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Home / Opinion Digests / Insurance / Insurance  –  Auto Insurance – Medical Payments Coverage – Assignment of Benefits – Validity

Insurance  –  Auto Insurance – Medical Payments Coverage – Assignment of Benefits – Validity

Plaintiffs’ claims against their treating hospital and auto insurer dismissed where plaintiffs validly assigned their medical coverage payment benefits as a form of “health insurance” as part of their hospital admission forms.

We grant defendants’ motion to dismiss for failure to state a claim.

Plaintiffs filed suit against defendant, asserting claims of breach of contract, interference with contractual relations, unfair or deceptive trade practices, and conversion; plaintiffs sought to represent a purported class of similarly situated persons. Plaintiffs’ claims arose from their treatment at defendant’s hospital following an automobile accident, during which plaintiffs or someone on their behalf executed forms that included the assignment of various insurance benefits. Plaintiffs argued that the assignment did not extend to the medical payments coverage provided by their auto insurance policy. Plaintiffs alleged that defendant contacted their insurer, who remitted checks under the medical payments coverage without their knowledge. Defendants moved to dismiss plaintiffs’ claims.

We first rule that plaintiffs have standing to pursue their breach claim against their insurer, as plaintiffs argue that they have a contractual right to determine how they will use their medical payments coverage benefits. We rule that this argument may assert an injury-in-fact if such benefits were not assigned.

However, we find that plaintiffs’ own pleadings support the finding that their medical payments coverage benefits were assigned to defendant hospital. We find that plaintiffs’ admission form assigns either “liability insurance” or “health insurance” benefits. Although we reject the hospital’s contention that the medical payments coverage was “liability insurance”, we also reject plaintiffs’ argument that the admission form’s use of the term “health insurance” was limited to “health benefit plans” as defined by statute. Instead, we note that the statute expressly recognizes that there are other forms of health insurance not included within the definition of “health benefits plans”, such as Medicare, Medicaid, or CHIP, even though payments under such plans are considered as health insurance benefits. Thus, we rule that plaintiffs’ admission forms clearly assign their medical payments coverage benefits as “health insurance”. Finally, we rule that the anti-assignment provision in plaintiffs’ policy did not preclude assignment in this case because anti-assignment clauses did not apply to assignments after loss, such as in this case, as there is no risk of increasing the insurer’s liability.

Granted.

Justice v. Mission Hospital, Inc. (Lawyers Weekly No. 020-021-19, 17 pp.) (James Gale, J.) Robert B. Long, Jr. and Steve R. Warren for plaintiffs; Joseph L. Adams, Phillip T. Jackson, Eric P. Edgerton, Robert W. Fuller, Mark A. Hiller, Christian H. Staples, J. Bennett, Laura Johnson Evans, and Glenn C. Raynor for defendants. 2019 NCBC 21


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