22 Fla. L. Weekly Supp. 738a

Online Reference: FLWSUPP 2206IGLEInsurance — Personal injury protection — Coverage — Medical expenses — Standing — Plaintiff who received assignment from provider has standing to bring action against insurer — Exhaustion of policy limits — Where insurer received plaintiff’s demand letter and copies of assignments from insured to provider and from provider to plaintiff before paying remaining benefits to provider, payment to provider was gratuitous and did not exhaust benefits — Payment to provider did not effect accord and satisfaction as to debt owed by insurer to plaintiff

GABLES INSURANCE RECOVERY, INC., a/a/o Yuleysi Esquivel Iglesias, Plaintiff, vs. PROGRESSIVE AMERICAN INSURANCE COMPANY, Defendant / Third-Party Plaintiff, ALL X-RAY DIAGNOSTIC SERVICES, CORP., Third-Party Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County, Small Claims Division. Case No. 12-27369 SP 05. October 8, 2014, nunc pro tunc August 21, 2014. Shelly J. Kravitz, Judge.

ORDER DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT ON THE EXHAUSTION OF BENEFITS AND GRANTING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT ON STANDING AND ACCORD AND SATISFACTION

THIS CAUSE having come before the Court on August 21, 2014, on Defendant’s Amended Motion for Summary Judgment on Exhaustion of Benefits and Plaintiff’s Cross-Motion for Summary Judgment on Standing and Accord and Satisfaction, and the Court having reviewed said motions, the record, and applicable law, as well as heard argument of counsel and otherwise fully advised in the premises, it is hereby ORDERED and ADJUDGED that Defendant’s Amended Motion for Summary Judgment is DENIED and Plaintiff’s Cross-Motion for Summary Judgment is GRANTED for the reasons set forth herein.

FACTS

The undisputed evidence shows that this matter involves a suit for personal injury protection (“PIP”) benefits under a policy of insurance issued by Progressive American Insurance Company (“Progressive”). On December 4, 2009, Ms. Iglesias was involved in an automobile accident. She subsequently sought treatment at Excellence Chiropractic for injuries allegedly sustained in the accident. Ms. Iglesias appeared on December 9, 2009, at All X-Ray Diagnostic Services, Corp. (“All X-Ray” or “Provider”) after being prescribed diagnostic studies. In conjunction with having said studies conducted, Ms. Iglesias executed an Assignment of Benefits assigning all rights to PIP benefits to All X-Ray under the insurance policy. All X-Ray subsequently assigned all of its rights originating from the insured to Gables Insurance Recovery, Inc., (“Gables”) on February 25, 2010. On or about March 12, 2010, Gables submitted a Notice of Intent to Initiate Litigation (“Pre-Suit Demand Letter”) to Progressive along with the initial assignment from Ms. Iglesias to All X-Ray and the subsequent assignment from All X-Ray to Gables. Progressive responded to Gables’ pre-suit demand letter on April 15, 2010. Over one year later, Progressive received a pre-suit demand letter from the Law Offices of Armando A. Brana, P.A., (“Brana”) who purportedly represented the provider regarding the same charges at issue in this case. On August 3, 2011, Progressive responded to the pre-suit demand letter submitted by Brana and issued payment to the provider in the amount of $222.80. To date, Gables has not revoked or rescinded the assignment, nor has it reassigned said benefits to All X-Ray.

STANDARD OF REVIEW

Rule 1.510(c) of the Florida Rules of Civil Procedure, a moving party is entitled to summary judgment if the “pleadings, depositions, answers to interrogatories, and admissions on file together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” On a motion for summary judgment, the moving party bears the burden of proving the non-existence of any genuine issue of material fact. Holl v. Talcott, 191 So. 2d 40 (Fla. 1966); Harvey Bldg., Inc. v. Haley, 175 So. 2d 780 (Fla. 1965); Connolly v. Sebeco, Inc., 89 So. 2d 482 (Fla. 1956). If the moving party meets its burden, then the burden shifts to the non-moving party to provide evidence sufficient to reveal a genuine and material disputed issue of fact. See id. at 43-44. It is not enough for the non-moving party opposing summary judgment merely to assert that an issue exists. Harvey Bldg., Inc., 175 So. 2d at 783.ANALYSISA. Assignment

In order to determine whether Progressive can be held liable for No-Fault benefits in excess of policy limits, the Court must first analyze whether GIR has standing to bring forth the instant case and whether GIR timely notified Progressive of its assignment. The Court may then determine whether the policy at hand was properly exhausted.

The law on assignments is well settled in Florida — “an assignment transfers to the assignee all the interests and rights of the assignor in and to the thing assigned.” Prescription Partners, LLC v. State Dep’t of Fin. Serv., No. 1D12-3305 (1st DCA Mar. 28, 2013) [38 Fla. L. Weekly D715a] (citing Dep’t of Revenue v. Bank of Am., N.A., 752 So. 2d 637, 642 (Fla. 1st DCA 2000) [25 Fla. L. Weekly D118a] (quoting State v. Family Bank of Hallandale, 667 So. 2d 257, 259 (Fla. 1st DCA 1995) [20 Fla. L. Weekly D1992a])). See also United Auto. Ins. Co. v. Otero, 39 So. 3d 563, 564 (Fla. 3d DCA 2010) [35 Fla. L. Weekly D1091a]; LLP Mortg., Ltd. v. Cravero, 851 So. 2d 897, 898 (Fla. 4th DCA 2003) [28 Fla. L. Weekly D1889a]; Schuster v. Blue Cross & Blue Shield of Fla., 843 So. 2d 909, 912 (Fla. 4th DCA 2003) [28 Fla. L. Weekly D505a]; and Livingston v. State Farm Mut. Auto. Ins. Co., 774 So. 2d 716, 718 (Fla. 2d DCA 2000) [25 Fla. L. Weekly D533c]. Unless an express prohibition exists in a statute, a party may assign any of its rights in common law or via statute, including those arising under contracts, to another party. Id. at 1222 (quoting VOSR Indus. v. Martin Props., Inc., 919 So. 2d 554, 556 (Fla. 4th DCA 2005) [31 Fla. L. Weekly D71a]). See also Gables Ins. Recovery, Inc., a/a/o Maria Carmen Ovalle v. Seminole Cas. Ins. Co., 10 So. 3d 1106, 1108 (Fla. 3d DCA 2009) [34 Fla. L. Weekly D672b]; Livingston v. State Farm Mut. Auto. Ins. Co., 774 So. 2d 716, 718 (Fla. 2d DCA 2000) [25 Fla. L. Weekly D533c]; Schuster v. Blue Cross & Blue Shield of Fla., 843 So. 2d 909, 912 (Fla. 4th DCA 2003) [28 Fla. L. Weekly D505a]. Specifically, Florida’s No-Fault Law does not prohibit the assignment of PIP benefits. See id. See also Gables Ins. Recovery, Inc., a/a/o Maritza Piure v. Seminole Cas. Ins. Co., No. 06-010175 SP 25, slip op. (11th Jud. Cir. Ct. Apr. 26, 2007).

In the instant case, the claimant, Ms. Iglesias, sought diagnostic studies at All X-Ray’s facility on December 9, 2009. Prior to conducting the studies, All X-Ray obtained an assignment from Ms. Iglesias vesting it with all of the rights for PIP benefits under the policy. On February 25, 2010, All X-Ray assigned these benefits to GIR authorizing Progressive, Ms. Iglesias’s insurer, to pay any amounts due and owing to Gables. As a result of the assignment, Gables became the true party in interest and, thus, had standing to pursue the instant case. See Gables Ins. Recovery, Inc., a/a/o Maria Carmen Ovalle v. Seminole Cas. Ins. Co., 10 So. 3d 1106 (Fla. 3d DCA 2009) [34 Fla. L. Weekly D672b]; See also Gables Ins. Recovery, Inc., a/a/o Maritza Piure v. Seminole Cas. Ins. Co., No. 06-010175 SP 25, slip op. (11th Jud. Cir. Ct. Apr. 26, 2007); and Schuster v. Blue Cross & Blue Shield of Fla., 843 So. 2d 909, 911 (Fla. 4th DCA 2003) [28 Fla. L. Weekly D505a].

The next line of inquiry to determine whether Progressive can be held liable for No-Fault benefits in excess of policy limits centers on the issue of notice. “The effect of . . . an assignment is to place the insured’s cause of action for such benefits in the [assignee].” Schuster v. Blue Cross & Blue Shield of Fla., 843 So. 2d 909, 911-912 (Fla. 4th DCA 2003) [28 Fla. L. Weekly D505a].

Notice, knowledge or a notice or notification received by an organization is effective for a particular transaction from the time when it is brought to the attention of the individual conducting that transaction, and in any event from the time when it would have been brought to his or her attention if the organization had exercised due diligence.

Bldg. Materials Corp. of Am. v. Presidential Fin. Corp., 972 So. 2d 1090, 1093 (Fla. 2d DCA 2008) [33 Fla. L. Weekly D351a]. See also Geico Gen. Ins. Co. v. Tarpon Total Health Care, 86 So. 3d 585 (Fla. 2d DCA 2012) [37 Fla. L. Weekly D1027a]. It is well-settled under Florida law that a debtor who receives notice of an assignment “may be held liable to the assignee if the debtor later pays the assigned debt to the assignor rather than the assignee.” Id. at 1092-93. Once notice is received, a debtor may only discharge its obligation by paying any due and owing amounts to the assignee. Id. Furthermore, even in the case where there are multiple assignments for the same accounts receivable, Florida law recognizes the English rule — “the assignee who first gives notice of his claim to the debtor is preferred and has the prior right.” Boulevard Nat’l Bank of Miami v. Air Metal Indus., Inc., 174 So. 2d 559, 560 (Fla. 3d DCA 1965).

On or about March 12, 2010, after receiving the assignment of PIP benefits under Ms. Iglesias’s policy from All X-Ray, Gables submitted a pre-suit demand letter to Progressive which included a copy of the Assignment of Benefits from the patient/claimant to All X-Ray and a copy of the Assignment of Benefits from All X-Ray to Gables. Progressive responded to Gables’ pre-suit demand letter on or about April 15, 2010. Progressive’s response is an acknowledgement of receipt regarding the documents submitted by Gables; namely, the pre-suit demand letter and the respective assignments. During her deposition, Progressive’s litigation adjuster acknowledged receipt of both Gables’ pre-suit demand letter and assignments. Progressive’s litigation adjuster also acknowledged that Progressive had not received any rescission or revocation of the assignment to Gables, nor had it received any reassignment from Gables back to the medical provider. Over a year later, Progressive received a pre-suit demand letter from a law firm purporting to represent the medical provider for the same accounts receivable that had previously been assigned to Gables. Progressive responded to this subsequent pre-suit demand letter by sending a draft for the remaining benefits in the policy. The draft did not name Gables as the payee, nor did Progressive’s response to the subsequent pre-suit demand letter inform the attorney mistakenly representing the provider that the amounts sought had been previously assigned to Gables. The record shows that despite timely submission of the assignment naming Gables the assignee, Progressive sent a payment for due and owing benefits to the provider, a party that was not the true party in interest.B. Exhaustion of Benefits

Generally, an insurer is not liable for PIP benefits above policy limits, absent bad faith, if the insurer paid proper claims for other providers prior to receiving notice of a payment dispute. See Geico v. Robinson, 581 So. 2d 230, 231 (Fla. 3d DCA 1991); Sheldon v. United Servs. Auto. Ass’n, 55 So. 3d 593, 596 (Fla. 1st DCA 2010) [36 Fla. L. Weekly D23a]; Progressive Am. Ins. Co. v. Stand-Up MRI of Orlando, 990 So. 2d 3, 4 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a]; Simon v. Progressive Exp. Ins. Co., 904 So. 2d 449, 450 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D1156b].

Progressive cites to the recent 4th DCA case, Northwoods Sports Med. & Physical Rehab., Inc. (a/a/o Suzanne Cabrera), & Wellness Assoc. of Fla., Inc., (a/a/o Daniel North) v. State Farm Mut. Auto. Ins. Co. and USAA Cas. Ins. Co., No. 4D11-1556, 4D11-3796 (Fla. 4th DCA Mar. 5, 2014) [39 Fla. L. Weekly D491a], in support of its contention that it should not be held liable beyond policy limits. The Fourth District in Wellness cites to Boulevard Nat’l Bank of Miami v. Air Metal Indus., Inc. and states that the issue there revolved on the order of assignments on the same accounts receivable and noted that a factual dispute as to the amount owed did not exist. See Wellness, at *9.

Progressive argues that it issued payments for due and owing benefits as claims were received and that payments were made to exhaustion. Progressive further argues that it issued drafts to payees based on assignments submitted by medical providers for PIP benefits under Ms. Iglesias’s policy. Based on the evidence in the record, Progressive exhausted benefits on or about August 3, 2011, when it paid remaining benefits for the same accounts receivable at issue in the instant case pursuant to a pre-suit demand letter submitted by an attorney who did not represent, nor did it purport to represent, the assignee, Gables. The pre-suit demand letter and payment issued by Progressive were made subsequent to Gables’ notice to Progressive of its assignment. The pre-suit demand letter and payment issued by Progressive were made subsequent to Progressive’s response to Gables acknowledging its pre-suit demand letter and assignment. In this case, Progressive did not pay in accordance to well-settled notions in Florida assignment law, nor did it pay in accordance to its own policies to issue drafts to payees based on the assignments that were noticed and filed.

As a result, benefits have not been exhausted in the instant matter under the subject insurance policy. Florida law on the exhaustion of benefits in No-Fault cases provides an insurer the ability to issue payments in a timely fashion for claims that have been noticed. In the instant case, Progressive was on notice of Gables’ assignment for more than one year regarding the charges at issue before it issued a payment to a party not the assignee. Florida law is clear — once a party has been noticed as to an assignment of an amount that is due and owing, the only way to discharge the disputed debt is to issue the payment to the assignee. Payment to the assignor does not “discharge the obligation.” Bldg. Materials, 972 So. 2d at 1093. A payment made to a party that is not the true party in interest and which the debtor has been noticed is deemed gratuitous in nature and, thus, does not exhaust benefits.CONCLUSION

Accordingly, it is ORDERED and ADJUDGED that Defendant’s Motion for Summary Judgment is DENIED and Plaintiff’s Cross-Motion for Summary Judgment on the issue of Standing and Accord and Satisfaction is GRANTED for the reasons set forth herein.

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