STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, PETITIONER,
v.
STEVEN V. GONNELLA, SR. AND VICKI GONNELLA, ETC., RESPONDENTS

Fla. 5th DCA | 1996-08-09
No. 96-683
PETERSON, C.J., and HARRIS, J., concur.
677 So. 2d 1355 Florida District Court of Appeal, Fifth District (1996) Positive Treatment
Cited by 10 cases

AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.

Synopsis

State Farm challenges a circuit court decision allowing insureds to revoke their assignment of benefits to a medical provider and avoid mandatory arbitration. The Florida appellate court held that once an assignment of benefits is executed and a dispute arises, revoking the assignment cannot undo the statutory and contractual requirement for binding arbitration.


Holding

The court held that once a claims dispute exists between a medical provider and an insurer, and a demand for arbitration has been made, the right and obligation to arbitrate vests and cannot be avoided by later revocation of the assignment. The revocation is meaningless under both the statute and the insurance policy.


Headnotes

[1] Once a medical provider receives an assignment of benefits from an insured, disputed medical claims between the provider and the insurance company must be resolved by bin…

[2] An insured may not avoid the requirement of binding arbitration by revoking an assignment of benefits after a demand for arbitration has been made.

Previewing 2 of 5 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.

Join FLexlaw to unlock all legal intelligence

Key Quotes

“The legislative intent is clear. Section 627.736(5) requires arbitration to resolve disputes involving medical benefits. Moreover, section 682.02, Florida Statutes (1995), provides that a written agreement to submit a controversy to arbitration is 'valid, enforceable, and irrevocable'.”

Establishes the statutory foundation for the mandatory arbitration requirement and its irrevocable nature

Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.

Join FLexlaw to unlock all legal intelligence

Facts & Procedural History

The Gonnellas were injured in a car accident and assigned their personal injury protection benefits to Dr. Josephine Tan for treatment. State Farm mad…

The full statement of facts, procedural history, and disposition for this case are member content.

Join FLexlaw to unlock all legal intelligence

© FLexlaw, Inc. — AI-generated enrichments are proprietary. All rights reserved.


Opinion of the Court
ANTOON, Judge.

ANTOON, Judge.

This ease focuses on the requirement of section 627.736(5), Florida Statutes (1995)

, that once a medical provider receives an assignment of benefits from an insured, disputed medical claims between the provider and the insurance company must be resolved by binding arbitration. We specifically ad dress the question of whether the insured may avoid arbitration by revoking the assignment after a demand for arbitration has been made. We answer the question in the negative.

The Gonnellas were injured in an automobile accident. At the time of the injuries, they were insured by State Farm and were entitled to personal injury protection benefits. Dr. Josephine Tan treated the Gonnel-las for their injuries, and on May 25, 1993, they executed assignments of benefits in favor of Dr. Tan, allowing her to receive direct payment from State Farm. Pursuant to the assignment, State Farm made some payments to Dr. Tan, but eventually a dispute arose between State Farm and Dr. Tan regarding a claim for payment. The Gonnellas filed suit in county court alleging that State Farm had failed to pay personal injury protection benefits. State Farm then filed a motion to dismiss based on section 627.736(5) and a corresponding provision in the insurance policy. The county court granted the motion and dismissed the lawsuit.

After the dismissal and two years after the assignment of benefits, State Farm filed a demand for arbitration. Arbitration commenced, but before its conclusion the Gonnel-las executed a revocation of their assignment of benefits to Dr. Tan.

Thereafter, the Gonnellas filed a second suit in county court seeking the amounts allegedly due Dr. Tan. The county court dismissed the second complaint, concluding that the Gonnellas’ revocation of their assignment of benefits did not negate the contractual and statutory requirement that the dispute be resolved by arbitration. The Gonnellas appealed and the circuit court, acting in its appellate capacity, disagreed and determined that the revocation placed the Gonnellas in the same position that they had occupied prior to its execution, clearing the way for them to pursue in county court the amount allegedly owed Dr. Tan. The circuit court ruled that even though Dr. Tan had accepted benefits under the assignment, and a demand for arbitration had been made, the revocation obviated the requirement for binding arbitration under both section 627.736(5) and the insurance policy.

State Farm’s petition for writ of certiorari claims that the circuit court’s opinion constitutes a departure from the essential requirements of law. In support of this argument, State Farm asserts that no dispute exists between itself and the Gonnellas regarding entitlement to any personal injury protection benefits. Rather, the sole issue is the disputed claim for payment between itself and Dr. Tan. The Gonnellas, on the other hand, argue that because the assignment to Dr. Tan included an unambiguous provision that it could be revoked, the revocation terminated Dr. Tan’s right to receive their personal injury protection benefits. They also contend that they regained their right to sue for those benefits upon execution of the revocation, and that section 627.736(5) and the policy provision requiring arbitration no longer apply. We reject the Gonnellas’ argument.

The legislative intent is clear. Section 627.736(5) requires arbitration to resolve disputes involving medical benefits. Moreover, section 682.02, Florida Statutes (1995), provides that a written agreement to submit a controversy to arbitration is “valid, enforceable, and irrevocable”. In addition to these statutory directives, by accepting the terms of their policy, the Gonnellas specifically agreed that, once they assigned their personal injury protection benefits to a medical provider, disputes between that provider and State Farm would be resolved by binding arbitration. The Gonnellas’ interpretation would render the statutory and policy provisions requiring arbitration meaningless.2

We are not required to address the question of whether the revocation of an assignment of personal injury protection benefits prior to a claims dispute between the provider and the.insurer would void the requirement of binding arbitration of such disputes because here, not only was the assignment executed, but a claims dispute had arisen, a demand for arbitration had been made, and arbitration had commenced. We hold that, the right and obligation to arbitrate vested, at the latest, upon State Farm’s demand for arbitration. The Gonnellas’ later revocation of the assignment was meaningless. A contrary interpretation would frustrate the purpose of arbitration, and delay resolution of disputes as occurred in the instant case.3

We grant the petition, quash the final order of the circuit court, and issue the writ.

PETITION GRANTED; ORDER QUASHED, and WRIT ENTERED.

PETERSON, C.J., and HARRIS, J., concur. . Section 627.736(5) provides in pertinent part:

627.736 Required personal injury protection benefits; exclusions; priority.-

* * * * * *

(5) CHARGES FOR TREATMENT OF INSURED PERSONS.-

* * * * *

Every insurer shall include a provision in its policy for personal injury protection benefits for binding arbitration of any claims dispute involving medical benefits arising between the insurer and any person providing medical services or supplies if that person has agreed to accept assignment of personal injury protection benefits. The provision shall specify that the provisions of chapter 682 relating to arbitration shall apply.

. Under Florida law, arbitration is the favored means of dispute resolution. Roe v. Amica Mutual Ins. Co. 533 So. 2d 279 (Fla.1988). See also Ronbeck Construction Co. Inc. v. Savanna Club Corp., 592 So. 2d 344 (Fla. 4th DCA 1992) (arbitration is a favored means of dispute resolution and all doubts regarding the scope of an arbitration agreement and the existence of a waiver of arbitration should be resolved in favor of arbitration).

. We note that the circuit court had no statutory or case law to support its decision. Although the Gonnellas cited to Advanced Orthopedic Institute v. Bankers Insurance, 3 Fla. L. Weekly Supp. 673 (13th Circuit June 30, 1995). The decision is not dispositive. Advanced Orthopedic is factually distinguishable because it was the medical provider. not the insured, who challenged the arbitration requirement of section 627.736(5). In this regard, Advanced Orthopedic successfully argued to the circuit court that it could not be forced to arbitrate since it was not a party to insurance policy.


Cases With Similar Vibessemantic neighbors from the corpus


Citator

Cited By

  • Rittman v. Allstate Ins. Co., 727 So. 2d 391 (Fla. 1st DCA 1999)
    …696 So. 2d at 478. Once made, an assignment of the insured’s interest in personal injury protection benefits to a medical services provider is irrevocable. See § 682.02, Fla.Stat. (1995); State Farm Mutual Automobile Insurance Company. v. Gonnella, 677 So. 2d 1355, 1356-1357 (Fla. 5th DCA 1996); State Farm Fire & Casualty Co. v. Ray, 556 So. 2d 811, 813 (Fla. 5th DCA 1990)(“Because an unqualified assignment transfers to the assignee all the interest of the assignor under the assigned contract, the assignor ha…
  • Orion Ins. Co. v. Magnetic Imaging Sys. I, 696 So. 2d 475 (Fla. 3d DCA 1997)
    …. “[OJnce a medical provider receives [*477] an assignment of benefits from an insured, disputed medical claims between the provider and the insurance company must be resolved by binding arbitration.” State Farm Mut. Automobile Ins. Co. v. Gonnella, 677 So. 2d 1355 (Fla. 5th DCA 1996). Magnetic concedes in its brief that section 627.736(5) of the Florida Statutes requires that insurance policies for personal injury protection benefits include a provision for arbitration between the medical service provider an…
    1 / 2
  • Livingston v. State Farm Mut. Auto. Ins. Co., 774 So. 2d 716 (Fla. 2d DCA 2000)
    …interest of the assignor under the assigned contract, and that 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. See State Farm Mutual Auto. Ins. Co. v. Gonnella, 677 So. 2d 1355 (Fla. 5th DCA 1996); State Farm Fire & Casualty Co. v. Ray, 556 So. 2d 811, 813 (Fla. 5th DCA 1990). The supreme court’s pronouncement in Pinnacle does not alter this general rule. From our perspective, the outcome of this case depends largely upon…

Previewing 3 of 5 citing cases — full citator treatment, depth of discussion, and citing context are member features.

Join FLexlaw to unlock all legal intelligence

Authorities Cited

Full citator, related cases, and AI research tools

Open in FLexlaw