15 Fla. L. Weekly Supp. 967a
Insurance — Personal injury protection — Standing — Assignment — Insured may execute assignments in favor of multiple medical providers — Affirmative defenses — Amendment — Denial — Abuse of discretion to not allow insurer to amend affirmative defenses to add exhaustion of benefits defense where proffered affirmative defense does not prejudice medical provider — Error to enter summary judgment despite existence of disputed issue of fraud
UNITED AUTOMOBILE INS. CO., Appellant, vs. DIAGNOSTIC MEDICAL CENTER, (a/a/o MADELIN NUNEZ), Appellee. Circuit Court, 13th Judicial Circuit (Appellate) for Hillsborough County. Case No. 06-8729, Division X. L.C. Case No. 05-002184-CC. April 15, 2008. On review of a final order of the Hillsborough County Court. The Honorable Charlotte Anderson presiding. Counsel: Heather A. Harwell and Mark Sandag, Tampa, for Appellant. Timothy A. Patrick, Tampa, for Appellee. Mark A. Boyle, Fink, Boyle & Gentile, P.A., Ft. Myers, Co-Counsel for Appellee.
(RALPH C. STODDARD, J.) Appellant United Automobile Insurance Company (the insurer) appeals the summary judgment entered against it by the county court on two grounds: that the trial court erred in failing to allow the insurer to amend its answer to include the exhaustion of benefits affirmative defense and by granting summary judgment despite the existence of a disputed issue of material fact. We agree that the trial court erred in entering summary judgment and reverse the decision. The standard of review is de novo.1 The facts, stated briefly, are as follows.
The insurer’s insured Madeline Nunez was involved in a motor vehicle accident on August 24, 2003. As a result, she sought and received medical treatment at Appellee Diagnostic Medical Center’s (the provider) clinic. She executed an assignment in favor of the provider. When the insurer failed to pay the provider for certain services, the provider allegedly rendered and billed for, the provider sued the insurer. After the provider filed a motion for summary judgment, the insurer sought to amend its answer to include certain affirmative defenses, including exhaustion of benefits and that the insured executed multiple assignments. The trial court allowed amendment as to the latter, but did not allow the insurer to assert the exhaustion of benefits defense, stating that the information was available to the insurer at the time the lawsuit and original answer were filed. Ultimately, the trial court found no issue of fact and entered summary judgment in favor of the provider as a matter of law on the remaining issues. This appeal followed.
The insurer raises three issues in the appeal. The first is that a subsequent assignment of benefits is invalid if the assignor has not revoked the first assignment. The insurer contends that the assignor retains nothing to assign. We disagree. It is well-understood that only one person may own an action based upon an assignment of benefits.2 However, this does not mean that an insured may not execute assignments of benefits in favor of multiple healthcare providers, and we are aware of no decisional authority that precludes multiple assignments. The two notions do not conflict. Cases such as Schuster v. Blue Cross and Blue Shield of Florida3 [28 Fla. L. Weekly D505a] stand only for the proposition that, in the event of a lawsuit, there is only one owner of a single cause of action for benefits, as between an insured and her assignee. An insured who assigns her benefits may not maintain a lawsuit on behalf of a healthcare provider to whom she has executed an assignment. But this has no impact on an insured’s ability to execute assignments of benefits in favor of multiple healthcare providers. The trial court was correct on this issue.
The second issue relates to the amendment of the insurer’s affirmative defenses. After the lawsuit was filed, the insurer filed an answer and affirmative defenses. Ten months later, the insurer moved to amend its answer and affirmative defenses. Pursuant to a hearing on the matter, the trial court allowed the amendment of all the proposed affirmative defenses except one: exhaustion of benefits. The stated reason for denying leave to amend on that issue was that the information relating to the defense was available when insurer first filed affirmative defenses. This is not the standard a court is to use to determine whether to allow an amendment of affirmative defenses. While granting leave to amend a pleading rests within the discretion of the trial court, all doubts should be resolved in favor of allowing amendment.4 Unless there are exceptional circumstances, leave to amend should be granted.5 In the absence of prejudice, it was an abuse of discretion to disallow the amendment, particularly since the court did allow others to be added. Here, if exhaustion of benefits is proved, it is dispositive of the case.6
Prejudice is a term often used, but rarely defined. In this context, prejudice exists where an amendment would remove an opposing party’s ability to maintain a lawsuit on procedural, rather than substantive grounds. Thus, where a proposed amendment requires dismissal of the lawsuit on procedural grounds after the expiration of the statute of limitations and which amendment is not dispositive of the case on the merits, it is prejudicial and an amendment would not be permitted.7
On the other hand, the fact that the amendment requires a plaintiff to prove its allegations does not amount to prejudice to the plaintiff; it merely offers due process to the defendants.8 Based upon the foregoing, the proffered affirmative defense does not prejudice the provider.
The timing of the request for amendment is likewise not a factor here.9 Thus, the trial court abused its discretion when it did not allow the insurer to amend its affirmative defenses to include the exhaustion of benefits defense.
The insurer also argues that the trial court erred in entering summary judgment because of the existence of material fact. This error is evident on the face of the summary judgment order, wherein the court wrote:
4. The Defendant made what appear to be allegations of fraud. The court finds that this is not the proceeding in which to raise such allegations.
The trial court does not indicate which proceeding would be preferable to decide the merits of the case, nor does the order go on to address or dispose of the fraud issue on a procedural basis. Therefore, the inescapable conclusion is that there exists a disputed issue of fact which precluded summary judgment.10 Accordingly, it is
ORDERED that the decision of the trial court is REVERSED and the cause is REMANDED for proceedings consistent with this opinion.
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1Poe v. IMC Phosphates, Inc. et al., 885 So. 2d 397 (Fla. 2d DCA 2004).
2See e.g. Schuster v. Blue Cross and Blue Shield of Florida, 843 So. 2d 909 (Fla. 4th DCA 2003); Oglesby v. State Farm Mut. Auto. Ins. Co., 781 So.2d 469 (Fla. 5th DCA 2001).
3843 So. 2d 909 (Fla. 4th DCA 2003).
4Thompson v. Jared Kane Co., Inc., 872 So. 2d 356 (Fla. 2d DCA 2004).
5Id.
6Sun Valley Homeowners, Inc. v. American Land Lease, Inc., 927 So.2d 259, 263 (Fla. 2d DCA 2006) (denial of leave to amend a pleading is an abuse of discretion where the proffered amendment indicates that a plaintiff can state a cause of action; the same holds true where a defendant demonstrates he could prevail with the assertion of a properly available defense).
7See Ingersoll v. Hoffman, 589 So.2d 223 (Fla. 1991).
8Thompson v. Jared Kane Co., Inc., 872 So.2d 356, 360 (Fla. 2d DCA 2004).
9Carib Ocean Shipping, Inc. v. Armas, 854 So.2d 234, 235-236 (Fla. 3d DCA 2003) ([a]t every stage of the action the court must disregard any error or defect in the proceedings which does not affect the substantial rights of the parties; it is clear that the “interests of justice” are far better served by determining a case on its substantive merits, rather than a mistake in pleading). Bill Williams Air Conditioning & Heating, Inc. v. Haymarket Coop. Bank, 592 So.2d 302 (Fla. 1st DCA 1991) (general rule favors amendment).
10Richards v. Wax, 511 So. 2d 433, 434 (Fla. 2d DCA 1987) (fraud is a subtle thing requiring full explanation of facts and circumstances of alleged wrong to determine if they collectively constitute fraud and thus, is not ordinarily suitable even for summary judgment).
