6 Fla. L. Weekly Supp. 27b

Insurance — Personal injury protection — Arbitration — Error to deny insurer’s motion to dismiss and compel arbitration of medical provider’s dispute involving medical bills submitted directly to insurer for treatment of insured — Medical provider who accepts assignment of benefits is required to arbitrate a disputed claim for PIP medical benefits — Medical provider may not avoid arbitration of such dispute merely by raising claim for declaratory relief — Issue of whether insurer has lost right to contest particular covered benefits because it allegedly failed to obtain an independent medical examination is arbitrable, even though medical provider seeks declaratory relief — Section 86.02 does not create declaratory relief as sole and exclusive remedy

U.S. SECURITY INSURANCE COMPANY, Appellant, vs. BRADFORD CHIROPRACTIC CENTER, Appellee. 17th Judicial Circuit in and for Broward County. General Jurisdiction Division. Case No. 97-8787(14). Opinion filed September 23, 1998. An appeal from the County Court for Broward County. Counsel: David B. Pakula, of Fazio, Dawson, DiSalvo, Cannon, Abers & Podrecca, Ft. Lauderdale, for appellant. Harley N. Kane, of Greenspan & Kane, Boca Raton, for appellee.

(Before Jeffrey E. Streitfeld, Judge.) This appeal is from a non-final order denying U.S. Security Insurance Company’s motion to dismiss and compel arbitration of a dispute involving no-fault medical benefits. The order is reversed.

Bradford Chiropractic Center treated Janis Alincy for injuries allegedly arising from an automobile accident which occurred on December 17, 1996. Alincy is insured under an automobile insurance policy issued by U.S. Security which provides personal injury protection (PIP) benefits. Bradford accepted an assignment of benefits from Alincy and submitted bills for its treatment of Alincy directly to U.S. Security.

After a dispute arose concerning the bills, Bradford filed suit against U.S. Security seeking payment. U.S. Security moved to compel arbitration and dismiss the law suit based on section 627.736(5), Florida Statutes, which mandates arbitration of disputes concerning benefits between a PIP carrier and a medical provider who has accepted assignment of benefits.¹ After a hearing, the trial court denied U.S. Security’s motion.

The trial court erred in denying the motion. The law is now settled that a medical provider who accepts assignment of benefits is required to arbitrate a disputed claim for PIP medical benefits. Southeast Diagnostic Services v. State Farm Mut. Auto. Ins. Co., 697 So. 2d 988 (Fla. 4th DCA 1997); Orion Ins. Co. v. Magnetic Imaging Systems I, 696 So. 2d 475 (Fla. 3d DCA 1997). Accordingly, Bradford’s claim must be submitted to arbitration.

Notwithstanding the above case law, Bradford contends that it is not required to arbitrate its dispute with U.S. Security under the facts of this case. One day before the hearing on U.S. Security’s motion to dismiss and compel arbitration, Bradford filed an amended complaint which added a count for declaratory relief. Count II of the amended complaint sought a declaration that, pursuant to section 627.736(7), Florida Statutes, an independent medical examination (IME) must be conducted before an insurer can refuse to pay PIP benefits. Bradford alleged that the insurer did not conduct an IME and improperly denied benefits based solely on a physician’s report that the treatment was not reasonable and necessary.

Bradford argues that count II of the amended complaint raises a question of law which is non-arbitrable. Bradford asserts that arbitrators are only authorized to determine factual issues, such as whether the medical bills are reasonable and customary. Therefore, according to Bradford, the lower court properly denied U.S. Security’s motion to dismiss and compel arbitration. The court disagrees.

The dispute in this case presents the arbitrable issue of whether Bradford is entitled to receive PIP medical benefits. Count II of the amended complaint merely presents a sub-issue which the arbitrators may need to address in order to resolve the parties’ dispute concerning the payment of PIP benefits. The legislature, in enacting the mandatory arbitration provision set forth in section 627.736(5), Florida Statutes, intended for such disputes to be resolved by arbitration rather than in the courts. Bradford cannot circumvent the clear legislative mandate merely by raising a claim for declaratory relief.

The court does not agree with Bradford’s premise that arbitrators are limited to considering only factual questions. Many arbitration agreements require arbitration of legal issues, such as the interpretation of contractual provisions. E.g., Gale Group, Inc. v. Westinghouse Elec. Corp., 683 So. 2d 661 (Fla. 5th DCA 1996) (requiring arbitration of dispute concerning interpretation of contractual term “ineligible accounts receivable”); Advantage Dental Health Plans, Inc. v. Beneficial Administrators, Inc., 683 So. 2d 1133 (Fla. 4th DCA 1996). The fact that such disputes are capable of being resolved by way of declaratory relief in a court of competent jurisdiction does not mean that declaratory relief is the sole and exclusive remedy. If it were the exclusive remedy, then agreements to arbitrate such disputes would be meaningless.

The parties’ agreement determines the issues that are subject to arbitration. When a dispute falls within the scope of a valid arbitration agreement, and arbitration has not been waived, the trial court is without jurisdiction to do anything but send the case to arbitration. Fortune Ins. Co. v. U.S.A. Diagnostics, Inc., 684 So. 2d 208 (Fla. 4th DCA 1996); Gersh v. Concept House, Inc., 291 So. 2d 258 (Fla. 3d DCA 1974); §682.03, Fla. Stat. (1997). In insurance cases subject to an arbitration agreement, the trial court determines coverage issues. However, other issues are for the arbitrators. Nationwide Ins. Co. v. Cooperstock, 472 So. 2d 547 (Fla. 4th DCA 1985).

Arbitration is a favored means of dispute resolution under Florida law. Roe v. Amica Mut. Ins. Co., 533 So. 2d 279 (Fla. 1988). When a court must decide whether a particular dispute is subject to an arbitration agreement, doubts about the scope of the agreement should be resolved in favor of arbitration. Regency Group, Inc. v. McDaniels, 647 So. 2d 192 (Fla. 1st DCA 1994).

[A]ny time a contract contains an arbitration clause, there is a presumption of arbitrability in the sense that an order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.

Beaver Coaches, Inc. v. Revels Nationwide R.V. Sales, Inc., 543 So. 2d 359, 362 (Fla. 1st DCA 1989) (emphasis in original text), quoting A T & T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 106 S. Ct. 1415, 89 L.Ed.2d 648 (1996).

The issues Bradford raises in count II of its amended complaint are arbitrable. The controlling arbitration provision states that the parties must arbitrate “any claims dispute involving medical benefits.” §627.736(5). The parties have a “claims dispute” concerning whether the insurer is liable for PIP benefits notwithstanding the alleged absence of an IME. The dispute is one “involving medical benefits.” There are no issues concerning the validity of the agreement, a waiver of arbitration or coverage. An example of a coverage issue would be whether the insured complied with a condition precedent, or whether the claimant qualifies as an “insured.” The issue here is whether the insurer has lost the right to contest particular covered benefits because it allegedly failed to obtain an IME.

Bradford Chiropractic, in arguing that count II is non-arbitrable, relies on a circuit court appellate decision of Judge Miller in Falk v. Allstate Indemnity Co., case no. 97-10296 (17th Jud. Cir. Ct. April 13, 1998). However, this court respectfully disagrees with the Falk decision.

Falk incorrectly reasons that an issue that may be adjudicated by way of a declaratory action, must be so adjudicated and cannot be sent to arbitration. Judge Miller’s opinion relies on section 86.021, Fla. Stat. (1997), which provides that “[t]he existence of another remedy does not preclude a judgment for declaratory relief.” However, section 86.021 merely makes declaratory relief available as an additional remedy. For example, a party with a cause of action for breach of contract would not be prohibited from seeking declaratory relief for a judicial interpretation of the allegedly breached contract. The statute plainly does not create declaratory relief as a sole and exclusive remedy. The legislature could not have intended to deprive parties of the right to agree to submit a dispute to arbitration merely because the dispute may be adjudicated by way of declaratory relief.

If the rule announced in Falk is correct, then any time a party wishes to reneg on his agreement to arbitrate, all he needs to do is file an action for declaratory relief. Such a rule effectively rewrites contracts, which courts are prohibited from doing. See State Farm Fire & Cas. Ins. Co. v. Deni Associates of Florida, Inc., 678 So. 2d 397, 403 (Fla. 4th DCA 1996).

In summary, the court holds that an assignee medical provider seeking payment of contested PIP medical benefits must submit to arbitration. The medical provider may not avoid arbitration of such a dispute merely by raising a claim for declaratory relief.

The order denying U.S. Security’s motion to dismiss and compel arbitration is reversed. Upon remand, the entire case should be dismissed and sent to arbitration. Bradford’s motion for appellate attorney’s fees is denied.

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¹Section 627.736(5), Florida Statutes (1997), provides in relevant part:

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 provision shall specify that the provisions of Chapter 682 relating to arbitration shall apply. The prevailing party shall be entitled to attorney’s fees and costs.

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