Stand Up Multipositional Advantage MRI, P.A. v. Am. Family Ins. Co.
| Decision Date | 11 January 2017 |
| Docket Number | A15-0843 |
| Citation | 889 N.W.2d 543 |
| Parties | STAND UP MULTIPOSITIONAL ADVANTAGE MRI, P.A., Appellant, v. AMERICAN FAMILY INSURANCE COMPANY, a Wisconsin corporation, Respondent, Michael Schultz, et al., Respondents, Ilya Knyazev, et al., Respondents, Thomas Bennerotte, et al., Respondents, Jed Benjamin Iverson, Respondent, Gabriel Johnson, Respondent, Michael Fay, et al., Respondents, Brad Ratgen, et al., Respondents, Landon Barakow, Respondent, Lebertha Porter, Respondent. |
| Court | Minnesota Supreme Court |
Randall D.B. Tigue, Randall Tigue Law Office, P.A., Fridley, Minnesota, for appellant.
Matthew D. Lutz, Eden Prairie, Minnesota, for respondent American Family Insurance Company.
Michael J. Weber, Weber & Nelson Law Office, PLLC, Minneapolis, Minnesota, for amici curiae Center for Diagnostic Imaging, Minnesota Chiropractic Association, American Chiropractic Association, Minnesota Ambulatory Surgery Center Association, Twin Cities Orthopedics, and Minnesota Medical Group Management Association.
Dale O. Thornsjo, Lance D. Meyer, O'Meara, Leer, Wagner & Kohl, P.A., Minneapolis, Minnesota, for amici curiae The Insurance Federation of Minnesota and The Property Casualty Insurers Association of America.
Jennifer E. Olson, TSR Injury Law, Bloomington, Minnesota, for amicus curiae Minnesota Association for Justice.
Charles J. Lloyd, Livgard & Lloyd PLLP, Minneapolis, Minnesota, for amicus curiae Minnesota Glass Association.
At issue in this case is the enforceability of an anti-assignment clause in an automobile insurance policy. Respondent American Family Insurance Company (American Family) issued automobile insurance policies to respondent-policyholders, who were later injured in automobile accidents. American Family's policy contained an anti-assignment clause, which became relevant when the policyholders assigned their interests in basic economic loss benefits to their medical provider, appellant Stand Up Multipositional Advantage MRI, P.A. (Stand Up), in order to obtain medical treatment. Stand Up sued American Family, the policyholders, and the policyholders' attorneys for failing to pay Stand Up directly in accordance with the assignments. The district court, on cross-motions for summary judgment, concluded that American Family's anti-assignment clause was unenforceable and the assignments to Stand Up were valid. The court of appeals reversed, determining that American Family's anti-assignment clause was valid and that it prohibited the assignments to Stand Up. Because we conclude that the anti-assignment clause precludes the assignments, we affirm.
This action began after respondents Tiffani Mazzie, Prisly Arredondo Cerna, and Teri Baker (collectively, "policyholders") were injured in separate car accidents.1 The policyholders had insurance through American Family and the policies contained an anti-assignment clause, which stated that "[i]nterest in this policy may be assigned only with [American Family's] written consent." The parties agree that American Family did not consent to the assignments at issue.
In order to obtain medical treatment, the policyholders assigned their rights and benefits under their policies to Stand Up. Stand Up provides magnetic resonance imaging scans
at a clinic in Golden Valley. Before providing imaging services, Stand Up required each policyholder to execute a form entitled, "Authorization and Irrevocable Assignment of Insurance Benefits for Direct Payments by My Payers to Stand Up, PA." The third paragraph of the assignment began:
I hereby assign to [Stand Up] to the extent permitted by law, but only to the extent of my Charges, all of my rights, remedies, and benefits related to any Payer, including without limit a primary, non-contingent right to receive Proceeds from any Payer, now or in the future, and any and all causes of action that I might have against any Payer now or in the future, the right to prosecute such causes of action either in my name or in [Stand Up's] name, and the right to settle or otherwise resolve such causes of action as [Stand Up] sees fit.2
The agreement also provided that if a Stand Up patient chose to hire an attorney to assist her in recovering insurance proceeds, that patient could not require Stand Up to reduce its bill by the share of attorney's fees or costs incurred in collecting those proceeds.
After the policyholders executed the assignments, Stand Up treated and billed them. Although the record does not reflect precisely when Stand Up initially billed each policyholder, we agree with the court of appeals' conclusion that the only reasonable inference in light of the record is that Stand Up billed the policyholders after performing the imaging services. Stand Up Multipositional Advantage MRI, P.A. v. Am. Family Ins. Co. , 878 N.W.2d 21, 27 (Minn. App. 2016).
Each policyholder submitted a claim to American Family for reimbursement of the medical expenses from Stand Up, but American Family denied medical expense benefits in each case. Each policyholder then pursued mandatory no-fault arbitration pursuant to Minn. Stat. § 65B.525, subd. 1 (2016), and obtained arbitration awards for Stand Up's bill. American Family satisfied the awards by issuing checks in the names of the policyholders and the attorneys who represented the policyholders.3 American Family did not pay Stand Up "directly," "exclusively," or to the "full extent" of the bills, as the text of the assignment required.
Stand Up filed a complaint in Hennepin County District Court against the policyholders, their attorneys, and American Family for failing to make payment directly to Stand Up under the assignments. The complaint also alleged that by paying the arbitration awards directly to the policyholders and attorneys, American Family breached the assignments, breached its fiduciary duties to the policyholders, breached Stand Up's U.C.C. lien, and violated its duty of prompt payment under Minn. Stat. § 65B.54, subd. 1 (2016).
The district court considered cross-motions for summary judgment by Stand Up and American Family. The court determined that American Family's anti-assignment clause was valid. But the court concluded that the clause, as a matter of law, did not prevent the policyholders from assigning their rights to proceeds under the policy to Stand Up. The court reasoned that because the assignments occurred after the automobile accidents, the assignments did not "affect the bargain struck between the insurer and the insured." The court also found that American Family had notice of the assignments to Stand Up. As a result, the court upheld the assignments and granted Stand Up's motion for summary judgment.
On appeal, a divided court of appeals reversed. Stand Up , 878 N.W.2d at 28. To determine whether American Family's anti-assignment clause precluded the assignments to Stand Up, the court of appeals applied the rule followed in the majority of jurisdictions: anti-assignment clauses prohibit pre-loss assignments but not post-loss assignments. Id. at 27–28. The court concluded that the assignments to Stand Up were pre-loss, because they were made before billing, and so unenforceable due to American Family's anti-assignment clause. Id. The court therefore held that American Family was entitled to summary judgment. Id. at 28.
Judge Hooten concurred in part and dissented in part. She concluded that the district court lacked subject matter jurisdiction. Id. at 28 (Hooten, J., concurring in part, dissenting in part). In the alternative, Judge Hooten would have affirmed the district court's conclusion that the assignments to Stand Up were valid. Id. at 33. We granted Stand Up's petition for review.
The primary issue on appeal is whether an anti-assignment clause in an automobile insurance policy prevents a policyholder from assigning basic economic loss benefits under that policy to a medical provider.4 This issue comes to us from an appeal of a grant of summary judgment. We review a district court's legal conclusions on summary judgment de novo. Commerce Bank v. W. Bend Mut. Ins. Co. , 870 N.W.2d 770, 773 (Minn. 2015). The interpretation of the language of an automobile insurance policy is a question of law that is also subject to de novo review. See Star Windshield Repair, Inc. v. W. Nat'l Ins. Co. , 768 N.W.2d 346, 348 (Minn. 2009). Finally, the interpretation of the Minnesota No-Fault Insurance Act, Minn. Stat. §§ 65B.41 -.71 (2016), which regulates automobile insurance policies in Minnesota, is also subject to de novo review because it presents a question of law. See City of Oronoco v. Fitzpatrick Real Estate, LLC , 883 N.W.2d 592, 595 (Minn. 2016).
Before turning to the merits, we must determine whether, as Judge Hooten concluded, the district court lacked subject matter jurisdiction over Stand Up's claim.5 Stand Up , 878 N.W.2d at 28 (Hooten, J., concurring in part, dissenting in part). Judge Hooten relied on language in the No-Fault Act that requires mandatory arbitration for claims regarding the payment of certain medical expenses. Id. ; see Minn. Stat. § 65B.525, subd. 1. Assuming that Stand Up was a valid assignee, Judge Hooten determined that Stand Up had only the procedural rights the policyholders had: "to submit their claims to mandatory arbitration." Stand Up , 878 N.W.2d at 29. Because Judge Hooten concluded that Stand Up's claim should have been submitted to arbitration, she reasoned that the district court lacked subject matter jurisdiction to resolve the claim. The court of appeals majority disagreed and held that the district court "plainly had jurisdiction to the extent that the district court considered whether the assignments are valid." Id. at 26 n.1.
We agree with the court of appeals majority that the district court had jurisdiction to determine whether Stand Up's assignments are valid. No-fault arbitrators are " ‘limited to deciding questions of fact, leaving the interpretation of law to the courts.’ " Fernow v. Gould , 835 N.W.2d 8, 11 (Minn. 2013)...
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