10 Fla. L. Weekly Supp. 718b
Insurance — Personal injury protection — Where, due to valid assignment of benefits to medical provider, insured had no cause of action at time he filed original complaint, and insurer paid medical bills and interest prior to filing of amended complaint joining medical provider as plaintiff, medical provider has no cause of action against insurer — Amended complaint does not relate back to date of filing first complaint where amended complaint has effect of adding new party, medical provider is not sufficiently related to insured to come within narrow exception to rule against relation back when amended complaint has effect of adding new party, and insurer would be prejudiced if relation back were allowed because insurer would be exposed to liability for attorney’s fees for complaint that was never valid when filed
JEFF SCHMIDT, and FIRST COAST MEDICAL CENTER, Plaintiffs, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 4th Judicial Circuit in and for Duval County. Case No. 01-06659-CC, Division G. May 12, 2003. Tyrie W. Boyer, Judge. Counsel: David M. Gagnon. Kevin Loftus.
ORDER GRANTING DEFENDANT’S SECOND MOTION FOR SUMMARY JUDGMENT
THIS CAUSE having come before the Court on Defendant’s Second Motion for Summary Judgment and the Court, having heard argument of counsel and being otherwise duly advised in the premises, finds:
1. Jeff Schmidt (“Schmidt”) filed a Complaint for PIP benefits on June 22, 2001, requesting payment for medical treatment he received from First Coast Medical Center (“First Coast”). Schmidt filed an Amended Complaint on July 8, 2002, adding First Coast as a Plaintiff.
2. State Farm paid the outstanding medical bills from First Coast Medical Center on November 16, 2001, with all required and applicable interest. Therefore, the applicable bills were paid to First Coast after the filing of Schmidt’s Complaint but well before the amendment to add First Coast as a co-Plaintiff.
3. On December 20, 2002, this Court granted State Farm’s Motion for Summary Judgment in part, finding as a matter of law that a valid assignment of benefits existed in favor of First Coast.
4. As this Court found in granting, in part, Defendant’s first Motion for Summary Judgment, Schmidt did not have standing to file the lawsuit and, therefore, had no cause of action at the time he filed the original Complaint. See, e.g., Oglesby v. State Farm Mut. Auto. Ins. Co., 781 So. 2d 469, 470 (Fla. 5th DCA 2001); see also Allstate Ins. Co. v. Kaklamanos, 2003 WL 1740882 [28 Fla. L. Weekly S287a] (Fla. April 3, 2003).1
5. The medical bills from First Coast were paid with the required interest prior to the joining of First Coast to the litigation and, therefore, First Coast had no cause of action against State Farm unless the Amended Complaint relates back to the date of filing the original Complaint.
6. The question presented by Defendant’s Second Motion for Summary Judgment is whether, as a matter of law, the Amended Complaint relates back to the date of the filing of the original Complaint.
7. This Court previously has ruled that Schmidt had no viable cause of action at the time of the filing of the original Complaint and thereafter repleaded in the Amended Complaint to which a summary judgment was granted in favor of the Defendant. Therefore, First Coast cannot collect damages as the present Plaintiff in a lawsuit that was invalid at the time it was filed. See Marianna & B.R. Co. v. Maund, 56 So. 670, 672 (Fla. 1911) (“a plaintiff cannot supply the want of a valid claim at the commencement of the action by the acquisition or accrual of one during the pendency of the action . . . where the right to sue arises out of a transaction subsequent to the institution of the suit, relief cannot be had by a supplemental or amended complaint, for the obvious reason that the cause of action did not then exist); Jeff-Ray Corp. v. Jacobson, 566 So. 2d 885, 886 (Fla. 4th DCA 1990) Cf. Oglesby, 781 So. 2d at 470 (“. . . the one that owns the claim must bring the action if one is to be brought.”)
8. If the Amended Complaint related back to the date of the filing of the original Complaint, it would have the effect of requiring the Defendant to pay Plaintiff’s attorneys’ fees pursuant to Florida Statute §627.736.2
9. Even if the substitution of the Plaintiffs were proper, First Coast is not entitled to recover in this action.
10. It is well settled under Florida law that generally “an amended complaint does not relate back to the original filing date where it has the effect of adding a new party to the cause of action.” See, e.g., Patel v. School Board of Volusia County, 813 So. 2d 135, 136 (Fla. 5th DCA 2002); Schwartz v. Wilt Chamberlain’s of Boca Raton, LTD., 725 So. 2d 451, 453 (Fla. 4th DCA 1999); Kozich v. Shahady, 702 So. 2d 1289 (Fla. 4th DCA 1997); West Volusia Hospital Authority v. Jones, 668 So. 2d 635, 636 (Fla. 5th DCA 1996).
11. However, relation back of an Amended Complaint adding a party is allowed only where “the new party is sufficiently related to the original party so that no prejudice to the new party will occur.” See Patel, 813 So. 2d at 136; see also Ron’s Quality Towing, Inc. v. Southeastern Bank of Florida, 765 So. 2d 134, 136 (Fla. 1st DCA 2000) (finding identity of interest between the officer of a corporation and the corporation itself in a claim against the defendant for unfair requirements in its lending procedures).
12. The cases recognizing this narrow exception nearly always involve a statute of limitations and multiple corporate defendants, see, e.g., Darden v. Beverly Health & Rehabilitation, 763 So. 2d 542 (Fla. 5th DCA 2000), rather than where, as here, parties are involved in a contractual dispute. In contrast, this case involves two heretofore unrelated Plaintiffs, whose only legal relationship was based on an assignment of benefits that could have been easily obtained by Schmidt’s counsel. The Court finds a stark difference between an action originally filed, albeit incorrectly, against a subsidiary company and then amended after discovery to add the ultimate defendant corporation and a case such as this in which the lawsuit was incorrectly filed on behalf of a client without standing and then, for the purposes of convenience and a purported entitlement to attorney’s fees, a second “client” is added through relation back.
13. Since these cases usually arise in the context of determining whether two corporations are sufficiently related to allow relation back, courts consider factors such as whether the ownership of the parties overlaps, whether the officers and directors of the parties overlap, whether the parties share the same financial and registration statements, and whether the parties share the same attorney. See, e.g., Arwine v. Huntington National Bank, N.A., 818 So. 2d 621, 624 (Fla. 2d DCA 2002).
14. In “non-corporation” cases, courts still require a very significant relationship before relation back will be allowed. For example, courts have found that a sufficient relationship does not exist where two parties were independent agencies of the State. See Patel, 813 So. 2d at 136.
15. This Court is not convinced by Plaintiff’s argument that relation back is appropriate here. Except for the fact that Schmidt and First Coast have the same attorney, there is no genuine issue of material fact indicating that the two parties share any of the factors outlined in Arwine. See Arwine, 818 So. 2d at 624. Although the Arwine factors are not exhaustive, there is no record evidence indicating any specific relationship between Schmidt and First Coast.
16. Nothing in the record creates a genuine issue of material fact as to the lack of relationship between Schmidt and First Coast. They do not share an address, ownership of an entity, or common directors or officers. Indeed, First Coast and Schmidt have directly adverse interests in this suit. Schmidt, as the State Farm insured, has an interest in reserving as much of his available PIP benefits as possible for future treatment and/or wage-loss claims. Conversely, First Coast would be benefitted by depleting those benefits by obtaining payment for medical services. The opposing interests of Schmidt and First Coast prevent them from having an identity of interest.
17. This Court distinguishes the case law addressing relation back in the context of a company and its parent or subsidiary company. As opposed to an officer of a corporation and the corporation itself, who are likely to have the same purpose in pursuing a matter for the health of the corporation, Schmidt and First Coast have opposite interests in regards to Schmidt’s PIP benefits.
18. Plaintiff’s argument that a sufficient relationship exists because the assignment of benefits requires Schmidt to pay First Coast for any medical care not compensable under Schmidt’s policy with State Farm is moot. It is undisputed that State Farm paid the bill at issue. Accordingly, this Court need not decide whether this portion of the assignment of benefits creates a sufficient relationship since the insured was not required to pay any funds.
19. This Court is further unpersuaded by Plaintiff’s argument that relation back should occur because State Farm knew of the relationship between Schmidt and First Coast. “[K]nowledge of impending litigation should not necessarily impact the relation-back doctrine.” See Patel, 813 So. 2d at 136.
20. State Farm would be prejudiced if relation back were allowed. Specifically, as mentioned above, if relation back were allowed, State Farm would be exposed to liability for attorney’s fees for a Complaint that was never valid when filed. Plaintiff’s counsel is, in effect, seeking payment for filing a Complaint on behalf of one client when proper pre-suit investigation of the claim would have demonstrated that Schmidt did not have standing to pursue this lawsuit.
21. Since no genuine issue of material fact exists as to whether the Amended Complaint should relate back, State Farm is entitled to Final Summary Judgment.
It is therefore ORDERED and ADJUDGED:
State Farm’s Second Motion for Summary Judgment is GRANTED.
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1This Court finds this recent Supreme Court case involving the standing of an insured to bring a PIP lawsuit to be consistent with this Court’s prior ruling. As is more fully evident in the First DCA opinion, Kaklamanos v. Allstate Ins. Co., 796 So. 2d 555 (Fla. 1st DCA 2001), the insured there was not proceeding with the suit at the same time the medical providers were proceeding under a valid assignment of benefits. Since the insured in this suit executed a valid assignment in favor of his medical provider, only the medical provider had standing to bring suit. In Kaklamanos, the Supreme Court acknowledged the validity of an assignment of benefits in PIP suits when it stated, in footnote 3 of its opinion, “In fact, where an insured does assign PIP benefits to the medical provider, it has been ruled an unqualified assignment which removes the insured’s standing to bring a direct action against the insurer, even though the insured remains liable for any medical bills not paid by the insurer.” Id. (citing Oglesby v. State Farm Mut. Auto. Ins. Co., 781 So. 2d 469 (Fla. 5th DCA 2001) and Livingston v. State Farm Mut. Auto. Ins. Co., 774 So. 2d 716, 717 (Fla. 2d DCA 2000)). Based on this statement, this Court finds this recent opinion to be in complete accord with the ruling on Defendant’s first Motion for Summary Judgment.
2This Court makes no determination of the issues raised in Plaintiff’s pending Motion for Entitlement to Attorneys’ Fees. There, Plaintiff argues that whether the Amended Complaint relates back to the original Complaint or not, Defendant owes fees because it confessed judgment. This Court will rule on this issue at a later time. In any event, it is undisputed that if this Court had ruled that the Amended Complaint related back, Defendant would have owed Plaintiff’s attorneys’ fees.
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