5 Fla. L. Weekly Supp. 643a
Insurance — Personal injury protection — Appeal by insured who executed and subsequently revoked an assignment of benefits from order granting insurer’s motion for summary judgment based on insured’s lack of standing in breach of contract and declaratory judgment action — Assignment — Revocation — Insured’s revocation of assignment of benefits to medical provider by mutual revocation is valid — Revocation was authorized by assignee — Standing — Insured has standing to maintain breach of contract action because insured became real party in interest when assignment of benefits was mutually revoked — Because standing is necessary element of cause of action, insured must amend complaint to properly allege her standing — Abuse of discretion to deny plaintiff’s motion to file second amended complaint where motion was timely and could properly be considered by trial court, and plaintiff could state cause of action if she amended her complaint to properly assert stand- ing — Record indicates that assignment of benefits had been mutually revoked and insured could assert standing in newly amended complaint based on that revocation — Insured who has alleged doubt as to her entitlement to benefits under insurance contract has standing to maintain declaratory judgment action seeking declaration that use of paper review to deny payment for medical services violated Florida Motor Vehicle No-Fault Act
Additional ruling in this case at 5 Fla. L. Weekly Supp. 645a
CYNTHIA POKE, Plaintiff/Appellant, v. ALLSTATE INDEMNITY COMPANY, Defendant/Appellee. 9th Judicial Circuit, in and for Orange County. Case No. CVA 97-16. June 8, 1998. Counsel: Seifert, Miller & Slusher, P.A., Terry A. Slusher, for Appellant. Rissman, Weisberg, Barrett, Hurt, Donahue & McLain, P.A., Art C. Young, for Appellee.
(BEFORE CONRAD, SPRINKEL and EVANS, JJ.)
FINAL ORDER AND OPINION
THIS CAUSE comes before the Court on Appellant, Cynthia Poke’s, appeal of the trial court’s order granting summary judgment in favor of Appellee, Allstate Indemnity Company, and denying her motion to file a second amended complaint. This Court has jurisdiction pursuant to Florida Rule of Appellate Procedure 9.030(c)(1)(a). The Court, having reviewed the record on appeal and briefs of counsel, dispenses with oral argument pursuant to Florida Rule of Appellate Procedure 9.320.
Poke was involved in an automobile accident on July 14, 1995. Thereafter, she began receiving chiropractic treatment for injuries sustained in the accident from Dr. Scott Wittmer. Dr. Wittmer ordered certain diagnostic testing be performed by Great Southern Medical, Inc. (“GSM”). GSM treated Poke on September 13, 1995 and January 31, 1996. On January 31, 1996, Poke executed an “Assignment of Benefits,” assigning her right to recover medical benefits from Allstate for the treatment rendered by GSM.
Allstate rejected Poke’s claim for the diagnostic treatment rendered by GSM. Allstate found that the treatment was not medically necessary based upon a “paper” review of Poke’s medical records by Dr. Cliff Shooker, D.C.
Poke filed a two count complaint on February 5, 1996. In count one, Poke alleged a breach of contract based on Allstate’s failure to pay for diagnostic services rendered by GSM. In count two, Poke sought a declaratory judgment declaring that the use of a paper review as a basis for the denial of benefits under a personal injury protection (“PIP”) policy constituted a violation of the Florida Motor Vehicle No-Fault Act.
Poke filed an Amended Complaint on March 27, 1996. On November 6, 1996, Poke revoked and rescinded the previous assignment of benefits to GSM by mutual revocation. On January 3, 1997, Allstate became aware of the original “Assignment of Benefits” executed on January 31, 1996. On January 7, 1997, Allstate filed a Motion for Summary Judgment claiming that Poke lacked standing when her Amended Complaint was filed due to her assign- ment of benefits to GSM. Poke filed a Response to Allstate’s Motion for Summary Judgment on January 10, 1997 and January 31, 1997. Poke argued that Allstate did not demand arbitration, Allstate did not give consent to the original assignment, and Allstate waited too long to raise the issue of standing.
Allstate claims it was not aware of Poke’s revocation of benefits until January 24, 1997, when Poke produced the same. On January 27, 1997, Poke filed a Motion for Leave to File a [Second] Amended Complaint. On February 5, 1997, Poke filed a Second Amended Motion for Leave to File a [Second] Amended Complaint. On February 10, 1997, Poke filed a Motion for Leave to Amend and for Substitution of Parties. Poke sought to substitute herself, after she arguably reinstated her standing, for herself. The trial court denied the motion to amend and to substitute parties. Several of Poke’s motions arose out of hearings held before the trial court on February 3rd, 4th and 6th, 1997.
On February 26, 1997, the trial court entered an Order Granting Defendant’s Motion for Summary Judgment based upon Poke’s lack of standing. A final judgment was entered on the same day. On March 3, 1997, the court entered a written order denying Poke’s Motion for Substitution.
An order of summary judgment is entitled to de novo review. Carter v. United of Omaha Life Insurance, 685 So. 2d 2 (Fla. 1st DCA 1996). In viewing the record as a whole, this court must view all possible inferences in favor of the non-moving party. Id. If material issues of fact exist, and the slightest doubt remains, summary judgment must be reversed. Id.
Poke makes the following arguments on appeal: 1) Poke had standing because Allstate never agreed to the assignment of benefits as required by the insurance policy; 2) Allstate waived its right to raise the issue of standing because it actively litigated the action and failed to raise the issue prior to its motion for summary judgment; 3) Poke had standing to file a declaratory judgment action; 4) the trial court erred in granting summary judgment on the declaratory judgment action where the motion for summary judgment did not directly ask for summary judgment on that count; and 5) the trial court erred in refusing to grant Poke’s Motion for Leave to File a Second Amended Com- plaint based upon a mutual revocation of assignment or, alternatively, her third party beneficiary sta- tus.
I.Validity of the Mutual Revocation of Assignment of Benefits
Poke argues that the original assignment of benefits could be rescinded by mutual consent. Allstate argues that pursuant to State Farm Fire and Casualty Company v. Ray, 556 So. 2d 811 (Fla. 5th DCA 1990), an assignment to a medical provider is irrevocable where it is given in exchange for medical care. Poke argues that Ray involved a unilateral rescission by the insured and that the action by the insured was to limit payment to the provider, not obtain benefits for payment of medical bills. The court in Ray held that “[b]ecause an unqualified assignment transfers to the assignee all the interest of the assignor under the assigned contract, the assignor has no right to make any claim on the contract once the assignment is complete, unless authorized to do so by the assignee.” (Emphasis added). Id. at 813.
Allstate also cites State Farm v. Gonnella, 677 So. 2d 1355 (Fla. 5th DCA 1996). In that case, the court specifically addressed the question of whether an insured may avoid arbitration by revoking an assignment after a demand for arbitration has been made. The Gonnella court found that such a revocation was inappropri- ate Id. at 1356. The revocation at issue in Gonnella was based on language contained in the original assignment that permitted the insured to revoke the assignment, indicating that assignments of benefits to medical providers are not per se irrevocable. The revocation in this case was authorized by the assignee. Therefore, it is valid.
II.Effect of Mutual Revocation on Standing
Because the mutual revocation has been deemed valid, the next question is whether the mutual revocation cured Poke’s standing problem, without further action, or whether Poke was required to amend her complaint.
“Standing is the right of a party to sue or to defend in a particular action. . . . To have standing a person must have a cause of action that he can assert and a personal stake in the outcome so that he will adequately represent the interest he asserts.” Trawick, Trawick’s Florida Practice and Procedure, Parties §4-15 p. 58. “In its broadest sense, standing is no more than having, or representing one who has, “a sufficient stake in an otherwise justiciable controversy to obtain judicial resolution of that controversy.” Kumar Corp. v. Nopal Lines. Ltd., 462 So. 2d 1178, 1182 (Fla. 3d DCA 1985). At least equally important is the “requirement that the claim be brought by or on behalf of one who is recognized in the law as a `real party in interest,’ that is, `the person in whom rests, by substantive law, the claim sought to be enforced. . . .’ ” Id. at 1183.
The basic purpose of rules requiring that every action be prosecuted by or on behalf of the real party in interest is merely “to protect a defendant from facing a subsequent similar action brought by one not a party to the present proceeding and to ensure that any action taken to judgment will have its proper effect as res judicata ….”
Id., quoting Prevor-Mayorsohn Carribean, Inc. v. Puerto Rico Marine Management, Inc., 620 F.2d 1, 4 (1st Cir. 1980); see Fla.R.Civ.P. 1.210. When the assignment of benefits was mutually revoked, Poke became the “real party in interest.” However, because standing is a necessary element of a cause of action, Poke must amend the complaint to properly allege her standing in this mat- ter.
III.Trial Court’s Denial of Poke’s Second Motion for Leave to Amend Complaint
On January 7, 1997, Allstate filed its Motion for Summary Judgment arguing that Poke lacked standing because she had assigned her benefits to GSM and Allstate had agreed to indemnify and defend her. On January 10, 1997, Poke filed her Response in Opposition to Defendant’s Motion for Summary Judgment. The trial court entered an order on January 22, 1997 setting the matter for trial the week of February 10, 1997. On January 27, 1997, Allstate filed a Motion for Leave to File Amended Answer and Affirmative Defenses seeking to add claims regarding Poke’s lack of standing.
On January 31, 1997, Poke filed her Memorandum of Law in Opposition to Defendant’s Motion for Summary Judgment. A hearing was held on Allstate’s Motion for Summary Judgment on February 3, 1997. The issue, as framed by Allstate, was whether or not Poke had standing to bring the lawsuit, inasmuch as she did not have a cause of action at the time she filed her Amended Complaint. Allstate conceded that if the revocation was valid, Poke would only need to address the issue of whether standing could be retroactively corrected. At that hearing, the trial court found that the initial assignment of benefits was valid and Allstate did not waive the issue of standing.1 The court orally granted Allstate’s motion for summary judgment but continued the matter to permit Poke the opportunity to consider her options, including amendment of her com- plaint.
Poke filed a Second Motion for Leave to Amend the Complaint and for Substitution of Plaintiff. In that motion, Poke sought to correct the standing problem through substitution of herself for herself. On February 4, 1997, another hearing was held before the trial court on the summary judgment matter. At that hearing, Poke informed the court that she had filed a motion for leave to amend and a motion for substitution of parties. The court denied the motion for substitution. Allstate claimed that Poke had failed to move to amend prior to the order granting summary judgment on the standing issue and insisted on the entry of a written order granting summary judgment. The court chose to continue the matter so that it could be determined whether or not Poke had the right to amend after the court had orally granted summary judgment.
Poke filed a Second Motion for Leave to Amend the Complaint and for Continuance on February 5, 1997. Poke sought to amend the complaint to properly allege standing based upon the mutual revocation of the assignment of benefits. The next proceeding was held on February 6, 1997. The court heard Poke’s arguments regarding her motion for leave to file a second amended complaint.
The court entered a written order granting Allstate’s motion for summary judgment on February 20, 1997. The court held that Poke lacked standing at the time her Amended Complaint was filed. No written order was entered denying Poke’s Second Motion for Leave to File an Amended Complaint.2
Generally, leave to amend should be liberally granted. Fla. R. Civ. P. 1.190. “Leave to amend should be freely given, the more so when a party seeks such a privilege at a hearing on a summary judgment motion and when the amendment is based on the same conduct, transaction and occurrence upon which the original claim was brought.” (Emphasis added). Spolski v. Jett-Aire Corp., 637 So. 2d 968, 970 (Fla. 5th DCA 1994). However, an appellate court will not “disturb orders of lower courts in the exercise of their judicial discretion unless an abuse of discretion is clearly shown.” Id.
“Courts should aim to dispose of cases on their merits and allow amendments when the right to amend is not abused and the rights of the opposing party are not invaded.” Ujcic v. City of Apopka, 581 So. 2d 218, 220 (Fla. 5th DCA 1991). “[R]efusal to allow amendment of a pleading constitutes an abuse of discretion unless it clearly appears that allowing the amendment would prejudice the opposing party; the privilege to amend has been abused; or amendment would be futile.” Karn and Michael v. Coldwell Banker Residential Real Estate, Inc., 705 So.2d 680 (Fla. 4th DCA 1998), citing Bill Williams Air Conditioning & Heating, Inc. v. Haymarket Coop. Bank, 592 So. 2d 302, 305 (Fla. 1st DCA 1991). “Where summary judgment should be entered in a cause but it appears that the unsuccessful party may have a cause of action or defense if properly pleaded, the proper procedure is to grant the motion for summary judgment but with leave to amend.” B.P. Development and Management Corp. v. P. Lafer Enterprises, Inc., 538 So. 2d 1379, 1381 (Fla. 5th DCA 1989); see also Hart Properties, Inc. v. Slack, 159 So. 2d 236 (Fla. 1963); DiPaolo v. Rollins Leasing Corp., 700 So. 2d 31 (Fla. 5th DCA 1997) (dissent, footnote 1).
“A motion to amend a complaint following a final summary judgment is not necessarily untimely since it is within the discretion of the trial court to grant or deny.” B.P. Development and Management Corp. v. P. Lafer Enterprises, Inc., 538 So. 2d at 1382; but see DiPaolo v. Rollins Leasing Corp., 700 So.2d at 32. “In the event such a motion is filed, the trial court, in the exercise of its discretion, must determine whether the facts appearing in the record at the time of summary judgment reasonably indicate that the plaintiff can raise a justifiable issue through an amended complaint.” Hervey v. Alfonso, 650 So. 2d 644, 647 (Fla. 2d DCA 1995), citing Gold Coast Crane Serv., Inc. v. Watier, 257 So. 2d 249 (Fla. 1971). “If the trial court concludes that the plaintiff can state a bona fide cause of action, it must grant the motion, for to do otherwise would constitute an abuse of discretion.” Hervey v. Alfonso, 650 So. 2d at 647.
Poke’s motion was filed prior to the entry of final summary judgment. The motion was timely and could properly be considered by the trial court. Summary judgment was granted based on Poke’s lack of standing at the time she filed her Amended Complaint. The record indicates that the assignment of benefits had been mutually revoked and Poke could assert standing in a newly amended complaint based on that revocation. Poke could state a cause of action if she amended her complaint to properly assert standing. Therefore, the trial court’s denial of her motion to file a second amended complaint was an abuse of discretion.
IV.Poke’s Standing to Maintain a Declaratory Judgment Action
Poke sought a declaratory judgment that Allstate’s use of a “paper” review to deny her payment for medical services violated the Florida Motor Vehicle No-Fault Act. Poke was found to lack standing to maintain her declarato- ry judgment action due to her lack of standing in her breach of contract action. Poke argues that her standing to maintain the declaratory judgment action exists independently from her standing to maintain the breach of contract action. Allstate argues that standing is identical even if the two counts are considered separate causes of action. Otherwise, Allstate argues, it could face double exposure for the same conduct.
Section 86.021, Florida Statutes provides that
Any person claiming to be interested or who may be in doubt as to his or her rights under a . . . contract, or other article, memorandum, or instrument in writing or whose rights, status, or other equitable or legal relations are affected by a statute . . . or by . . . contract . . . may have determined any question of construction or validity arising under such statute . . . [or] contract . . . or any part thereof, and obtain a declaration of rights, status, or other equitable or legal relations thereunder.
Section 86.111, Florida Statutes, provides that “[t]he existence of another adequate remedy does not preclude a judgment for declaratory relief.”
The court in Tindall v. Allstate Ins. Co., 472 So. 2d 1291 (Fla. 2d DCA 1985), held that “[d]isagreements concerning coverage under insurance policies are proper subjects for declaratory judgment.” Id. at 1292. “The right to utilize . . . [the] declaratory decree statute . . . depends on whether or not the movant shows that he is in doubt as to the existence or non-existence of some right, status, immunity, power or privilege, that he is entitled to have such doubt removed, and, if circumstances warrant it, obtain appropriate and necessary relief.” Id., quoting Hildebrandt v. Department of Natural Resources, 313 So. 2d 73, 75 (Fla. 3d DCA 1975).
In this case, Allstate arguably sought summary judgment based upon Poke’s lack of standing to bring a declaratory judgment action.3 Poke is an insured who alleged she was in doubt as to her entitlement to benefits under her insurance contract. Pursuant to the declaratory judgment statute, Poke has standing to maintain the declaratory judgment action. The trial court erred in granting summary judgment on that count.
Accordingly, it is hereby
ORDERED AND ADJUDGED that the trial court’s order granting summary judgment in favor of Defendant, Allstate Indemnity Company, as to Count II – Declaratory Judgment is REVERSED.
FURTHER ORDERED that the trial court’s denial of Plaintiff, Cynthia Poke’s, Second Motion for Leave to Amend the Complaint is REVERSED.
Plaintiff shall he permitted to amend her complaint within a reasonable time, as determined by the trial court, to properly allege standing.
This case is REMANDED to the trial court for proceedings not inconsistent with this order.
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1The court believed, however, that the mutual revocation was most likely valid and restored Poke’s right to maintain the breach of contract action.
2The court indicated that the entry of final judgment implicitly denied Poke’s motion to amend. At a hearing held on March 12, 1997, Poke requested the entry of a written order denying the motion to amend. The court expressed its reluctance to enter an order more than ten days after final judgment had been entered. The court agreed that, if required by the appellate court, he would provide a written order.
3Poke argued, below and on appeal, that the summary judgment motion was directed solely at the breach of contract action. Therefore, an award of summary judgment in the declaratory judgment action was inappropriate.
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