17 Fla. L. Weekly Supp. 202a

Online Reference: FLWSUPP 1703GOME

Insurance — Personal injury protection — Examination under oath — Failure to attend — Insured’s obligation to attend EUO does not shift to medical provider merely because insured assigned benefits to provider — Insurer may not enforce policy provision requiring that assignee submit to EUO

FLAGLER CLINIC CENTER, CORP, a/a/o RAMON GOMEZ, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 09-00988 CC 25 (3). December 10, 2009. Jacqueline Schwartz, Judge.

ORDER ON CROSS MOTIONS FOR FINAL SUMMARY JUDGMENT AND ENTERING FINAL JUDGMENT IN FAVOR OF PLAINTIFF FLAGLER CLINIC CENTER, CORP. a/a/o RAMON GOMEZ

THIS CAUSE having come before the Court November 3, 2009, on Plaintiff’s and Defendant’s Cross Motions For Final Summary Judgment, and the Court having reviewed the pleadings, heard argument of counsel, and otherwise being fully advised, the Court finds as follows:

STATEMENT OF UNDISPUTED MATERIAL FACTS

1. Plaintiff, Flagler Clinic Center, Corp. a/a/o Ramon Gomez filed the instant action against Defendant State Farm Mutual Insurance Company (“State Farm”) seeking Personal Injury Protection (“PIP”) benefits pursuant to Section 627.736, Florida Statutes (2009) and an insurance contract issued by State Farm.

2. Ramon Gomez was involved in an automobile collision on July 1, 2007. At the time of the collision, Ramon Gomez (“Ramon”) was covered for PIP insurance benefits under an insurance policy issued by State Farm to Adjusting Solutions, Inc., c/o Daniel Diaz.

3. The day after the collision, Ramon started receiving medical care from Flagler Clinic Center, Corp. (“Flagler Clinic”), and executed a document titled “Irrevocable Assignment of Benefits/Policy Rights.” This document assigned Ramon’s rights under the State Farm PIP insurance policy to collect benefits to Flagler Clinic.¹

4. Flagler Clinic timely submitted a claim to State Farm seeking payment of PIP medical services rendered to Ramon under the insurance contract.

5. After receiving the claim and bills for medical services, State Farm, through its attorney, took the Examination Under Oath (“EUO”) of Ramon on September 4, 2007.²

6. Following the EUO of Ramon, State Farm sought the additional EUO’s of: (1) the person with most knowledge of treatment at Flagler Clinic, (2) Dr. Kevin Resiseck, and (3) the therapist that rendered treatment to Ramon. These persons did not appear for the EUO’s which were scheduled on October 24, 2007 at the State Farm office in Miami.

7. State Farm did not pay for the medical services provided to Ramon by Flagler Clinic.

8. Flagler Clinic then filed the instant action for breach of contract seeking damages, statutory interest, and attorney’s fees and costs. State Farm’s answer to the complaint asserted the affirmative defense that Flagler Clinic’s failure to submit to an EUO breached a necessary condition precedent and therefore it was not required to make payment. Both parties filed motions for summary judgment.

ISSUE PRESENTED

Whether State Farm has the right to deny an assignee medical provider’s claim for medical services rendered to an insured under a personal injury protection policy on the basis that the assignee medical provider did not attend an examination under oath.

CONCLUSIONS OF LAW

It is well established that an insured may assign the right to receive PIP benefits under an insurance contract to a medical provider. See, Lexington Ins. Co. v. Simkins Indus., Inc., 704 So. 2d 1384 (Fla. 1998); Gables Ins. Recovery Inc. v. Seminole Casualty Ins. Co., 10 So. 3d 1106 (Fla. 3d DCA 2009); Hartford Ins. Co. of Southeast v. St. Mary’s Hosp., Inc., 771 So. 2d 1210 (Fla. 4th DCA 2000); Gisela Inv. N.V. v. Liberty Mut. Ins. Co., 452 So. 2d 1056 (Fla. 3d DCA 1984). Since an assignment transfers all interests and rights to the assignee, in the instant case the insured Ramon’s cause of action for benefits was effectively transferred to the medical provider Flagler Clinic. See Continental Casualty Co. v. Ryan Inc. Eastern, 974 So. 2d 368 (Fla. 2008), Oglesby v. State Farm Mut. Auto. Ins. Co., 781 So. 2d 469 (Fla. 5th DCA 2001); State Farm Fire and Cas. Co. v. Ray, 556 So.2d 811 (Fla. 5th DCA 1990).

It is also established and well-reasoned that where an insured agrees in an insurance policy to submit to an EUO as a condition precedent to suit, the EUO requirement must be complied with by the insured in order to maintain an action to recover policy benefits. See Amica Mut. Ins. Co. v. Drummond, 970 So. 2d 456 (Fla. 2d DCA 2007); Fassi v. Amer. Fire & Cas. Co., 700 So. 2d 51 (Fla. 5th DCA 1997); Goldman v. State Farm Fire Gen. Ins. Co., 660 So. 2d 300 (Fla. 4th DCA 1995), review denied, 670 So. 2d 938 (Fla. 1996).

However, this Court does not find it either established or well-reasoned to permit an insurance company to deny payment of PIP benefits on the basis that the insurance company unilaterally created an EUO condition precedent for potential assignees in its contract with the insured. Applying common sense and precedent in this jurisdiction, it is clear that regardless of the terms of the insurance contract drafted by State Farm, it is not conceivably justifiable to permit State Farm to deny liability for PIP benefits on the basis that it unilaterally created conditions precedent for Flagler Clinic, an assignee that was not a party to the insurance contract.

Since Flagler Clinic was not a party to the insurance contract, it does not owe any duty of performance to State Farm. See Sans Souci v. Div. of Fla. Land Sales & Condos, 448 So.2d 1116 (Fla. 1st DCA 1984); Dependable Ins. Co. v. Landers, 421 So.2d 175 (Fla. 5th DCA 1982); De La Rosa v. Tropical Sandwiches, Inc ., 298 So.2d 471 (Fla. 3d DCA 1974). The terms of the insurance contract and its conditions that included submission to an EUO were only agreed to by the insured Ramon. Therefore State Farm’s contract interpretation arguments with regard to the provisions it included in the insured’s contract (a clear attempt to create a duty of performance in potential assignees) are irrelevant. In sum, Flagler Clinic as an assignee is not liable to perform conditions that it never agreed to under a contract that it was not a party to. See Marlin Diagnostics v. State Farm Mutual Automobile Insurance Co., 897 So.2d 469 (Fla. 3d DCA 2004); Advanced Diagnostics Testing, Inc. v. State Farm Insurance Co., 11 Fla. L. Weekly Supp. C964 (Fla. 11th Cir. Ct. Aug. 17, 2004).

As succinctly stated by the Third District Court of Appeal in Marlin Diagnostics, “the obligation to attend an EUO does not shift to the provider merely because the insured assigned . . . benefits.” Marlin Diagnostics v. State Farm Mutual Automobile Insurance Co., 897 So.2d at 470. Ramon’s assignment to Flagler Clinic was a simple transfer of the right to receive payment. Flagler Clinic’s acceptance of the right to be paid does not translate to a duty to perform or assume the obligations of the contract that were solely agreed to by Ramon.

From a policy perspective, this Court finds most instructive the reasoning applied by the dissent in Shaw v. State Farm Fire and Casualty Co., 2009 WL 3398710, 34 Fla. L. Weekly D2189 (Fla.App. 5 Dist. Oct 23, 2009)(Griffin, J., dissenting)(emphasis added). As stated by Judge Griffin:

The ability to assign contractual rights is an important commercial mechanism to facilitate transactions and to secure the payment of obligations, but this device would be completely thwarted if the obligor could impose conditions on the exercise of rights acquired through assignment. There is a reason why there is a vast body of case law on whether a particular right is or is not assignable but no law on assignments that are purportedly conditioned on performance of some contractual duty by the assignee.

Here the insured has agreed that whatever monies he is entitled to receive on account of the care he has been given, is payable to [the medical provider]. If no monies are due and owing because of the failure of the insured to perform some covenant under the policy, including the examination under oath, then [the medical provider] has no claim against State Farm, precisely because it is subject to State Farm’s defenses against the insured. But State Farm may not include in the insurance contract any requirement of performance on the part of the assignee that conditions the right to payment. To the extent State Farm’s policy may have such a provision, it is simply unenforceable. It does not matter whether it is the requirement to submit to examination under oath, to pay a fee, to accept a discount or anything else. The assignee did not undertake any duty of performance, and State Farm cannot unilaterally impose an obligation on the assignee by putting it in the policy. Unless the assignee agrees to assume a duty under the contract, he simply does not have the duty. Contrary to the majority’s reading of Marlin, this is exactly the holding of that case. The Marlin court quickly dispatched State Farm’s argument that the assignment of payment by the insured to the healthcare provider transferred not only her right to payment, but her duty to submit to an examination under oath: “The obligation to attend an EUO does not shift to the provider merely because the insured assigned her benefits.” 897 So.2d at 470.

Shaw v. State Farm Fire and Casualty Co., 2009 WL 3398710 at 10 (Griffin, J., dissenting)(emphasis added).

This Court similarly concludes in applying the holding of Marlin Diagnostics, that State Farm may not enforce a policy provision requiring an assignee to submit to an EUO. A contrary ruling would thwart the ability to assign PIP benefits and have a chilling effect on insured persons seeking medical treatment.

In reaching this conclusion, this Court has thoroughly considered the insurer’s concerns with the ability to seek information related to any alleged insurance fraud. Those concerns are adequately protected by the mechanisms set forth in Section 627.736, which include the requirement that medical providers provide detailed written reports concerning treatment and expenses upon the insurer’s request. Medical providers must also permit the insurer to inspect and copy relevant records, and can be required to provide “a sworn statement that the treatment or services rendered were reasonable and necessary with respect to the bodily injury sustained.” See, §627.736(6)(b), Fla. Stat. (2009).³ Section 627.736(6)(c) further provides that the insurer may petition the Court for additional discovery which could include taking the deposition of a medical provider. Thus, for all intents and purposes, the insurer does retain the ability to take an examination under oath of relevant persons and is able to utilize existing legislative mechanisms to ensure oversight and detect fraud. In the words of the Third District “[i]t appears the legislature has covered all bases.” Marlin Diagnostics v. State Farm Mutual Automobile Insurance Co., 897 So.2d at 470.

There is no genuine issue of material fact that Flagler Clinic, as Ramon’s assignee, had the right to personal injury protection benefits and was not required to attend an EUO in order to successfully assert that right. See Marlin Diagnostics v. State Farm Mutual Automobile Insurance Co., 897 So.2d 469 (Fla. 3d DCA 2004); Advanced Diagnostics Testing, Inc. v. State Farm Insurance Co., 11 Fla. L. Weekly Supp. C964 (Fla. 11th Cir. Ct. Aug. 17, 2004).

Accordingly, it is ORDERED and ADJUDGED that the Motion For Final Summary Judgment filed by the Defendant State Farm is hereby DENIED, and the Motion For Final Summary Judgment filed by the Plaintiff Flagler Clinic is hereby GRANTED.

FINAL JUDGMENT FOR FLAGLER CLINICCENTER, CORP., a/a/o, RAMON GOMEZ

Pursuant to the foregoing, Final Judgment is hereby entered in favor of Plaintiff FLAGLER CLINIC CENTER, CORP., a/a/o, RAMON GOMEZ and against Defendant STATE FARM MUTUAL INSURANCE COMPANY.

__________________

¹The assignment document provides that the assignment of insurance benefits to Flagler Clinic “includes but [is] not limited to all rights to collect benefits directly from patient’s insurance company.” Nothing in the assignment document provides for any duties, responsibilities, or obligations on the part of Flagler Clinic.

²The relevant provision of the insurance policy regarding EUO’s is contained in an amended endorsement and states the following under the heading of “Reporting a Claim – Insured’s Duties”:

4. Other Duties Under No-Fault, Medical Payments, Uninsured Motor Vehicle and Death, Dismemberment and Loss of Sight Coverages

. . . .

Questioning Under Oath

Under:

. . . .

c. Physical Damage Coverages, you or the owner of a covered vehicle, or any other person or organization making claim or seeking payment; must, at our option, submit to an examination under oath, provide a statement under oath, or do both, as reasonably often as we require. Such person or organization must answer questions under oath, asked by anyone we name, and sign copies of the answers. We may require each person or organization answering questions under oath to answer the questions with only that person’s or organization’s legal representative, or representatives and no other person present.

³The legislature has provided significant protections to detect fraud in Section 627.736(6)(b), Fla. Stat. (2009) which specifies:

Every physician, hospital, clinic, or other medical institution providing, before or after bodily injury upon which a claim for personal injury protection insurance benefits is based, any products, services, or accommodations in relation to that or any other injury, or in relation to a condition claimed to be connected with that or any other injury, shall, if requested to do so by the insurer against whom the claim has been made, furnish forthwith a written report of the history, condition, treatment, dates, and costs of such treatment of the injured person and why the items identified by the insurer were reasonable in amount and medically necessary, together with a sworn statement that the treatment or services rendered were reasonable and necessary with respect to the bodily injury sustained and identifying which portion of the expenses for such treatment or services was incurred as a result of such bodily injury, and produce forthwith, and permit the inspection and copying of, his or her or its records regarding such history, condition, treatment, dates, and costs of treatment; provided that this shall not limit the introduction of evidence at trial.