            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



TEAM REHABILITATION W2,                                              UNPUBLISHED
                                                                     April 25, 2019
               Plaintiff-Appellant,

v                                                                    No. 343005
                                                                     Oakland Circuit Court
STATE FARM MUTUAL AUTOMOBILE                                         LC No. 17-160947-NF
INSURANCE COMPANY,

               Defendant-Appellee.


Before: MARKEY, P.J., and FORT HOOD and GADOLA, JJ.

PER CURIAM.

        Plaintiff, Team Rehabilitation W2, appeals by right the trial court’s order granting
summary disposition in favor of defendant, State Farm Mutual Automobile Insurance Company.
Non-party Timothy Haerens, who was insured by State Farm under a no-fault insurance policy,
was injured in a motor vehicle accident and received rehabilitation and therapy services from
plaintiff. Haerens executed an assignment of limited rights in favor of plaintiff. Plaintiff then
commenced this action against State Farm under the assignment in an effort to obtain no-fault
benefits to cover the cost of the services it provided Haerens. The trial court concluded that
language in the assignment no longer obligated Haerens to pay plaintiff for the services he
received; therefore, there were no longer any “incurred” charges or “allowable expenses” for
State Farm to pay under MCL 500.3107(1)(a). We reverse and remand for further proceedings.

         In a first amended complaint, plaintiff alleged that Haerens was involved in a car accident
on January 3, 2016, sustaining injuries that necessitated medical care and treatment. As part of
his care, plaintiff provided recovery, rehabilitation, and therapy services to Haerens, incurring
costs and expenses in doing so. Plaintiff further alleged that Haerens was covered by a no-fault
insurance policy issued by State Farm, that State Farm was first in priority to pay benefits
relative to Haerens’s therapy, and that plaintiff had provided reasonable proof in support of
payment of benefits to State Farm. Plaintiff contended that State Farm was in breach of contract,
i.e., the insurance policy, and that plaintiff had the authority to bring a cause of action against
State Farm based on an assignment of limited rights executed by Haerens on December 1, 2016.
Along with the breach of contract count, plaintiff set forth a claim of promissory estoppel. In


                                                -1-
support, plaintiff maintained that State Farm had told plaintiff twice that Haerens’s insurance
policy was “open and billable,” that plaintiff, justifiably relying on those statements, provided
services to Haerens in expectation of being compensated, and that State Farm did not pay
plaintiff, nor did it ever have any intention of paying plaintiff. Finally, plaintiff sought
declaratory relief with respect to the applicability of the no-fault act, MCL 500.3101 et seq.

        The assignment of limited rights executed by Haerens stated that Haerens assigned to
plaintiff “the right to payment for therapy services provided to [Haerens] by [plaintiff] to which
[he] may be entitled under the No Fault Act, MCL 500.3101 et seq.” The agreement only
assigned “the right to payment of . . . charges for therapy services” and not any other benefits
that Haerens might be entitled to under the no-fault act. The assignment was not revocable. The
assignment further provided:

               This assignment is for all services provided to Me by Team Rehab on or
       before the date of execution of this agreement. This assignment does not include
       an assignment of any future No Fault benefits.

              I certify that I have received therapy services from Team Rehab and
       incurred charges for those services. This agreement assigns the rights, privileges
       and remedies for those charges to Team Rehab.

               I certify that I understand that team Rehab will pursue payment from
       persons or companies other than Me. If Team Rehab determines, as a result of its
       own investigation or judicial or quasi-judicial proceedings, that I do not have a
       right to No Fault Benefits under MCL 500.3101 et seq, Team Rehab will pursue
       payment under My other insurance policies, or other health benefits such as
       Medicare.

               Team Rehab certifies that it will not pursue payment of its charges from
       Me, but will accept payment from the persons or companies it pursues as payment
       of its total charges. If I receive a payment from one of the parties pursued by
       Team Rehab that includes payment for therapy provided by Team Rehab, and that
       party denies payment to Team Rehab, Team Rehab may demand payment from
       Me.

               Team Rehab undertakes to pay all the costs of pursuing payment from
       persons or companies other than Me under the No Fault Act . . . . This includes . .
       . claims for No-fault interest and attorney fees. I undertake to cooperate with
       Team Rehab by providing information to Team Rehab’s attorneys, answering
       their questions, attending depositions and appearing at a trial.

              If this agreement is nullified by judicial or quasi-judicial proceedings, I
       automatically grant Team Rehab a lien on any benefits to which I may be entitled
       under the No Fault Act.

              I understand that if I retain counsel to seek My No Fault Benefits, that
       counsel shall have no right to pursue payment for Team Rehab’s charges for


                                               -2-
       therapy services provided to Me by Team Rehab, nor shall that counsel have any
       right [to] payment of an Attorney fee from services provided by Team Rehab.

               Patient and Team Rehab agree that if any terms or provisions of this
       agreement are declared unenforceable by any Court or Federal or State Agency
       having jurisdiction over the subject matter of this agreement, the terms that are
       not affected shall remain in full force and effect. [Emphasis added.]

        In lieu of filing an answer to plaintiff’s complaint, State Farm filed a motion for summary
disposition under MCR 2.116(C)(8). State Farm asserted that the insurance policy contained a
clause which provided that “[n]o assignment of benefits or other transfer of rights is binding
upon us unless approved by us.” Thus, according to State Farm, the purported assignment was
invalid. In support, State Farm attached 38 pages of an insurance policy without identifying
where exactly the cited language could be found. Additionally, the attached pages made no
reference to the name of a particular policyholder, but it did contain a form number. State Farm
noted that plaintiff did not have an independent cause of action against State Farm under the no-
fault act in light of our Supreme Court’s decision in Covenant Med Ctr, Inc v State Farm Mut
Auto Ins Co, 500 Mich 191; 895 NW2d 490 (2017). Next, State Farm contended that the
assignment itself waived plaintiff’s right to pursue Haerens for services rendered; therefore,
under MCL 500.3107(1)(a), “incurred” charges no longer existed, and “allowable expenses”
recoverable under the no-fault act must actually be incurred. Finally, State Farm argued that
partial assignments are unenforceable as a matter of law.

        In response, plaintiff maintained that it had a viable cause of action against State Farm on
the basis of the assignment Haerens executed. Plaintiff noted that Covenant Med Ctr recognized
and approved of such assignments. Plaintiff also argued that “the subject assignment is not in
fact partial, but a complete assignment of a debt distinguishable from other debts perhaps owed
by” State Farm. Plaintiff further responded that State Farm’s “anti-assignment” clause in its
policy did not defeat plaintiff’s action. Plaintiff asserted that “an anti-assignment clause will not
be enforced where a loss occurs before the assignment, because in that situation, the assignment
of the claim under the policy is viewed no differently than any other assignment of an accrued
cause of action.” Plaintiff additionally contended that the assignment did not waive plaintiff’s
right to pursue State Farm for the payments, arguing that “the assignment in no way attempted to
relieve State Farm of any obligations to pay th[e] bill.” Plaintiff also indicated that the insurance
policy attached to State Farm’s summary disposition brief was not the correct policy.

        In a reply brief, State Farm submitted a heavily redacted document regarding policy
details for Haerens’s specific insurance policy, and the document referred to the same form
number identified in the policy previously submitted by State Farm.

        On January 10, 2018, the trial court heard State Farm’s motion for summary disposition
and took the matter under advisement. On March 9, 2018, the trial court issued a written
opinion and order granting summary disposition in favor of State Farm. The court first ruled that
State Farm had not shown that the insurance policy barred the enforceability of the assignment or
that the assignment was only a partial assignment. The trial court next quoted MCL
500.3107(1)(a), which provides that personal protection insurance (PIP) benefits are payable for
“[a]llowable expenses consisting of all reasonable charges incurred for reasonably necessary

                                                -3-
products, services and accommodations for an injured person's care, recovery, or rehabilitation.”
(Emphasis added.) After citing and examining case law construing MCL 500.3107(1)(a), the
trial court concluded:

                The Plaintiff’s assignment clearly states that it will only demand payment
       from Haerens if [State Farm] pays Haerens No-Fault benefits . . . . If [State Farm]
       never makes a payment to Haerens, Haerens never has to pay the Plaintiff.
       Likewise, if [State Farm] never makes a payment to Haerens, the Plaintiff cannot
       file a lien against Haerens. Therefore, Haerens has no legal obligation to pay the
       Plaintiff if [State Farm] never pays any benefits. The court concludes that because
       of the assignment, Haerens has not incurred the charges from the Plaintiff and
       therefore he is not entitled to benefits from [State Farm] on those charges.
       Therefore, no factual development could possibly justify recovery on any of
       Plaintiff’s claims. The Amended Complaint is dismissed.

Plaintiff now appeals as of right.

       This Court reviews de novo a trial court’s ruling on a motion for summary disposition.
Hoffner v Lanctoe, 492 Mich 450, 459; 821 NW2d 88 (2012). Additionally, this Court reviews
de novo issues concerning the proper interpretation of a contract and the legal effect or
application of a contract. Rory v Continental Ins Co, 473 Mich 457, 464; 703 NW2d 23 (2005).
And finally, we likewise review de novo issues of statutory construction. Estes v Titus, 481
Mich 573, 578-579; 751 NW2d 493 (2008).

        MCR 2.116(C)(8), which provides for summary disposition when a “party has failed to
state a claim on which relief can be granted,” tests the legal sufficiency of a complaint. Beaudrie
v Henderson, 465 Mich 124, 129; 631 NW2d 308 (2001). The trial court may only consider the
pleadings in rendering its decision under MCR 2.116(C)(8). Id. All factual allegations in the
complaint are accepted as true. Dolan v Continental Airlines/Continental Express, 454 Mich
373, 380-381; 563 NW2d 23 (1997). “The motion should be granted if no factual development
could possibly justify recovery.” Beaudrie, 465 Mich at 130. Although the trial court granted
State Farm’s motion for summary disposition under MCR 2.116(C)(8), the court’s reasoning was
ultimately based on construction and application of the language in the assignment. According
to the court, the assignment no longer obligated Haerens to pay plaintiff for the therapy and
rehabilitation services he had received, except if State Farm paid Haerens for such services,
thereby defeating any recovery by plaintiff from State Farm under MCL 500.3107(1)(a). When a
court takes into consideration documentary evidence or information outside of the pleadings in
granting a motion for summary disposition, we must treat the court’s decision as having granted
summary disposition under MCR 2.116(C)(10). Innovation Ventures v Liquid Mfg, 499 Mich
491, 506-507; 885 NW2d 861 (2016).

       In Pioneer State Mut Ins Co v Dells, 301 Mich App 368, 377; 836 NW2d 257 (2013), this
Court set forth the framework regarding analysis of a motion for summary disposition brought
under MCR 2.116(C)(10). It explained:

               In general, MCR 2.116(C)(10) provides for summary disposition when
       there is no genuine issue regarding any material fact and the moving party is

                                                -4-
        entitled to judgment or partial judgment as a matter of law. A motion brought
        under MCR 2.116(C)(10) tests the factual support for a party's claim. A trial court
        may grant a motion for summary disposition under MCR 2.116(C)(10) if the
        pleadings, affidavits, and other documentary evidence, when viewed in a light
        most favorable to the nonmovant, show that there is no genuine issue with respect
        to any material fact. A genuine issue of material fact exists when the record,
        giving the benefit of reasonable doubt to the opposing party, leaves open an issue
        upon which reasonable minds might differ. The trial court is not permitted to
        assess credibility, weigh the evidence, or resolve factual disputes, and if material
        evidence conflicts, it is not appropriate to grant a motion for summary disposition
        under MCR 2.116(C)(10). A court may only consider substantively admissible
        evidence actually proffered relative to a motion for summary disposition under
        MCR 2.116(C)(10). [Citations and quotation marks omitted.]

        When a judgment is sought under MCR 2.116(C)(10), the moving party is required to
submit “[a]ffidavits, depositions, admissions, or other documentary evidence in support of the
grounds asserted in the motion.” MCR 2.116(G)(3). When the moving party satisfies this
requirement for purposes of MCR 2.116(C)(10), the “adverse party may not rest upon the mere
allegations or denials of his or her pleading, but must, by affidavits or as otherwise provided in
this rule, set forth specific facts showing that there is a genuine issue for trial.” MCR
2.116(G)(4). And “[i]f the adverse party does not so respond, judgment, if appropriate, shall be
entered against him or her.” Id.

        The contractual assignment between Haerens and plaintiff, in conjunction with MCL
500.3107(1)(a), formed the basis for the trial court’s ruling. “The cardinal rule in the
interpretation of contracts is to ascertain the intention of the parties[;] [t]o this rule all others are
subordinate.” McIntosh v Groomes, 227 Mich 215, 218; 198 NW 954 (1924). In light of this
rule, “[i]f the language of the contract is clear and unambiguous, it is to be construed according
to its plain sense and meaning; but if it is ambiguous, testimony may be taken to explain the
ambiguity.” New Amsterdam Cas Co v Sokolowski, 374 Mich 340, 342; 132 NW2d 66 (1965);
see also Frankenmuth Mut Ins Co v Masters, 460 Mich 105, 111; 595 NW2d 832 (1999).

        “When interpreting a statute, the primary rule of construction is to discern and give effect
to the Legislature’s intent, the most reliable indicator of which is the clear and unambiguous
language of the statute.” Perkovic v Zurich American Ins Co, 500 Mich 44, 49; 893 NW2d 322
(2017). The language of a statute must be enforced as written, “giving effect to every word,
phrase, and clause.” Id. Additional judicial construction is only permitted when statutory
language is ambiguous. York Charter Twp v Miller, 322 Mich App 648, 659; 915 NW2d 373
(2018). When determining the Legislature’s intent, statutory provisions are not to be read in
isolation; rather, they must be read in context and as a whole. In re Erwin Estate, 503 Mich 1, 6;
921 NW2d 308 (2018).

        We begin by examining the language of the relevant statute, MCL 500.3107, which,
again, provides in pertinent part that PIP benefits are payable for “[a]llowable expenses
consisting of all reasonable charges incurred for reasonably necessary products, services and
accommodations for an injured person's care, recovery, or rehabilitation.” To establish
entitlement to PIP benefits under MCL 500.3107(1)(a), the claimant must show that (1) an

                                                  -5-
expense was incurred; (2) the expense was for a service, product, or accommodation reasonably
necessary for the injured person's care, recovery, or rehabilitation, and (3) the charge or expense
was reasonable. Bombalski v Auto Club Ins Ass’n, 247 Mich App 536, 541; 637 NW2d 251
(2001). With respect to the term “incurred,” as used in MCL 500.3107(1)(a), the Bombalski
panel ruled:

               We . . . conclude that in light of the ordinary meaning of incurred and the
       public policy behind the no-fault act, incurred charges within MCL
       500.3107(1)(a) do not encompass any amounts (1) exceeding those that plaintiff's
       health insurer actually paid in satisfaction of plaintiff's medical bills and (2) for
       which plaintiff no longer bears legal responsibility. [Id. at 546.]

        The Court explained that to “incur” means suffering or bringing upon oneself a liability
or expense and that a person becomes liable for medical expenses when he or she accepts
medical treatment. Id. at 542. The Court held that a healthcare provider’s full charges are not
incurred by the insured to the extent that the charges exceeded amounts paid by a medical insurer
as full compensation. Id. at 543. In Williams v AAA Mich, 250 Mich App 249, 269; 646 NW2d
476 (2002), this Court similarly held:

               In this case, plaintiff seems to acknowledge that he owes no outstanding
       amounts to [the hospital] for the services it provided and that, pursuant to its
       contractual agreement with [the medical insurer], [the hospital] accepted the
       reimbursement amounts that [the medical insurer] offered as payment in full for
       the services that [the hospital] provided. Consequently, plaintiff did not incur the
       full amounts billed by [the hospital] and is not entitled to a further recovery from
       defendant of the difference between the full amounts that [the hospital] billed for
       its services and the lesser amounts that [the hospital] accepted from [the medical
       insurer] as payment in full.

        Here, the trial court ruled, and State Farm argues, that the assignment effectively
extinguished any liability or debt Haerens incurred in relation to the services plaintiff provided.
This position is based on the language in the assignment which states that plaintiff “certifies that
it will not pursue payment of its charges from [Haerens], but will accept payment from the
persons or companies it pursues as payment of its total charges.” Plaintiff contends that the
language of the assignment constituted a covenant not to sue, as opposed to a release of liability,
and that the covenant not to sue did not absolve Haerens of liability for the services he received
from plaintiff. Plaintiff further maintains that Haerens incurred charges for its services at the
time the services were provided, and nothing in the assignment caused Haerens to “un-incur” the
charges. Finally, plaintiff argues that State Farm had no standing to challenge the assignment for
purposes of MCR 2.116(C)(8) because State Farm was not a party to the contract. And, in fact,
State Farm tortiously interfered with the assignment.

        There can be no reasonable dispute that Haerens incurred charges when he accepted and
received services from plaintiff. The question is whether those charges lost their “incurred”
status following the execution of the assignment between plaintiff and Haerens. Bombalski and
Williams did not involve an assignment, and those cases entailed circumstances in which
healthcare providers actually received payment for their services and accepted the payments in

                                                -6-
full satisfaction of the incurred debts even though more was originally owed to the healthcare
providers. We conclude that the assignment did not discharge the liability or responsibility
concerning payment for the services plaintiff rendered. Nor did the charges lose their “incurred”
character upon execution of the assignment. The trial court’s ruling failed to appreciate the
nature of an assignment.

        It is well accepted in our jurisprudence that an assignee stands in the shoes of the
assignor, acquiring the same rights as the assignor. Nichols v Lee, 10 Mich 526, 528-529 (1862);
Wells Fargo Bank, NA v SBC IV REO, LLC, 318 Mich App 72, 107; 896 NW2d 821 (2016);
Burkhardt v Bailey, 260 Mich App 636, 652-653; 680 NW2d 453 (2004); Prof Rehab Assoc v
State Farm Mut Auto Ins Co, 228 Mich App 167, 177; 577 NW2d 909 (1998); First of America
Bank v Thompson, 217 Mich App 581, 587; 552 NW2d 516 (1996). Haerens, as the assignor,
held contractual rights to no-fault benefits under the insurance policy which covered amounts
owed to plaintiff for rehabilitation and therapy services. 1 On consummation of the assignment,
plaintiff stood in Haerens’s shoes, and the shoes in which Haerens had been standing were those
of a party that had an existing incurred debt that was covered, or potentially covered, by the State
Farm no-fault policy. The assignment did not extinguish the obligation or liability; rather, the
right to recover the debt simply shifted to the assignee—plaintiff. There remained an incurred
charge for services, and to construe the assignment to the contrary would render it entirely
illusory. Haerens would enjoy the benefit of not being pursued for payment in return for
plaintiff’s having no ability to recover from State Farm.

        Moreover, there is language in the assignment that does not lend itself to a determination
that Haerens’s liability for the obligation to plaintiff ceased upon execution of the assignment. In
J & J Farmer Leasing, Inc v Citizens Ins Co of America, 472 Mich 353, 357-358; 696 NW2d
681 (2005), the Michigan Supreme Court explained the difference between a covenant not to sue
and a release of liability:

               There is a material difference between a covenant not to sue and a release.
       A release immediately discharges an existing claim or right. In contrast,
       a covenant not to sue is merely an agreement not to sue on an existing claim. It
       does not extinguish a claim or cause of action. The difference primarily affects
       third parties, rather than the parties to the agreement.

       Here, the assignment provided, “If I [Haerens] receive a payment from one of the parties
pursued by Team Rehab that includes payment for therapy provided by Team Rehab, and that
party denies payment to Team Rehab, Team Rehab may demand payment from Me.” If the
charge were truly no longer “incurred” or Haerens’s liability ended with the assignment, Haerens


1
  To be clear, we are proceeding on the assumption that Haerens is entitled to PIP benefits from
State Farm in relation to plaintiff’s services and that Haerens could make a successful direct
claim to State Farm for those benefits. Our ruling is not intended to preclude any defenses that
State Farm may have against Haerens under the policy of insurance. The assignment also
rendered plaintiff subject to those defenses. See Wells Fargo Bank, 318 Mich App at 107 (an
assignee is subject to the same defenses as the assignor).


                                                -7-
could not be made to pay plaintiff for the rehabilitation and therapy services upon his receipt of
benefits covering those services. Additionally, plaintiff simply promised “not [to] pursue
payment” from Haerens, which is more in the nature of, or akin to, a covenant not to sue. There
is no language in the assignment indicating that plaintiff was releasing Haerens from all liability.
In sum, the trial court erred in granting summary disposition in favor of State Farm.

        Apparently sensing the potential flaw in the trial court’s ruling, State Farm devotes a
large portion of its appellate brief to the argument that the trial court should have granted it
summary disposition on the basis of the anti-assignment clause in the underlying insurance
policy. But, as State Farm recognizes, this precise argument was rejected by this Court in Jawad
A Shah, MD, PC v State Farm Mut Auto Ins Co, 324 Mich App 182, 200; 920 NW2d 148 (2018),
wherein the panel held:

               [W]e conclude that the anti-assignment 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.

        We decline State Farm’s invitation to ask for the convening of a special panel for the
purpose of creating a conflict with Shah under MCR 7.215(J)(2) and (3) considering that our
Supreme Court has ordered oral argument on the application for leave to appeal filed in Shah and
has directed the parties to brief the issue concerning the enforceability of State Farm’s anti-
assignment clause. 503 Mich 882 (2018).2 Should our Supreme Court in Shah rule in favor of
State Farm, there would be potential avenues for State Farm in this case to obtain relief from our
ruling.

        Finally, in light of our holding, we find it unnecessary to address plaintiff’s tortious
interference argument and its contention that State Farm lacked standing to challenge the
assignment for purposes of a motion brought pursuant to MCR 2.116(C)(8), where State Farm
was not a party to the assignment.

        We reverse and remand for proceedings consistent with this opinion. We do not retain
jurisdiction. Having fully prevailed on appeal, we award taxable costs to plaintiff under MCR
7.219.

                                                             /s/ Jane E. Markey
                                                             /s/ Karen M. Fort Hood
                                                             /s/ Michael F. Gadola



2
  We also note that another panel of this Court, absent disagreement, applied and relied upon the
holding in Shah, ruling that a comparable anti-assignment clause was unenforceable under
similar circumstances. Henry Ford Health Sys v Everest Nat’l Ins Co, __ Mich App __, __; __
NW2d __ (2018); slip op at 3.


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