18 Fla. L. Weekly Supp. 90b

Online Reference: FLWSUPP 1801LGON

Insurance — Personal injury protection — Medical provider that is administratively dissolved corporation is permitted to maintain PIP suit related to damages or causes of action that predate corporate dissolution

A&E REHAB THERAPY, INC., a/a/o LINET GONZALEZ, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County, Civil Division. Case No. 06-09641 SP 05 (08). Wendell M. Graham, Judge. Counsel: Maria E. Corredor, Law Offices of Maria E. Corredor, P.A., Miami. Fernando L. Roig.

ORDER DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

THIS CAUSE having come before the Court upon Defendant’s Motion for Final Summary Judgment, the Court having heard argument of counsel at a hearing thereon, on September 15, 2009, and the Court otherwise being fully advised in the premises, the Court hereby makes the following findings of fact and law:

Undisputed facts relevant to the issue at hand:

1. Plaintiff (A & E REHAB) seeks payment of PIP benefits under the subject policy of insurance pursuant to an alleged assignment of benefits executed by Linet Gonzalez and submitted charges to the Defendant (STATE FARM) for alleged medical treatment rendered to Ms. Gonzalez for dates of service February 16, 2006 through May 18, 2006.

2. Plaintiff filed the instant suit on or about June 23, 2006 for alleged unpaid benefits and breach of contract for failure to provide an explanation of benefits.

3. At all times during the time that Plaintiff submitted bills (PIP claims) to Defendant and at the time of the alleged breach(es) of contract sued upon accrued, Plaintiff was an active and licensed Florida Corporation.

4. Plaintiff was administratively dissolved for failure to file an annual report on September 14, 2007 by the Florida Department of State, Division of Corporations and remained administratively dissolved as of the date of the hearing hereon.

Relevant Fla. Statutes considered by the Court:

5. Fla. Stat. 607.1622(1):

“Each domestic corporation and each foreign corporation authorized to transact business in this state shall deliver to the Department of State for filing a sworn annual report on such forms as the Department of State prescribes that sets forth. . . .” (emphasis added)

Fla. Stat. 607.1622(8):

“An corporation failing to file an annual report which complies with the requirements of this section shall not be permitted to maintain or defend any action in any court of this state until such report is filed. . .”

Fla. Stat. 607.1421(3):

“A corporation administratively dissolved continues its corporate existence but may not carry on any business except that necessary to wind up and liquidate its business and affairs under s. 607.1405 (2009) . . . .” See also Fla. Stat. 607.1420 as cited by Defendant in its Motion for Summary Judgment.

Fla. Stat. 607.1405. Effect of Dissolution:

(1) “A dissolved corporation continues its corporate existence but may not carry on any business except that appropriate to wind up and liquidate its business and affairs, including:

(a) Collecting its assets;

(e) Doing every other act necessary to wind up an liquidate its business and affairs.”

(2) “Dissolution of a corporation does not:

(e) Prevent commencement of a proceeding by or against the corporation in its corporate name;

(f) Abate or suspend a proceeding pending by or against the corporation on the effective date of dissolution. . .”

Issue to be ruled upon by the Court:

Defendant argues that Fla. Stat. 607.1622(8) carves out an exception for corporations which have been administratively dissolved for failure to file an annual report and for the otherwise applicable rule that if a corporation is administratively dissolved by the Florida Department of State, Division of Corporations, under F.S. 607.1420, the corporation continues its corporate existence, and it may continue to carry on business only that is necessary to wind up and liquidate its business and affairs.

Plaintiff argues that Fla. Stat. 607.1622(8) simply does not apply to dissolved corporations and that instead it is Fla. Stat. 607.1421 (and/or Fla. Stat. 607.1420) and Fla. Stat. 607.1405 that apply in determining the rights, to bring and/or maintain the instant suit, of the Plaintiff, administratively dissolved corporation, in this matter.

Applicable and binding case law:

“Section 607.1622, Florida Statutes (1995) pertains to an undissolved corporation’s requirement (emphasis added) to provide the Department of State with a sworn annual report. When read within the context of section 607.0622, it is evident that section 607.1622(8) provides the penalty for an undissolved corporation’s failure to submit its annual report to the Department of State.” Cygnet Home, Inc. v. Kaleny Limited of Florida, Inc, (681 So.2d 862 (Fla. 5th DCA 1996)[21 Fla. L. Weekly D2171c].

See also Levine, et. al vs. Levine, 734 So.2d 1191 (Fla. 2nd DCA 1999)[24 Fla. L. Weekly D1568a], wherein the Court held, in part, that where the dissolved corporation was seeking “. . .redress for conduct occurring prior to the corporation’s dissolution. . .[the administratively dissolved corporation’s] suit to reduce those claims to judgment constituted an appropriate act to wind up and liquidate the ‘corporate affairs.” Id at 1196. In fact, the Court in Levine goes on to reiterate its holding in this regard, when it states that: “We have already stated our conclusion that, insofar as LZD complained of conduct predating the corporation’s dissolution, section 607.1405(1) permitted it to sue to reduce its causes of action to judgment.” Id. at 1197.

In a recent case, the 2nd DCA, in interpreting and citing to its decision in Levin, yet again reiterated its holding relating to an administratively dissolved corporation’s right to bring and/or maintain a suit related to a cause of action accruing prior to dissolution. In reversing the order of dismissal, the 2nd DCA reasoned and ruled that “. . .if a corporation was administratively dissolved for failing to file its annual report, arguably section 607.1622(8) would preclude an administratively dissolved corporation’s suit on a cause of action accruing after its dissolution.” (Emphasis added).” PBF of Ft. Myers v. D & K Partnership et. al., 890 So.2d 384 (Fla. 2nd DCA 2004) [30 Fla. L. Weekly D15a].

Similarly, the 4th DCA has also addressed the issue at hand and the interplay of the Florida statutes involving the issue, ruling that “. . .there is no distinction between administrative and voluntary dissolution; that in either case, the corporation continues its existence for purposes of winding up and liquidating its business and affairs and that dissolution does not prevent suits by or against the corporation in its corporate name,” Braun v. Buyers Choice Mort. Corp., 851 So.2d 199 (Fla. 4th DCA 2003) [28 Fla. L. Weekly D1513a]. See also Nat’l Judgment, 826 So.2d 1034 (Fla. 4thDCA 2002) [27 Fla. L. Weekly D1747c].

Additionally, the 3d DCA has also addressed the issues on this matter, although not as directly on point as the other Florida District Courts of Appeal. In the case of Allied Roofing Industries, Inc. v. Venegas, Et. Al., 826 So.2d 6 (Fla. 3d DCA 2003) [28 Fla. L. Weekly D1623a] the Plaintiff, Allied had, after being administratively dissolved, misrepresented to the trial Court that it was in the process of “winding down its affairs” when apparently the facts eventually revealed otherwise (i.e. that the corporation remained active and administratively dissolved at the time of the hearing on the Motion to Dismiss the Plaintiff’s complaint). Regardless of these egregious set of facts (facts which do not exist in the instant case), the 3rd DCA in reversing the trial Court’s ultimate dismissal of the case (note dismissal was based upon the Plaintiff having misrepresented its corporate status as opposed to the Court ruling that an administratively dissolved corporation could not maintain a suit), held and reasoned that “. . . [t]he sanctions authorized for failing to file an annual report — involuntary dissolution and the inability to carry on any business, including bringing or defending a lawsuit, other than that necessary to wind up its affairs under sections 607.1420 and 607.1421 — are intended to benefit the State, not third parties outside the corporation/State relationship. Hence, the Vanegases, “who are strangers to the dealings between plaintiff and the State, should be allowed to take advantage of the plaintiff’s default. . .to escape their own obligations to the plaintiff. . .” Id.

Finally, the case of Paradise Creations, Inc v. UV Sales, Inc., 315 F.3d 1304 (Fed. Cir. 2003) (applying Florida law) speaks directly to the rights of an administratively dissolved corporation in holding that corporations have the capacity to sue, even after dissolution, where the suit is “necessary to wind up and liquidate its business affairs.” See Paradise Creations, 315 F.3d at 1307 (quoting Fla. Stat. ch. 607.1421(3)(2001)). The Paradise Court determined that:

The Florida courts are now apparently unanimous that, although under chapter 607.1622 a corporation loses its capacity to sue if it fails to file an annual report, once it is administratively dissolved, somewhat paradoxically it regains capacity to sue under chapters 607.1421(3) and 607.1405(2)(e), as “ ‘necessary to wind up and liquidate its business and affairs.’ ” Cygnet Homes, Inc. v. Kaleny Ltd. of Fla., 681 So. 2d 826, 826 (Fla. 5th Dist. Ct. App. 1996)[21 Fla. L. Weekly D2171c], (quoting Fla. Stat. 607.1421(3)); Nat’l Judgment Recovery Agency, Inc. v. Harris, 862 So. 2d 1034, 1035 (Fla. 4th Dist. Ct. App. 2002)[27 Fla. L. Weekly D1747c](overruling its precedent to the contrary and adopting the rule of Cygnet).

Holding & Ruling:

In reviewing all applicable cases presented by the parties, and otherwise available to the Court, the Court finds that no authority exists to support the interpretation, by the Defendant, related to the interplay between Fla. Stat. 607.1622, Fla. Stat. 607.1421 and Fla. Stat. 607.1405 and in fact there exists numerous binding opinions from the various Florida District Court’s of Appeal on the issue raised by Defendant’s Motion for Final Summary Judgment. Under the facts of this case, and the applicable law, Plaintiff as an administratively dissolved corporation is permitted to maintain the instant suit, related to damages/causes of actions that pre-date corporate dissolution, pursuant to Fla. Stat. 607.1421 and Fla. Stat. 607.1405. Accordingly, it is hereby:

ORDERED AND ADJUDGED, that Defendant’s Motion is hereby DENIED.