Assignment of Insurance Proceeds to a Nonexistent Entity Not Valid

Posted on November 17, 2009 by Mark Nation

In Progressive Express Insurance Company v. Hartley, ____ So.3d ____ (Fla. 5th DCA October 30, 2009), Progressive provided Hartley with PIP insurance.  Hartley was injured in an accident and sought treatment from Michael C. Durant, D.C.  Upon seeking treatment from Dr. Durant, Hartley executed an assignment of benefits to "Atlantic Coast Chiropractic Clinic." 

From 1993 - 1998, "Atlantic Coast Chiropractic Clinic" was a registered fictitious name for Durant Chiropractic Clinic, Inc.  However, in 1998, that corporation failed to renew the fictitious name as required under section 865.09(6)(a), Florida Statutes (1998).  Dr. Durant's clinic continued to operate under both the name Durant Chiropractic Clinic and Atlantic Coast Chiropractic Clinic.  Dr. Durant submitted claims to Progressive under the name Durant Chiropractic Clinic.  Progressive paid some bills and denied others. 

In November 2003, Dr. Durant executed a reassignment of benefits back to Hartley, and Hartley filed suit against Progressive for the unpaid bills.  Progressive moved for summary judgment asserting that Hartley lacked standing to bring the action.  The trial court granted Progressive summary judgment, and the circuit court reversed, finding that the initial purported assignment of Hartley to "Atlantic Coast Chiropractic Clinic" was invalid because the entity did not exist in 2003 or thereafter.  Accordingly, Hartley had retained the right to bring the suit. 

In its Petition for Cert. to the 5th DCA, Progressive argued that under section 865.09(9)(b), the initial assignment was valid.  That section provides that the failure of a business to comply with the fictitious name registration does not impair the validity of any contract of such business.  However, according to the 5th,

While that section may have supported Progressive's argument if the initial assignment was to Durant Chiropractic Clinic, Inc., d/b/a Atlantic Coast Chiropractic Clinic (notwithstanding a failure to comply with the fictitious name registration statute), it provides no relief to Progressive in the instant case.  The fact remains that the assignment was made to a non-existent entity.  Furthermore, if we were to accept Progressive's argument, no party could bring an action against Progressive for the alleged unpaid PIP benefits.

 

 

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Assignment of a Vague Assignment Approved

Posted on April 17, 2009 by Mark Nation

In Gables Insurance Recovery, Inc. v. Seminole Casualty Insurance Company, 34 FLW D672 (Fla. 3rd DCA April 1, 2009), the PIP insured received medical care from Atlantic Medical Specialty, Inc. and executed a document titled "ASSIGNMENT OF BENEFITS/POLICY RIGHTS."  This document purported to assign the insured's rights and benefits under her PIP policy to Atlantic although it failed to expressly name Atlantic as the medical provider/assignee referred to in the document.  Later, Atlantic assigned to Gables Insurance Recovery, Inc. any outstanding sums owed to Atlantic by the PIP insurer.

Gables then sued Seminole Casualty for outstanding amounts which Atlantic had billed to Seminole Casualty.  Seminole Casualty moved for summary judgment on two grounds: 1) the initial Assignment of Benefits to Atlantic was legally inadequate because it failed to name the purported assigner, Atlantic; and 2) that PIP benefits are not payable to third parties who did not render medical services.

On second-tier certiori review, the 3rd DCA ruled in favor of Gables and against Seminole Casualty.  The Court first determined that "any ambiguity regarding the identity of the initial assignee is easily rectified" by the fact that the insured submitted an affidavit confirming that she intended to assign the benefits to Atlantic, and that Atlantic was the provider to which the initial assignment refers.  (An assignment is a contract controlled by the intent of the parties). 

The Court then confirmed that the insured can assign the benefits of an insurance claim after a loss.  The Court then noted that Atlantic, as assignee, received all of the insured's rights including the right to further assign the policy proceeds.  Accordingly, Atlantic, standing in the shoes of the insured, was free to assign anything which it received by assignment. 

In its ruling, the Court cited a number of Florida cases allowing the assignment of insurance money after a loss, and recognizing that

a provision in a policy of insurance which prohibits assignment thereof except with consent of the insurer does not apply to prevent assignment of the claim or interest in the insurance money then due, after loss.

I pursue many cases on behalf of construction contractors, vendors, and medical providers under an assignment of benefits.  The insurance companies frequently - wrongly - allege that such assignments are improper because the policy prohibits assignments without the consent of the insurer.  This case, once again, confirms that such post loss assignments are valid.  

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