Ford Health System.
- Quinn’s no-fault insurer was Everest National, whose policy contained the clause: “Interest in this Policy may not be assigned without our written consent.”
- On July 31, 2017 Quinn executed an assignment to Henry Ford Health System of her right to enforce payment for services rendered arising from the accident; plaintiff then sued Everest for PIP benefits.
- Everest moved for summary disposition arguing the policy’s anti-assignment clause barred the assignment (and that the assignment was a partial assignment and invalid); the trial court granted the motion and dismissed the complaint.
- The Court of Appeals reversed, holding that the anti-assignment clause was unenforceable to bar assignment of an accrued claim for past or presently due PIP benefits and that the assignment was not an invalid partial assignment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of anti-assignment clause for accrued PIP claims | Clause cannot bar assignment of an accrued (post-loss) right to payment; such bans violate public policy | Clause unambiguously prohibits assignment of any “interest” without insurer consent and should be enforced | Anti-assignment clause unenforceable as to assignment of accrued PIP claims; assignment valid (court follows Roger Williams line via Shah) |
| Whether the assignment was invalid because Quinn hadn’t completed ongoing policy duties | Assignee entitled to recover past/present benefits; duties didn’t preclude assignment of accrued claims | Quinn’s ongoing duties under the policy prevent assignment until performed | Argument abandoned for lack of developed record/briefing; court rejects it |
| Whether the assignment was an improper partial assignment unenforceable against insurer | Assignment of past-due, discrete benefits is permitted; no single indivisible claim exists because PIP accrues and is payable as incurred | Assignment was only a portion of Quinn’s cause of action and thus unenforceable against the insurer under Schwartz | Partial-assignment rule from Schwartz doesn’t bar assignment here; MCR 2.205 and no-fault statutory scheme permit such assignments |
| Applicability of UCC/security-interest argument (MCL 440.9408) | Assignment of health-care-insurance receivable is permitted; statutory prohibition only targets future-benefit assignments | UCC treats assignee as secured creditor unable to sue insurer directly | Court did not reach UCC argument (decision rests on public-policy/precedent reasoning) |
Key Cases Cited
- Roger Williams Ins Co v. Carrington, 43 Mich 252 (1880) (anti-assignment clause unenforceable for assignments made after loss of insured property)
- Rory v. Continental Ins. Co., 473 Mich 457 (2005) (principles for construing insurance contracts; unambiguous terms enforced)
- Covenant Med. Ctr., Inc. v. State Farm Mut. Auto. Ins. Co., 500 Mich 191 (2017) (insurer may discharge obligation by directing payment to provider)
- Schwartz v. Tuchman, 232 Mich 345 (1925) (partial assignments and debtor burdens; equitable relief historically available)
- United Servs. Auto. Ass’n v. Nothelfer, 195 Mich App 87 (1992) (MCR 2.205 replaces common-law rule against splitting causes of action)
- Professional Rehab Assocs. v. State Farm Mut. Auto. Ins. Co., 228 Mich App 167 (1998) (statutory bar applies to assignments of future benefits, not accrued benefits)