6 Fla. L. Weekly Supp. 20a
Insurance — Personal injury protection — Arbitration — Insurer did not waive its right to arbitrate claim disputes arising between itself and medical service provider by making offer of judgment and requesting independent medical examination — Conduct did not constitute inconsistent acts which would result in waiver of right to arbitrate — Reversible error to dismiss insured’s action against insurer to enforce payment of PIP benefits and to direct parties to proceed with arbitration, because assignment of benefits which gave rise to right to arbitrate was revoked prior to claims dispute between insurer and medical service provider and prior to insurer’s request for arbitration — Because assignment had expired, statutory and policy provisions requiring binding arbitration of claims disputes between medical service provider and insurer no longer applied — Revocation of assignment afforded insured right to bring legal action to recover PIP benefits
MICHAEL R. THOMAS, SR., Appellant, vs. OAK CASUALTY INSURANCE COMPANY, Appellee. 11th Judicial Circuit, in and for Dade County, Appellate Division. Case No. 97-182 AP. Opinion filed July 17, 1998. An Appeal from County Court for Dade County, Roger A. Silver, Judge. Counsel: Mark Tischhauser and Brenda Harmer, for appellant. David Pakula and Valeri Dondero, for appellee.
(Before CAROL R . GERSTEN, MAXINE COHEN LANDO and STANFORD BLAKE)
(STANFORD BLAKE, J.) Appellant, Michael Thomas (“Thomas”), seeks review of the trial court’s order granting appellee’s, Oak Casualty Insurance (“Oak Casualty”), motion to dismiss the complaint and to compel arbitration. Thomas contends that Oak Casualty waived its right to arbitration, therefore the trial court erred in granting the motions. Having carefully considered the record prepared by the parties and the briefs and arguments on appeal, we conclude that the appellee did not waive its right to arbitrate claim disputes arising between itself and the medical service provider. However, the assignment which gave rise to the right to arbitrate had expired prior to appellee’s request for arbitration. Therefore, the trial court erred in dismissing the proceeding and in directing the parties to proceed with arbitration. We reverse the order under review and remand for further proceedings.
Thomas was injured in an automobile accident. At the time of the injuries, he was insured by Oak Casualty and was entitled to personal injury protection benefits. Dr. Kevin Marlin treated Thomas for his injuries, and on June 16, 1995, they executed an assignment of benefits in favor of Dr. Marlin, allowing him to receive direct payment from Oak Casualty. Included in the assignment is a revocation clause which states that “the undersigned further agrees that this assignment shall automatically be revoked if payment is not made within 30 days upon receipt of all necessary paperwork, pursuant to Florida statutes section 627.736(4)(6).” Dr. Marlin submitted a claim for payment for services rendered from June 16, 1995 to September 5, 1995. In a letter dated January 12, 1996, Oak Casualty notified Dr. Marlin that the bills he submitted had been reviewed, that the payment amount had been reduced, and demanded arbitration in the event Dr. Marlin disagreed.
Insurance policies for personal injury protection benefits are required to provide 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 the benefits. § 627.736, Fla. Stat. (1997). The contract of insurance between Oak Casualty and its insured provides that in the event a medical service provider has agreed to accept an assignment of benefits from the insured, any dispute between Oak Casualty and the medical service provider shall be decided by arbitration upon a written request of either party. Clearly, the assignment document signed by Thomas and Dr. Marlin created an assignment. However, the terms of the assignment indicate that the parties intended the assignment to be, not an unqualified, but a conditional assignment subject to automatic revocation if Oak Casualty did not render payment within 30 days upon receipt of all necessary paperwork. But see State Farm Fire and Casualty Co. v. Ray, 556 So. 2d 811, 813 (Fla. 5th DCA 1990) (an unqualified assignment transfers to the assignee all the interest of the assignor under the assigned contract); State Farm Mutual Auto Ins. Co. v. Gonnella, 677 So. 2d 1355, 1357 (Fla. 5th D.C.A. 1996) (revocation of assignment benefits occurring after insurer’s demand for arbitration is invalid to avoid arbitration).
On February 8, 1996, Thomas filed an action against Oak Casualty to enforce payment of the personal injury benefits, also alleging damages for unfair claims practices. Oak Casualty did not file an answer to the complaint, but did make an Offer of Judgment to Thomas. In June 1996, Oak Casualty filed a Motion to Dismiss and Compel Arbitration which the court granted on December 2, 1996. The granting of this motion is the subject of this appeal.
It is well-established that all doubts about the scope of an arbitration agreement, as well as any questions about waivers should be resolved in favor of arbitration. Ronbeck Construction Co. v. Savanna Club Corp., 592 So. 2d 344, 346 (Fla. 4th DCA 1992). While arbitration agreements are favored, a party may waive its right to arbitration by engaging in conduct which is inconsistent with the right. See, e.g. Mike Bradford & Co. v. Gulf States Steel Co., 184 So. 2d 911, 913 (Fla. 3d DCA 1966).1 Initiating a lawsuit, or participating in a lawsuit without first seeking arbitration, constitutes an affirmative selection of a judicial remedy which runs counter to the purpose of arbitration. See Lapidus v. Arlen Beach Condominium Association, Inc., 394 So. 2d 1102 (Fla. 3d DCA 1981), see also Benoay v. Prudential-Bache Securities, Inc., 805 F. 2d 1437 (11th Cir. 1986) (mere participation in discovery is not enough to constitute a waiver where the request for arbitration is timely made). In the case sub judice, appellant’s contention that Oak Casualty waived its right to arbitration is without merit. Oak Casualty’s conduct in attempting to resolve the dispute by making an offer of judgment and requesting an independent medical examination have not been held to constitute inconsistent acts which would result in waiver of the right to arbitrate.
While we are unwilling to accept appellant’s argument that a waiver of arbitration occurred in this case, the fact that the underlying assignment contained an automatic revocation provision is of particular importance. For certain, the legislature intended that the requirements of section 627.736(5) apply in cases where a valid assignment exists. In the instant case, the record indicates that the assignment was revoked prior to the claims dispute between Oak Casualty and Dr. Marlin, and before Oak Casualty made a request for arbitration. Therefore, section 627.736(5) and the policy provision requiring binding arbitration of claims disputes as between the insurer and medical services providers no longer applied. Hence, the trial court granted the motion to compel arbitration based on an expired assignment of benefits, and as between parties who are not required to submit to arbitration. The revocation of the assignment afforded Thomas the right to bring a legal action to recover the personal injury protection benefits. As there is no evidence in the record to indicate that Thomas agreed to arbitrate disputes relating to the personal injury benefits, we conclude that the trial court committed reversible error in granting appellee’s motion to dismiss and compel arbitration. See G&N Construction Co. v. Kirpatovsky, 181 So. 2d 664, 667 (Fla. 3d DCA 1966) (contracts providing for arbitration will be construed so as not to force a party to submit to arbitration a question he did not intend to be so submitted).
Accordingly, the order under review is reversed and remanded. (MAXINE COHEN LANDO and CAROL R. GERSTEN, JJ. concur.)
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1In Bradford, the defendant answered plaintiff’s complaint without raising the arbitration issue, counterclaimed upon the same contract, allowed the cause to proceed for over five months, and allowed the jury to be impanelled.
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