22 Fla. L. Weekly Supp. 391a
Online Reference: FLWSUPP 2203KOVAInsurance — Personal injury protection — Affirmative defenses — Res judicata — Class action — Insurer is not entitled to summary judgment on affirmative defense of res judicata based on class action settlement where there is disputed issue of fact as to whether medical provider was given notice of proposed settlement, and notice, if given, was sent directly to represented provider without copy being sent to provider’s counsel — Even if notice and other elements of res judicata were established, doctrine will not be applied where totality of circumstances demonstrates that application of res judicata would defeat ends of justice — Provider’s lawsuit against insurer was pending well before resolution of class action lawsuit, and insurer never put provider on notice of pending class action and its potentially dispositive impact on provider’s case until after opt-out deadline for settlement had passed and final judgment had been entered in class action suit
UNIVERSITY CHIROPRACTIC CENTER, INC. (a/a/o Melissa Kovach), Plaintiff, vs. UNITED SERVICES AUTOMOBILE ASSOCIATION, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. COCE09-16032(53). September 17, 2014. Robert W. Lee, Judge. Counsel: Andrew J. Weinstein, Weinstein Law Firm, Coral Springs, for Plaintiff. David Hwalek, Herssein Law Group, P.A., Tampa, for Defendant.
ORDER DENYING DEFENDANT’S AMENDEDMOTION FOR SUMMARY JUDGMENT
THIS CAUSE having come on to be heard on September 11, 2014, on Defendant’s Amended Motion for Summary Judgment and the Court having heard argument of counsel, having reviewed the Court file, and being otherwise advised in the premises, it is hereupon,
ORDERED AND ADJUDGED as follows:
BACKGROUND:
1. This case arises out of a breach of contract claim for a failure to pay personal injury protection (“PIP”) benefits.
2. On or about March 21, 2008, Melissa Kovach was injured in an automobile accident.
3. At the time of the accident, Ms. Kovach was covered for PIP benefits under an insurance policy issued by United Services Automobile Association.
4. As a result of the injuries that Melissa Kovach sustained, she treated at the Plaintiff’s chiropractic facility from March 24, 2008 through December 11, 2008.
5. Plaintiff submitted its medical bills to USAA in accordance with Florida’s no-fault law and the insurance policy; however, USAA declined to pay the bills alleging that Plaintiff’s Standard Disclosure and Acknowledgment Form was insufficient.
6. On or about June 02, 2009, Plaintiff filed its complaint seeking unpaid PIP benefits for the services rendered on the dates set forth above.
7. At the time Plaintiff filed this lawsuit and commenced litigation, Plaintiff was unaware that the Goodwiller class-action lawsuit was also being litigated and could potentially have an impact on Plaintiff’s cause of action. In fact, it was not until after the September 29, 2009 opt-out deadline passed and not until after the December 01, 2009 Final Judgment and Order of Approval was entered in Goodwiller that the Defendant — a party to both lawsuits — made Plaintiff aware, through its counsel, that the Goodwiller case existed and, conveniently, that deadlines had passed.
8. Defense counsel, while clearly being aware that the Goodwiller case was pending in the same courthouse as the instant case, inexplicably failed to notify Plaintiff’s counsel that the class action was pending.
9. On March 22, 2011, this Court entered final judgment in favor of the Plaintiff.
10. Defendant appealed and on May 23, 2013, the appellate court entered an order reversing the final judgment for the sole purpose of allowing Defendant to amend its answer to assert its requested affirmative defense of res judicata. [20 Fla. L. Weekly Supp. 391a; rehearing denied 20 Fla. L. Weekly Supp. 1152a.]
11. On November 12, 2013, Defendant filed its amended renewed motion to add affirmative defenses.
12. On March 21, 2014, this Court, based on the Appellate Court Order, allowed the Defendant to plead the affirmative defense of res judicata.
ANALYSIS AND CONCLUSION
1. Currently, the only issue remaining in this case is Defendant’s seventeenth affirmative defense, which states:
Plaintiff’s claims are barred by res judicata, as Plaintiff is a member of the Settlement Class of Steven E. Goodwiller, M.D., P.A. v. United Services Automobile Association and USAA Casualty Insurance Company. With regard to the “Final Judgment and Order of Approval” in Goodwiller as executed by Judge Peter Weinstein, the same causes of action between the same parties have already been adjudged. Therefore, the Plaintiff is currently barred from instituting/maintaining this action before this Court.
2. Interestingly, aside from a very brief mention of res judicata, Defendant’s motion for summary judgment never discusses res judicata, its requirements, or how this defense applies to the facts and circumstances of this case.
3. The Florida Supreme Court has explained the doctrine of res judicata as follows:
A judgment on the merits rendered in a former suit between the same parties or their privies, upon the same cause of action, by a court of competent jurisdiction, is conclusive not only as to every matter which was offered and received to sustain or defeat the claim, but as to every other matter which might with propriety have been litigated and determined in that action.1
4. Stated differently, in Florida Dept. of Transportation v. Juliano,2 the Florida Supreme Court stated that under the doctrine of res judicata:
[A] judgment on the merits will bar “a subsequent action between the same parties on the same cause of action.” Youngblood v. Taylor, 89 So. 2d 503, 505 (Fla.1956) (emphasis supplied). Importantly, the doctrine of res judicata not only bars issues that were raised, but it also precludes consideration of issues that could have been raised but were not raised in the first case.
5. Whether the application of res judicata is proper is a question of law,3 and courts have recognized that res judicata extends only to the facts and conditions as they existed at the time the prior court rendered the prior judgment.4
6. It is well-settled in Florida that the purpose of res judicata is to promote finality and prevent endless relitigation of the same claims by barring future litigants from asserting claims that a court has already finally determined in connection with prior litigation.
7. The Florida Supreme Court has said that “[t]he foundation of res judicata is that a final judgment in a court of competent jurisdiction is absolute and settles all issues actually litigated in a proceeding as well as those issues that could have been litigated.”5
8. The case at bar, clearly, is not a case where Plaintiff is attempting to take two bites at the apple. The facts and conditions as they existed at the time that the class-action court rendered final judgment are inconsistent with the typical case applying res judicata in that the Plaintiff in this case had already been in active litigation with the Defendant for approximately 6 months in a concurrent lawsuit without any knowledge that a class-action lawsuit was pending.
9. Nevertheless, before this Court is able to make a determination as to whether the affirmative defense of res judicata is applicable to this cause of action, it is necessary for the Defendant to first bring forth sufficient summary judgment evidence to satisfy all of the elements of its defense.
10. In this case, Defendant needed to demonstrate, inter alia, that Plaintiff was a member of the Goodwiller settlement class and, if so, that Plaintiff received proper notice of the Goodwiller proposed settlement and failed to opt-out timely. The Defendant has failed to do that.
11. Defendant essentially argued that there are no genuine issues of material fact that Plaintiff was a member of a class-action lawsuit because Plaintiff was put on notice of a proposed class-action settlement and failed to “opt-out” by the deadline set forth in the Notice of Proposed Settlement and as such, Plaintiff’s claims in this lawsuit are barred based on the doctrine of res judicata.
12. After careful consideration of Defendant’s motion and the record evidence currently presented to this Court, the Court finds that Defendant failed to present competent evidence to support its position that Plaintiff was a member of the Goodwiller settlement class.
13. However, assuming Defendant is able to overcome this hurdle, its defense still would fail.
14. To demonstrate that Plaintiff was put on notice of the Goodwiller Proposed Settlement, Defendant relied solely on the Affidavit of Amy Lake, the Class Action Administrator, which was filed with the Court on February 05, 2010.
15. Ms. Lake testified in the affidavit that she is “responsible for supervising the class action administration services provided by Rust Consulting in connection with the Goodwiller settlement, and [has] personal knowledge of the facts set forth [in the affidavit].”
16. Ms. Lake goes on to testify that “Pursuant to the terms of the Goodwiller Order, health care providers were notified of the proposed settlement by mailed notice which was made on August 14, 2009.”
17. Lastly, Ms. Lake testified that “I have reviewed the records of Rust Consulting relating to the Goodwiller settlement. The following provider was mailed notice via First-Class Mail on August 14, 2009. [UNIVERSITY CHIROPRACTIC 8233 COOPER CREEK BLVD UNIVERSITY PARK, FL 34201 TIN: 20-0157888]. The notice was not returned as undeliverable. At no time has Rust Consulting received any request to opt out of the settlement class from this provider.”
18. In support of its position, Defendant cited to and relied upon Berwick v. Prudential Property & Casualty Ins. Co.,6 for the principle that in Florida “[i]t is presumed that mail properly addressed, stamped and mailed was received by the addressee.”
19. However, Defendant omitted the part of the decision where the Berwick court states as follows:
Unless otherwise provided by statute, a presumption established primarily to facilitate the determination of an action, as here, rather than to implement public policy is a rebuttable “presumption affecting the burden of producing evidence,” see § 90.303, Fla.Stat. (1981), a “bursting bubble” presumption, see C. Ehrhardt, supra, at §§ 302.1, 303.1. Such a presumption requires the trier of fact to assume the existence of the presumed fact unless credible evidence sufficient to sustain a finding of the non-existence of the presumed fact is introduced, in which event the bubble bursts and the existence of the fact is determined without regard to the presumption. See § 90.302(1), Fla.Stat. (1981); C. Ehrhardt, supra, at § 302.1; see generally Ladd, Presumptions in Civil Actions, 1977 Ariz.St.L.J. 275 (1977).
20. Aside from this Court’s finding that the affidavit of Amy Lake was legally and factually insufficient since it fails to affirmatively demonstrate that it was based upon personal knowledge7 as required by the Florida Rules of Civil Procedure, Plaintiff introduced contrary evidence for this Court’s consideration thereby bursting the bubble of the presumption as stated in Berwick.
21. In fact, at a hearing held before this Court on February 10, 2011, the Defendant through its counsel, David Hwalek, conceded that the deposition testimony of Mrs. Arnsperger raised a disputed issue of fact:
THE COURT: Okay. So you thought it was a legal issue. You didn’t think you needed to amend your affirmative defenses.
MR. HWALEK: Right.
THE COURT: What made you change your mind?
MR. HWALEK: When the deposition on December 13 was taken, the plaintiff’s person raised the issue that they never received notice, and that makes it a disputed issue of fact at this point if the Court considers that deposition.8
22. If the Court were to stop its analysis here, Defendant’s motion would be denied since it failed to meet its burden of demonstrating that Plaintiff was a part of the settlement class and had received proper notice.
23. However, assuming arguendo that Plaintiff was a member of the settlement class andthat Defendant did send notice as it has alleged, this Court finds it highly problematic that notice was not sent to Plaintiff’s counsel even though the Defendant and its attorneys were well aware of the fact that Plaintiff was represented at the time the notice would have been sent.
24. When addressing this rather disturbing issue, Defendant failed to cite to a single Florida decision to support its position that it was not required to send notice to Plaintiff’s attorney under the facts and circumstances of this case, which is presumably because any such decision would have directly contradicted the unambiguous language of Rule 4-4.2(a) of the Rules Regulating the Florida Bar, which provides as follows:
In representing a client, a lawyer must not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer. Notwithstanding the foregoing, a lawyer may, without such prior consent, communicate with another’s client to meet the requirements of any court rule, statute or contract requiring notice or service of process directly on a person, in which event the communication is strictly restricted to that required by the court rule, statute or contract, and a copy must be provided to the person’s lawyer. (Emphasis added).
25. Since both Defendant and Defendant’s counsel were well aware of the fact that Plaintiff was represented in this pending lawsuit when they allegedly sent notice to the Plaintiff, this Court fails to see how Defendant used “the best notice that is practicable under the circumstances” where Defendant failed to notice the attorneys of a knowingly represented party in active litigation, which “troubled” the Circuit Court for the 17th Judicial Circuit in Goodwiller v. United Services Automobile Association9 and certainly troubles this Court in this case.
26. If this Court were to ignore the fact that Defendant and its attorney failed to provide, at a minimum, a copy of the notice to the Plaintiff’s counsel under the facts and circumstances of this case, this Court would be promoting violations of rules and precedence that has been in place for years, which the Court will not do.
27. Lastly, even if the Defendant did properly establish all of the elements of its defense, this Court still would not apply the doctrine of res judicata based on the totality of the circumstances of this case.
28. The Florida Supreme Court has long recognized that the doctrine of res judicata will not be applied where it would defeat the ends of justice.10
29. In Wallace v. Luxmoore,11 the Court stated as follows:
Stare decisis and res adjudicata are perfectly sound doctrines, approved by this court, but they are governed by well-settled principles and when factual situations arise that to apply them would defeat justice we will apply a different rule. Social and economic complexes must compel the extension of legal formulas and the approval of new precedents when shown to be necessary to administer justice. In a democracy the administration of justice is the primary concern of the State and when this cannot be done effectively by adhering to old precedents they should be modified or discarded. Blind adherence to them gets us nowhere.
30. The case at bar was pending well before the resolution of the class action lawsuit. At the time Plaintiff filed this lawsuit and commenced litigation, there was no way of Plaintiff knowing that the Goodwiller class-action lawsuit was also being litigated and could potentially have a dispositive impact on Plaintiff’s cause of action. Defendant never put Plaintiff’s counsel on notice even though it was well aware of Plaintiff’s counsel’s existence (i.e., case was being actively litigated against the Defendant in county court.). Defendant failed to inform Plaintiff’s counsel of the pending class action lawsuit until after the opt-out deadline had passed and not until after final judgment had been entered, even though the cases were proceeding at the same time in the very same courthouse. Moreover, even when Defendant made Plaintiff aware, the Defendant did not attempt to raise the class-action issue in any pleading until the eve of trial.
31. To apply the potentially dispositive doctrine of res judicata to the facts of this case would clearly “defeat the ends of justice” and unjustly reward the Defendant for its “hide the ball” litigation tactics.
32. Based on the above findings, as well as the reasons set forth on the record, the Court hereby denies Defendant’s Amended Motion for Summary Judgment.
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1Engle v. Liggett, 945 So.2d 1246, 1259 (Fla. 2006) [31 Fla. L. Weekly S464a]; Florida Dept. of Transp. v. Juliano, 801 So.2d 101 (Fla. 2001) [26 Fla. L. Weekly S784a].
2801 So.2d 101.
3Engle, 945 So.2d at 1259.
4See Saadeh v. Stanton Rowing Foundation, Inc., 912 So.2d 28 (Fla. 1st DCA 2005) [30 Fla. L. Weekly D1972a]; Hialeah Race Course, Inc. v. Gulfstream Park Racing Ass’n., 210 So.2d 750 (Fla. 4th DCA 1968).
5Engle, 945 So.2d at 1259.
6436 So.2d 239 (Fla. 3d DCA 1983).
7See, e.g., Williams v. Cal Henderson, 779 So.2d 450 (Fla. 2DCA 2000) [25 Fla. L. Weekly D2439c].
8See Hearing Transcript page 8, lines 15-24.
919 Fla. L. Weekly Supp. 1069b (17th Cir. Ct. 2011).
10See, e.g., State v. McBride 848 So.2d 287 (Fla. 2003) [28 Fla. L. Weekly S401a]; DeCancino v. Eastern Airlines, Inc., 283 So.2d 97, 98 (Fla.1973); Universal Constr. Co. v. City of Fort Lauderdale, 68 So.2d 366, 369 (Fla.1953).
1124 So.2d 302, 304 (Fla. 1946). See also AMEC Civil, LLC v. State, 41 So.3d 235 (Fla. 1st DCA 2010,) [35 Fla. L. Weekly D864c] quoting Flesche v. Interstate Warehouse, 411 So.2d 919, 924 (Fla. 1st DCA 1982) (reasoning that res judicata “will not be invoked where it will work an injustice”).
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