            If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                 revision until final publication in the Michigan Appeals Reports.




                         STATE OF MICHIGAN

                           COURT OF APPEALS



MICHIGAN HEAD & SPINE INSTITUTE, PC,                              UNPUBLISHED
                                                                  September 17, 2019
              Plaintiff-Appellant,
and

BEAUMONT HEALTH, and KUANDA BEY,

              Intervening Plaintiffs,


v                                                                 No. 345916
                                                                  Wayne Circuit Court
GEICO INDEMNITY CO., and STATE FARM                               LC No. 16-012678-NF
MUTUAL AUTOMOBILE INSURANCE CO.,

              Defendants-Appellees.


Before: BORRELLO, P.J., and K. F. KELLY and SERVITTO, JJ.

PER CURIAM.

       In this action under Michigan’s no-fault act, MCL 500.31011 et seq., plaintiff Michigan
Head & Spine Institute, PC (MHSI), appeals as of right and challenges the trial court’s rulings
granting summary disposition motions filed by defendants, State Farm Mutual Automobile
Insurance Company and GEICO Indemnity Company (collectively, defendants), dismissing
MHSI from the case, and denying MHSI’s motion for leave to amend its complaint. For the
reasons set forth in this opinion, we reverse and remand this matter for further proceedings
consistent with this opinion.

                                        I. BACKGROUND



1
 The recent amendments to MCL 500.3101 are not implicated in the instant appeal. See 2017
PA 140; 2019 PA 21.



                                              -1-
        On October 4, 2016, MHSI initiated this lawsuit against defendants, seeking to recover
payment for medical services MHSI provided to Kuanda Bey following Bey’s involvement in
two motor vehicle accidents. According to the complaint, Bey was injured in motor vehicle
accidents that occurred on July 3, 2014, and November 11, 2015, which led him to seek medical
treatment “on various occasions at MHSI, including but not limited to dates of service between
May 18, 2016 and August 2, 2016.” The complaint alleged that GEICO and State Farm were the
no-fault insurers in the highest order of priority responsible for paying personal protection
insurance benefits on Bey’s behalf with respect to these two motor vehicle accidents. The trial
court granted Beaumont Health’s subsequent motion to intervene, which alleged that it was also
entitled to reimbursement for medical services provided to Bey and related to one or both of the
above motor vehicle accidents.2

         On May 25, 2017, as the instant action was proceeding, our Supreme Court held in
Covenant Med Ctr, Inc v State Farm Mut Auto Ins Co, 500 Mich 191, 195-196; 895 NW2d 490
(2017) that “healthcare providers do not possess a statutory cause of action against no-fault
insurers for recovery of personal protection insurance benefits under the no-fault act,” expressly
overruling caselaw from this Court that had concluded that medical providers possessed
independent standing to directly sue no-fault insurers. However, the Covenant Court clarified
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.” Id. at 217 n 40, citing MCL 500.31433 and Prof
Rehab Assoc v State Farm Mut Auto Ins Co, 228 Mich App 167, 172; 577 NW2d 909 (1998).

        Less than three weeks later, State Farm moved for summary disposition under MCR
2.116(C)(8), arguing that the claims of MHSI and Beaumont Health should be dismissed
pursuant to the holding in Covenant. GEICO subsequently concurred in State Farm’s summary
disposition motions.

         In response, MHSI moved for leave to file an amended complaint. MHSI indicated that
Bey had “signed assignments at the end of virtually every appointment” with MHSI since 2014,
including the most recent appointment on September 27, 2016. As pertinent to the issues now on
appeal, MHSI requested that it be allowed to amend its complaint in light of Covenant to specify
that it had standing to pursue its claims against GEICO and State Farm based on the assignments
executed by Bey. Several such assignments, completed by Bey and assigning his right to collect
no-fault benefits to MHSI, were attached to MHSI’s motion. These included assignments
completed on August 2, 2016, September 19, 2016, and September 27, 2016, stating that Bey did
“hereby assign [his] right to collect no-fault insurance benefits, if any, for unpaid services
rendered by Michigan Head & Spine Institute (MHSI) to date, to MHSI and attorneys operating
on its behalf” and that “[t]his is not an assignment of benefits payable in the future or after the
date of this document.” Beaumont Health similarly moved for leave to file an amended
complaint to account for an assignment it had received from Bey as a basis for its standing to


2
    Beaumont Health is not a party to the instant appeal.
3
  MCL 500.3143 provides: “An agreement for assignment of a right to benefits payable in the
future is void.”


                                                  -2-
pursue its claims against GEICO and State Farm. Attached to this motion was an assignment of
benefits completed by Bey on June 8, 2017.

        Defendants opposed allowing the proposed amendments to the complaints and argued
that the amendments would be futile because the assignments were prohibited by antiassignment
clauses in the respective insurance policies issued by State Farm and GEICO to Bey. State
Farm’s antiassignment clause stated, “No assignment of benefits or other transfer of rights is
binding upon us unless approved by us.” GEICO’S antiassignment clause stated, “Your rights
and duties under this policy may not be assigned without our written consent.” State Farm and
GEICO both alleged that they did not approve or consent to the assignments by Bey.

        MHSI and Beaumont Health also filed responses to State Farm’s motions for summary
disposition. Both MHSI and Beaumont Health maintained that the antiassignment clauses in the
insurance contracts were not enforceable to prevent the post-loss assignment of claims. In
making this argument, MHSI and Beaumont Health relied on the Michigan Supreme Court’s
holding in Roger Williams Ins Co v Carrington, 43 Mich 252, 254; 5 NW 303 (1880), stating
that an insurance policy’s provision prohibiting assignment without the insurer’s consent was
invalid as against public policy with respect to an assignment made after the loss occurred and
that such a post-loss assignment could therefore be effectively made without the insurer’s
consent. MHSI and Beaumont Health argued that our Supreme Court had thus recognized a
distinction between pre-loss assignments and post-loss assignments, only the former of which
could permissibly be prohibited by the contract on the theory that a pre-loss assignment could
materially change the risk assumed by the insurer. MHSI and Beaumont Health argued that a
post-loss assignment has no effect on the risk assumed by the insurer because the claim has
already accrued, at which time the insurer’s liability has become fixed, and an assignee merely
obtains the right to pursue the claim as the assignor could have pursued it.

          While the above motions remained pending, Bey moved to intervene as a plaintiff in the
action.

        A hearing was held on August 11, 2017 to address the pending motions. The trial court
granted Bey’s motion to intervene. The trial court also granted the summary disposition motions
filed by State Farm and GEICO under MCR 2.116(C)(8), and the court consequently dismissed
without prejudice the claims of MHSI and Beaumont Health pursuant to Covenant. The trial
court concluded that these claims against State Farm and GEICO would be resolved through
Bey’s case. The trial court further ruled that MHSI’s and Beaumont Health’s motions for leave
to amend the complaints were moot but would be denied nonetheless because the amendments
would be futile. In doing so, the trial court expressed its conclusion that the antiassignment
clauses in the insurance policies rendered the proposed amendments to the pleadings futile.




                                                -3-
       MHSI filed an application for leave to appeal in this Court, which was denied “for failure
to persuade the Court of the need for immediate appellate review.”4 The Michigan Supreme
Court denied MHSI’s application for leave to appeal and MHSI’s motion for reconsideration.5

       On September 28, 2018, pursuant to stipulation of the parties remaining in the case, an
order was entered dismissing the action with prejudice. The order stated that it dismissed “all
claims as to all parties.”

       MHSI now appeals.

                                       II. DISCUSSION

         The dispositive issues in this case concerns the enforceability of the antiassignment
clauses and whether MHSI’s motion for leave to amend its complaint to avoid summary
disposition under Covenant was considered under the proper legal standards. MHSI argues on
appeal that the resolution of these issues is controlled by this Court’s decision in Jawad A Shah,
MD, PC v State Farm Mut Auto Ins Co, 324 Mich App 182; 920 NW2d 148 (2018), under which
the antiassignment clauses were unenforceable to prevent the post-loss assignments that occurred
in this case.

                                 A. STANDARD OF REVIEW

        A trial court’s ruling on a motion for summary disposition is reviewed de novo. Winkler
v Marist Fathers of Detroit, Inc, 500 Mich 327, 333; 901 NW2d 566 (2017). In this case, the
trial court granted summary disposition pursuant to MCR 2.116(C)(8), which provides that
summary disposition is appropriate if “[t]he opposing party has failed to state a claim on which
relief can be granted.” On a motion under MCR 2.116(C)(8), a court is to consider only the
pleadings, and the motion should only be granted if “the claims alleged are so clearly
unenforceable as a matter of law that no factual development could possibly justify recovery.”
Maiden v Rozwood, 461 Mich 109, 119-120; 597 NW2d 817 (1999) (quotation marks and
citation omitted).

       However, as this Court has previously explained:

               ‘‘If a trial court grants summary disposition pursuant to MCR 2.116(C)(8),
       (C)(9), or (C)(10), the court must give the parties an opportunity to amend their
       pleadings pursuant to MCR 2.118, unless the amendment would be futile.”
       Yudashkin v Holden, 247 Mich App 642, 651; 637 NW2d 257 (2001) (quotation
       marks and citation omitted); see also MCR 2.116(I)(5) (‘‘If the grounds asserted
       are based on subrule (C)(8), (9), or (10), the court shall give the parties an


4
 Michigan Head & Spine Institute PC v Geico Indemnity Co, unpublished order of the Court of
Appeals, entered January 18, 2018 (Docket No. 340273).
5
 Michigan Head & Spine Institute, PC v Geico Indemnity Co, 501 Mich 1084 (2018); Michigan
Head & Spine Institute, PC v Geico Indemnity Co, 502 Mich 909 (2018).


                                               -4-
       opportunity to amend their pleadings as provided by MCR 2.118, unless the
       evidence then before the court shows that amendment would not be justified.”).
       ‘‘An amendment is futile if it merely restates the allegations already made or adds
       allegations that still fail to state a claim.” Yudashkin, 247 Mich App at 651
       (quotation marks and citation omitted). Under MCR 2.118(A)(2), a party may
       amend a pleading by leave of the court and such ‘‘[l]eave shall be freely given
       when justice so requires.” [Shah, 324 Mich App at 209.]

        When reviewing a trial court’s decision whether to grant leave to amend, this Court will
only reverse if the trial court’s ruling “constituted an abuse of that discretion that resulted in
injustice.” Id. at 208 (quotation marks and citation omitted). “[A]n abuse of discretion occurs
only when the trial court’s decision is outside the range of reasonable and principled outcomes.”
Id. (quotation marks and citation omitted; alteration in original). ‘‘[A] motion to amend should
ordinarily be denied only for particularized reasons, including undue delay, bad faith or a
dilatory motive, repeated failure to cure deficiencies by amendments previously allowed, undue
prejudice to the opposing party, or futility.’’ Id. (quotation marks and citation omitted; alteration
in original). “A trial court necessarily abuses its discretion when it makes an error of law.” Id.
(quotation marks and citation omitted).

         In this case, the trial court’s decisions to deny MHSI the opportunity to amend its
pleadings to account for its assignments from Bey and to grant the summary disposition motions
filed by State Farm and GEICO were intricately intertwined. The record reflects that the trial
court clearly considered and relied on the antiassignment clauses in the policies in reaching its
decisions. However, these policies, as well as the assignments relied on by MHSI, were not
attached to any pleadings; they were only attached to the parties’ respective motions and
responses to motions. See MCR 2.110(A) (defining the term “pleading”). Therefore, because
the trial court’s rulings necessarily were based on consideration of material outside the pleadings,
we will treat the trial court’s summary disposition ruling as one made under MCR 2.116(C)(10).
Shah, 324 Mich App at 206-207.

        Under MCR 2.116(C)(10), “a trial court considers affidavits, pleadings, depositions,
admissions, and other evidence submitted by the parties in the light most favorable to the party
opposing the motion.” Maiden, 461 Mich at 120 (citation omitted). “Where the proffered
evidence fails to establish a genuine issue regarding any material fact, the moving party is
entitled to judgment as a matter of law.” Id.

                                          B. ANALYSIS

        Our resolution of the instant appeal is guided by our decision in Shah. Like this case,
Shah involved a situation where medical providers sought to rely on assignments to maintain
their action seeking to recover from a no-fault insurer after the Covenant decision was issued
during the course of ongoing litigation, while the no-fault insurer contended that the assignments
were invalid due to an antiassignment clause in the insurance policy. Shah, 324 Mich App at
186-191. This Court held in Shah that “the antiassignment clause in the instant case is
unenforceable to prohibit the assignment that occurred here—an assignment after the loss
occurred of an accrued claim to payment—because such a prohibition of assignment violates
Michigan public policy that is part of our common law as set forth by our Supreme Court.”

                                                -5-
Shah, 324 Mich App at 200, citing Roger Williams, 43 Mich at 254 and Rory v Continental Ins
Co, 473 Mich 457, 469-471; 703 NW2d 23 (2005). The Shah Court reasoned:

               Our Supreme Court in Roger Williams essentially held that an accrued
       cause of action may be freely assigned after the loss and that an antiassignment
       clause is not enforceable to restrict such an assignment because such a clause
       violates public policy in that situation. Roger Williams, 43 Mich at 254. In this
       case, [the insured] had an accrued claim against his insurer for payment of
       healthcare services that had already been provided by plaintiffs [i.e., the medical
       providers] before [the insured] executed the assignment. Under Roger Williams,
       the contractual prohibition against [the insured] assigning that claim to plaintiffs
       was unenforceable because it was against public policy. Id. [Shah, 324 Mich
       App at 200.]

        Through an assignment from the injured insured, a medical provider may obtain standing
to sue a no-fault insurer directly to recover no-fault benefits. Shah, 324 Mich App at 204 (stating
that “[a]n assignee stands in the position of the assignor, possessing the same rights and being
subject to the same defenses” and that “the procurement of the assignments . . . provided the only
means by which [the medical providers] could have standing to maintain a direct action against
defendant insurer for recovery of no-fault benefits in this case”) (quotation marks and citation
omitted); see also Covenant, 500 Mich at 195-196, 217 n 40.

        In this case, Bey similarly assigned MHSI his right to collect any no-fault benefits to
which he may be entitled for medical services already provided, and he completed these
assignments after his right to claim no-fault benefits became fixed on the basis of receiving
treatment for injuries following an automobile accident.6 See MCL 500.3105(1)7; MCL
500.3107(1)(a).8 Under Shah, the antiassignment clauses in the instant case were unenforceable
as against public policy to prohibit such a post-loss assignment of rights. Shah, 324 Mich App at
200.

       Although defendants generally disagree with this Court’s opinion in Shah and seemingly
imply that Shah may be somehow disregarded in this case because our Supreme Court has




6
  The substantive questions regarding defendants’ actual degree of liability under the no-fault act
are not before this Court at this juncture.
7
  MCL 500.3105(1) provides: “Under personal protection insurance an insurer is liable to pay
benefits for accidental bodily injury arising out of the ownership, operation, maintenance or use
of a motor vehicle as a motor vehicle, subject to the provisions of this chapter.”
8
  MCL 500.3107(1)(a) provides generally that personal protection insurance benefits are payable
for “[a]llowable expenses” related to “an injured person’s care, recovery, or rehabilitation.”
While this statute has recently been amended, this particular language appears in both the prior
and current versions of the statute. Compare 2012 PA 542 with 2019 PA 21.


                                                -6-
granted oral argument on the application for leave to appeal in Shah,9 the fact remains that Shah
is still binding on this Court at this time and its precedential effect has not been diminished. See
MCR 7.215(J)(1) (“A panel of the Court of Appeals must follow the rule of law established by a
prior published decision of the Court of Appeals issued on or after November 1, 1990, that has
not been reversed or modified by the Supreme Court, or by a special panel of the Court of
Appeals as provided in this rule.”); MCR 7.215(C)(2) (“A published opinion of the Court of
Appeals has precedential effect under the rule of stare decisis. The filing of an application for
leave to appeal to the Supreme Court or a Supreme Court order granting leave to appeal does not
diminish the precedential effect of a published opinion of the Court of Appeals.”).

        The trial court in this case granted summary disposition and dismissed MHSI from this
action pursuant to Covenant and then denied MHSI the opportunity to amend its pleadings to
account for a theory of standing based on assignments it had already obtained from Bey before
filing the instant action,10 believing that the antiassignment clauses made such an amendment
futile. However, because the assignments could have provided MHSI with the standing it lacked
once the Covenant decision was issued and the antiassignment clauses were unenforceable to
prevent the post-loss assignments in this case, the antiassignment clauses thus did not dictate the
conclusion that it would have been futile to permit MHSI to amend its complaint to reflect the
existence of the assignments. Shah, 324 Mich App at 200, 204, 209; Covenant, 500 Mich at
195-196, 217 n 40. Therefore, the trial court necessarily abused its discretion in denying MHSI’s
motion for leave to amend because its decision was based on a mistake in law. Shah, 324 Mich
App at 208-209. Furthermore, because assignments from Bey could have provided MHSI with
standing under Covenant, the trial court erred by granting summary disposition without properly
applying the law regarding the effect of the antiassignment clauses in order to determine
whether an amendment to the pleadings based on the assignments would have been futile.11
Shah, 324 Mich App at 209.




9
  The Michigan Supreme Court ordered oral argument to be scheduled on the application for
leave to appeal in Shah. Jawad A Shah, MD, PC v State Farm Mut Auto Ins Co, 503 Mich 882
(2018).
10
   Unlike Shah, the assignments in this case were obtained before the litigation commenced and
this case thus presents an attempt to file an amended pleading, not a supplemental pleading. See
Shah, 324 Mich App at 204 (concluding that the medical providers had actually sought to file a
supplemental pleading because “the procurement of the assignments was an event that occurred
after the filing of the original complaint and provided the only means by which plaintiffs could
have standing to maintain a direct action against defendant insurer for recovery of no-fault
benefits in this case”); see also MCR 2.118(D) and (E) (discussing amended and supplemental
pleadings).
11
  The validity of these assignments and whether defendants are actually liable to pay any of the
benefits sought in this action are not currently before this Court because the trial court did not
rule on those issues.


                                                -7-
        In light of this conclusion, MHSI’s remaining arguments are moot because a ruling on
those issues would not “for any reason have a practical legal effect on the existing controversy.”
Garrett v Washington, 314 Mich App 436, 449; 886 NW2d 762 (2016) (quotation marks and
citation omitted). There is accordingly no need for this Court to address those arguments. Id.
(“This Court does not decide moot issues.”).

        Reversed and remanded for further proceedings consistent with this opinion. We do not
retain jurisdiction. Plaintiffs, having prevailed, are entitled to costs. MCR 7.219(A).

                                                            /s/ Stephen L. Borrello
                                                            /s/ Kirsten Frank Kelly
                                                            /s/ Deborah A. Servitto




                                               -8-
