11 Fla. L. Weekly Supp. 964c
Insurance — Personal injury protection — Assignment — Coverage — Conditions precedent — Examination under oath — Medical provider/assignee — Document providing that insured is transferring and conveying all rights, title, and interest in medical expense reimbursement was valid assignment and not merely a direction to pay — Assignment does not transfer to health care provider the obligation to attend an examination under oath — Under clear terms of insurance policy drafted by insurer, neither facility which employed physician nor treating physician was required to attend EUO as condition precedent to filing suit — Order dismissing case reversed
ADVANCED DIAGNOSTIC TESTING, INC., Appellant, v. STATE FARM INS. CO., Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 02-472 AP (consolidated with case nos. 03-297 AP, 03-648 AP, 03-654 AP). L.C. Case No. 2001008909 SP 25. August 17, 2004. An Appeal from the County Court for Miami-Dade County, Judge Mercedes A. Bach. Counsel: Stuart B. Yanofsky, for Appellant. Nancy W. Gregoire and James P. Murphey, for Appellee.[Original Opinion at 11 Fla. L. Weekly Supp. 199a]
(BEFORE SIDNEY B. SHAPIRO, PAUL SIEGEL and MICHAEL B. CHAVIES, JJ.)
(PAUL SIEGEL, J.) The previous opinion of this court filed on January 27, 2004, is vacated and withdrawn, and this opinion is substituted in its stead.
Advanced Diagnostic Testing, Inc. (Advanced) provided medical care following an auto accident which injured a State Farm Insurance Company (State Farm) policy holder. Advanced, a corporation, received an assignment of benefits from its patient assigning to it the patient’s right to payment by State Farm for the medical care. The trial court granted a motion by State Farm to dismiss Advanced’s claim, finding that the purported assignment was merely a direction to pay and that it was not valid because it was conditional. To support the lower court’s decision, State Farm argues that either (1) the purported assignment was valid, thus carrying with it the obligation to attend an examination under oath (EUO) so that Advanced’s claim is void for failure to attend the EUO, or (2) the purported assignment was not a true assignment, but merely a direction to pay, which did not give Advanced standing to sue State Farm.A. Assignment Validity
With respect to the validity of the assignment, this Court notes that the facts of this case are remarkably similar to the facts in Multicare Medical Center, Inc. v. State Farm Fire and Casualty, 10 Fla. L. Weekly Supp. 724a (11th Circuit, Miami-Dade County 2003). In fact, the wording of the assignments and the health care provider’s affidavits are nearly identical in the two cases.1 Although not binding on this Court, we are persuaded by the reasoning of Multicare Medical Center, that the true nature of the document in question is an assignment and not merely a direction to pay, because it provides that the insured is transferring and conveying all of his rights, title and interest in his medical expense reimbursement.
State Farm would have us find that, because the document in question is an assignment, it transferred all of the assignor’s obligations along with his benefits. As support for its argument, State Farm cites Suniland Associates, Ltd. v. Wilbenka, Inc., 656 So.2d 722, 724 (Fla. 3d DCA 1995) for its statement that “an assignee succeeds to his assignor’s rights under the assignment of a contract and takes with it all the burdens to which it is subject in the hands of the assignor.” Suniland dealt with the assignment of a contract for lease, and simply held that the assignment was subordinate to a mortgage (the referenced burden). In contrast to Suniland, the instant case did not deal with an assignment of a contract, but an assignment of benefits. In other words, the insured did not assign his insurance policy to Advanced, he merely assigned his right to certain proceeds from his insurance policy to Advanced. This situation is not equivalent to the situation in Suniland. However, even analogizing from the Suniland situation to the instant case, State Farm is not correct about how “burdens” are transferred from an assignor to an assignee. To use the Suniland terminology, the “burden” to which the assignor was subject in the instant case was a condition precedent which required the insured to comply with a request for an EUO before filing suit. This “burden” did, in fact, transfer to Advanced, so that it could not successfully sue if the condition precedent was not complied with, meaning that Advanced could not sue if the insured refused to attend an EUO.
State Farm also cites State v. Family Bank of Hallandale, 667 So. 2d 257, 259 (Fla. 3d DCA 1975) for the proposition that “The assignee steps into the shoes of the assignor and is subject to all equities and defenses that could have been asserted against the assignor had the assignment not been made.” Again, this does not mean that the insured transferred his obligation to attend an EUO to the healthcare provider. Instead, this simply means that State Farm could defend against Advanced using any defense that it could have used against the insured if the insured had not assigned his right to sue. A valid defense that State Farm could have used against the insured if he had not made the assignment would exist if the insured did not attend an EUO. If State Farm were defending this case against the insured, it would not be a defense against the insured that the health care provider did not attend an EUO. Therefore, this is also not a defense that is available when the health care provider has stepped into the shoes of the insured and is subjected to any defenses that would be available against the insured. In other words, when an insured assigns his benefits to a healthcare provider, the obligation to attend an EUO remains with the insured, and the insurer has a good defense to the provider’s claim if the insured refuses to attend an EUO.
State Farm further misconstrues the law of assignments when it takes the position that it can require an EUO of both the insured and the assignee.2 This position is contrary to well settled law that only one party can “own” the right to make a claim. See, Oglesby v. State Farm Mut. Auto. Ins. Co., 781 So. 2d 469, 470 (Fla. 5th DCA 2001) (“[O]nly the insured or the medical provider ‘owns’ the cause of action against the insurer at any one time. And the one that owns the claim must bring the action if an action is to be brought.”). Therefore, when an insured assigns its right to sue to a health care provider, only the health care provider, and not the insured, “owns” the right to sue and is able to bring suit. See Multicare Medical Center, Inc. v. State Farm Fire and Casualty, 10Fla. L. Weekly Supp. 724a (11th Circuit, Miami-Dade County 2003) and cases cited therein. Similarly, if State Farm were correct that the assignment in the instant case transferred the obligation to attend an EUO to the health care provider, then only the health care provider, and not the insured would have the obligation to attend an EUO. State Farm’s argument that the obligation to attend an EUO transfers to the health care provider, but also stays with the insured, is unpersuasive.B. EUO (Examination Under Oath) Requirement
State Farm’s second argument in support of the dismissal order is that the order was properly entered because Advanced’s employee failed to attend an EUO when noticed and thus Advanced violated an obligation under the insurance contract whose benefits were assigned to it. Under the explicit terms of the insurance policy in the instant case, neither a corporate healthcare provider who is making a claim based on an assignment, nor a treating physician working for the healthcare provider, is required to attend an EUO. The policy states the following:
Person — means a human being.
State Farm Policy at 4 (p. 8 of State Farm’s Appendix) (emphasis in policy).
Any person who suffers a bodily injury . . . must notify us of the claim in writing as soon as reasonably possible . . . . The person making claim also shall:
. . .
b. be examined by physicians chosen and paid by us as often as we reasonably may require. . . .
c. answer questions under oath when asked by anyone we name, as often as we reasonably ask, and sign copies of the answers.
State Farm Policy at 6 (p. 10 of State Farm’s Appendix) (emphases in policy).
Based on this language of the policy, which neither party brought to the attention of the trial court or this court, we cannot understand how State Farm can seriously argue that either Advanced, or the treating physician working for Advanced, is a “person making claim.” While Advanced is certainly “making a claim,” it is a corporation, not a human being and therefore does not fit into the definition of “person” set forth in the policy. Therefore, Advanced is not a “person making claim” under the explicit definitions of the insurance policy, and is not required to attend an EUO. Likewise, while the physician who treated the insured is a human being, he is not making a claim, so he is also not a “person making claim” and also is not required to attend an EUO.
As such, it is clear under the terms of the insurance policy drafted by State Farm, that neither Advanced nor the treating physician was required to attend an EUO as a condition precedent to filing suit. This Court also agrees with Advanced that, if it were to determine that either Advanced or the attending physician were a “person making claim” under the policy, and thus required to attend an EUO, the same determination would lead to the absurd result that Advanced or the attending physician could also be required to attend an independent medical examination. This is because a “person making claim” is required under the policy to comply with both obligations.
State Farm asserts that “If a health care provider . . . is allowed to avoid the discovery approved in the above cases [an EUO of the health care provider], as it apparently intends to attempt, an insurer has no way to confirm whether the policy benefits are being improperly eroded by unnecessary and illegal treatment.” This argument is disingenuous. Kaminester v. State Farm Auto. Ins. Co., 775 So. 2d 981 (Fla. 4th DCA 2000), a case in which State Farm was represented by one of the same attorneys that it is represented by in the instant case, establishes that insurance companies have the right to discovery to investigate treatment, so health care providers will not avoid discovery by not being required to attend EUO’s.
This court is not unsympathetic to what we perceive to be State Farm’s motive in seeking an EUO from Advanced’s treating doctor. Some insurers consider South Florida to be an active locus of insurance fraud, especially in auto accident cases. In our criminal courts, we have seen prosecutions for staging phony accidents and for charging for medical care never delivered. State Farm must have the means available to it to investigate potentially fraudulent claims. And it does, without resorting to a contract EUO of the treating doctor. Section 627.736(6)(c) of the Florida Statutes (1999) allows an insurer to petition a court for discovery of facts about an injured person’s treatment or the dates and costs of such treatment. Kaminester, supra, allowed State Farm to obtain an MRI lease, even after it had paid its insured’s claim. Once a provider sues State Farm on an assignment, State Farm can depose the treating doctor if it wishes, and also engage in all the usual discovery methods to uncover any fraud.
Therefore, this Court is not convinced that medical providers should be required to attend EUOs in general, and moreover, it is clear that the policy involved in the instant case explicitly does not require either Advanced or the treating physician to attend an EUO.3 Because the assignment in question was a valid assignment, and because the medical provider was not required to attend an EUO, the trial court’s order dismissing the case is REVERSED. (SIDNEY B. SHAPIRO and MICHAEL B. CHAVIES, JJ. CONCUR.)
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1Both the assignment in Multicare Medical Center and the instant assignment provide, in relevant part:
I hereby assign, transfer and convey to [blank line] (Hereinafter “the Provider”) all of my rights, title and interest in and to medical expense reimbursement in whatever form . . . . I further authorize the Provider to negotiate, collect and settle any claims with any insurance carrier or other third party payer with regard to these services . . . . I further direct my insurer to direct all payments for services rendered by the Provider to: ADVANCED DIAGNOSTIC TESTING, INC. . . . . THIS IS A DIRECT AND IRREVOCABLE ASSIGNMENT OF MY RIGHTS AND BENEFITS UNDER MY POLICY OF INSURANCE WHICH SHALL BECOME EFFECTIVE UPON ACCEPTANCE BY THE PROVIDER.
2State Farm set forth this position both at oral argument and in its Answer Brief. See Answer Brief at 11 (“The only issue, therefore, is whether the EUO is also enforceable against a health care provider that has taken an assignment of Policy benefits.”) (emphasis added).
3This Court cautions that if they do not inform a court of the “person” definition, State Farm and its attorneys could face sanctions if they continue to make the argument that a corporate health care provider or its physician is a “person making claim” and required to attend an EUO, while its policy explicitly defines “person” as “a human being.” Under these circumstances, State Farm’s argument has no basis in law or fact. We refrain from imposing sanctions in this case because there was some uncertainty in the law when the Appellee’s brief was written.
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ORDER GRANTING ATTORNEYS FEES
The Petitioner has requested attorneys fees pursuant to Florida Statute § 627.428. This section provides, in relevant part, that “in the event of an appeal in which the insured or beneficiary prevails, the appellate court shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured’s or beneficiary’s attorney prosecuting the suit in which the recovery is had.” Pursuant to this statute, the Petitioner as the prevailing party in this appeal, is entitled to attorneys fees if it ultimately prevails in this case in the trial court. Tench v. American Reliance Ins. Co., 671 So. 2d 801 (Fla. 3d DCA 1996), and cases cited therein.
This case is REMANDED to the trial court for the assessment of attorneys fees against State Farm in accordance with the foregoing. (SHAPIRO, SIEGEL, AND CHAVIES, JJ., concur.)
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