965 N.W.2d 650
Mich. Ct. App.2020Background
- Tracy (the insured) entered a settlement agreement with Farm Bureau that included an anti-assignment clause and a merger clause.
- Michigan Ambulatory Surgical Center provided medical services to Tracy and held an accrued no-fault claim for unpaid charges.
- Tracy assigned the accrued claim to the medical provider to satisfy Tracy’s obligation to the provider.
- Farm Bureau refused to pay the assignee, citing the anti-assignment clause in the settlement agreement.
- The majority distinguished this case from Shah (which invalidated an anti-assignment clause in an insurance policy) and enforced the settlement clause; Judge Swartzle dissented, arguing Shah and older precedent control.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an anti-assignment clause in a post-accident settlement agreement bars an assignee medical provider from suing the insurer on an accrued no-fault claim | The anti-assignment clause is unenforceable as against public policy (Shah); assignee can pursue insurer | The settlement and merger clauses make Shah distinguishable; anti-assignment should be enforced | Dissent: Shah controls — anti-assignment clause unenforceable; (majority reached opposite result and enforced the clause) |
Key Cases Cited
- Jawad A Shah, MD, PC v. State Farm Mut. Auto. Ins. Co., 324 Mich App 182 (2018) (held anti-assignment clause unenforceable where insured had accrued claim for medical services prior to assignment)
- Roger Williams Ins. Co. v. Carrington, 43 Mich 252 (1880) (early Michigan decision articulating a public-policy basis for the right to assign certain claims)