Shaw v. State Farm Fire and Casualty Company, Case No. 5D07-3136 (Fla. App. 10/23/2009)
Decision Date | 23 October 2009 |
Docket Number | Case No. 5D07-3136. |
Parties | DAVID SHAW, DAVID G. SHAW D.C., P.A., ETC., ET AL., Appellants, v. STATE FARM FIRE AND CASUALTY COMPANY, ET AL., Appellees. |
Court | Florida District Court of Appeals |
Appeal from the Circuit Court for Seminole County, James E.C. Perry, Judge.
Christopher V. Carlyle and Shannon McLin Carlyle, of The Carlyle Appellate Law Firm, The Villages, for Appellant.
Kenneth P. Hazouri of De Beaubien, Knight, Simmons, Mantzaris & Neal, LLP, Orlando, and Dale T. Gobel, of Masten, Lyerly, Peterson, Denbo & Gobel, LLC, Maitland, for Appellees.
The issue we must resolve is whether an Examination Under Oath (EUO) clause in an insurance policy is binding on an assignee of the No-Fault benefits and the cause of action to recover those benefits, thereby prohibiting a noncompliant assignee from making a claim or seeking payment under the policy. The clause provides in pertinent part that "any person or organization making claim or seeking payment . . . must, at our option, submit to an examination under oath, provide a statement under oath, or do both, as reasonably often as we require." (Emphasis omitted). The trial court held that this EUO provision is a condition precedent with which the assignee must comply in order to make a claim and file suit. Because the assignee refused to comply, the trial court rendered summary judgment in favor of the insurer. We affirm.
Introduction of the parties is appropriate here. State Farm Fire and Casualty Company issued the insurance policy containing the EUO provision to its insured, Renard St. Louis, who subsequently assigned the No-Fault benefits and the cause of action to recover those benefits to appellants, David Shaw, David G. Shaw, D.C., P.A., d/b/a Central Florida Chiropractic Center, DC Services, LLC, DC Supply, LLC, and Charles Machler (collectively "Appellants").
The facts are not in dispute and are not complicated. Therefore, we will not dwell too much upon them other than to present them in summary fashion. After St. Louis was involved in a motor vehicle accident, he received medical care from Appellants. He executed two assignment forms assigning his No-Fault benefits and his cause of action to recover those benefits to Appellants. One assignment specifically assigned both the policy benefits and the cause of action to recover those benefits to David G. Shaw, D.C., P.A., d/b/a Central Florida Chiropractic Center1 and the other specifically assigned both the policy benefits and the cause of action to recover those benefits to DC Services, LLC.2
When Appellants presented a claim to State Farm for the services rendered to St. Louis, State Farm requested that Appellants appear for an EUO pursuant to the clause previously quoted. State Farm requested the EUO to investigate suspected fraudulent claims made by Appellants. Appellants refused to attend the EUO and State Farm refused payment. Appellants subsequently filed the instant declaratory action seeking a judgment declaring that they are not required under the policy provisions to attend the EUO. In response, State Farm filed an answer, affirmative defenses, and counterclaim. In the answer, State Farm denied that Appellants had complied with conditions precedent to making a claim for policy benefits and specifically alleged that they failed and refused to submit to the EUO as required by the policy. Among the several affirmative defenses alleged, State Farm asserted this refusal and failure and that Appellants had committed fraud by performing unnecessary diagnostic services solely for personal gain. The counterclaim filed by State Farm included several counts alleging unlawful patient brokering, unnecessary diagnostic testing, deceptive and unfair trade practices, and unjust enrichment. An amended counterclaim was subsequently filed by State Farm adding other counts based on fraud and conspiracy to commit fraud.
State Farm filed a motion for summary judgment. The trial court subsequently entered a final summary judgment concluding that the Appellants failed and refused to comply with the EUO provision of the policy, which is a condition precedent to making a claim and filing suit to recover policy benefits, and that this non-compliance rendered the bills submitted by Appellants non-compensable.
The courts have consistently held that an EUO provision in an insurance policy is a condition precedent that must be complied with in order to maintain an action to recover policy benefits. See Goldman v. State Farm Fire Gen. Ins. Co., 660 So. 2d 300 (Fla. 4th DCA 1995), review denied, 670 So. 2d 938 (Fla. 1996); see also Starling v. Allstate Floridian Ins. Co., 956 So. 2d 511, 513 (Fla. 5th DCA 2007) ( ); Fassi v. Amer. Fire & Cas. Co., 700 So. 2d 51 (Fla. 5th DCA 1997) ( ). Courts in other jurisdictions also interpret EUO provisions to be conditions precedent to making a claim and filing suit to recover the claim under the policy. See Pervis v. State Farm Fire & Cas. Co., 901 F.2d 944, 947 (11th Cir.) , cert. denied, 498 U.S. 899 (1990). We note that during oral argument, Appellants conceded that the EUO provision is a condition precedent to making a claim and filing suit under the policy.
Here, the policy issued by State Farm clearly and specifically provides: "There is no right of action against us . . . until all the terms of this policy have been met . . . ." One of those terms is the EUO provision in the policy that requires "any person or organization making claim or seeking payment . . . must, at our option, submit to an examination under oath, provide a statement under oath, or do both, as reasonably often as we require." (Emphasis omitted). Appellants are certainly any person or organization; they are making claim or seeking payment; and they should, therefore, be bound by the EUO provision as a condition precedent to making claim or seeking payment through litigation. This comports with Florida law, which has provided for some time that an assignment of benefits or a cause of action to recover those benefits under a contract does not remove from the assignee the burden of compliance with contract conditions. In Shreve Land Co. v. J & D Financial Corp., 421 So. 2d 722 (Fla. 3d DCA 1982), the assignor assigned its interest in the purchase price due under a contract to the assignee. The assignee subsequently recovered a judgment against the original purchaser under the contract. In reversing that judgment, the court held:
The law is well settled that an assignee succeeds to his assignor's rights under the assignment of a contract and takes it with all the burdens to which it is subject in the hands of the assignor. If the assignee seeks to enforce the contract, he must show that all conditions have been performed either by himself or the assignor.
This general principle was adopted by the Florida Supreme Court long ago in Florida East Coast Railway Co. v. Eno, 128 So. 622 (Fla. 1930), wherein a contractor, Eno, assigned to a bank his rights to proceeds due under a contract from the owner of certain property. An interpleader action was filed by the owner after the bank, as assignee, and other claimants made competing claims to those funds. The court held that [t]he bank, as Eno's assignee, occupies the same position as did Eno with respect to the moneys, having the same rights, and being subject to the same equities, conditions, and defenses, the assignment not being a negotiable instrument. The mere assignment "of all sums due and to become due the contractor" in and of itself creates no different or other liability of the owner to the assignee than that which existed from the owner to the assignor.
Id. at 626. This rule has been reaffirmed by the courts in more recent decisions. See Law Office of David J. Stern, P.A. v. Sec. Nat. Servicing Corp., 969 So. 2d 962, 968 (Fla. 2007) ; Farkus v. Fla. Land Sales & Dev. Co., 915 So. 2d 688, 689 (Fla. 5th DCA 2005); Family Bank of Hallandale, 667 So. 2d at 259 ; Fred S. Conrad Const. Co. v. Exch. Bank of St. Augustine, 178 So. 2d 217, 219 (Fla. 1st DCA 1965) (); Nusbaum v. Riskin, 136 So. 2d 1, 3 (Fla. 2d DCA 1961) ().
Appellants argue that the decisions in Marlin Diagnostics v. State Farm Mutual Automobile Insurance Co., 897 So. 2d 469, 469 (Fla. 3d...
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