UNITED SERVICES AUTOMOBILE ASSOCIATION, vs LESS INSTITUTE PHYSICIANS, D/B/A LESSPINE INSTITUTE, A/A/O AMELIA F. STRINGER-GOWD, No. 3D21-157 (Fla 3d DCA 2022)
We once heard of a thing called the New York Rule. Meet the English rule.
“At the time, USAA claimed that it never received the EMC determination from Less; while in fact, Less had sent the determination to USAA, but USAA had overlooked it. As a result, Less’s requests for payment went unpaid. Subsequently, USAA received a claim from the insured for lost wages and PIP transportation. USAA elected to pay insured’s personal claim. As the result of payment, the $10,000 in insurance benefits was exhausted. Less filed a breach of contract action against USAA. During suit, Less
presented the EMC determination it had timely submitted to USAA that USAA had overlooked. Throughout trial, this error by USAA was generally classified as an inadvertent mistake, except on summary judgment. Notably, in the pleadings, Less did not include a claim of bad faith in the breach of
contract action, did not amend the complaint to add a claim of bad faith, nor did it file a separate claim of bad faith pursuant to section 624.155, Florida Statutes (2020)”
“Though the trial court did not make a determination of bad faith, it instead held that benefits had not been exhausted because USAA’s payment of the insured’s claim was gratuitous because it was paid out of order pursuant to the English Rule of priority adopted by Florida courts. We find that the trial court misapplied the English Rule as the rule only applies to assignees (insurance providers) and not to the insured (typically the assignor). See Reg’l MRI of Orlando, Inc. a/a/o Lorraine Gerena v. State Farm Mut. Auto. Ins. Co., 18 Fla. L. Weekly Supp. 563a (Fla. 9th Cir. App. 2011) (“[T]he English Rule only applies to claims of competing assignees.”); see also Boulevard Nat. Bank of Miami v. Air Metal Indus., Inc., 176 So. 2d 94, 96 (Fla. 1965) (“[T]he so-called ‘English’ rule or ‘American’ rule of priority between assignees of successive assignments . . . .”); Northwoods,137 So. 3d at 1054 (“[T]he English rule of priorities, which gives priority to an assignee first giving notice to the creditor . . . .”). Because the English Rule does not apply to the insured, there is no basis for a gratuitous payment”
Very interesting in the priority of payment realm.
