The Minnesota Court of Appeals enforced the policy's anti-assignment provisions for the assignment of no-fault insurance claims to a medical provider. Stand Up Multipositional Advantage MRI, P.A. v. Family Ins. Co., 2016 Minn. App. LEXIS 24 (Minn. Ct. App. April 25, 2016).
Stand Up Multipositional Advantage MRI (SUMA) operated a clinic that performed MRIs. Before the MRI was done, SUMA had its patients sign a one-page assignment and lien agreement. The agreement stated, in part,
I hereby assign to SUMA . . . all of my claims to, rights to, and interests in, proceeds, whether resolved or unresolved, including without limit ownership rights, which I may have now or in the future relating directly or indirectly to my charges, condition, or causes of my condition . . . including remedies that I might have against or with respect to any payer now or in the future . . . . consistent with these terms, I hereby direct any and all Payers, to pay the proceeds directly to, immediately to, and exclusively in the name of SUMA to the full extent of my charges.
American Family Insurance Company issued auto policies, which included an anti-assignment provision: "Interest in this policy may be assigned only with our written consent."
In July 2013, SUMA filed suit against various insurers, including American Family, for alleged failure to make payment directly to SUMA pursuant to the assignments its patients signed. The patients were injured in an auto accident and sought an MRI from SUMA. Each signed an assignment.
SUMA filed suit, alleging that American Family refused to make payment pursuant to the assignments. Cross-motions for summary judgment were filed. The trial court granted SUMA's motion and denied the motion filed by American Family.
On appeal, American Family argued that the assignments to SUMA were invalid because the patients executed their assignments before they incurred a loss for purposes of the Minnesota No-Fault Act. The court noted that an anti-assignment provision in a policy was unenforceable under Minnesota law with respect to a post-loss assignment, thereby making a post-loss assignment valid and enforceable.
Under the No-Fault Act, the patient's loss accrued when the medical expense was incurred. Therefore, a patient's assignment of a no-fault insurance claim to a medical provider was invalid and unenforceable if the applicable policy forbade such an assignment and if the patient made the assignment before the medical provider billed the patient for the medical services. Here, the patients were billed by SUMA after they assigned their respective no-fault claims to SUMA. Therefore, the assignments were pre-loss assignments and invalid under the policy language.