Opinion
4D22-1924
08-02-2023
CLEARCARE, LLC, Appellant, v. GRANADA INSURANCE COMPANY, Appellee.
Chad A. Barr of Chad Bar Law, Altamonte Springs, for appellant. James H. Wyman and Ronald L. Kammer of Hinshaw &Culbertson LLP, Coral Gables, for appellee.
Not final until disposition of timely filed motion for rehearing.
Appeal from the County Court for the Seventeenth Judicial Circuit, Broward County; Louis H. Schiff, Judge; L.T. Case No. COINX21052149.
Chad A. Barr of Chad Bar Law, Altamonte Springs, for appellant.
James H. Wyman and Ronald L. Kammer of Hinshaw &Culbertson LLP, Coral Gables, for appellee.
GROSS, J.
In this small claims action to recover for medical services, Clearcare, LLC, appeals a final order granting Granada Insurance Company's motion for summary disposition and entering judgment in favor of Granada. The basis of the county court's ruling was that the Miami-Dade circuit court had entered a declaratory judgment ruling that Granada was not obligated to provide coverage to its insured, so Clearcare, the alleged assignee of the policy's PIP benefits, could not recover from Granada.
We reverse because Clearcare was not added as a party to the Miami-Dade lawsuit, even though the alleged assignment of benefits occurred prior to the entry of the declaratory judgment.
Facts
Granada issued a commercial automobile insurance policy to Yuber-Care Services, LLC. Yuber-Care was subcontracted to provide medical transportation services to Elizabeth Fernandez.
During the policy period, Fernandez was injured in an automobile accident while being transported in a 2010 Mercedes by Yuber-Care. In April 2020, Fernandez brought a negligence action against Yuber-Care and other defendants for damages arising out of the accident.
In June 2020, Granada sued Fernandez, Yuber-Care, and other defendants in Miami-Dade County circuit court, seeking a declaration that it had no duty to defend or indemnify Yuber-Care for any claims arising out of the accident because (1) the 2010 Mercedes was not a covered auto under the policy, and (2) the driver was not an "approved driver," so neither Yuber-Care nor the driver were "insureds" for purposes of the accident. Granada and Fernandez filed a stipulation in which Fernandez agreed to be bound by any judgment entered in the Miami-Dade action in exchange for being dismissed from that action without prejudice.
In August 2020, Fernandez allegedly assigned her PIP benefits to Clearcare in exchange for medical treatment for injuries sustained in the auto accident.
In November 2020, Clearcare sent Granada a presuit demand letter requesting payment of PIP benefits. Granada refused payment in December 2020 on the ground that the 2010 Mercedes occupied by Fernandez in the accident was not a listed vehicle on the policy at the time of the loss.
In September 2021, Clearcare sued Granada in a small claims action in Broward County. Clearcare alleged that Fernandez had provided Clearcare with an assignment of benefits, but no assignment was attached to Clearcare's statement of claim.
The Florida Rules of Civil Procedure were invoked for this case pursuant to an administrative order.
In March 2022, in the Miami-Dade declaratory action, the circuit court entered a final summary judgment in favor of Granada, ruling that the company had no duty to defend or indemnify Yuber-Care for Fernandez's claims arising out of the accident because (1) the 2010 Mercedes was not a "covered auto" and (2) the driver was not an "approved driver" under the policy.
In May 2022, the Broward county court granted Granada's motion for summary disposition based on the Miami-Dade declaratory judgment.
Discussion
The Miami-Dade action was subject to section 86.091, Florida Statutes (2021), which provides:
When declaratory relief is sought, all persons may be made parties who have or claim any interest which would be affected by the declaration. No declaration shall prejudice the rights of persons not parties to the proceedings.
(Emphasis supplied).
A declaratory judgment determining, as between an insurer and the insured, questions relating to the coverage of an insurance policy has the "force and effect of a final judgment" and operates as "res judicata of the matters at issue between the parties and their privy." Allstate Ins. Co. v. Warren, 125 So.2d 886, 888 (Fla. 3d DCA 1961). However, "privies, in such sense that they are bound by the judgment, are those who acquire an interest in the subject matter after the rendition of the judgment; if their title or interest attached before that fact, they are not bound unless made parties." Id. (quoting Hocken v. Allstate Ins. Co., 147 S.W.2d 182, 186 (Mo.Ct.App. 1941)) (emphasis added).
Florida law is clear that "one who acquires an interest in the subject matter of the suit after rendition of judgment is a 'privy' in such sense that he is bound by the judgment." Barnett Bank of Clearwater, N. A. v. Rompon, 359 So.2d 571, 572 (Fla. 2d DCA 1978). But "one whose interest arises prior to such a declaratory judgment is not bound by the judgment unless made a party to the action." Id.; see also Indep. Fire Ins. Co. v. Paulekas, 633 So.2d 1111, 1113 (Fla. 3d DCA 1994) ("A declaratory action obtained by an insurer against its insured is not binding on a third-party claimant who was not a party to the declaratory judgment action."); Helt v. Liberty Ins. Corp., 153 F.Supp.3d 1388, 1389 (M.D. Fla. 2015) (holding that a declaratory judgment, which determined that an insurance policy was void ab initio, was "not binding upon a third party who acquired rights under the policy prior to the declaratory judgment action but was not joined as a party to that action").
For example, in Tower Radiology Center. v. Direct General Insurance Co., 348 So.3d 1147, 1150 (Fla. 4th DCA 2022), we agreed with a PIP assignee's "argument that, because it was a non-party to the declaratory judgment action, the trial court violated section 86.091, Florida Statutes (2021), when it relied on the final consent judgment to dismiss the instant case." There, the consent judgment in the declaratory judgment action was rendered nearly two months after the assignee had filed its statement of claim. Id. at 1149.
Here, because Clearcare was not a party to the Miami-Dade declaratory judgment action, and because the alleged assignment occurred prior to the rendition of the declaratory judgment, the trial court violated section 86.091 and Clearcare's due process rights when it enforced the declaratory judgment against Clearcare. Granada had notice of Clearcare's claim prior to the entry of the Miami-Dade judgment but did not join Clearcare as a party to that action, depriving it of the opportunity to be heard.
We reject Granada's argument that Fernandez's stipulation to be bound by the declaratory judgment controls the result in this case. That stipulation was legally insignificant here, as the crucial question is whether Clearcare acquired its interest in the policy before the rendition of the declaratory judgment. Clearcare was not a party to either the stipulation or the declaratory judgment action, so the stipulation did not give rise to any defenses against it.
We reverse the summary disposition and remand for further proceedings consistent with this opinion. We have considered Granada's tipsy coachman argument and reject it for multiple reasons, not the least of which is that the doctrine is inapplicable to an unpled affirmative defense.
Reversed and remanded.
GERBER and LEVINE, JJ., concur.