The Michigan Court of Appeals has recently ruled that a claimant, who has assigned his/her right to collect No-Fault Personal Injury Protection/Personal Protection Insurance (“PIP”) benefits, cannot claim those benefits when the one-year-back rule has lapsed and the claimant and those medical providers execute revocations of assignments. See Robinson v. Szcsotka, unpublished Docket No. 359646 2023 Mich. App. LEXIS 2417.
The Robinson v. Szcsotka Decision
Tiffany Shantel Robinson (“Robinson”) filed a lawsuit against Suburban Mobility Authority for Regional Transportation (“SMART”) claiming that she was injured in an automobile accident. She allegedly incurred medical bills pertaining to same. Prior to Robinson filing her lawsuit, she assigned her rights to recover PIP benefits to several of her medical providers, including Northland Radiology, Quest Physical Therapy, Dependable Transportation, Aligned Chiropractic, and Elite Diagnostics.
SMART filed a motion for partial summary disposition arguing that Robinson had no right to pursue any of the expenses for providers that she had assigned her rights to collect to. Robinson responded and included mutual revocations of the assignments for all providers aside from a provider who had filed its own lawsuit. Robinson acknowledged that her medical providers had failed to bring any claims in a timely manner and were barred from recovery pursuant to the one year back rule contained in MCL 500.3145. However, she argued that given the mutual revocations, the court should treat the assignments as if they never existed because the revocations included language regarding same. She further argued that the revocations “revoked, rescinded, and nullified” the assignments nunc pro tunc, or retroactively, such that Robinson recovered her rights to recover PIP benefits dating back to the date of the assignments. The assignments contained the following language: “The assignments are revoked nunc pro tunc the date the assignment(s) was/were entered into and should be considered as if it/they never existed and that both [parties of this revocation] wish to revoke and rescind any and all Assignment of Rights as if it never existed by the execution of this agreement.” SMART argued that it had standing to challenge the effect of the assignments, because it had a real interest in the claims that might be brought against it. SMART also argued that a valid assignment is one manifesting a present intent to transfer, where the assignor does not retain any power of revocation. SMART additionally argued that when Robinson filed her complaint, she had already executed the assignments and therefore, the medical providers held the responsibility of timely bringing those claims pursuant to the one-year-back rule. Along these lines, SMART argued that given the one-year-back rule had lapsed, there were no claims to “give back” to Robinson. The lower court granted the motion in part as to the claim pertaining to Michigan Institute of Pain and Headache (d/b/a Metro Pain Clinic) but denied the remaining portion of the motion that pertained to the other providers and held that SMART had no right to enforce the assignments.
SMART appealed and the Michigan Court of Appeals reversed the lower court’s ruling. The Michigan Court of Appeals noted that “an assignee of a cause of action becomes the real party in interest with respect to that cause of action, inasmuch as the assignment vests in the assignee all rights previously held by the assignor." The Court of Appeals further noted that an assignment divests the assignor of any interest in the subject matter of the assignment and therefore the assignor loses the right that allows the assignor to prosecute its claim. Given that Robinson assigned her rights to the providers before commencing her lawsuit, she was not the real party in interest for those bills because her rights were divested by virtue of the assignments. While Robinson filed her lawsuit prior to the one-year-back, she had assigned those rights to the medical providers who became the real parties in interest at that time. Because those providers failed to prosecute their claims prior to the one-year-back rule lapsing, their rights were extinguished. The court noted that one must be the real party in interest when the lawsuit is filed, and a retroactive, or nunc pro tunc, revocation cannot be used to correct a factual problem that existed when a lawsuit was filed. Further, while Robinson and her providers were free to mutually decide to revoke the assignments, those revocations were as of the date of the execution and could not be used to retroactively eliminate the fact that the assignments existed at the time Robinson filed her lawsuit. Additionally, the Court noted that the medical providers had no timely claims to return to Robinson as of the date of the revocations because the revocations occurred more than a year after the services were rendered.
The Implication of this Decision Going Forward
This decision should serve as a reminder that claimants who have assigned their rights to pursue No-Fault benefits do not have standing to pursue any assigned claims and there is likelihood that those assigned claims are lost in their entirely if the assignees failed to properly or timely pursue those assigned rights. In essence, a claimant that assigns a right to claim No-Fault benefits to a medical provider and subsequently revokes the assignment after the one-year back rule has lapsed, is likely precluded from arguing that the revocation dates back to the assignment date.