19 Fla. L. Weekly Supp. 1069b

Online Reference: FLWSUPP 1913GOODInsurance — Personal injury protection — Class action — Motion for leave to belatedly opt out of class action — Where insurers defending class action sent notice of class action to medical providers who were litigating against insurers in county court, but did not give notice of class action to attorneys representing providers in county court actions until after judgment had been entered in class action, prevailing equities are with providers — Motion to opt out is granted

STEVEN E. GOODWILLER, M.D., P.A., Plaintiff, v. UNITED SERVICES AUTOMOBILE ASSOCIATION and USAA CASUALTY INSURANCE COMPANY et al., Defendants. Circuit Court, 17th Judicial Circuit (Appellate) in and for Broward County, Civil Division. Case No. 08-015594-CACE-12. December 5, 2011. Michele Towbin Singer, Judge. Counsel: Cindy A. Goldstein, Law Office of Cindy A. Goldstein, P.A., Coral Springs and Sisy Mukerjee, Coral Springs.

ORDER ON MOTIONS FOR LEAVE TO BELATEDLYOPT OUT OF THE CLASS ACTION

On April 1, 2011, the Court conducted a hearing on the Motions for Leave to Opt Out Belatedly of the Class Action filed by St. George Spinal Clinic, P.A. and Delray Advanced Medical, Inc. (collectively, the “Medical Providers”). The Court heard argument of counsel, reviewed the file, and was otherwise fully advised. It is therefore ORDERED and ADJUDGED as follows:Background

In early 2008, Plaintiff, a medical provider, filed a class action lawsuit against Defendants on behalf of over 2,000 medical providers. On July 31, 2009, the Court approved a proposed settlement as well as the notice to be sent to class members which among other things explained the procedure for members to opt out of the class action suit. After the claim deadline and opt out deadline expired, the Court held a final Fairness Hearing. On December 9, 2010, the Court executed a Final Judgment and Order of Final Approval which confirmed the fairness and reasonableness of the settlement and the notices.¹

On January 25, 2010, the Medical Providers filed this Motion for Leave to Opt Out Belatedly. The Medical Providers state that they did not receive any notices regarding the class action lawsuit and were in fact unaware of the class action lawsuit. Ironically, the Medical Providers were in the middle of litigating against the Defendants in their own respective suits in county court. The Medical Providers’ positions are that had they known of the class action, they would have definitely opted out.

Both sides acknowledge that notices were sent to addresses of the Medical Providers. The Medical Providers complain though, that the Defendants should have also notified the Medical Providers’ counsel who were suing Defendants in the county court cases. Instead, the lawyer for the Defendants in the county court cases continued litigating the cases without telling the Medical Providers’ counsel of the class action lawsuit until the opt out deadline had passed, the Final Judgment had been entered and the time for appeal had passed. Then and only then did Defendants’ counsel notify the Medical Providers’ counsel of the class action lawsuit by filing a 57.105 Motion to Dismiss.Findings by the Court

The Court is aware that procedural due process does not require notice to all class members in a class action suit. See Scott v. Walker, 378 So.2d 828 (2nd DCA 1979). Moreover, the case law seems to be that so long as the notice was fair and reasonable as well as the best notice practicable under the circumstances, lack of notice to a class member normally does not allow a late opt out. See In re Terazosin Hydrochloride Antitrust Litigation, 2005 WL 2451957 (S.D. Fla 2005); see also Demint v. Nationsbank Corp., 208 F.R.D. 639, 642 (M.D. Fla. 2002).

This case does not involve merely a lack of notice, however. The Court is troubled by the failure of the Defendants to notify the Medical Providers’ lawyers of the class action lawsuit until not only the opt-out deadline had passed but also the final judgment in the class action suit had been entered. The Defendants’ explanation for this is that they used different lawyers for the class action lawsuit and the county court cases. They further explain that the lawyers in the county court cases, like the Medical Providers were unaware of the existence of the class action lawsuit. This explanation hardly excuses the Defendants’ behavior. The Defendants should have made sure that their lawyers knew of the class action lawsuit. Defendants cannot be absolved of their responsibilities by simply having different lawyers for different lawsuits.

The Medical Providers ask the Court to accept their late filings based on excusable neglect. A determination of whether there is excusable neglect “requires an analysis of the prevailing equities. . .” Demint, 208 F.R.D. at 642. Quoting the Supreme Court, the Demint court listed several relevant factors for the court to consider in this analysis: 1) danger of prejudice to Defendants; 2) the length of delay and its potential impact on the judicial proceedings; 3) the reason for the delay, including whether the delay was within the Medical Providers’ reasonable control; and 4) the presence or absence of good faith by the Medical Providers. Demint, 208 F.R.D. at 642, citing Pioneer Inv. Servs. Co. v. Brunswick Assoc. Ltd. P’ship, 507 U.S. 380, 395, 113 S.Ct. 1489 (1993).

In this case, the Court finds that prejudice to Defendants is not significant. Defendants argue that the Court allowing these Medical Providers to opt out now would “open the floodgates” to other dissatisfied class members seeking to opt out. This Court notes that the Final Judgment was entered over 18 months ago, so any additional motions to opt out would be quite tardy and could be denied on that basis alone. In any event, any prejudice to Defendants was caused by Defendants by their failure to notify in a timely manner Medical Providers’ counsel in the county court cases of the class action lawsuit.

The length of the delay was caused directly by Defendants. The Court finds that Medical Providers filed their motions to opt out promptly as soon as they learned of the class action lawsuit.

The reason for the delay the Court finds was due to the Medical Providers not receiving notice from Defendants of the class action lawsuit, even though notice was sent to them.

The Court also finds that the Medical Providers acted in good faith. As soon as they discovered the class action lawsuit, they acted diligently and promptly. The facts in this case are different from the facts in the Demint case. Unlike our case, the parties seeking to opt out late in the Demint case knew of the class action lawsuit but assumed that their filing and pursuing a separate lawsuit would be sufficient notice of their intent to opt out. The Demint court held that the parties still needed to file a motion to opt out of the class action lawsuit and denied the parties’ late motion to opt out.

The Court finds that the “prevailing equities” in this case are with the Medical Providers. The Court hereby GRANTS the Medical Providers’ Motions to Opt Out.

__________________

¹“The Court finds that the Notice contemplated by the Settlement Agreement and Stipulation and the Order of Preliminary Approval has been given to the Class Members. Said Notice has properly, reasonably, fairly, and adequately advised the Class Members of (a) the terms of the Settlement Agreement and Stipulation; (b) their right to object to the Settlement; (c) the time and place of the Fairness Hearing; and (d) their right to opt out of the Settlement. The Notice provided to the Class Members constitutes due and sufficient notice of the Settlement and the Fairness Hearing to all persons affected by and/or entitled to participate in the Settlement or the Fairness Hearing, in full compliance with the requirements of due process and the Florida Rules of Civil Procedure.” Final Judgment and Order of Final Approval.

* * *