19 Fla. L. Weekly Supp. 142a
Online Reference: FLWSUPP 1902TROPInsurance — Personal injury protection — Examination under oath — Failure to attend — Attendance at EUO is not condition precedent to filing suit for PIP benefits — However, unreasonable failure to attend EUO is affirmative defense to prospective PIP benefits — Thirty-day claim investigation window during which EUOs must be scheduled is measured from date of insurer’s receipt of medical bills, not date of receipt of notice of accident — No merit to arguments that insured who is not policyholder has no duty to attend EUO or that insured’s failure to attend is immaterial to medical provider/assignee’s claim for benefits
TROPICAL HEALING POWER LLC, a/a/o BRANDON VENABLE, Plaintiff(s), vs. MENDOTA INSURANCE COMPANY, Defendant(s). County Court, 13th Judicial Circuit in and for Hillsborough County, Civil Division. Case No. 10-CC-002553, Division I. May 6, 2011. Herbert M. Berkowitz, Judge. Counsel: Joseph P. Gleason, Law Offices of Gonzalez & Associates, Brandon, for Plaintiff. Michael C. Clarke, Tampa, for Defendant.
AMENDED ORDER DENYING DEFENDANT’S MOTIONFOR SUMMARY JUDGMENT AND ORDER DENYINGPLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
These competing Motions for Summary Judgment came on to be heard on March 21, 2011, all parties being represented by their respective counsel and the Court, being fully advised in the premises, issued its Order Denying Defendant’s Motion for Summary Judgment on April 12, 2011. The Court, sua sponte, has decided that the said Order of denial should be more fully explained, and so enters this Amended Order Denying Defendant’s Motion For Summary Judgment. For the reasons stated below, the Court also denies the Plaintiff’s Motion For Summary Judgment as well.
The Defendant argues that the assignor of benefits, Brandon Venable, an “insured” under the terms of the underlying policy of insurance issued to Jasmine Morrow, failed to attend either of two scheduled examinations under oath (hereinafter “EUO”), and that such failure to attend either of the EUOs constituted a material breach of the insurance policy, thus relieving the Defendant of any liability for payment of personal injury protection benefits. Defendant specifically argues that attending an EUO is a condition precedent to maintaining a suit for breach of the insurance policy, and failure to attend an EUO bars this cause of action from going forward.
The Florida Supreme Court has now spoken to the underlying premise of Defendant’s argument. Custer Medical Center a/a/o Maximo Masis, v. United Automobile Insurance Company, 35 Fla. L. Weekly S640a (Fla SCt, November 4, 2010) makes it clear that attendance at an EUO is not a condition precedent to filing suit for No-Fault benefits, but rather the failure to attend an EUO may be raised in the context of an affirmative defense, with all of the attendant burdens of proof of establishing any affirmative defense. However, the mere failure to attend an EUO is, in itself insufficient to meet the burden of proving that such failure to attend an EUO was unreasonable. Further, any such unreasonable failure would apply only to prospective benefits so sought. See, too United Automobile Insurance Company v. Francisco Diaz, (Cir.Ct., 11th Jud. Cir. (Appellate) for Miami-Dade County, Case No. 09-115AP, February 3, 2011 [18 Fla. L. Weekly Supp. 348a].
Based upon Custer and Diaz, the Defendant’s Motion for Summary Judgment must be, and is hereby Denied.
Plaintiff argues that the relevant iteration of the Florida No-Fault statute (FS§ 627.736, eff. January 1, 2008) requires that payments of claims must be made within 30 days of receiving notice of the claim, and that in the present case, more than 30 days elapsed before the insurer requested the first EUO. Plaintiff further argues that Mr. Venable was not a party to the contract of insurance, as was Ms. Morrow, and had no duty to attend an EUO, as Mr. Venable was a mere beneficiary of the policy of insurance and not the policy holder.
The Plaintiff’s position that more than 30 days elapsed from the date the Defendant was notified of the claim to the date that the first EUO was scheduled is incorrect. The Plaintiff begins his count on the date (August 24, 2009) that the insured gave notice to her insurance company that a motor vehicle accident had occurred. A report of an accident is not a report of “a claim”, as the former merely advises of an event which may result in a claim or claims, while the latter by its very nature requires a specific request for reimbursement for a specific and liquidated loss. Here, the Defendant did not receive the first medical bills for Brandon Venable from Tropical Healing Power, LLC (the plaintiff herein by assignment of benefits) until September 17, 2009. Therefore, the 30 day statutory count down upon which Plaintiff relies begins not on August 24, 2009, but rather on September 17, 2009, when the Defendant received notice of this claim. Defendant timely scheduled both EUOs prior to the expiration of the 30 day period, and did not deny the present claim until the Plaintiff’s assignor failed to appear at the second scheduled EUO.
The Plaintiff also argues that as an assignee of benefits, rather than as a party to the underlying contract, the failure of its assignor to attend an EUO is immaterial to its receipt of payment on its claim. Plaintiff also argues that its assignor, Mr. Venable, was not a party to the subject contract of insurance, but only a beneficiary under the said contract and therefore, was not bound by the policy provisions regarding attendance at an EUO. Plaintiff additionally argues that Mr. Venable is not required to comply with the EUO provisions of the insurance contract because the EUO requirement is only contained in the contract and is not a requirement of the No-Fault Statute. See Custer, supra at foot note 1. Relying on Shaw v. State Farm Fire and Casualty Company, 37 So.3d. 329 (Fla 5DCA, 2010) [34 Fla. L. Weekly D2189a], Plaintiff also argues that taking an assignment of contractual benefits does not include the assumption of any duty of performance under the underlying contract. Therefore, Plaintiff’s position is that there is no duty of performance (i.e. to attend an EUO) on Mr. Venable and that Plaintiff, as assignee of Mr. Venable’s claim for benefits, was not subject to any duty of performance under the subject insurance contract.
Plaintiff’s reliance on Shaw is misplaced. Indeed, Shaw clearly suggests the opposite conclusion. As the Shaw Court notes, “. . . the assignee of a non-negotiable instrument takes it with all the equities and defenses of the debtor connected with or growing out of the obligation that the obligor had against the assignor at the time of the assignment.” (Shaw, at 333) citations omitted “. . . The right of the assignee under the contract is no better than its assignor’s rights. If the assignor is entitled to be paid, the assignee is entitled to be paid, but if the assignor is not entitled to be paid because of some failure of performance on the part of the assignor, then the assignee is not entitled to be paid either.” Shaw, at 333.
Shaw goes on to point out that if no monies are due and owing because of the failure of [the assignor] to perform some covenant under the policy, including, for example, an examination under oath, then [the assignee] has no claim against [an insurance company] precisely because it is subject to [the insurance company’s] defenses against the insured. Shaw, at 333.
While Mr. Venable is not the named insured under the policy of insurance underlying this claim, he is an insured under this policy. His benefits under the policy, if any, derive not from his being an assignee or beneficiary of the named insured, Jasmine Morrow. Rather, if he is entitled to recover any benefits thereunder, it is due to his status under the law as “an insured”. As such he is obligated to perform all statutory obligations including cooperation with the insurer’s right to investigate claims within the statutory framework of Florida’s No-Fault laws.
While Custer, supra. instructs that an EUO is invalid as being more restrictive than the statutorily mandated coverage and the terms and limitations permitted under the statutory provisions (Custer, footnote 1), Custer also instructs that an unreasonable failure to attend a requested medical examination can constitute an affirmative defense and is available to challenge a claim for benefits. While there is a marked difference between the right to require attendance at a medical examination (as permitted by the No-Fault Statute) and requiring attendance at an EUO (an invalid contract provision, according to Custer), the No-Fault Statute does provide the carrier the right to investigate a claim for 30 days after receipt of such claim. Fla. Statute §627.736(4)(b).
In that context, the Defendant took steps to investigate the claim within the statutory period, and may allege an unreasonable failure to cooperate with its timely investigation as an affirmative defense. If the defendant can carry its burden of proving its affirmative defense that Mr. Venable’s failure to appear at the EUO was unreasonable and in some way prejudiced the Defendant, then Defendant must be given the opportunity to carry that burden. Certainly a Motion for Summary Judgment is not the time to weigh the potential future success or failure of such affirmative defense. Custer, while discarding the EUO as an invalid policy provision, still allows for the underlying affirmative defense of an unreasonable failure to cooperate with the insurance company’s right to timely investigate the claim in question. The EUO, although established by an invalid policy provision attempting to create a condition precedent to the initiation of a suit for benefits, may no longer be considered such a condition precedent, the EUO as an investigative tool may still be available to the insurance carrier under certain, if limited, conditions. With regard to the present case, the Defendant requested an EUO within the 30 day statutory window, and failure to attend the EUO by Mr. Venable may have precluded the Defendant from discovering a valid basis for denying the claim before it. Certainly this creates a question of fact, to be determined other than by Summary Judgment. As a consequence, Plaintiff’s Motion for Summary Judgment must be and is therefore Denied.
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