20 Fla. L. Weekly Supp. 182a

Online Reference: FLWSUPP 2002GLOUInsurance — Personal injury protection — Standing — Assignment — Dissolved corporation — Where medical provider was administratively dissolved for failure to file annual report on date it accepted assignments from insureds and during period of treatment but was not in pursuit of winding up its affairs and was subsequently reinstated by Department of State, insurer cannot rely on dissolution as defense to paying PIP claims — Notice of covered loss — Although some claim forms submitted by provider did not contain license number of person performing treatment, where insurer did not notify provider of missing numbers and continued to process claim by sending insured to independent medical examination, forms were substantially complete

HEALING HANDS PAIN RELIEF CENTER, INC., a/a/o, GILDA SAINT LOUIS, Plaintiff, v. STAR CASUALTY INSURANCE COMPANY, Defendant. County Court, 10th Judicial Circuit in and for Polk County. Case No.: 53-2011-CC-2937. December 7, 2012. Honorable Robert Fegers, Judge. Counsel: Chad A. Barr, Eiffert & Associates, P.A., Orlando, for Plaintiff. Matthew Corker and Amy Prevatt, Conroy, Simberg, Ganon, Krevans, for Defendant.

FINAL SUMMARY JUDGMENT

THIS MATTER came before the Court on Plaintiff’s Motion for Final Summary Judgment and Defendant’s Motion for Summary Judgment, and, being considered by the Court and otherwise being fully advised of the premises; it is hereby ORDERED AND ADJUDGED as follows:

Roselaure, Bertony and Gilda Saint Louis sustained injuries in a motor vehicle accident on or about December 30, 2008. As a result of those injuries, the Saint Louis’ sought medical treatment at Healing Hands Pain Relief Center, Inc. (hereinafter Healing Hands) and assigned their personal injury protection (PIP) insurance benefits to Healing Hands. Healing Hands submitted bills for treatment to Star Casualty. No payments were made by Star Casualty.

Star Casualty Insurance Company (hereinafter “Star Casualty”) issued the subject insurance policy to Bertony and Roselaure Saint Louis which included No-Fault benefits in the amount of $10,000.00 per person with no deductible. At the time of the accident and during the period of treatment at issue, Gilda Saint Louis was the minor child of Bertony and Roselaure Saint Louis.

The assignments of benefits executed by Roselaure, Bertony and Gilda Saint Louis were all executed during a time in which Healing Hands was administratively dissolved by the Florida Department of State for failure to file an annual report. In addition, all treatment provided to Roselaure, Bertony and Gilda Saint Louis was provided by Healing Hands while it was administratively dissolved by the Florida Department of State for failure to file its annual report. Subsequent to Plaintiff’s treatment of the Saint Louis’, but before the filing of this action, on March 24, 2009, Healing Hands was reinstated by the Florida Department of State.

In February of 2011, Healing Hands filed this action seeking payment of No-Fault benefits for services rendered. Star Casualty filed its Answer and Affirmative Defenses, wherein Star Casualty contended that Healing Hands did not have a valid massage establishment license, that Healing Hands lacked standing since it was administratively dissolved at the time it accepted the subject assignment of benefits and provided treatment, that Healing Hands failed to provide notice of a covered loss because the CMS-1500 forms lacked the license number of the medical professional in box 31, and some or all of the services were provided outside of the licensure of the medical provider. However, Defendant’s Corporate Representative testified that the only reason why these bills have not been paid was due to the administrative dissolution of Healing Hands at the time the assignment was executed and during the period of treatment.

Star Casualty filed a motion for summary judgment and alleged that Healing Hands lacked standing to maintain this lawsuit because Healing Hands, by accepting the subject assignment, was conducting business in violation of state law during the period it was administratively dissolved. As a result, Star Casualty argues that the assignment was a nullity from the beginning.

Healing Hands filed a motion for final summary judgment which also addressed Star Casualty’s argument regarding the administrative dissolution, but also addressed all other remaining issues in this case. As it relates to the administrative dissolution issue, Healing Hands argued in its motion that the reinstatement of an administratively dissolved corporation relates back to and takes effect as of the date of the administrative dissolution, and that reinstatement allows the corporation to resume carrying on its business as if the administrative dissolution had never occurred. Additionally, Healing Hands sought final summary judgment as to the issues of standing, the medical necessity and causal relation of the medical services, reasonableness of the charges, and compliance with conditions precedent. In sum, Healing Hands sought entry of a final summary judgment.

A hearing on the parties’ summary judgment motions was held on September 11, 2012. Based on the motions written by counsel for the parties, oral arguments of counsel for the parties, and based on the Court’s review of the pleadings and record evidence, the Court hereby DENIES Defendant’s Motion for Summary Judgment, and GRANTS Plaintiff’s Motion for Entry of Final Judgment for the reasons set forth below:

The Court will first address the standing argument raised by Star Casualty first in its Affirmative Defenses, and again in its Motion for Summary Judgment. Both parties advised the Court that this was a legal question for the Court’s determination as it involves a question of statutory interpretation. The Court agrees.

In its Motion for Summary Judgment, Star Casualty contends that the assignment at issue is void ab initio because Healing Hands could not carry on business activities in its administratively dissolved status, except as necessary to wind up and liquidate its business and affairs, pursuant to section 607.1421(3), Florida Statutes. Further, Star Casualty claims that section 607.1405(1), Florida Statutes, governs the “effect of dissolution” of a corporation and states as follows:

(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;

b) disposing of its properties that will not be distributed in kind to its shareholder;

c) discharging or making provision for discharging liabilities;

d) distributing its remaining property among its shareholder according to their interests; and

e) doing every other act necessary to wind up and liquidate its business and affairs.

According to Star Casualty, the acceptance of an assignment by Healing Hands was an act that did not fall under (a)-(e) of section 607.1405(1), Florida Statutes, because there was no record basis to conclude that the acceptance of an assignment was related to winding up the affairs of the corporation and therefore Healing Hands does not have standing to maintain this action. Star Casualty relies primarily on the cases of Physician Management Associates, LLC v. State Farm Mutual Automobile Insurance Co., 13 Fla. L. Weekly Supp. 864a (Fla. 13th Cir. February 28, 2006), Levine v. Levine, 734 So. 2d 1191, 1197 (Fla. 2d DCA 1999) [24 Fla. L. Weekly D1568a], and PBF of Fort Myers, Inc. v. D & K P’ship, 890 So. 2d 384 (Fla. 2d DCA 2004) [30 Fla. L. Weekly D15a].

Healing Hands argues in its motion that the assignment of benefits is effective to confer standing based on section 607.1422(3), Florida Statutes which states that if a corporation that has been administratively dissolved is subsequently “reinstated” by the Florida Department of State:

The reinstatement relates back to and takes effect as of the effective date of the administrative dissolution and the corporation resumes carrying on its business as if the administrative dissolution had never occurred.

Healing Hands relies on multiple DCA cases including Triple T., Inc. v. Jaghory, 612 So. 2d 642 (Fla. 4th DCA 1993), Capital Construction Services, Inc. v. Rubinson, 541 So. 2d 748 (Fla. 3d DCA 1989), LeLac Property Owners’ Association, Inc. v. Routh, 493 So. 2d 1131 (Fla. 4th DCA 1986), In re Estate of McMillian, 603 So. 2d 685 (Fla. 1st DCA 1992), Cosmopolitan Distributors, Inc. v. Lehnert, 470 So. 2d 738 (Fla. 3d DCA 1985), and Spector v. Hart, 139 So. 2d 923 (Fla. 2d DCA1962).

The Court agrees with Healing Hands and finds that despite the fact that Healing Hands was administratively dissolved on the date it accepted the subject assignment of benefits and during the period in which it provided treatment to the patient, the subsequent reinstatement by the Florida Department of State related back to the date of the administrative dissolution thereby allowing Healing Hands to engage in such business activities as clearly provided by statute. See Fla. Stat. § 607.1422(3). The Court first notes that Defendant’s reliance on Physician Management Associates, LLC v. State Farm Mutual Automobile Insurance Co., 13 Fla. L. Weekly Supp. 864a (Fla. 13th Cir. February 28, 2006) is misplaced. Specifically, Defendant has misconstrued the phraseology of Physician Management wherein the Court states:

This suggests the corollary that if a claim accrues after a corporation’s administrative dissolution in a context which did not involve the winding up of its affairs, the corporation may not maintain a legal claim.

In context, the above statement simply means that a corporation in pursuit of winding up its affairs cannot, after dissolution, carry on any business outside the universe of “winding up of its affairs”; this is in stark contrast to a corporation not in pursuit of winding up its affairs. This corollary does not say Physician Management was not winding up its affairs; it says the activity involved is beyond that which is permitted as “winding up” activities. The corollary suggested does not apply to the facts in play in the instant case wherein the Plaintiff is not in pursuit of “winding up” its affairs. The quoted statement set forth above, to be a corollary, necessarily carries the presumptive inference that notwithstanding Physician Management’s reinstatement, Physician Management was still an entity in pursuit of winding up its affairs; consistent with the Physician Management Court’s reliance on PBF of Fort Myers, Inc. v. D & K Partnership, 890 So. 2d 384 (Fla. 2d DCA; 2005) [30 Fla. L. Weekly D15a]. In other words, nowhere in the opinion does the Physician Management Court state that the entity Physician Management was not in pursuit of “winding up” its affairs; the Court simply states a reinstatement occurred. To interpret Physician Management differently would run countercurrent to a broad body of case law and the clear language of Florida Statute 607.1422(3) as it applies to the reinstatement of administratively dissolved entities not intending to “close shop.”¹ Similarly, Defendant has misplaced its reliance on Levine v. Levine, 734 So. 2d 1191 (Fla. 2d DCA; 1999) [24 Fla. L. Weekly D1568a] and PBF of Fort Myers, Inc. v. D & K Partnership, 890 So. 2d 384 (Fla. 2d DCA; 2005) [30 Fla. L. Weekly D15a]. In Levine, “ ‘LZD’ ceased to do business in December 1990” (at page 1192) and in PBF “counsel for PBF conceded that PBF is no longer an active corporation” (at page 365). Clearly, in both Levine and PBF, the Second District Court of Appeal was dealing with entities “winding up” business affairs and “closing shop.”

The Court finds the cases cited and argued by counsel for Healing Hands to be instructive. In Triple T., Inc. v. Jaghory, 612 So. 2d 642 (Fla. 4th DCA 1993), the Fourth DCA reasoned that a corporation who was administratively dissolved at the time it entered into a commission agreement but subsequently reinstated, could sue on that commission agreement because section 607.1422(3), Florida Statutes has been interpreted as “allowing a reinstated corporation to bring, defend, or intervene in any lawsuit, even one which is based on facts that arose prior to its reinstatement.” Id. at 643 (emph. added). In LeLac Property Owners’ Association, Inc. v. Routh, 493 So. 2d 1131 (Fla. 4th DCA 1986), the Fourth DCA held that the LeLac Property Owners’s Assoc. could sue to enjoin property owners who purchased property that was managed by LeLac during the time in which LeLac was administratively dissolved, because LeLac was subsequently reinstated. In the case of In re Estate of McMillian, 603 So. 2d 685 (Fla. 1st DCA 1992) the First DCA held that a corporation could inherit the res of a trust during the time they were administratively dissolved but subsequently reinstated, because a reinstated corporation can pursue a cause of action against a third party, even where the cause of action accrued after dissolution and before reinstatement. In Cosmopolitan Distributors, Inc. v. Lehnert, 470 So. 2d 738 (Fla. 3d DCA 1985) the Third DCA held that according to the corporate revival statutory scheme, “a corporation that has paid its delinquent taxes and filed its delinquent annual reports has “never been dissolved”. In the case of Spector v. Hart, 139 So. 2d 923 (Fla. 2d DCA 1962), the Second DCA held that a lease signed by an administratively dissolved corporation was ratified and confirmed when the corporation was subsequently reinstated. Notably, the Spector Court provides the following analysis of this issue:

The primary purpose of § 608.37, Florida Statutes, F.S.A., is the collection of delinquent taxes. A large number of corporations in Florida overlook the payment of taxes and the filing of various required forms with the Secretary of State. Circuit judges in the state, with few exceptions, have had the experience of dealing with cases instituted against or by corporations, which cases have been dismissed or stayed pending the payment of the excise taxes. Corporate business was carried on even after suspension or dissolution by the state but upon payment of such taxes the statute specifically provides that the Secretary of State shall issue a receipt which shall state that the corporation has been fully restored or its permit to do business in the state fully revived and restored; and that restoration shall be effective from the date of dissolution or cancellation of the permit.

Id. at 927. The Court ended its opinion quoting the late Chief Justice Vanderbilt of the New Jersey Supreme Court who, in the case of J. B. Wolfe, Inc. v. Salkind, 3 N.J. 312, 70 A.2d 72, 13 A.L.R.2d 1214 (1949), said:

The object of these statutes being solely the raising of revenue for the State (the police aspects of the situation being covered by separate statutory provisions hereinafter referred to) it would be inequitable to permit third persons, such as the defendants here, who had dealt with the corporation in the period when its charter had been forfeited to defend suits against them on this ground after the corporation had complied with R.S. 54:11-5, N.J.S.A., and it had been reinstated as a corporation and entitled to all its franchises and privileges. In good conscience the defendants, who are strangers to the dealings between plaintiff and the State, should not be allowed to take advantage of the plaintiff’s default in paying its taxes to escape their own obligations to the plaintiff, when its default has been cured by its subsequent compliance with the statutory requirements.

Id.

Healing Hands was reinstated by the Florida Department of State, and in accordance with the cases analyzing and applying section 607.1422(3), Florida Statutes, Star Casualty is not entitled to rely on the administrative dissolution of Healing Hands as a defense to payment of the subject claims. By virtue of its reinstatement, Healing Hands “ ‘has never been dissolved’ because it has [been reinstated by the Florida Department of State].” Cosmopolitan Distributors, Inc., 470 So. 2d 738, at page 739. It is clear that the Legislature, through the enactment of Florida Statute 607.1422(3), desired the ministerial act of an administrative dissolution be forgiven ab initio; to hold otherwise disregards the clear and unambiguous language of Florida Statute 607.1422(3). As Star Casualty’s motion for summary judgment was limited to this specific issue, the Court hereby denies Star Casualty’s motion for summary judgment. The Court finds that there is no genuine issue of material fact regarding the legal question of whether Healing Hands was permitted to accept the subject assignment of benefits and treat the subject patient during the time it was administratively dissolved. The Court finds as a matter of law that the administrative dissolution of Healing Hands served as no impediment to the activities described above because of the fact that Healing Hands was reinstated by the Florida Department of State.

Healing Hands further argues in its motion for final summary judgment that there is no genuine issue of material fact that an accident occurred on December 30, 2008, that Healing Hands has standing pursuant to an assignment of benefits, that the services at issues were medically necessary, that the medical services were causally related, that the charges were reasonable in price, and that Healing Hands complied with all conditions precedent by submission of a compliant demand letter, and finally, the remaining affirmative defenses.

Regarding the issue of occurrence of the accident, the Court finds that there is no genuine issue of material fact regarding the occurrence of an accident involving the subject assignor on December 30, 2008. The occurrence of the accident was conveyed to medical personnel for purposes of medical diagnosis and treatment and as such, this information constitutes an exception to the hearsay rule. See Fla. Evidence Code §90.803. Star Casualty provided no record evidence to create a genuine issue of material fact as to this issue during the hearing or in advance of the hearing.

As it relates to the issue of standing, the Court finds that there is no genuine issue of material fact that the language of the assignment of benefits is sufficient to convey standing in favor of the Healing Hands.

As to whether the treatment provided to the assignor was medically necessary, causally related and reasonable in price, the Corporate Representative of Star Casualty testified that the only reason why the subject bills have not been paid is because of the administrative dissolution. In addition, Healing Hands filed the affidavit of the medical provider responsible for all of the treatment at issue as well as for setting the prices of the charges at issue who testified that the treatment at issue was medically necessary, causally related to the motor vehicle accident, and that the charges were reasonable in price. As such, the Court finds that there is no genuine issue of material fact as to this issue and finds that Healing Hands has met is burden.

Finally, the Court finds that there is no genuine issue of material fact that Healing Hands complied with all conditions precedent to filing this action, specifically, section § 627.736(10), Florida Statutes. While Defendant did raise noncompliance with the presuit demand requirement as an affirmative defense (Paragraph 5 of Defendant’s Affirmative Defenses), there is no genuine issue of material fact that the Plaintiff’s demand letter complies with section § 627.736(10), Florida Statutes.

At the time of the hearing on this matter, Star Casualty maintained a defense (Paragraph 1 of Defendant’s Affirmative Defenses) that alleged that Healing Hands did not have a valid massage establishment license. However, the Corporate Representative of Star Casualty testified that the only reason why the subject bills have not been paid is because of the administrative dissolution issue addressed above. The Corporate Representative for Star Casualty could not provide any facts to support this defense during his deposition, which transcript was timely filed by Healing Hands. The principal of Healing Hands filed an affidavit in which it was stated that Healing Hands did have a valid massage establishment license during the time in which the subject treatment was provided. As such, the Court finds that there is no genuine issue of material fact regarding this defense and finds that this defense is not a defense to payment of the subject No-Fault claim.

Lastly, Star Casualty maintained a defense (paragraph 4 of Defendant’s Affirmative Defenses) that alleged Healing Hands failed to provide notice of a covered loss because the CMS 1500 forms submitted by Healing Hands did not contain the license number of the individual performing the service in box 31. At the hearing, it was confirmed that many of the CMS 1500 forms did have the license number and only a handful did not, Star Casualty did not notify Healing Hands that the license number was missing prior to litigation, and in fact Star Casualty continued to process the claim by sending the assignor to an IME appointment. Based on the case of United Auto. Ins. Co. v. Prof’l Med. Group, Inc., 26 So. 3d 21 (Fla. 3d DCA 2009) [34 Fla. L. Weekly D2500a], the Court finds that there is no genuine issue of material fact that the CMS-1500 forms submitted by Healing Hands and that form the basis of this action were “substantially complete” as to all relevant and material information as required by section 627.736(5)(d), Florida Statutes. The Court notes that the Corporate Representative of Star Casualty testified that the only reason why the subject bills have not been paid is because of the administrative dissolution issue addressed above. The Court finds that there is no genuine issue of material fact regarding this defense and finds that this defense is not a defense to payment of the subject No-Fault claim.

For purposes of completeness, the Court finds that the Defendants allegations contained within paragraphs 6 and 7 of the Affirmative Defenses are not affirmative defenses. As such, the existence of these defenses do not serve as a bar to the Plaintiff’s claim for relief.

Based on the foregoing, the Defendant’s Motion for Summary Judgment is hereby DENIED. There appearing to be no further issues for this Court’s consideration, Plaintiff’s Motion for Final Summary Judgment is hereby GRANTED, and,

IT IS ORDERED AND ADJUDGED that the Plaintiff, Healing Hands Pain Relief Center, Inc. a/a/o Gilda Saint Louis, c/o Eiffert & Associates, PA, 122 East Colonial Drive, Suite 210, Orlando, Florida, 32801, shall recover from the Defendant, Star Casualty Insurance Company, 5539 Southwest 8th Street, Gables, Florida, 33134, the sum of $6,880.00, plus pre-judgment interest as established by F.S. 55.03 through the date of entry of this judgment, which shall bear post-judgment interest at the pursuant to F.S. 55.03, for which let execution issue FORTHWITH.

IT IS FURTHER ORDERED AND ADJUDGED that the Court retains jurisdiction to determine Plaintiff’s entitlement to, and the amount of, attorney fees and costs taxable against the Defendant upon timely motion by the Plaintiff.

__________________

¹Moreover, if the Physician Management corollary is susceptible to a different interpretation, such is of questionable reliability since “general statements of law in an opinion must be given such weight only as the facts in that particular case warrant.” Enix v. Diamond T. Sales & Service Co., 188 So. 2d 48 (2nd DCA; 1966).

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