5 Fla. L. Weekly Supp. 520b
Insurance — Personal injury protection — Arbitration — Once insured assigned benefits to medical provider, and insurer made payments directly to medical provider which provider accepted, all parties were committed to the arbitration process, and arbitration could not be waived without consent of insured, insurer, and medical provider — Right to sue not revived in instant case by insured’s revocation of assignment after insurer had begun making payments directly to provider — Trial court properly dismissed insured’s suit against insurer for lack of subject matter jurisdiction
Lori A. Dooley, Appellant, v. Allstate Insurance Company, Appellee. 12th Judicial Circuit in and for Sarasota County, Civil Appeal. Case No. 97-5059 CA-01. County Court Case No. 97-2634-CC. Opinion filed March 31, 1998. Appeal from the County Court for Sarasota County; Barbara B. Briggs, Judge. Counsel: Scott Alan Schieb, for Appellant. Kelly S. Weaver, for Appellee.
I. BACKGROUND:
On November 15, 1996, the appellant, Lori Dooley, was involved in an automobile accident. At the time of the accident, Dooley was insured by Allstate. Pursuant to the terms of her contract of insurance with Allstate, Dooley was entitled to personal injury protection benefits, medical and extended medical expense coverage. Following the accident, Dooley sought medical treatment from various medical care providers, including a chiropractor, Dr. Rhodes, at Venice Chiropractic Center.
An amendment to the policy provides that any claims disputes over PIP medical benefits will be decided by arbitration upon the request of either party.
On November 18, 1996, Dooley executed an assignment of benefits in favor of Venice Chiropractic, allowing the medical provider to receive payments for services rendered to Dooley directly from Allstate. Although some payments were made to Venice Chiropractic, eventually Allstate sought an independent review of certain services provided to Dooley, specifically, electrodiagnostic, thermography and EMG studies. The review undertaken by the independent company consisted solely of a review of records with no actual physical examination.
On May 10, 1997, Dooley executed a Revocation of Assignment concerning her contract rights with Allstate.
On June 11, 1997, Dooley filed a lawsuit in the county court of the Twelfth Judicial Circuit against Allstate to recover for the services described herein. On June 26, 1997, defendant moved to dismiss the complaint for lack of subject matter jurisdiction and demanded arbitration.
On July 24, 1997, while the county suit was pending, Dooley and Venice Chiropractic executed a signed Agreement modifying the November 18, 1996 assignment which reassigned the right to bring a cause of action against Allstate to Dooley. To date, Venice Chiropractic has not filed any lawsuit against Allstate.
II. ISSUE ON APPEAL:
This appeal seeks review of the lower court’s order granting Allstate’s motion to dismiss the complaint for lack of subject matter jurisdiction.
Although several legal questions are presented by the appellant, the controlling appellate issue can best be queried as follows: When does a Personal Injury Protection (PIP) insured give up her right to sue her PIP carrier for non payment of benefits and become irrevocably bound by the arbitration process mandated by Section 627.736(5), Florida Statutes? The answer to this determines whether the county court’s order of dismissal should be upheld.
III. CONCLUSIONS OF LAW:
In this case, the insured executed an assignment of PIP benefits in favor of her health care provider, Dr. Rhodes, a chiropractor, in November, 1996. In accordance with the insurance policy, Allstate paid PIP benefits until June, 1997, when the insurer sent notice to the provider challenging charges for certain services.
In May, 1997, Dooley signed a document wherein she purported to revoke and rescind “all assignments or transfers of personal injury protection . . . benefits” previously executed by her. This “Revocation of Assignment” was followed in June by an agreement between Ms. Dooley and Dr. Rhodes which attempted to modify nunc pro tunc the November, 1996, assignment of benefits. In this agreement, in exchange for a letter of protection, the provider reassigned to the insured “her right to bring any and all causes of action which DOOLEY might have against her PIP insurance carrier.” Suit was then filed against Allstate.
The battle between the litigants is joined on whether the assignment of benefits is revocable or irrevocable. If the revocation of assignment and the agreement reassigning the right to sue the carrier are valid, then Dooley has legal standing to bring her action in county court, and the court has subject matter jurisdiction to consider the action filed by her against Allstate. If the revocation is ineffective, the lower court’s ruling was correct and the case properly dismissed.
At the outset, the court notes that the document signed by the insured in November, 1996, is titled “IRREVOCABLE ASSIGNMENT, LIEN AND AUTHORIZATION INSURANCE BENEFITS AND ATTORNEY.” However, nothing in the body of the document addresses the issue of irrevocability. Notwithstanding its label, the substantive clauses do not prohibit revocation. However, it does not necessarily follow that the patient and the provider are free to revoke assignment, once the insurer’s participation in the payment arrangement has commenced.
The court has concluded the legal effect of the assignment and its purported revocation must be viewed in light of section 627.736(5), Florida Statutes (1996) and the cases interpreting the statute. This section provides:
“Every insurer shall include a provision in its policy for personal injury protection benefits for binding arbitration of any claims dispute involving medical benefits arising between the insurer and any person providing medical services or supplies if that person has agreed to accept assignment of personal injury protection benefits.”
The policy, as amended, in force between Ms. Dooley and Allstate contains the following clause implementing F.S. 627.736(5):
“Any claim dispute involving medical benefits under this part of the policy between us and a health care provider who has agreed to accept an assignment of personal injury protection benefits will be decided by arbitration upon the written request of either party….”
While the PIP policy is between Dooley and Allstate, Dr. Rhodes is a third party beneficiary. As such he is bound to the arbitration provision contained in the policy of insurance. The policy specifically anticipates the arbitration of disputes between Allstate and ‘health care providers.’ Accordingly, when he accepts assignment he also accepts the contractually mandated arbitration procedure agreed to by the insured. Orion Insurance Co. v. Magnetic Imaging Systems I, 696 So. 2d 475, 477-478 (Fla. 3d DCA 1997); Southeast Diagnostic Services v. State Farm Mut. Auto. Ins. Co., 697 So.2d 988, 989 (Fla.App. 4th DCA 1997); Omni Ins. Co. v. Special Care Clinic, Inc., (case not final) 1998 WestLaw 107313, March 13, 1998, (Fla.2d DCA 1998). It follows that the third party beneficiary may not rescind the assignment arrangement without the consent of both insured and insurer.
In light of this statute, insureds who are seeking medical benefits from their PIP carriers have two choices. They may pay for covered medical services out of their own pockets and file for reimbursement directly from their insurer. In such cases if a dispute arises between the provider and the carrier, for example, over the necessity or reasonableness of the medical services, the insured retains the right to sue the insurance company for a denial of benefits.
Alternatively, with the consent and cooperation of the medical provider, insureds may assign their right to receive PIP medical benefits to the provider. When this occurs, and the provider requests and receives payments directly from the insurance company, the provisions of F.S. 627.736(5) are activated and the statute will control the resolution of disputes between the provider and the carrier. Orion Insurance Co. v. Magnetic Imaging Systems I, 696 So. 2d 475 (4th DCA 1997).
Likewise, a provider who would prefer to avoid arbitration has the option of not accepting assignments from patients, in which case he must look to them for payment, however problematic that option may be in many instances. Once assignment is accepted, though, the provider is bound to arbitrate even though it has signed no contract agreeing to waive its right to sue. Orion Insurance Co. Id.
Generally, assignments are of two types: revocable and irrevocable. An assignment is irrevocable if it is given for consideration. Moreover, a gratuitous assignment which is ordinarily revocable may become irrevocable if the assignee reasonably relies on the assignment to his detriment and the assignor should have reasonably expected that such reliance might be induced. In re Hazelwood, 43 B.R. 208, 214 (Bkrpcy. E.D. Va. 1984).
Here, the legislature made the insurer a party to the payment agreement and the carrier is entitled to rely on the assignment and to enforce it to the same extent as the assignee. The statute clearly intends the provider and the carrier to become bound to arbitration once the patient and the provider have acted on the assignment. Thereafter, litigation in court involving payment disputes can occur only with a waiver of arbitration by all affected parties, including the carrier.
For the statute to be meaningful, there must be three parties bound by the insured’s act of assigning PIP benefits: the insured, the provider, and the PIP carrier, and this court holds once the assignment is in force and acted upon by the three affected parties, and direct payments to the provider have been requested and commenced, all are committed to the arbitration process. Thereafter, each of the participants in this tripartite arrangement must agree before the arbitration provision required by section 627.736(5), Florida Statutes (1996), can be waived.
It must be conceded that there are no Florida cases directly on point with this court’s holding. In State Farm Mutual Automobile Assn. v. Gonnella, 677 So. 2d 1355 (Fla. 5th DCA 1996), which comes the closest, the Fifth District Court of Appeal did not reach the issue of the earliest point in time that a revocation of assignment might be effective. Gonnella held that the right and obligation to arbitrate under F.S. 627.736(5) vested, at the latest, upon the demand for arbitration. Id. at 1357. An attempt at revocation after arbitration had commenced was deemed untimely.
The Gonnella court also suggests that revocation of an agreement to arbitrate may not be possible at any time, for the additional reason that section 682.02, Florida Statutes (1995) provides that a written agreement to submit a controversy to arbitration is “valid, enforceable, and irrevocable.” Id. p. 1356.
Aside from case law, it appears illogical to allow the insured and the provider to renounce the assignment and reverse course once the carrier has begun to make payments in reliance on the statute. Such a procedure would permit the medical service provider to receive the benefits of the statute, such as direct payments and ease of collection at the front end of treatment, while avoiding the consequences of accepting assignment, binding arbitration, at the back end. Moreover, such a result would frustrate the clear meaning of F.S. 627.736(5).
For the reasons stated, the lower court is AFFIRMED.
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