Parrish Chiropractic Centers, P.C. v. Progressive Cas. Ins. Co.

• Decision Date: 25 February 1993
• Docket Number: No. 92CA0114,92CA0114
• Citation: 857 P.2d 540
• Parties: PARRISH CHIROPRACTIC CENTERS, P.C., Plaintiff-Appellant, v. PROGRESSIVE CASUALTY INSURANCE COMPANY, Defendant-Appellee. . IV
• Court: Colorado Court of Appeals

Page 540

857 P.2d 540

PARRISH CHIROPRACTIC CENTERS, P.C., Plaintiff-Appellant, v. PROGRESSIVE CASUALTY INSURANCE COMPANY, Defendant-Appellee.

No. 92CA0114.

Colorado Court of Appeals,

Div. IV.

Feb. 25, 1993.

Rehearing Denied April 8, 1993.

Certiorari Granted Aug. 30, 1993.

Ozer & Mullen, P.C., Robert C. Ozer, Denver, for plaintiff-appellant.

White & Steele, P.C., Frederick W. Klann, George A. Codding, III, Denver, for defendant-appellee.

Opinion by Judge JONES.

Plaintiff, Parrish Chiropractic Centers, P.C., appeals the summary judgment entered against it and in favor of defendant, Progressive Casualty Insurance Company, on Parrish's claim seeking to enforce payment of insurance benefits to Parrish by Progressive. We affirm.

This litigation involves payment for chiropractic services rendered to patients who are insured by Progressive under automobile insurance policies issued pursuant to the No-Fault Act, § 10-4-701, et seq., C.R.S. (1987 Repl.Vol. 4A). The policies contain a provision stating: "Interest in this policy may not be assigned without our written consent." (emphasis in original).

Upon contacting Parrish for treatment, the insured patients were initially requested by Parrish to execute assignment documents assigning to it their insurance proceeds for treatment under the policies. Although the patients executed the requested documents, Progressive refused to honor the assignments and made payment directly to the insureds.

Parrish then commenced this action seeking to enforce the assignments and for direct payment from Progressive. Upon cross-motions for summary judgment, the trial court found the assignments were prohibited by the policy language and dismissed the complaint.

Parrish contends that it is entitled to enforce the assignments because the right to payment here is a transfer of a chose in action freely made by assignment. We disagree.

It is generally true, as Parrish asserts, that the law favors the assignability of contract rights unless the assignment purports to transfer a matter of personal trust or confidence or is otherwise forbidden by an express provision to the contrary. Scott v. Fox Brothers Enterprises, Inc., 667 P.2d 773 (Colo.App.1983). Thus, a prohibition of assignment in an insurance policy will typically not be enforced if the prohibition would operate to defeat insurance coverage, thereby working a forfeiture which is not favored in the law, especially when the assignment has no effect on the insurer's risk or hazard of loss. See National American Insurance Co. v. Jamison Agency, Inc., 501 F.2d 1125 (8th Cir.1974); Metropolitan Life Insurance Co. v. Lanigan, 74 Colo. 386, 222 P. 402 (1924).

Here, it is undisputed that Progressive has met its obligations under the insurance contract by payment to its insureds and coverage has not been impaired. Consequently, there is no bar to the enforcement of the contract provision forbidding assignment on the grounds of forfeiture.

The validity of non-assignable clauses has been previously upheld by this court. We have noted that the policy of free alienability of choses in action can be overcome by the strong policy of freedom of contract. Parrish v. Rocky Mountain Hospital & Medical Services Co., 754 P.2d 1180 (Colo.App.1988).

We conclude that the plain and unambiguous language of the policy provision here is broad enough to include prohibition of assignment of the right to payment, particularly since the amount of benefits payable had yet to be fixed at the time the assignments were made.

Parrish further contends that it is entitled to receive the benefits of the policies as the unequivocal...