Accident911 Help Medical Center Corp., et al. v. Direct General Insurance Company, 3rd District, Case No, 3D23-773. L.T. Case No. 22-9836, Aug. 23, 2023
The Third District Court of Appeal rules that the trial court abused its discretion in denying the medical providers’ and assignees’ motion to intervene in a declaratory judgment action between an insurer and an insured. The movant’s interest in litigation is of such direct and immediate character that they will either gain or lose by direct legal operation and effect of judgment where the insurer sought declaration that the policy at issue was rescinded and void ab initio.
This appeal involved a suit filed by Direct General against its insured Ivet Caro and her son, Daniel Jose Alvare, who had been involved in a motor vehicle accident on September 8, 2021, while operating the insured vehicle. Ivet Caro had been involved in a motor vehicle accident on September 21, 2021, in which she was a passenger of a vehicle that was not insured under the immediate policy. As a result of both accidents, Caro and Alvare made a claim under the policy. Alvare had assigned his rights to PIP benefits under the policy to East Coast Medical Rehab, while Caro had assigned her rights to PIP benefits to both Accident911 Help and Rivero Diagnostic Center.
After receiving the two claims, Direct General filed an action for breach of contract and declaratory judgment against both Caro and Alvare. In its complaint, Direct General alleged that it had rescinded Caro’s insurance policy and sought a declaration that the policy was now void ab initio because Caro made a material misrepresentation on the application for insurance by failing to disclose that her son, Alvare, was a household resident over the age of fifteen. Direct General asserted that the misrepresentation was material as, had it been disclosed, it would have resulted in an increase in the policy premium. In its prayer for relief, Direct General sought a declaration that, since the policy was void ab initio, any assignment of PIP benefits from Caro and Alvare to any medical provider, doctor, or medical entity is void.
After a default was obtained against Alvare, 911Help Medical Center Corp, East Coast Medical Rehab Ctr., Inc. and Rivero Diagnostic Center, Inc. all filed a motion to intervene pursuant to Florida Rule of Civil Procedure 1.230 which provides: “Anyone claiming an interest in pending litigation may at any time be permitted to assert his right by intervention, but the intervention shall be in subordination to, and in recognition of, the propriety of the main proceeding, unless otherwise ordered by the court in its discretion.”
The lower court denied the motion and, in its decision, focused on the providers’ contention that they were “indispensable parties” to the action, after which the immediate appeal followed. In issuing its ruling, the Third District ruled that the trial court abused its discretion as the providers clearly met the well-established test for intervention, which was established in the Florida Supreme Court decision in Union Cent. Life Ins. Co. v. Carlisle, 593 So. 2d 505, 507 (Fla. 1992). In Carlisle, the court articulated a two-part test that requires the trial court to “first make a preliminary determination whether the interest asserted is appropriate to support intervention” and, if so, must “exercise its sound discretion whether to permit the intervention” by taking into consideration “a number of factors, including the derivation of the interest, any pertinent contractual language, the size of the interest, the potential for conflicts or new issues, and any other relevant circumstance.”
In applying the test, the court noted that the allegations in Direct General’s complaint undermined any assertion that the providers lacked the requisite interest in the litigation to necessitate intervention. The court analyzed several of the allegations in the complaint, including the following: (1) the plaintiff Direct General, the defendant’s Caro and Alvare, and the claimants, Accident911 Help Medical Center Corp., East Coast Medical Rehab Ctr., Inc. and Rivero Diagnostic Center, “have an actual, present, adverse and antagonistic interest in the subject matter described herein; (2) Direct General “seeks a declaration of its rights and obligations under the automobile policy with respect to the claims asserted against [it]”; and (3) Direct General seeks a declaration that, because the insurance policy issued to Caro was rescinded and is void ab initio, “any assignment of personal injury protection (PIP) benefits” from Caro or Alvare to any medical provider, doctor and/or medical entity is void.” In analyzing these allegations, the court noted that, were Direct General successful in obtaining a judgment declaring that the policy is void ab initio, the providers’ right to policy benefits pursuant to the assignments from Caro and Alvare would be extinguished and that, based on same, it appeared the providers were the only entities who could adequately protect their rights in the suit.
Ultimately, the court held that, since the providers’ interest in the suit is “of such a direct and immediate character that [it] will either gain or lose by the direct legal operation and effect of the judgment,” the lower court committed reversible error and ordered that the order denying intervention be reversed.
The significance of this case is that it arguably gives any provider who was assigned policy benefits the right to intervene in a suit between the insured and insurer, even when the insurer is alleging fraud or misrepresentation against its insured. SIU adjusters should be aware of this caveat when making the decision to initiate a declaratory action against an insured in a claim involving potential misrepresentations or fraud by the insured.
