Fourth District Court of Appeal Holds that an Assignment of Benefits Is Not Bound by Declaratory Action
By KeiErica A. Baker
Florida’s Fourth District Court of Appeal recently held that the assignee must be joined to pending declaratory judgment proceedings to be bound by them. In Clearcare LLC v. Granada Insurance Company, the Fourth DCA reversed a trial court’s entry of summary judgment in favor of the insurer.
Following an automobile accident, the insurer sued its insured, a passenger and other defendants, seeking a declaration that it had no duty to defend or indemnify under the policy since the vehicle was not a covered auto and the driver was not an “approved driver.” In exchange for a dismissal without prejudice, the passenger agreed to be bound by any judgment entered in the action. Thereafter, the passenger assigned their PIP benefits to Clearcare.
Clearcare sent the insurer a pre-suit demand, and the insurer refused payment because the vehicle occupied by the passenger was not a covered vehicle. Clearcare sued the insurer. While Clearcare’s suit was pending, the insurer obtained summary judgment in its favor in the original lawsuit. The insurer then moved for summary judgment in Clearcare’s suit, which the trial court granted based on the declaratory judgment the insurer received in the original lawsuit.
On appeal, the Fourth DCA found that the assignment of benefits predated the rendition of the declaratory judgment and that Clearcare was not a party to the declaratory judgment action. The court further noted that the insurer had notice of Clearcare’s claim prior to the entry of the declaratory judgment but failed to join Clearcare as a party to that action, which deprived Clearcare of the opportunity to be heard. Therefore, the trial court violated section 86.091, Florida Statutes (2021) and Clearcare’s due process rights when it enforced the declaratory judgment against Clearcare.
Private: KeiErica A. Baker