Mich. Ambulatory Surgical Ctr. v. Farm Bureau Gen. Ins. Co. of Mich.

• Decision Date: 19 November 2020
• Docket Number: No. 349706,349706
• Citation: 334 Mich.App. 622,965 N.W.2d 650
• Parties: MICHIGAN AMBULATORY SURGICAL CENTER, Plaintiff-Appellee, v. FARM BUREAU GENERAL INSURANCE COMPANY OF MICHIGAN, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

334 Mich.App. 622

965 N.W.2d 650

MICHIGAN AMBULATORY SURGICAL CENTER, Plaintiff-Appellee,

v.FARM BUREAU GENERAL INSURANCE COMPANY OF MICHIGAN, Defendant-Appellant.

No. 349706

Court of Appeals of Michigan.

Submitted September 9, 2020, at Detroit.

Decided November 19, 2020 at 9:05 a.m.

Anthony, Paulovich & Worrall, PLLC (by Gerald K. Paulovich ) for the Michigan Ambulatory Surgical Center.

Kopka Pinkus Dolin PC, Farmington Hills (by Rana D. Lange and Mark L. Dolin ) for Farm Bureau General Insurance Company of Michigan.

Before: Riordan, P.J., and O'Brien and Swartzle, JJ.

Riordan, P.J. Defendant appeals by leave granted¹ the trial court's order denying defendant's motion for summary disposition in this action to collect personal protection insurance (PIP) benefits under the no-fault act, MCL 500.3101 et seq. We vacate the order and remand this case to the trial court.

I. FACTS & PROCEDURAL HISTORY

On October 19, 2015, defendant's insured, Terry Tracy, was injured in a motor vehicle accident in Orion Township and filed suit against defendant to collect unpaid PIP benefits. Tracy and defendant executed a settlement agreement on November 10, 2017, in which defendant agreed to pay Tracy $7,500, and Tracy agreed to release her rights to PIP benefits accrued through the date of the case evaluation, September 25, 2017. The settlement agreement was a separate contract with a merger clause—not an addendum to the no-fault policy, and it did not in any way limit coverage under the policy or prohibit Tracy from seeking additional PIP benefits in the future. Rather, the settlement agreement anticipated that Tracy would accrue additional claims to PIP benefits in the future. The settlement agreement specifically provided that she would "not assign any of her rights to medical benefits to medical providers in the future without the express written consent of [defendant]" with respect to any claim for benefits arising from the motor vehicle accident that occurred on October 19, 2015, in Orion Township.

Thereafter, Tracy sought and received plaintiff's medical services, creating a newly accrued claim for PIP benefits. Contrary to her agreement with defendant, Tracy then assigned to plaintiff her right to reimbursement for plaintiff's billings. Plaintiff sued defendant to recover payment for the assigned, newly accrued PIP benefits. Defendant then moved for summary disposition, arguing that the antiassignment clause in the settlement agreement invalidated Tracy's later assignment to plaintiff. Plaintiff responded that contractual provisions barring the postloss assignment of an accrued claim to payment of insurance benefits are unenforceable as against public policy under Jawad A. Shah, M.D., PC v. State Farm Mut. Auto. Ins. Co. , 324 Mich. App. 182, 200, 920 N.W.2d 148 (2018). In turn, defendant argued that Shah only applied to antiassignment clauses in no-fault insurance policies, not to similar clauses in settlement agreements.

The trial court denied defendant's motion and this appeal followed.

II. ANALYSIS

At the outset, we clarify that the issue in this case is whether the trial court committed error requiring reversal when it concluded that the antiassignment provision in the settlement agreement was invalid pursuant to our holding in Shah , 324 Mich. App. at 200, 920 N.W.2d 148. Specifically, we must determine whether there is a factual distinction between the antiassignment provision in the no-fault policy at issue in Shah and a similar provision in the settlement agreement between defendant and its insured. See In re Houghten's Estate , 310 Mich. 613, 617-618, 17 N.W.2d 774 (1945) (noting that principles of stare decisis apply unless the facts of the subsequent case are distinguishable). For the reasons stated below, we find that Shah is inapplicable to the facts of this case. The antiassignment provision in the settlement agreement does not contravene any portion of the no-fault act, and unlike in Shah , we cannot find that it violates any public policy identified by our jurisprudence.

We review de novo matters of statutory interpretation and a trial court's decision on a motion for summary disposition under MCR 2.116(C)(8). City of Fraser v. Almeda Univ. , 314 Mich. App. 79, 92, 886 N.W.2d 730 (2016) ; Maiden v. Rozwood , 461 Mich. 109, 118, 597 N.W.2d 817 (1999). We enforce unambiguous contracts as written, and we uphold the validity of an antiassignment provision that is clear and unambiguous unless it violates law or public policy. Westfield Ins. Co. v. Ken's Serv. , 295 Mich. App. 610, 615, 815 N.W.2d 786 (2012) ; Besic v. Citizens Ins. Co. of the Midwest , 290 Mich. App. 19, 24, 800 N.W.2d 93 (2010) ; Shah , 324 Mich. App. at 198, 920 N.W.2d 148, citing Detroit Greyhound Employees Fed. Credit Union v. Aetna Life Ins. Co. , 381 Mich. 683, 689-690, 167 N.W.2d 274 (1969) ; Employers Mut. Liability Ins. Co. of Wisconsin v. Mich. Mut. Auto. Ins. Co. , 101 Mich. App. 697, 702, 300 N.W.2d 682 (1980) ; Rory v. Continental Ins. Co. , 473 Mich. 457, 468-469, 703 N.W.2d 23 (2005).

We begin with the relevant language of the no-fault act. MCL 500.3143 states that "[a]n agreement for assignment of a right to benefits payable in the future is void." By enacting MCL 500.3143, the Legislature codified the public-policy concerns that arise when an insurer's risk is increased by an insured's assignment of a contractual relationship.² However, MCL 500.3143 neither mentions nor prohibits agreements not to assign benefits—such as the antiassignment provision contained in the settlement agreement in this case. Book-Gilbert v. Greenleaf , 302 Mich. App. 538, 542, 840 N.W.2d 743 (2013) (stating that a court may not "read into the statute a requirement that the Legislature has seen fit to omit"). " ‘[A] right to benefits payable in the future’ is distinguishable from a right to past due or presently due benefits." Prof. Rehab. Assoc. v. State Farm Mut. Auto. Ins. Co. , 228 Mich. App. 167, 172, 577 N.W.2d 909 (1998) (quotation marks omitted). Similarly, an agreement not to assign future rights is distinguishable from "[a]n agreement for assignment of a right to benefits payable in the future." MCL 500.3143.

Perhaps, when enacting MCL 500.3143, the Legislature intended to invalidate a preloss assignment of an insurance policy to prevent an insured from substituting in a different party and consequently assigning to an insurer a risk that it had not agreed to cover. But that is not for us to discern or decide here, as we are charged with the responsibility of following the language of the statute as written, not with making policy. Prof. Rehab. Assoc. , 228 Mich. App. at 172, 577 N.W.2d 909. MCL 500.3143 pertains to "benefits payable in the future," and it does not distinguish between a preloss transfer of an insurance policy or a postloss transfer of benefits for a claim that has not accrued under the policy. Presumably, in either scenario, the assignment would be invalid, but neither factual scenario is present in this case because Tracy did not transfer the policy itself, and the assignment was executed after her claim had accrued as part of an agreement that is separate and distinguishable from the no-fault policy that was in effect. See generally Allard v. State Farm Ins. Co. , 271 Mich. App. 394, 400, 722 N.W.2d 268 (2006) ("Until the expense is incurred, the insured's entitlement to benefits does not accrue and the insurer's liability to pay the claim does not attach.").

In Shah , we held that an antiassignment clause contained within an insurance policy was unenforceable to prohibit an assignment of an accrued claim because such a prohibition violates Michigan public policy. Shah , 324 Mich. App. at 200, 920 N.W.2d 148. Our analysis relied entirely on our Supreme Court's holding in Roger Williams Ins. Co. v. Carrington , 43 Mich. 252, 254, 5 N.W. 303 (1880), which states as follows:

The assignment having been made after the loss, did not require consent of the company. The provision of the policy forfeiting it for an assignment without the company's consent is invalid, so far as it applies to the transfer of an accrued cause of action. It is the absolute right of every person—secured in this State by statute —to assign such claims, and such a right cannot be thus prevented. It cannot concern the debtor, and it is against public policy. [Emphasis added.]

Notably, the statute referenced in Roger Williams was not cited or otherwise identified, and Roger Williams was decided nearly 100 years before the enactment of the no-fault scheme³ and more than 75 years before the adoption of the Insurance Code.⁴ Nonetheless, this Court found that Roger Williams was binding precedent that precluded the insurer from enforcing the antiassignment provision in the insurance policy. Shah , 324 Mich. App. at 200, 920 N.W.2d 148.

This case does not present the same public-policy concerns regarding insurance policies as were implicated in Shah and Roger Williams . In those cases, the courts concluded that public policy compelled a judicial redrafting of the terms of the respective insurance policies because doing so would not increase an insurer's liability, but we cannot conclude that the same is true in this case. Here, defendant does not dispute coverage of the newly accrued claims, and like in Shah , a judicial redrafting of the settlement agreement would not increase defendant's liability under the terms of the insurance policy with respect to the newly accrued claims. However, doing so may increase defendant's liability under the settlement agreement. The dissent concludes this distinction is unimportant because the antiassignment provision has the same effect regardless of whether it is drafted into an insurance policy or a separate settlement agreement, and therefore, this case lacks any meaningful factual distinction from Shah . In effect, the dissent finds no practical distinction between the insurance policy and the settlement agreement. We cannot...