HENRY FORD HEALTH SYSTEM v EVEREST NATIONAL INSURANCE COMPANY
No. 341563
STATE OF MICHIGAN COURT OF APPEALS
November 20, 2018
FOR PUBLICATION 9:00 a.m. Lapeer Circuit Court LC No. 17-051075-NF
PER CURIAM.
In this action for recovery of personal protection insurance (PIP) benefits payable under the no-fault act,
I. BACKGROUND
On July 30, 2016, Jennifer Quinn was involved in a motor vehicle accident. At the time of the accident, Quinn was insured under a no-fault insurance policy issued by defendant. Quinn received treatment from plaintiff, incurring medical expenses in excess of $200,000, which defendant refused to pay. On or about July 31, 2017, Quinn executed an assignment of rights, providing, in pertinent part, as follows:
This is an assignment of the right to enforce payment of charges incurred only for Services arising out of the July 30, 2016 accident, for which charges are payable under any policy of insurance, contract and/or statute. Such assignment shall include, in Assignee‘s sole discretion, the right to pursue appeal of a payment denial under any procedure outlined in any insurance policy, contract or statute and/or the right to file a lawsuit to enforce the payment of benefits due or past due for these Services incurred and resulting charges.
Plaintiff initiated this action the same day, seeking payment for services provided to Quinn.
Defendant moved for summary disposition pursuant to
The trial court ruled that plaintiff‘s complaint against defendant was barred under the terms of the insurance policy. The court reasoned that Quinn‘s failure to obtain defendant‘s written consent before assigning her rights triggered a separate clause of the policy that precluded suit against defendant in the absence of full compliance with the terms of the policy. The trial court also rejected plaintiff‘s contention that the anti-assignment clause was invalid under the UCC because “[t]he assignee by operation of the statute is only a secured creditor who may assert rights to the health-insurance receivable against the assignor or lower priority creditors, but not against the account debtor (in this case the insurer).” Accordingly, the trial court granted defendant‘s motion for summary disposition and dismissed plaintiff‘s complaint with prejudice.
II. STANDARD OF REVIEW
We review a trial court‘s ruling on a summary disposition motion de novo. Robins v Garg (On Remand), 276 Mich App 351, 361; 741 NW2d 49 (2007). “Summary disposition is appropriate under
III. ANALYSIS
Plaintiff maintains on appeal that, acting as assignee of Quinn‘s claim, it was entitled to recover past and presently due benefits for the services it rendered to Quinn for her accident related injuries. According to plaintiff, to the extent that the pertinent clause in defendant‘s insurance contract is construed as an anti-assignment clause, it was inoperative to bar assignment of an accrued cause of action under Michigan law. We agree.
“Insurance policies are contracts and, in the absence of an applicable statute, are subject to the same contract construction principles that apply to any other species of contract.” Id. at 554 (quotation marks and citation omitted). Under traditional principles of contract construction, “unless a contract provision violates law or one of the traditional defenses to the enforceability of a contract applies, a court must construe and apply unambiguous contract provisions as written.” Rory v Continental Ins Co, 473 Mich 457, 461; 703 NW2d 23 (2005). A contract is ambiguous “if it is equally susceptible to more than a single meaning.” Barton-Spencer v Farm Bureau LifeIns Co of Mich, 500 Mich 32, 40; 892 NW2d 794 (2017). Because the contract at issue involves mandatory PIP benefits required by the no-fault act, the contract and statutes must be “read and construed together as though the statutes were part of the contract . . . .” Titan Ins Co, 491 Mich at 554 (quotation marks and citation omitted).
The contractual provision at issue in this case states, in pertinent part, “Interest in this Policy may not be assigned without our [defendant‘s] written consent.” Plaintiff contends that this provision should be read as an anti-transfer clause, prohibiting the insured from assigning the policy to someone else without consent, rather than a limitation upon the insured‘s ability to assign an accrued right to recovery under the policy. The policy does not define the term “interest.” Thus, in determining the meaning of the word, it is appropriate to consult a dictionary. Vushaj v Farm Bureau Gen Ins Co of Mich, 284 Mich App 513, 515; 773 NW2d 758 (2009). Relevant to interpreting this provision, Black‘s Law Dictionary defines “interest” in both a “collective” and “distributive” sense. “Collectively, the word includes any aggregation of rights, privileges, powers, and immunities; distributively, it refers to any one right, privilege, power, or immunity.” Black‘s Law Dictionary (10th ed). Plaintiff‘s interpretation is too narrow in that it focuses solely on the first half of the definition, while ignoring the latter. Nor does the dual nature of the term leave it equally susceptible to more than one meaning. Instead, “interest” can only be reasonably understood as referring to both collective rights and “distributive” or individual rights. By using a broad term like “interest” in this provision, the policy should be reasonably construed as prohibiting assignment of any interest—that is, interest in the policy itself or interest in specific benefits arising under the policy—without written consent from defendant. Because we construe this provision as unambiguously prohibiting assignment of any interest without defendant‘s consent, we must enforce the provision as written unless it violates law or a traditional defense to enforceability applies. Rory, 473 Mich at 461.
Another panel of this Court recently considered the enforceability of an unambiguous anti-assignment clause in a no-fault insurance policy in Jawad A Shah, MD, PC v State Farm Mut Auto Ins Co, ___ Mich App ___; ___ NW2d ___ (2018) (Docket No. 340370). There, the Court determined that resolution of this issue turned on application of precedent established in Roger Williams Ins Co v Carrington, 43 Mich 252; 5 NW 303 (1880), in which the Court declined to enforce an anti-assignment clause when the assignment was made after a loss of insured property had occurred. Shah, ___ Mich App at ___; slip op at 8. The Shah Court explained:
Our Supreme Court in Roger Williams essentially 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. Roger Williams, 43 Mich at 254. Here, there similarly was an accrued claim against [an] insurer that was held by [the insured] for payment of health care services that had already been provided by [the healthcare providers] before [the insured] executed the assignment. Under Roger Williams, any contractual prohibition against the assignment of that claim to plaintiffs was unenforceable because it was against public policy. Id.
Therefore, we conclude that enforcement of the anti-assignment clause in the instant case is unenforceable to prohibit the assignment that occurred here—
The relevant circumstances presented in this case are identical to those at issue in Shah. That is, like the insured party in Shah, Quinn was injured in an automobile accident and received treatment that was alleged to fall within the scope of allowable expenses for which she could seek PIP benefits under the no-fault act. See id. at ___; slip op at 1. After the services were rendered, Quinn assigned her right to payment for those services to her healthcare provider, despite an unambiguous anti-assignment clause contained in the insurance policy. See id. at ___; slip op at 2-3. Given the clear parallels between these cases, we are bound by the resolution of this very issue in Shah.
Defendant presents two additional arguments for affirming the trial court‘s ruling that were not addressed in Shah. First, defendant contends that Quinn could not assign her right to payment of PIP benefits because she had not fully performed her obligations under the policy. According to defendant, Quinn‘s “duties under the policy are ongoing” and her performance of “these ongoing obligations . . . is essential to [defendant]‘s ability to review and consider claims.” But apart from these vague references, defendant fails to identify what “ongoing” duties or obligations Quinn has concerning the claims she assigned to plaintiff. Therefore, we consider this argument abandoned because a party cannot simply “announce a position or assert an error and then leave it up to this Court to discover and rationalize the basis for his claims, or unravel and elaborate for him his arguments, and then search for authority either to sustain or reject his position.” Yee v Shiawassee Co Bd of Comm‘rs, 251 Mich App 379, 406; 651 NW2d 756 (2002).
Next, defendant argues that the assignment was unenforceable because it did not assign Quinn‘s entire cause of action for PIP benefits arising from the subject accident. Relying primarily on Schwartz v Tuchman, 232 Mich 345; 205 NW 140 (1925), defendant contends that a partial assignment of a cause of action is unenforceable against the debtor. In Schwartz, the plaintiff was assigned the right to receive one-third of the commission payable from a real estate transaction. Id. at 347-348. When the party responsible for payment of the commission failed to do so, the plaintiff sought to enforce the assignment in equity. Id. at 348. The trial court dismissed the action, concluding that the plaintiff had an adequate remedy at law against the real estate broker that assigned the partial commission to the plaintiff. Id. On appeal, the Supreme
The reason for the legal doctrine is obvious. The law permits the transfer of an entire cause of action from one person to another, because in such case the only inconvenience is the substitution of one creditor for another. But if assigned in fragments, the debtor has to deal with a plurality of creditors. If his liability can be legally divided at all without his consent, it can be divided and subdivided indefinitely. He would have the risk of ascertaining the relative shares and rights of the substituted creditors. He would have, instead of a single contract, a number of contracts to perform. A partial assignment would impose upon him burdens which his contract does not compel him to bear. [Id. at 349-350.]
However, the Supreme Court reasoned that these concerns did not arise in a court of equity, where “the interests of all parties can be determined in a single suit,” and “[t]he debtor can bring the entire fund into a court and run no risk as to its proper distribution.” Id. at 350. Thus, the Court concluded that “partial assignments should be sustained in a court of chancery in all cases where it can be done without detriment to the debtor or stakeholder, whenver [sic] equitable and just results may be accomplished by it.” Id. (quotation marks and citation omitted).
Defendant‘s argument is unpersuasive because it ignores subsequent case law stating that ”
This case is readily distinguishable from the circumstances presented in Schwartz, where the defendant was obligated to make a single commission payment to a third party, and the plaintiff sought to enforce an assignment of a fraction of that payment. Schwartz, 232 Mich at 347-348. As the Court explained in Schwartz, the partial assignment imposed the burden of multiple creditors and performances upon the defendant—a burden that he did not bargain for when he entered the contract. Id. at 349-350. In contrast, under the no-fault act, PIP benefits are payable as loss accrues,
As further support for its contention that the assignment at issue in this case amounted to an unenforceable partial assignment of a cause of action, defendant cites various cases that
This outcome—the ability of a healthcare provider who has provided services to a party injured in a motor vehicle accident to pursue recovery from the provider as the assignee of the injured party‘s claim—is further supported by the manner in which the no-fault act addresses assignments.
IV. CONCLUSION
In sum, consistent with this Court‘s recent ruling in Shah, we conclude that the anti-assignment clause in defendant‘s insurance policy is unenforceable as against public policy to the extent that it attempts to restrict the insured‘s ability to assign an accrued claim. We further conclude that Quinn‘s assignment to plaintiff was not unenforceable as a “partial assignment.”
We reverse the trial court‘s order granting defendant‘s motion for summary disposition and remand for further proceedings consistent with this opinion.2 We do not retain jurisdiction.
/s/ Colleen A. O‘Brien
/s/ Jonathan Tukel
/s/ Anica Letica