Erie Ins. Co. v. Mckinley Chiropractic Ctr., P.C.

• Decision Date: 14 September 2017
• Docket Number: Record No. 161172.
• Citation: 803 S.E.2d 741
• Parties: ERIE INSURANCE COMPANY, Appellant, v. MCKINLEY CHIROPRACTIC CENTER, P.C., Appellee.
• Court: Virginia Supreme Court

294 Va. 138

803 S.E.2d 741

ERIE INSURANCE COMPANY, Appellant,

v.MCKINLEY CHIROPRACTIC CENTER, P.C., Appellee.

Record No. 161172.

Supreme Court of Virginia.

September 14, 2017

Upon consideration of the record, briefs, and argument of counsel, the Court is of opinion that there is reversible error in the judgment of the circuit court.

Devonta Dodson was involved in a motor vehicle collision with Joann Hutson, whom Erie Insurance Company ("Erie") insured with liability coverage under an automobile insurance policy. Seeking chiropractic care for injuries stemming from the collision, Dodson became a patient of McKinley Chiropractic Center, P.C. ("McKinley") and executed a document assigning to McKinley "all insurance and/or litigation proceeds to which Patient is now or may hereafter become entitled" and "any and all causes of action that Patient might have or that might exist in Patient[']s favor against such insurance company" to satisfy any debts Dodson owed to McKinley for chiropractic services. McKinley faxed to Erie a copy of the assignment shortly after McKinley began providing care to Dodson and again after treatment ended.

On a subsequent date, Dodson accepted $7,300 from Erie in return for Dodson's agreement to release both Hutson and Erie "of and from any and all causes of action, suits, rights, judgments, claims and demands of whatsoever kind ... which I/we now have or may hereafter have, especially the claimed legal liability of releasee(s) arising ... out of the [motor vehicle] accident."

McKinley later filed a warrant in debt against Erie and obtained judgment for the chiropractic services provided to Dodson. On appeal from the general district court, the circuit court held that McKinley was entitled to judgment against Erie because Erie had received notice of the assignment and "fail[ed] to honor" the assignment when it paid the settlement monies directly to Dodson.

Erie now appeals, arguing that as a matter of law McKinley did not have a right to sue Erie. We agree.

Code § 8.01–13 provides that "[t]he assignee or beneficial owner of any bond, note, writing or other chose in action, not negotiable may maintain thereon in his own name any action which the original obligee, payee, or contracting party might have brought." The circuit court made no express ruling regarding the nature of the obligation of Erie to Dodson on which McKinley, as Dodson's assignee, was permitted to maintain in its own name the warrant in debt. However, we find that no such...