Progressive Exp. v. Mcgrath Chiropractic

• Decision Date: 18 November 2005
• Docket Number: No. 2D05-1497.,2D05-1497.
• Citation: 913 So.2d 1281
• Parties: PROGRESSIVE EXPRESS INSURANCE COMPANY, Petitioner, v. McGRATH COMMUNITY CHIROPRACTIC, f/k/a Naples Community Chiropractic, as assignee of Abner Joseph, Respondent.
• Court: Florida Supreme Court

913 So.2d 1281

PROGRESSIVE EXPRESS INSURANCE COMPANY, Petitioner, v. McGRATH COMMUNITY CHIROPRACTIC, f/k/a Naples Community Chiropractic, as assignee of Abner Joseph, Respondent.

No. 2D05-1497.

District Court of Appeal of Florida, Second District.

November 18, 2005.

COPYRIGHT MATERIAL OMITTED

Valeria Hendricks of Davis & Harmon, P.A., Tampa, for Petitioner.

Jack C. Morgan III of Morgan Law Firm, P.A., Fort Myers, for Respondent.

WALLACE, Judge.

Progressive Express Insurance Company (Progressive) seeks second-tier certiorari review of the appellate decision of the Twentieth Judicial Circuit reversing the Lee County Court's final judgment dismissing a small claims action filed by McGrath Community Chiropractic (the Provider). We grant Progressive's certiorari petition.

BACKGROUND

In May 2001, the Provider filed a small claims action against Progressive in the Lee County Court. The Provider sought the recovery of PIP benefits allegedly assigned to it by Abner Joseph under a policy of insurance issued by Progressive to Mr. Joseph. The Provider alleged in its statement of claim that the policy provided personal injury benefits and/or medical payments coverage and that the policy was required by law to comply with the Florida Motor Vehicle No-Fault Law, sections 627.730-.7405, Florida Statutes (1999) (the No-Fault Law). The Provider alleged further that it had "accepted, from ABNER JOSEPH, a written and/or equitable assignment of rights under the policy." However, the Provider did not attach a copy of a written assignment to its statement of claim.

Later, the Provider amended its statement of claim by attaching to it an "Assignment of Benefits Form" assigning to the Provider benefits payable under the policy for services rendered by the Provider. The form also authorized Progressive to pay such benefits directly to the Provider. The form bore the signature "Abner Joseph" and was dated January 8, 2002, more than six months after the action had been filed.

Progressive moved for a summary disposition in its favor on the ground that the Provider had no standing to file the action. The county court agreed with Progressive. It ruled as follows:

[T]here was no Assignment of Benefits, from Abner Joseph to the [Provider], either written or equitable, in existence at the time the [Provider] filed this lawsuit in May, 2001. Therefore, the [Provider] lacked standing to file suit at the time the original complaint was filed. The [Provider] cannot now assert standing based upon a questionable assignment of benefits that came into existence many months after the filing of the original complaint. Therefore, this Court lacks subject matter jurisdiction to hear this claim....

Based on this ruling, the county court dismissed the Provider's action.

The Provider appealed the dismissal of its action to the circuit court. A panel of three circuit judges heard the appeal. With one judge dissenting, the circuit court reversed the county court's dismissal of the action and remanded the case for further proceedings. Progressive timely filed its petition for writ of certiorari in this court seeking review of the circuit court's appellate decision.

THE STANDARD OF REVIEW

In considering a petition for second-tier certiorari, we do not provide the parties with an opportunity for a second appeal. Instead, we may grant such a petition only in "those instances in which the lower court did not afford procedural due process or departed from the essential requirements of the law." Hous. Auth. v. Burton, 874 So.2d 6, 8 (Fla. 2d DCA 2004) (citing Allstate Ins. Co. v. Kaklamanos, 843 So.2d 885, 889 (Fla.2003)). "A failure to observe `the essential requirements of law' has been held synonymous with a failure to apply `the correct law.'" Id. (citing Haines City Cmty. Dev. v. Heggs, 658 So.2d 523, 530 (Fla.1995)). In this case, Progressive does not claim that the circuit court's appellate decision deprived it of procedural due process. Therefore, we may not grant relief unless we determine that the circuit court departed from the essential requirements of law with a resulting miscarriage of justice. Ivey v. Allstate Ins. Co., 774 So.2d 679, 682 (Fla.2000); Combs v. State, 436 So.2d 93, 95-96 (Fla.1983).

DISCUSSION

A. The Applicability of the "Relation Back" Rule

The Provider did not attach a copy of a written assignment of benefits to its original statement of claim filed in May 2001. To a subsequently filed amended statement of claim, the Provider attached a copy of the Assignment of Benefits Form dated January 8, 2002. The circuit court held that the written assignment related back to the date of the original statement of claim under Florida Rule of Civil Procedure 1.190(c).¹ The circuit court reasoned: "A plaintiff can perform a condition precedent to the filing of a complaint after the complaint is filed provided the plaintiff amends the complaint to allege the condition within the time allowed by the statute of limitations." As authority, the circuit court cited Holding Electric, Inc. v. Roberts, 530 So.2d 301 (Fla.1988).

In Holding Electric, Inc., the "condition precedent" to maintaining the action was the statutory requirement that a contractor seeking to foreclose a construction lien must first serve a contractor's affidavit. Id. at 302. The Supreme Court of Florida held that failure to serve the contractor's affidavit before filing the action was not a fatal jurisdictional defect requiring dismissal of the action. Instead, the contractor could satisfy the statutory prerequisite after filing the original complaint but before filing an amended complaint pleading compliance with the statute. Thus the contractor would be permitted to continue the action provided the affidavit was served within the statutory limitations period. Id. at 303.

A claimant's standing to bring an action is distinct from questions arising from the claimant's noncompliance with one or more conditions precedent to maintaining the action. For example, in Voges v. Ward, 98 Fla. 304, 123 So. 785 (1929), the plaintiff held only one of twelve notes necessary to the replevin of the collateral under a conditional sales contract when the action for replevin was filed. Although the plaintiff acquired all of the notes before the suit was tried, the trial court ruled that the suit was prematurely brought. The supreme court affirmed the trial court's ruling on this point, explaining that "the general rule in actions at law is that the right of a plaintiff to recover must be measured by the facts as they exist [sic] when the suit was instituted." Id. at 793 (citing Cobbey on Replevin § 257 (2d ed.1900); 1 C.J. 1149). Similarly, in Marianna & B.R. Co. v. Maund, 62 Fla. 538, 56 So. 670 (1911), a landowner sought to recover for permanent damages to land committed by a railroad company. Id. at 670-71. The landowner did not expressly plead or offer proof that the damages occurred before the landowner acquired his ownership interest in the property. Id. at 672. After he filed suit against the railroad, the landowner obtained an assignment of the claim for damages to the property from the former owner and alleged the fact of the assignment in an amended pleading. Id. at 671. The trial court entered a decree in favor of the landowner, and the railroad appealed. Id. at 671-72. The Supreme Court of Florida reversed the decree and remanded the case to the trial court with directions to dismiss the landowner's case without prejudice. Id. at 673. In explaining its decision, the court said:

[I]t is obvious [the landowner] has not clearly shown a right of action when the suit was brought on the 24th of March, 1910, under the assignment of the right to sue executed on January 5, 1911. That assignment gave a new right of action long subsequent to the date of the bringing of the suit. It is decided in this state that in ejectment a plaintiff cannot recover upon a deed made after the suit is brought. We know of no reason why the same principle should not apply to a case like the instant one.

Id. at 672 (citations omitted). As these cases demonstrate, the 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.

Unlike a statutory requirement of the construction lien law, an assignment of PIP benefits concerns the claimant's standing to bring the action. "Standing is ... that sufficient interest in the outcome of litigation which will warrant the court's entertaining it." Gen. Dev. Corp. v. Kirk, 251 So.2d 284, 286 (Fla. 2d DCA 1971). At any one time, only the insured or the medical provider "owns" the cause of action against the insurer for PIP benefits. Oglesby v. State Farm Mut. Auto. Ins. Co., 781 So.2d 469, 470 (Fla. 5th DCA 2001). For a medical provider to bring an action for PIP benefits, the insured must assign his or her right to such benefits under the policy to the medical provider.

Thus the assignment of PIP benefits is not merely a condition precedent to maintain an action on a claim held by the person or entity who filed the lawsuit. Rather, it is the basis of the claimant's standing to invoke the processes of the court in the first place. If the insured has assigned benefits to the medical provider, the insured has no standing to bring an action against the insurer. Livingston v. State Farm Mut. Auto. Ins. Co., 774 So.2d 716, 718 (Fla. 2d DCA 2000). In this case, the converse is true. If on the date the Provider filed the original statement of claim Mr. Joseph had not assigned benefits to the provider, only Mr. Joseph had standing to bring the action. It follows that the Provider would have lacked standing under these circumstances, and the case should have been dismissed.

In relying exclusively on the "relation back" rule when considering the Provider's standing, the circuit court implicitly affirmed the county court's finding that the Provider did not possess an assignment of...