An appellate court in Michigan, reversing a trial court's decision, has upheld the enforceability of an insured's assignment of no-fault benefits to a healthcare provider that treated her for injuries she suffered in an automobile accident.
The Case
Emily Minca, who was insured by GEICO Indemnity Company, was involved in an automobile accident in which she sustained bodily injuries. She received medical treatment from American Anesthesia Associates and assigned to American Anesthesia "all no-fault benefits presently due or past due incurred as a result of [her] automobile accident(s) and relating to the reimbursement of medical billings by [American Anesthesia]."
American Anesthesia, as assignee, subsequently sued GEICO to recover personal protection insurance ("PIP") benefits payable to Ms. Minca under Michigan's no-fault law.
GEICO moved for summary disposition, relying on the antiassignment clause contained in its policy.
The trial court granted summary judgment to GEICO, and American Anesthesia appealed. It argued that it had a right to maintain a direct cause of action against GEICO on the basis of the assignment of no-fault benefits executed by Ms. Minca.
The Assignment
The assignment to American Anesthesia stated:
I assign to American Anesthesia Associates, LLC all no-fault benefits presently due or past due incurred as a result of my automobile accident(s) and relating to the reimbursement of medical billings by American Anesthesia Associates, LLC. I assign my right to recover no-fault interest and attorney's fees as it relates to the reimbursement of these medical billings. I am not assigning any future benefits.
(Emphasis added.)
The Appellate Court's Decision
The appellate court reversed.
In its decision, the appellate court explained that, in Covenant Medical Center, Inc. v. State Farm Mutual Automobile Ins. Co., 895 N.W.2d 490 (Mich. 2017), the Supreme Court of Michigan 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." However, the appellate court added, the Michigan Supreme Court stated that its decision 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."
The appellate court acknowledged that the GEICO policy unambiguously stated, "Your rights and duties under this policy may not be assigned without our written consent" and that GEICO had not consented to the assignment to American Anesthesia.
The appellate court ruled, however, that the antiassignment clause in the GEICO policy violated Michigan public policy because Ms. Minca did not assign any future benefits.
Accordingly, the appellate court concluded, the trial court erred when it relied on that clause in granting GEICO's motion for summary disposition.
The case is American Anesthesia Associates v. GEICO Indemnity Co., No. 343985 (Mich. Ct. App. Oct. 1, 2019).
Learn more:
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].