United States District Court, E.D. Michigan, Southern Division
ORDER DENYING DEFENDANT'S MOTION TO DISMISS
GERSHWIN A. DRAIN UNITED STATES DISTRICT COURT.
before the Court is Defendant Allstate Property and Causalty
Insurance Company's (“Allstate”) Motion to
Dismiss. Dkt. No. 6. Defendant asserts that Plaintiff does
not have a cause of action because Plaintiff is a healthcare
provider. Plaintiff maintains that it has a cause of action
because the injured party assigned Plaintiff her rights
against Defendant. For the reasons that follow, the Court
will deny Defendant's Motion to Dismiss.
August 4, 2012, Carol Baum was involved in a car accident and
sustained bodily injury. Dkt. No. 1, pg. 9 (Pg. ID 9).
Plaintiff, Special Tree Rehabilitation System (“Special
Tree”), was Baum's medical care provider as Baum
recovered from her injuries. Id. Plaintiff provided
medical services to Baum with an outstanding balance of over
$148, 000. Id. at pg. 10 (Pg. ID 10). Defendant
Allstate is the insurer of Daniel Roy, the driver of the car
that hit Baum. Dkt. No. 18, pg. 9 (Pg. ID 161). Plaintiff
submitted reasonable proof of Plaintiff's medical bill
balance to Defendant. Dkt. No. 1, pg. 10 (Pg. ID 10).
However, Defendant has withheld full payment of the balance.
Id. Baum assigned her rights to collect No Fault
insurance benefits to Plaintiff on July 11, 2017. Dkt. No.
18-2, pg. 2 (Pg. ID 183). Ms. Baum also executed multiple
other assignments of her rights to Plaintiff. See
Dkt. No. 18-2. On May 1, 2017, Plaintiff commenced the
present action in the Circuit Court for the County of Wayne,
State of Michigan. Dkt. No. 1, pg. 11 (Pg. ID 11). Defendant
removed the action to this Court on August 8, 2017. On
December 20, 2017, Defendant filed its Motion to Dismiss.
Dkt. No. 6. Plaintiff filed its response past the filing
deadline on April 13, 2018. Dkt. No. 18. Defendant did not
file a reply.
Civ. P. 12(b)(6) governs motions to dismiss. The court must
construe the complaint in favor of the plaintiff, accept the
allegations of the complaint as true, and determine whether
plaintiff's factual allegations present plausible claims.
See Fed. R. Civ. P. 12(b)(6). To survive a motion to
dismiss, a complaint must “allege enough facts to make
it plausible that the defendant bears legal liability.”
Agema v. City of Allegan, 826 F.3d 326, 331 (6th
Cir. 2016). The facts need to make it more than “merely
possible that the defendant is liable; they must make it
plausible.” Id. “Bare assertions of
legal liability absent some corresponding facts are
insufficient to state a claim.” Id. A claim
will be dismissed “if the facts as alleged are
insufficient to make a valid claim or if the claim shows on
its face that relief is barred by an affirmative
defense.” Riverview Health Inst., LLC v. Med. Mut.
Of Ohio, 601 F.3d 505, 512 (6th Cir. 2010).
25, 2017, the Michigan Supreme Court decided Covenant
Medical Center, Inc. v. State Farm Mutual Automobile
Insurance Company, which held that health care providers
no longer had a right to file a separate cause of action to
recover the cost of the services they provided. 895 N.W.2d
490, 504-05 (Mich. 2017). Defendant uses this case to assert
that Plaintiff, as a healthcare provider, does not have a
statutory right of action to bring a claim. Dkt. No. 6, pg. 8
(Pg. ID 40). Defendant also asserts that Plaintiff has not
proven Ms. Baum's assignment of rights to Plaintiff.
Id. at pg. 9 (Pg. ID 41). Additionally, Defendant
asserts that it is ethically questionable for Plaintiff to
obtain an assignment from Ms. Baum because she has an ongoing
claim with Defendant. Id.
argues that it has a statutory right of action to bring a
claim because Ms. Baum assigned her rights to Plaintiff. Dkt.
No. 18, pg. 14 (Pg. ID 166). Plaintiff submitted multiple
assignments through her guardian, Sue Morris, assigning her
right to collect No Fault insurance benefits to Plaintiff.
Dkt. No. 18-2, pg. 2-4 (Pg. ID 183-85).
Covenant, the court noted that insureds could still
assign their right to past or presently due benefits to a
healthcare provider. Covenant, 895 N.W. at 505 n.40.
In this case, Ms. Baum assigned her rights to Plaintiff.
Covenant does not expressly prohibit this
assignment. Therefore, this Court holds that Ms. Baum's
assignment of her rights to Plaintiff is valid.
also anticipates that Defendant will argue that Ms.
Baum's assignment is invalid because of an
anti-assignment clause in Defendant's insurance policy
for Daniel Roy. Dkt. No. 18, pg. 17 (Pg. ID 169). Michigan
law holds that post-loss assignments are enforceable.
Marion v. Vaughn, 163 N.W.2d 239, 244 (Mich. Ct.
App. 1968); see also Benson v. Assurity Life Ins.
Co., No. 1:03-CV-817, 2004 WL 2106637, at *10 n.3 (W.D.
Mich. June 16, 2004) (noting that “Michigan law allows
for assignment of rights under an insurance policy after a
loss has occurred, even where the policy contains an
anti-assignment clause”). In this case, the record does
not contain a copy of Mr. Roy's insurance policy for the
Court to review. However, assuming that there is a
no-assignment clause, Michigan law still allows assignment
after a loss. In this case, Ms. Baum assigned her rights to
Plaintiff after she suffered a loss. Therefore, the
assignment is valid. Further, Defendant did not assert that
the assignment is invalid because of an anti-assignment
clause in its Motion, nor did it file a reply that asserted
this argument. Therefore, this Court still finds that Ms.
Baum's assignment of her rights to Plaintiff is valid.