6 Fla. L. Weekly Supp. 55a
Insurance — Personal injury protection — Third-party beneficiaries — Language in policy stating that insurer would pay benefits to “or on behalf of” injured person did not make medical service provider an intended third party beneficiary of insurance contract — Medical services provider who did not receive assignment of benefits from insured did not have standing to sue insurer for payment
CENTRAL FLORIDA PHYSIATRISTS, P.A., Appellant, v. ALLSTATE INSURANCE COMPANY, Appellee. 9th Judicial Circuit, in and for Orange County. Case No. CVA 198-8. October 22, 1998. Richard F. Conrad, Charles N. Prather and Daniel P. Dawson, Judges.
FINAL ORDER AND OPINION
THIS CAUSE comes before the Court on Appellant, Central Florida Physiatrists, P.A.’s (“Central”), appeal of the dismissal of its complaint, with prejudice, based on a lack of standing. This Court has jurisdiction pursuant to Florida Rule of Appellate Procedure 9.030(c)(1). The Court, having reviewed the record and briefs of the parties, dispenses with oral argument pursuant to Florida Rule of Appellate Procedure 9.320.
Somnad Rutledge was insured pursuant to an automobile insurance policy issued by Appellee, Allstate Insurance Company. Rutledge’s coverage included personal injury protection (“PIP”) benefits. Rutledge was injured in an automobile accident on or about January 29, 1997. Central provided medical treatment to Rutledge on May 1, 1997. Rutledge filed a claim with Allstate for payment for Central’s services. Allstate refused to pay for the medical treatment provided by Central.
On September 9, 1997, Central filed suit against Allstate as a third party beneficiary of Rutledge’s insurance policy. On October 20, 1997, Allstate filed a Motion to Dismiss. Allstate argued that Central did not have standing because Central was, at best, an incidental third party beneficiary. Allstate also claimed that Central failed to attach the contract referred to in the complaint which gave it third party beneficiary status. Central argued that the language of the insurance policy, which it had just received, made it clear that it was contemplated as an intended beneficiary under the insurance policy. On January 8, 1998, the trial court filed an order dismissing Central’s complaint with prejudice due to Central’s lack of standing.
In its order, the trial court made the following finding: “Plaintiff did not receive an assignment of benefits from the Patient.” The trial court went on to find that “Plaintiff is not an intended third-party beneficiary of the insurance agreement between Somnad Rutledge and Defendant, and that therefore, Plaintiff has no standing to bring this action.” The court then certified the following question of great public importance to the Fifth District Court of Appeals:
WHETHER A HEALTH CARE PROVIDER WHO PROVIDES MEDICAID SERVICES THAT ARE PAYABLE UNDER AN AUTOMOBILE NO-FAULT INSURANCE POLICY, IS A THIRD-PARTY BENEFICIARY OF THE INSURANCE AGREEMENT BETWEEN THE PATIENT AND HER INSURER?
Central filed a Notice of Appeal on January 21, 1998, appealing this order to the Fifth District Court of Appeal based upon the certified question. By order dated February 5, 1998, the Fifth District Court of Appeal declined to accept jurisdiction and transferred the case to this Court for consideration.
“For the purpose of passing upon a motion to dismiss, the court must assume all the facts alleged in the complaint to be true. A motion to dismiss must be decided on questions of law only.” Cazares v. Church of Scientology of California, Inc., 444 So. 2d 442, 445 (Fla. 5th DCA 1983). “Standing is the right of a party to sue or to defend in a particular action…. To have standing a person must have a cause of action that he can assert and a personal stake in the outcome so that he will adequately represent the interest he asserts.” Trawick, Trawick’s Florida Practice and Procedure, Parties §4-15, p.58; see Kumar Corp. v. Nopal Lines, Ltd., 462 So. 2d 1178, 1182 (Fla. 3d DCA 1985).
The basic purpose of rules requiring that every action be prosecuted by or on behalf of the real party in interest is merely “to protect a defendant from facing a subsequent similar action brought by one not a party to the present proceeding and to ensure that any action taken to judgment will have its proper effect as res judicata . . . .”
Kumar Corp. v. Nopal Lines, Ltd., 462 So. 2d at 1182, quoting Prevor-Mayorsohn Carribean, Inc. v. Puerto Rico Marine Management, Inc., 620 F.2d 1, 4 (1st Cir. 1980); see Fla. R. Civ. P. 1.210.
Intended Third Party Beneficiaries
“A third party is an intended beneficiary, and thus able to sue on a contract, only if the parties to the contract intended to primarily and directly benefit the third party.” Cigna Fire Underwriters Ins. Co., Inc. v. Leonard, 645 So. 2d 28, 29 (Fla. 4th DCA 1994). “The right of a third party beneficiary to sue under a contract is . . . limited to those situations where the provisions of the contract clearly show an intention primarily and directly to benefit the individual bringing the suit or to a class of persons to which he claims to belong as a third party beneficiary.” Id., quoting Security Mut. Casualty Co. v. Pacura, 402 So. 2d 1266, 1267 (Fla. 3d DCA 1981).
The issue presented in this case is whether Central is an intended third party beneficiary of Rutledge’s PIP policy. Central argues that the language of Rutledge’s policy states, in pertinent part, that “Allstate will pay to or on behalf of the injured person the following benefits. . . .” Central argues that this language confers the necessary intended third-party beneficiary status on it.
Allstate argues that, in order for Central to have intended third party beneficiary status, it had to obtain an assignment of benefits from Rutledge. Section 627.736(5), Florida Statutes, provides that:
[a]ny physician, hospital, clinic, or other person or institution lawfully rendering treatment to an injured person for a bodily injury covered by personal injury protection insurance may charge only a reasonable amount for the products, services, and accommodations rendered, and the insurer providing such coverage may pay for such charges directly to such person or institution lawfully rendering such treatment, if the insured receiving such treatment or his or her guardian has countersigned the invoice, bill, or claim form . . . upon which such charges are to be paid for as having actually been rendered, to the best knowledge of the insured or his or her guardian.
The statute does not contemplate a claim by a medical provider independent of an assignment or direction for payment by the insured. Rutledge’s PIP insurance coverage was not intended to primarily and directly benefit Central. Therefore, the “on behalf of” language found in Rutledge’s insurance policy does not make Central an intended third party beneficiary.
Both parties cite Orion Insurance Company v. Magnetic Imaging Systems I, 696 So. 2d 475 (Fla. 3d DCA 1995), in support of their respective positions. In that case, a medical service provider, Magnetic, filed a class action suit on behalf of Orion’s insureds to recover interest on late payments of PIP benefits. Prior to filing suit, Magnetic received an assignment of benefits from the insureds. The court recognized two issues on appeal: 1) whether the interest claim involved in this case is arbitrable; and 2) whether Magnetic is obligated to arbitrate the claim even though Magnetic has not signed any agreement with the insurer that specifically provided for arbitration. Id. at 476. The court held that: 1) the interest claim was arbitrable; and 2) Magnetic was required to submit to arbitration because it was compelled to do so by statute and because it was a third party beneficiary of the insurance policy. Id.
Central focuses on the fact that the court in Orion stated that Magnetic was a third-party beneficiary of the contract between Orion and the insured. Allstate explains that Magnetic’s third party beneficiary status was based on the assignment of benefits Magnetic received from the insured.
In a general sense, Central may be correct in its assertion that it is a third party beneficiary of Rutledge’s PIP coverage, however, that does not mean it is an intended third party beneficiary. The court stated in Orion that a medical service provider has the ability to collect PIP benefits via assignment, it did not state that a medical service provider had the ability, independent of an assignment, to collect PIP benefits. While Central may be a third party beneficiary of the insurance policy, it does not become an intended third party beneficiary until it receives an assignment of benefits from Rutledge.
Central also cites a recent Fifth District Court of Appeal case in its Reply Brief. Delta Casualty Company, et al. v. Pinnacle Medical, Inc. et al., 1998 WL 672728 (Fla. 5th DCA October 2, 1998) [23 Fla. L. Weekly D2233].1 In that case, the court held that the arbitration provision of section 637.736(5), Florida Statutes, is unconstitutional. The court disagreed with the holding in Orion regarding the constitutionality of the statute and its applicability to medical service providers. Central argues that, because of this ruling, it must be considered an intended third-party beneficiary because it has no recourse except to pursue this lawsuit against Allstate. Central has missed a critical step in the process.
In Delta, Pinnacle, the medical service provider, received an assignment of benefits from the insured and subsequently filed suit for breach of the insurance contract. The insurer moved to dismiss and compel arbitration. The court held that the part of section 627.736(5), Florida Statutes, which required binding arbitration violates the due process rights guaranteed to medical service providers under Article I, Section 9 of the Florida Constitution. See Delta Casualty Company, et al. v. Pinnacle Medical, Inc. et al., 1998 WL 672728 (Fla. 5th DCA October 2, 1998). The court found that the insured had a right to maintain a cause of action against the insurer, however, when the claim was assigned, the medical service provider was denied the same right. See Id. The court found that the identity of the owner of the claim was the sole basis for denying access to a court to resolve the identical dispute. See Id. The court held that there was “no valid reason to single out medical providers and to deny them court access in this manner.” Delta Casualty Company, et al. v. Pinnacle Medical, Inc. et al., 1998 WL 672728 (Fla. 5th DCA October 2, 1998).
The holding in Delta contemplates that a medical service provider, that properly obtains an assignment of benefits, is entitled to maintain an action in court, just as the insured would be. Therefore, the court’s holding in Delta is inapplicable to the present situation because Central has not satisfied the threshold requirement that would provide it standing to maintain such a cause of action, specifically, it has not obtained an assignment of benefits.
Accordingly, it is hereby
ORDERED AND ADJUDGED that the trial court’s order granting dismissal of Appellant’s complaint with prejudice is AFFIRMED.
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1Central has provided a slip opinion dated April 24, 1998. However, research revealed an order on a consolidated appeal, involving the same case, dated October 2, 1998. This memorandum will refer to and cite the opinion in that case as opposed to the opinion rendered April 24, 1998.
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