26 Fla. L. Weekly Supp. 745b

Online Reference: FLWSUPP 2609LOWRInsurance — Personal injury protection — Class action concerning amendments to PIP statute requiring claimant to receive initial services and care within 14 days of accident — Standing — Issue of standing must be determined before addressing whether case is properly maintainable as class action — Medical provider lacked third-party standing at inception of lawsuit — Fact that insured had assigned PIP benefits to provider did not hinder insured from asserting her own rights, as demonstrated by fact that insured subsequently obtained reassignment of benefits from provider and was added as party — Insured’s addition as party plaintiff cannot cure standing defect where provider lacked standing at inception of case — Motion for class certification is denied and action is dismissed for lack of standing

SCENIC HEALTH ALLIANCE, INC., (a/a/o Era Lowry), ERA LOWRY and all others similarly situated, Plaintiffs, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. Circuit Court, 17th Judicial Circuit in and for Broward County. Case No. 14-021668 CACE (07). Class Representation. October 23, 2018. Jack Tuter, Judge. Counsel: Edward H. Zebersky, Mark Fistos, Zebersky Payne, LLP, Fort Lauderdale; Gary M. Farmer, Jr., Gary M. Farmer, Jr., P.A., Lighthouse Point; and Kimberly A. Driggers, Tallahassee, for Plaintiff. Marcy Levine Aldrich, Bryan T. West, Ross E. Linzer, and Ari H. Gerstin, Akerman LLP, Miami, for Defendant.

FINAL ORDER ON PLAINTIFF’S MOTIONFOR CLASS CERTIFICATION

THIS CAUSE came before the court on Plaintiff’s Motion for Class Certification. The court, having reviewed the motion and responses. having considered all other materials submitted in support of and against class certification, having heard argument of counsel, and being otherwise duly advised in the premises, finds and decides as follows:

The instant action concerns amendments made to Florida’s personal injury protection (“PIP”) statute requiring an individual seeking PIP benefits as a result of an automobile accident to receive initial services and care within fourteen (14) days of the subject motor vehicle accident (“14 Day Provision”)¹ Plaintiffs allege that defendant, State Farm Mutual Automobile Insurance Company (“Defendant” or “State Farm”), routinely and systematically as a general business practice denies claims where an insured does not seek initial services and care within the fourteen (14) day period. Plaintiffs allege that the 14-Day Provision is unconstitutional on due process, equal protection, and access to courts grounds, and request the court issue the following declaratory relief:

1. Find and declare that State Farm, as a general business practice, denies payment on claims under PIP because and insured did not receive initial services or care for injuries sustained in the automobile collision within 14 days of the collision.

2. Declare that the provisions of Florida Statutes relating to limited payment for claims unless initial treatment is rendered within 14 days of an automobile accident violate the due process, equal protection, or access to courts provisions of the Florida Constitution.

3. Declare that State Farm under its police and Florida Statutes cannot lawfully deny payments or claims, under PIP, for Plaintiffs, and all those similarly situated Class Members, because the insured did not receive initial services or care within 14 days of the automobile collision.

4. As relief supplemental to the foregoing declaration, issue an order requiring State Farm to adjust all of the claims that were submitted where State Farm refused to pay benefits because the insured did not receive their initial medical treatment within 14 days of the accident.

According to the operative complaint. plaintiff, Era Lowry (“Lowry”), was involved in an automobile accident on or about January 15, 2014. At the time of the accident, Lowry was insured under an automobile insurance policy issued by Defendant. Lowry did not seek any medical services or treatment until February 13, 2014, when she presented to Scenic Health Alliance, Inc. (“Scenic”). Scenic obtained an assignment of benefits from Lowry on February 13, 2014 (“2014 Assignment”). Pursuant to the 2014 Assignment, Scenic submitted its bills for Lowry’s treatment to State Farm. State Farm denied payment pursuant to the 14-Day Provision because Lowry did not receive treatment within fourteen (14) days of the automobile accident. Scenic thereafter sent a demand letter to State Farm on April 28, 2014 claiming a balance due of $1,925.00 for treatment provided to Lowry from February 13, 2014 to February 26, 2014.

On November 12, 2014, Scenic commenced the instant action as the sole named plaintiff. In the initial complaint, Scenic alleged it had “an Assignment of Benefits from Era Lowry of the contractual insurance benefits.” On September 16, 2015, Scenic filed a motion to add Lowry as a party plaintiff.² Prior to the filing of that motion, Scenic and Lowry executed a “Reassignment of Benefits” and a related “Agreement,” whereby Scenic reassigned to Lowry her benefits under the subject insurance policy in exchange for a payment of $2,000.00. Thereafter, on November 6, 2018, the court entered an ordered granting Scenic’s motion to add Lowry as a party and requiring Plaintiffs to file an amended pleading.

On March 6, 2018, Plaintiffs filed the instant motion seeking to certify the following class for such declaratory relief:

All persons who are insured, or who have submitted claims to STATE FARM under PIP insurance coverage for services or care and all persons who are insured under those same policies, where STATE FARM denied any payments and solely utilized Reason Code SF793 or a combination of Reason Code SF 793 and SF 493 as an explanation for denial. This class specifically does not include any person where any payments were made under the PIP portion of the Policy.

On August 27, 2018, Defendant filed its response. Thereafter, on September 4, 2018, Plaintiffs filed a reply. On September 6, 2018, Defendant filed a sur-reply. A hearing was held before the court on September 6 and September 7, 2018.

As an initial matter, Defendant argues that the court must deny the instant motion for class certification because both Scenic and Lowry lack standing. It is important to note that the issue raised by Defendant pertains to personal standing, which is distinct from whether Scenic and/or Lowry are adequate class representatives. As explained by the Third District Court of Appeal,

[c]are must be taken, when dealing with apparently standing-related concepts in a class action context, to analyze individual standing requirements separately and apart from [Federal] Rule [of Civil Procedure] 23 class prerequisites. Though the concepts appear related, in that they both seek to measure whether the proper party is before the court to tender the issues for litigation, they are in fact independent criteria. . . . Because individual standing requirements constitute a threshold inquiry, the proper procedure when the class plaintiff lacks individual standing is to dismiss the complaint, not to deny the class for inadequate representation. The class issues are not reached in this instance.

Taran v. Blue Cross Blue Shield of Florida, Inc., 685 So. 2d 1004, 1006 (Fla. 3d DCA 1997) [22 Fla. L. Weekly D135i] (emphasis added).

Under Florida law, “[t]he issue of standing is a threshold inquiry which must be made at the outset of the case before addressing whether the case is properly maintainable as a class action.” Ferreiro v. Philadelphia Indem. Ins. Co., 928 So. 2d 374, 376 (Fla. 3d DCA 2006) [31 Fla. L. Weekly D719a] (citations omitted).

To satisfy the requirement of standing, the plaintiff must show that a case or controversy exists between the plaintiff and the defendant, and that such case or controversy continues from the commencement through the existence of the litigation.

Id. at 377. “In other words, individuals ‘must allege some threatened or actual injury resulting from the putatively illegal action.’ ” Olen Props. Corp. v. Moss, 981 So. 2d 515, 517 (Fla. 4th DCA 2008) [33 Fla. L. Weekly D1024b] (quoting Linda R.S. v. Richard D., 410 U.S. 614, 617 (1973)). Additionally, “[i]n determining whether a case or controversy exists, the trial court is not required to determine the merits of the case, but rather is to determine whether sufficient facts have been alleged to establish that there is an issue to be decided.” Id. at 518. Although the court looks to the allegations contained in Plaintiff’s Amended Complaint, evidence as to this issue is also required. See id. at 517 (“[Plaintiff] presented sufficient evidence that a case or controversy existed to allow the trial court to find [Plaintiff] had standing.”); see also. The Club At Admiral’s Cove, Inc. v. Skigen, 879 So. 2d 57, 59 (Fla. 4th DCA 2004) [29 Fla. L. Weekly D1679b] (“”[T]he standing issue necessarily required evidence, a hearing on a motion to dismiss could not have adequately address the issue.” (citation omitted)).

Under Florida law, medical providers lack standing to challenge the constitutionality of Florida’s PIP law. See McCarty v. Myers, 125 So. 3d 333, 337 (Fla. 1st DCA 2013) [38 Fla. L. Weekly D2235a]. Plaintiffs argue that McCarty is distinguishable because the plaintiffs in that case did not assert a third-party standing argument. See id. at 337 n.4. In the instant case, Plaintiffs argue that Scenic had standing at the inception of the instant action based on the 2014 Assignment and third-party standing under Alterra Healthcare Corp. v. Estate of Shelley, 827 So. 2d 936 (Fla. 2002) [27 Fla. L. Weekly S735a] (“Alterra”). In Alterra, the Florida Supreme Court recognized the right of litigants to bring actions on behalf of third parties, if three criteria are satisfied:

The litigant must have suffered an “injury in fact,” thus giving him or her a “sufficiently concrete interest” in the outcome of the issue in dispute,” Singleton v. Wulff, 428 U.S. 106, 112 (1976); the litigant must have a close relation to the third-party, id., at 113-114; and there must exist some hindrance to the third-party’s ability to protect his or her own interests. Id., at 115-116.

Id. at 941-2 (internal citations omitted).

In support of its claim of third-party standing, Plaintiffs argue (1) Scenic suffered an injury in fact based on the non-payment of benefits to it from the Defendant; (2) Scenic has a sufficiently close relationship with Lowry (doctor-patient); and (3) Lowry was hindered from asserting her own rights because of the 2014 Assignment. Defendant does not take issue with numbers (1) or (2), but argues that Lowry has not been prevented from protecting her own interests. After a careful review, the court agrees. The Court determines that the 2014 Assignment, in and of itself, is not the type of hindrance or obstacle envisioned by the United States Supreme Court or Florida Supreme Court that would support third-party standing. See Singleton v. Wulff, 428 U.S. 106, 117 (1976); Alterra, 827 So. 2d at 944 (citing N. Fla. Regional Hosp., Inc. v. Douglas, 454 So. 2d 759, 760 (Fla. 1st DCA 1984) (“Douglas”)). In Douglas, the First District Court of Appeal determined that a hospital failed to demonstrate standing to assert the privacy rights of its nurses where those same nurses were permitted to intervene in the litigation. Douglas, 454 So. 2d at 760. In the instant action, Plaintiffs argument Lowry was prohibited from bringing suit is belied by the fact Lowry obtained a reassignment of benefits from Scenic and was added as a party to the instant action.

Notwithstanding the above determination that Scenic lacked standing at the inception of the lawsuit, the court must determine whether Lowry’s addition as a party plaintiff saves the instant action from being dismissed for lack of standing. See Taran, 685 So. 2d at 1006. After a careful review, the court determines it does not. It is well-settled Florida law that “a party’s standing is determined at the time the lawsuit was filed.” McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So. 3d 170, 173 (Fla. 4th DCA 2012) [37 Fla. L. Weekly D334b]. As mentioned above, Scenic lacked standing at the inception of the instant action. A “plaintiff’s lack of standing at the inception of the case is not a defect that may be cured by the acquisition of standing after the case is filed.” Id. “Thus, a party is not permitted, [as attempted by Plaintiffs in the instant action,] to establish the right to maintain an action retroactively by acquiring standing to file a lawsuit after the fact.” Id.

Based upon the above, the instant motion for class certification is DENIED and the instant action is dismissed for lack of standing. See Taran, 685 So. 2d at 1006 (“Because individual standing requirements constitute a threshold inquiry, the proper procedure when the class plaintiff lacks individual standing is to dismiss the complaint, not to deny the class for inadequate representation.”).

Accordingly, it is hereby:

ORDERED that Plaintiff’s Motion for Class Certification is DENIED and the instant action is DISMISSED, with prejudice for lack of standing as set forth herein.

__________________

¹Section 627.736(1)(a), Florida Statutes, provides, in pertinent part:

(1) An insurance policy complying with the security requirements of s. 627.733 must provide personal injury protection to the named insured . . . to a limit of $10,000 in medical and disability benefits and $5,000 in death benefits resulting from bodily injury, sickness, disease, or death arising out of the ownership, maintenance, or use of a motor vehicle as follows:

(a) Medical benefits. — Eighty percent of all reasonable expenses for medically necessary medical, surgical, X-ray, dental, and rehabilitative services, including prosthetic devices and medically necessary ambulance, hospital, and nursing services it the individual receives initial services and care pursuant to subparagraph 1. within 14 days after the motor vehicle accident.

§ 627.736(1)(a), Fla. Stat.

²The instant action was removed to federal court on December 22, 2014. The Order of Remand from the federal court was received by the Clerk of the Court on September 2, 2015.