            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MICHIGAN HEAD & SPINE INSTITUTE PC,                                UNPUBLISHED
                                                                   March 26, 2019
               Plaintiff-Appellant,

v                                                                  No. 342979
                                                                   Genesee Circuit Court
PIONEER STATE MUTUAL INSURANCE                                     LC No. 16-107129-NF
COMPANY,

               Defendant-Appellee.


Before: SHAPIRO, P.J., and BECKERING and M. J. KELLY, JJ.

PER CURIAM.

        In this suit seeking recovery of medical expenses under the no-fault act, MCL 500.3101
et seq., plaintiff, Michigan Head & Spine Institute PC, appeals by right the trial court order
granting summary disposition in favor of defendant, Pioneer State Mutual Insurance Company.
For the reasons stated in this opinion, we reverse and remand for further proceedings.

                                       I. BASIC FACTS

       On December 22, 2012, Larry Tullio was injured in a motor vehicle accident. At the time
of the accident, Tullio was insured under a no-fault insurance policy issued by Pioneer.
Following the crash, Tullio received treatment from Michigan Head & Spine, incurring
approximately $65,915 in medical expenses, which Pioneer refused to pay.

        Initially, Michigan Head & Spine filed their complaint in Macomb County; however, the
parties stipulated to change the venue to Genesee County and consolidate Michigan Head &
Spine’s case with Tullio’s case against Pioneer and the driver of the other vehicle. At that time,
the sole claim raised by Michigan Head & Spine was that Pioneer had violated its statutory duty
under the no-fault act to reimburse it for the services rendered to Tullio.

        On May 25, 2017, while this case was pending before the trial court, the Michigan
Supreme Court decided Covenant Med Ctr, Inc v State Farm Mut Auto Ins Co, 500 Mich 191;
895 NW2d 490 (2017). In Covenant, our Supreme Court held that healthcare providers have no
statutory cause of action against a no-fault insurer. Id. at 217-218. However, the Court also


                                               -1-
stated its “conclusion today is 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 40.1 In this case, between
December 16, 2013 and December 7, 2015, Tullio executed 12 assignments of rights that
provided:

               I, Larry A. Tullio, do hereby assign my right to collect no-fault insurance
       benefits for services rendered by Michigan Head & Spine Institute (MHSI) to
       date, to MHSI and attorneys operating on its behalf.[ 2]

Additionally, on September 21, 2017, Tullio executed an assignment of rights that provided as
follows:

               I, Larry A. Tullio (patient), do hereby assign my right to collect (including
       the right to sue for) no fault-insurance benefits, for unpaid services rendered by
       Michigan Head & Spine Institute, P.C. to date, to Michigan Head & Spine
       Institute, P.C. This is an assignment for services already rendered only; this is not
       an assignment of benefits for services rendered in the future or after the date of
       this document. . . .

The court granted leave to amend on October 16, 2017. Thereafter, on November 13, 2017,
Michigan Head & Spine filed an amended complaint.

        On February 13, 2018, Pioneer moved for summary disposition, arguing that (1) under
Covenant, Michigan Head & Spine could not sustain a statutory cause of action against it for
personal injury protection (PIP) benefits and (2) antiassignment language in Tullio’s no-fault
policy barred Michigan Head & Spine’s claim to the extent that it was based on the assignments
from Tullio. In response, Michigan Head & Spine conceded that under Covenant it could not
pursue a statutory cause of action against Pioneer, but it argued that it had the right to pursue
benefits under the assignments of rights from Tullio. Michigan Head & Spine contended that the
antiassignment clause in the insurance policy was void because it was against public policy.3 In
its reply brief, Pioneer argued that the antiassignment clause was not against public policy.
Additionally, Pioneer asserted for the first time that because one of the assignments of rights was




1
  Unlike past and presently due benefits, the assignment of future benefits is prohibited by the
no-fault act. See MCL 500.3143 (“An agreement for assignment of a right to benefits payable in
the future is void.”).
2
 The assignments are dated as follows: December 7, 2015, June 23, 2015, February 17, 2015,
December 16, 2014, December 8, 2014, May 5, 2014, March 13, 2014, February 7, 2014,
February 2, 2014, January 17, 2014, December 17, 2013, and December 16, 2013.
3
  Michigan Head & Spine also argued that a restriction on the assignment of no-fault benefits
was void under Michigan’s Uniform Commercial Code (UCC), MCL 440.9101 et seq. But the
trial court did not address that argument and we decline to do so for the first time on appeal.


                                                -2-
dated September 2017, the one-year-back rule, MCL 500.3145(1), prohibited Michigan Head &
Spine from recovering sums incurred more than a year before the assignment was executed.4

       On March 13, 2018, the trial court granted summary disposition in Pioneer’s favor after
concluding that it had to enforce the antiassignment clause in Tullio’s no-fault policy. This
appeal follows.

                                II. SUMMARY DISPOSITION

                                 A. STANDARD OF REVIEW

        Michigan Head & Spine argues that the trial court erred by granting summary disposition.
A trial court’s decision on a motion for summary disposition is reviewed de novo. Henry Ford
Health Sys v Everest Nat’l Ins Co, ___ Mich App ___, ___; ___ NW2d ___ (2018) (Docket No.
341563); slip op at 2. The trial court did not specify whether it was granting summary
disposition under MCR 2.116(C)(8) (failure to state a claim) or MCR 2.116(C)(10) (no genuine
issue of material fact). However, we treat the motion as having been decided under MCR
2.116(C)(10) because the trial court considered material outside the pleadings when it relied on
the antiassignment clause to dismiss the case. See Jawad A. Shah, MD, PC v State Farm Mut
Auto Ins Co, 324 Mich App 182, 207; 920 NW2d 148 (2018).

               A motion under MCR 2.116(C)(10) tests the factual sufficiency of the
       complaint. In evaluating a motion for summary disposition brought pursuant to
       this subsection, 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. 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. (quotation marks and citation omitted).]


4
  MCL 500.3145(1) provides in relevant part “the claimant may not recover benefits for any
portion of the loss incurred more than 1 year before the date on which the action was
commenced.” Although the issue was before it, the court made no findings with regard to the
effect the one-year-back rule would have on Michigan Head & Spine’s claim. Nevertheless, we
feel compelled to note that in Shah, 324 Mich App at 204, this Court held that a healthcare
provider receiving an assignment of rights from an insured “stands in the position of the
[insured], possessing the same rights and being subject to the same defenses.” In that case,
therefore, the healthcare provider could only recover the portion of the loss incurred in the year
before it received the assignment of rights. Id. at 205. Here, however, there are several
assignments of rights, dating from December 16, 2013 to September 21, 2017. Moreover, at the
time the September 21, 2017 assignment of rights was executed, Tullio had already commenced
his own action to recover benefits, so the rights he assigned were not as limited as the rights the
plaintiff in Shah assigned. Further distinguishing this case from Shah is the fact that Pioneer and
Michigan Head & Spine stipulated that “the date of filing for computation of the ‘one year back’
provision of the Michigan No-Fault Act, MCL 500.3145, shall be January 20, 2016, for claims of
Michigan Head & Spine Institute, P.C.”


                                                -3-
                                         B. ANALYSIS

        Michigan Head & Spines argues that, as the assignee of Tullio’s claim for no-fault
benefits, it was entitled to recover past and presently due benefits for the services it rendered to
Tullio for his accident related injuries. In response, Pioneer argues that an antiassignment clause
in Tullio’s insurance policy prohibits him from assigning the benefits without its consent. The
insurance policy provides that Tullio’s “rights and duties under this policy may not be assigned
without [Pioneer’s] written consent.” It is undisputed that Pioneer did not consent in writing for
Tullio to assign his right to benefits to Michigan Head & Spine.

        Insurance policies are contracts, and they “are subject to the same contract construction
principles that apply to any other species of contract.” Rory v Continental Ins Co, 473 Mich 457,
461; 703 NW2d 23 (2005). Thus, “unless a contract provision violates law or one of the
traditional defenses to the enforceability of a contract, . . . a court must construe and apply
unambiguous contract provisions as written.” Id. As a general rule, assignments are permitted
unless a contract clearly states otherwise. Shah, 324 Mich App at 197. However, an otherwise
clear and unambiguous contractual provision—including an antiassignment clause—is
unenforceable if the provision violates law or public policy. Id. at 198.

       In Shah, this Court held that an antiassignment clause in an insurance policy contract was
unenforceable because it violated Michigan public policy. Id. at 200. The insurer’s insured
assigned to his healthcare provider his right to no-fault benefits for care “already provided” by
the healthcare provider. Id. at 187-188. The insurer argued that the assignment was ineffective
because it violated an antiassignment clause in the insured’s no-fault policy; the healthcare
provider argued that the antiassignment clause was against public policy and so was void. Id. at
189, 196. The Shah Court held:

               Resolution of this issue turns on the application of our Supreme Court’s
       decision in Roger Williams Ins Co v Carrington, 43 Mich 252; 5 NW 303 (1880).
       In Roger Williams, an insurance policy was issued covering livery stable property;
       the property was later destroyed in a fire. Id. at 253. After the fire, the insured
       assigned the policy to secure a debt. Id. at 253-254. Our Supreme Court refused
       to enforce an antiassignment clause in that matter, explaining:

                       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. [Id. at 254.]

               In this case, the parties provide no authority, and we have found none,
       explicitly rejecting this analysis in Roger Williams. Moreover, it has been
       deemed controlling on this point of law in at least two relatively recent opinions
       of the United States District Court for the Western District of Michigan, Century

                                                -4-
       Indemnity Co v Aero-Motive Co, 318 F Supp 2d 530, 539 (WD Mich, 2003)
       (relying on Roger Williams while explaining that under Michigan law, “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.”); Action
       Auto Stores, Inc v United Capitol Ins Co, 845 F Supp 417, 422-423 (WD Mich,
       1993) (citing Roger Williams in support of the proposition that a provision
       prohibiting assignment without consent of the insurer was invalid with respect to
       a post-loss assignment).

               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 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.

               Therefore, we conclude that enforcement of 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. Roger Williams, 43 Mich at
       254; Rory, 473 Mich at 469-471. [Id. at 198-200.]

        The facts in this case are remarkably similar to those in Shah. And we conclude that, like
the antiassignment clause in Shah, the antiassignment clause in the no-fault policy at issue in this
case was unenforceable because of public policy. Tullio had an accrued claim against Pioneer
for the payment of health care services that had already been provided by Michigan Head &
Spine. The claim existed before the assignments were executed. Therefore, Tullio was free to
assign this claim to Michigan Head & Spine, despite the antiassignment clause in his no-fault
policy. See also Henry Ford Health Sys, ___ Mich App at ___; slip op at 4 (following Shah and
holding that an antiassignment clause prohibiting the assignment of already accrued benefits is
unenforceable because it violates public policy).

         Pioneer argues that we need not follow Shah because it did not consider portions of our
Supreme Court’s opinion in Rory, 473 Mich 457. However, Shah is a published opinion from
this Court, and, as such, we are bound to follow it. MCR 7.215(C)(2) (“A published opinion of
the Court of Appeals has precedential effect under the rule of stare decisis.”). Moreover, a fair
reading of Shah makes clear that it did, in fact, consider the opinion in Rory and it did not find
that it was applicable. See Shah, 324 Mich App at 196-200 (applying Rory to resolve the public-
policy question before the Court, and stating that it had located no authority “explicitly rejecting”
the public-policy holding in Roger Williams).



                                                -5-
        Reversed and remanded for further proceedings consistent with this opinion. Michigan
Head & Spine may tax costs as the prevailing party. MCR 7.219(A). We do not retain
jurisdiction.

                                                        /s/ Douglas B. Shapiro
                                                        /s/ Jane M. Beckering
                                                        /s/ Michael J. Kelly




                                            -6-
