16 Fla. L. Weekly Supp. 256b
Online Reference: FLWSUPP 163RUSZK
Insurance — Personal injury protection — Standing — Assignment — Corporation solely owned by medical provider had standing to bring PIP suit despite fact that corporation did not provide medical treatment or submit bills to insurer where corporation was assignee of insured
RAYMOND RUSZKOWSKI D.C., P.A., Plaintiff, v. UNITED AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County, Civil Division. Case No. 05-1411 SP 25 (1). September 12, 2008. Andrew S. Hague, Judge. Counsel: Christian Carrazana, Panter, Panter & Sampredo, P.A., Miami, for Plaintiff. Paula Ferris, Office of General Counsel, for Defendant.
ORDER DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT ON LACK OF STANDING
THIS ACTION came before the Court on Defendant’s motion for summary judgment on lack of standing; and upon hearing the arguments of counsel, and being otherwise fully advised in the premises, the Court makes the following findings of fact and law:
1. This is a breach of contract action for no fault insurance benefits governed by § 627.736, Florida Statutes (2007).
2. The claimant, Sandra Aguilar, entered into a contract of insurance with Defendant for personal injury protection insurance benefits.
3. The effective dates of the policy are as follows: May 24th, 2003 through May 24th, 2004.
4. The claimant was involved in a motor vehicle accident on or about April 18th, 2004; and suffered personal injuries as a result of said accident.
5. The claimant began a course of chiropractic treatment under the care of Dr. Raymond Ruszkowski D.C.
6. The claimant executed an assignment of benefits where the claimant assigned her rights under said policy to ACTIVE SPINE CENTERS LLC (hereafter “ACTIVE SPINE”); which is a Florida Corporation solely owned by Dr. Ruszkowski’s small business corporation, RAYMOND RUSZKOWSKI D.C., P.A.
7. The medical bills incurred by the claimant for the services rendered by Dr. Ruszkowski were billed to Defendant under the name and tax identification number of Raymond Ruszkowski D.C., P.A., not ACTIVE SPINE.
8. After Defendant breached the policy by refusing to pay the subject medical expenses, ACTIVE SPINE, as the assignee of the insured, filed suit against Defendant to enforce the policy.
9. During the course of litigation, ACTIVE SPINE, in exchange for valuable consideration, assigned its ownership interest in the present cause of action to Plaintiff, RAYMOND RUSZKOWSKI D.C., P.A.
10. In light of the post suit assignment from the original Plaintiff, ACTIVE SPINE, to RAYMOND RUSZKOWSKI D.C., P.A., the Court granted Plaintiff’s motion to substitute RAYMOND RUSZKOWSKI D.C., P.A., as the new Plaintiff pursuant to Fla. R. Civ. P. 1.260(c).
11. Defendant now moves for summary judgment on the grounds that ACTIVE SPINE did not have standing to commence suit because ACTIVE SPINE did not incur damages since ACTIVE SPINE did not submit bills to Defendant.
CONCLUSIONS OF LAW
12. It is well settled that where an insured has assigned his benefits, the insured no longer has standing to bring an action against the insurer. Oglesby v. State Farm Auto. Ins. Co., 781 So.2d 469 (Fla. 5th DCA 2001). The converse is also true in that where a party other than the insured files a direct action against the insurer to enforce a claim absent an assignment, only the insured in such a case has standing to bring the action. See e.g., Progressive Express Ins. Co. v. McGrath Community Chiropractic, 913 So.2d 1281 (Fla. 2nd DCA 2005). Lack of standing, moreover, cannot be cured after suit is commenced. Id.; See also Jeff-Ray Corp. v. Jacobson, 566 So.2d 885, 886 (Fla. 4th DCA 1990) (Holding that the assignee of mortgage could not maintain the mortgage foreclosure action because the assignment was dated four months after the action was filed; if the plaintiff wished to proceed on the assignment, it must file a new complaint.)
13. The Court rejects Defendant’s argument that ACTIVE SPINE lacked standing when suit commenced. Regardless of whether ACTIVE SPINE suffered damages as a result of Defendant’s failure to pay the claim at issue, ACTIVE SPINE owned the cause of action when suit commenced because ACTIVE SPINE was the assignee of the insured. See Professional Medical Consulting Services Inc. v. Hartford Life & Accidental Insurance Co., 849 So.2d 446 (Fla. 2nd DCA 2003) (PIP insured may assign after loss claim to a third party who is not a medical provider.) A third party, who neither provided treatment to the insured nor submitted bills to the insurer, has standing to enforce the claim so long as the party is an assignee of the insured. Id.
14. The Third District’s ruling in Kumar Corporation v. Nopal Lines LTD., et al., 462 So.2d 1178 (Fla. 3rd DCA 1985) also supports the Court’s decision in the present case. Kumar involved an action by a Seller of electronic equipment against a shipping company for loss of merchandise that was purportedly shipped to the Seller’s Buyer. The merchandise was transferred from the Seller to the Defendant shipping company for delivery after the Buyer agreed to purchase same. The merchandise was lost. After the Seller commenced suit against the shipping company, the company moved for summary judgment on the grounds that the Seller lacked standing to sue since the Seller did not incur damages as a result of the loss. The trial court agreed and entered a summary judgment for the Defendant.1 The Third District Court reversed the trial court on several grounds; and one of which was that Seller had standing because the Buyer executed an assignment to the Seller before suit commenced. See Kumar, 462 So.2d at 1182, 1185-1186, n.9.
15. The Court also observes that if one were to follow Defendant’s reasoning, no party, including the claimant, would have standing to file suit because (a) the claimant gave up her rights when she assigned her rights to ACTIVE SPINE; (b) ACTIVE SPINE lacks standing because it did not submit bills or render services to the claimant; (c) and RAYMOND RUSZKOWSKI D.C., P.A., lacks standing because the claimant never assigned her rights to RAYMOND RUSZKOWSKI D.C., P.A., before suit commenced.2
16. The Court also finds that Defendant’s reliance on Progressive Express Ins. Co. v. McGrath Community Chiropractic, 913 So.2d 1281 (Fla. 2nd DCA 2005) is misplaced. The Second District in Progressive, supra, only held that a party cannot establish standing retroactively by acquiring standing to file a lawsuit after the fact. Unlike the present case, the plaintiff who brought suit in Progressive did not have standing to file suit from the onset (because the Plaintiff did not have an assignment from the insured and did not prosecute the action on behalf of the insured3); and attempted to cure that defect after suit commenced by obtaining an assignment from the insured. The present case is the exact opposite from Progressive because here, the party who originally filed suit — i.e., ACTIVE SPINE — owned the cause of action because the claimant assigned her rights to ACTIVE SPINE before suit commenced. Further, unlike what the plaintiff in Progressive attempted to do, the post suit assignment from ACTIVE SPINE to RAYMOND RUSZKOWSKI D.C., P.A., in the present case is not an attempt to cure ACTIVE SPINE’s alleged lack of standing when it filed suit; instead, the assignment is a transfer of interest that occurred during the course of litigation; and RAYMOND RUSZKOWSKI D.C., P.A., was substituted as the new plaintiff based on Fla. R. Civ. P. 1.260(c). Standing, on the other hand, “is the basis of claimant’s standing to invoke the processes of the court in the first place.” Progressive, 913 So.2d at 1285. Thus, the post suit assignment from ACTIVE SPINE to RAYMOND RUSZKOWSKI D.C., P.A., is irrelevant because the dispositive issue is whether ACTIVE SPINE possessed the substantive right to invoke the process of the Court when it first filed suit.
17. Though Defendant argues that ACTIVE SPINE is not the real party in interest who commenced suit because ACTIVE SPINE did not incur damages, Defendant’s argument is not an attack on whether ACTIVE SPINE is the real party in interest; but instead, goes to whether ACTIVE SPINE had a sufficient interest in the controversy. The doctrine of standing, however, has two overlapping but theoretically separate principles. Kumar Corporation, 462 So.2d at 1182. The first is whether the party has a sufficient interest at stake in the controversy; which will be affected by the outcome of the litigation. Id.; Geiger v. Sun First Nat’l Bank of Orlando, 427 So.2d 815 (Fla. 5th DCA 1983). The other is whether the claim is brought by or on behalf of one who is recognized by law as a “real party in interest,” that is “the person in whom rests, by substantive law, the claim sought to be enforced.” Kumar Corporation, 462 So.2d at 1183 citing Author’s Comment to Fla. R. Civ. P. 1.210; 30 Fla. Stat. Ann. 304, 306-07 (1967); 3A J. Moore, Moore’s Federal Practice, ¶ 17.02 (2nd Ed. 1984). Defendant’s position pigeon holes the concept of standing to encompass only the ‘sufficient interest’ definition while ignoring the ‘real party in interest’ concept. ACTIVE SPINE under the substantive law was the ‘real party in interest’ because ACTIVE SPINE was the assignee of the insured. In Florida, only the assignee of a contract has standing to enforce the contract unless the assignee authorizes the assignor to bring suit on the assignee’s behalf. 3A Fla. Jur. 2d Assignments § 27 (2008); State Farm Fire & Cas. Co. v. Ray, 556 So.2d 811, 813 (Fla. 5th DCA 1990) (same); Oglesby, 781 So.2d at 469.
ACCORDINGLY, based on the Court’s findings of fact and law, it is hereby ORDERED & ADJUDGED that Defendant’s motion for summary judgment is DENIED; that the original Plaintiff, ACTIVE SPINE CENTERS LLC., had standing to commence the present action as an assignee of the insured.
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1The Defendant shipping company successfully argued that seller suffered no damages where the risk of loss as it relates to the merchandise was transferred to the Seller’s buyer once the goods were shipped; thus, the only party that could sue for the loss was the Buyer.
2Defense counsel argued during the hearing that Sandra Aguilar must assign her rights to RAYMOND RUSZKOWSKI D.C., P.A. Defense counsel misapprehends the law of assignments. The claimant could not assign her interest to RAYMOND RUSZKOWSKI D.C., P.A., because she assigned her interest to ACTIVE SPINE instead.
3Fla. R. Civ. P. 1.210(a), permits an action to be prosecuted in the name of someone other than, but acting for, the real party in interest. See also Kumar Corporation, 462 So.2d 1178, 1183 (Fla. 3rd DCA 1985) (“[W]here a plaintiff is either the real party in interest or is maintaining the action on behalf of the real party in interest, the action cannot be dismissed on the grounds that it lacks standing.”)
