Bay Area Injury Rehab Specialists Holdings, Inc. v. United Services Automobile Association

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
BAY AREA INJURY REHAB SPECIALISTS )
HOLDINGS, INC., as assignee of Antonette )
Warren, Glenda Herring, and Cassandra )
Hudson, individually, and on behalf of all )
those similarly situated, )
)
Appellants, )
)
v. ) Case No. 2D14-786
)
UNITED SERVICES AUTOMOBILE )
ASSOCIATION, USAA CASUALTY )
INSURANCE COMPANY, and )
GARRISON PROPERTY AND CASUALTY )
INSURANCE COMPANY, )
)
Appellees. )
)
Opinion filed June 10, 2015.
Appeal from the Circuit Court for
Hillsborough County; Charles Ed
Bergmann, Judge.
David M. Caldevilla and Michael R. Bray of
de la Parte & Gilbert, P.A., Tampa;
J. Daniel Clark of Clark & Martino, P.A.,
Tampa; and Christopher P. Calkin of The
Law Offices of Christopher P. Calkin, P.A.,
Tampa, for Appellants.
Nancy A. Copperthwaite, Marcy Levine
Aldrich, and Ross E. Linzer of Akerman
LLP, Miami; and Leslie E. Joughin III, of
Akerman LLP, Tampa, for Appellees.
LaROSE, Judge.
I. INTRODUCTION
Bay Area Injury Rehab Specialists Holdings, Inc. (BAIRS), a health care
provider, appeals a nonfinal order denying class certification of a putative class of
providers who opted out of a prior class action settlement and dismissing claims for
declaratory and injunctive relief. We have jurisdiction over class certification and
injunction issues. See Fla. Const., art. V, § 4(b)(1); Fla. R. App. P. 9.130(a)(3)(B), and
(a)(3)(C)(vi). We lack jurisdiction over the dismissal of the declaratory relief claim. See
Fla. R. App. P. 9.130(a)(3); Dep't of Corr. v. Ratliff, 552 So. 2d 302, 303 (Fla. 2d DCA
1989).
In its lawsuit, BAIRS alleged that the insurance companies (collectively
referred to as "USAA") routinely rejected valid claims for personal injury protection
("PIP") benefits based on an unlawful requirement that a separate "disclosure and
acknowledgement form" ( D&A form) be submitted every time an insured patient
received health care services. BAIRS sought declaratory relief (Count I), injunctive
relief to compel PIP payments (Count II), and damages (Count III). Further, BAIRS
sought to proceed for itself and as representative of opt-out class members from a prior
class action settlement involving similar issues. The earlier class action did not assert
claims for declaratory or injunctive relief.
For the reasons explained below, we affirm the trial court's order, with one
exception; we dismiss the appeal of the order dismissing the declaratory judgment
count as from a nonfinal, nonappealable order. See Ratliff, 552 So. 2d at 303.
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II. BACKGROUND
Before BAIRS sued USAA, Steven E. Goodwiller, M.D., as class
representative, sued USAA in south Florida for unpaid PIP benefits. See § 627.736,
Fla. Stat. (2013); Steven E. Goodwiller, M.D., P.A. v. USAA, No. 08-15594 (Fla. 17th
Cir. 2009). Dr. Goodwiller sought monetary relief comparable to what BAIRS would
later seek in Count III of its Second Amended Class Action Complaint (the complaint).
In 2009, BAIRS filed its putative class action, alleging that USAA would not pay any PIP
claim without a medical bill accompanied by a D&A form. Because of the similarity of
issues, USAA moved to stay the BAIRS lawsuit pending resolution of Goodwiller.
BAIRS agreed. Thereafter, the Goodwiller trial court approved a class action settlement
of Goodwiller. BAIRS and about 292 class members opted out of that settlement; as a
result, they neither shared in the settlement benefits nor were they bound by any
adjudications made in the final judgment. See Fla. R. Civ. P. 1.220(d)(2). With
Goodwiller resolved, the BAIRS lawsuit proceeded. USAA filed motions directed to the
sufficiency of BAIRS' complaint.
As framed by the trial court, USAA's motions presented two issues:
"(1) can a proposed class of opt-outs from a previous class action bring a serial class
action . . . on the same grounds; and (2) can the proposed class of opt-outs bring a
class action for declaratory and injunctive relief in this matter." Grappling with these
issues, the trial court acknowledged that Goodwiller did not involve claims for injunctive
or declaratory relief. The trial court recognized, however, that BAIRS' claim for
damages (Count III) was similar to the monetary claims asserted by Dr. Goodwiller.
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The trial court concluded that, as a general proposition, BAIRS could seek class action
certification for claims not raised in Goodwiller.
Ultimately, the trial court ruled that BAIRS could not represent a class of
Goodwiller opt-outs seeking the same form of monetary relief adjudicated in the
Goodwiller class settlement. Accordingly, the trial court struck the class allegations in
Count III. The trial court stated clearly that BAIRS, as a Goodwiller opt-out, could
pursue its damages claims on an individual basis.
The trial court dismissed the declaratory judgment claim raised in Count I,
with prejudice. The trial court concluded that there was no bona fide controversy about
USAA's ability to condition PIP benefit payments on the submission of a D&A form. The
trial court cited to a legion of Florida cases addressing the issue. The trial court opined
that this case law and the Goodwiller class settlement mooted the existence of any
dispute.
The trial court also concluded that BAIRS could not obtain the injunctive
relief sought in Count II. The trial court found that BAIRS could not demonstrate any
irreparable harm that could not be remedied by damages. Indeed, by seeking money
damages in Count III of its complaint, BAIRS, in the trial court's view, conceded that
injunctive relief requiring USAA to make PIP benefit payments was unnecessary. The
trial court dismissed Count II, with prejudice.
In dismissing Counts I and II, the trial court also observed that class action
status was inappropriate for the declaratory and injunctive relief claims, even if they had
not been raised in Goodwiller. As to both counts, the trial court noted that BAIRS,
individually and as the putative class representative, sought monetary relief as its
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predominant form of relief. Thus, class action status was inappropriate for these claims.
See Rollins, Inc. v. Butland, 951 So. 2d 860, 882 (Fla. 2d DCA 2006); Freedom Life Ins.
Co. of Am. v. Wallant, 891 So. 2d 1109, 1117 (Fla. 2d DCA 2004).
III. CLASS CERTIFICATION
We review the trial court's decision to grant or deny class certification for
an abuse of discretion. See Sosa v. Safeway Premium Fin. Co., 73 So. 3d 91, 98 (Fla.
2011).
BAIRS argues that the trial court abused its discretion by striking the class
action allegations of its complaint without allowing class discovery. See Fla. R. Civ. P.
1.220(d)(1); Frankel v. City of Miami Beach, 340 So. 2d 463, 469 (Fla. 1976) ("[T]rial
courts should reserve ruling on a motion to dismiss until the party seeking to represent
or maintain an action against a class has had the opportunity to employ sufficient
discovery to ascertain the necessary information that must be plead."); KPMG Peat
Marwick LLP v. Barner, 799 So. 2d 308, 309 (Fla. 2d DCA 2001) (noting information
needed to satisfy rule 1.220 requirements can be obtained only through discovery);
Commonwealth Land Title Ins. Co. v. Higgins, 975 So. 2d 1169, 1175 (Fla. 1st DCA
2008) (stating that trial court must allow sufficiently broad discovery to permit realistic
opportunity to meet class certification requirements). It focuses its argument primarily
on Count III, the damages claim. BAIRS contends that a class of Goodwiller opt-outs
will avoid a multiplicity of lawsuits, reduce the expense of litigation, make legal
processes more effective and expeditious, and provide a remedy that would not
otherwise exist. BAIRS nods to Frankel, 340 So. 2d at 469, where the supreme court
explained:
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In the average class action the information needed to satisfy the
requirements of the rule . . . can only be obtained through
discovery. Consequently, trial courts should reserve ruling on a
motion to dismiss until the party seeking to represent or maintain an
action against a class has had the opportunity to employ sufficient
discovery to ascertain the necessary information . . . .
USAA correctly observes that this is not "the average class action." And,
because the trial court wanted to avoid serial class actions, we cannot say that any
amount of class discovery would be relevant to the class action allegations in Count III.
BAIRS wants to represent a class of providers who opted-out of the Goodwiller class
settlement. When a putative class member opts out of a class, as it is entitled to do,
see Fla. R. Civ. P. 1.220(d)(2), it preserves its right to proceed on an individual basis in
its own subsequent lawsuit. An opt-out is not bound by the resolution of the underlying
class action. In In re Bridgestone/Firestone, Inc., Tires Products, Liability Litigation, 333
F.3d 763, 769 (7th Cir. 2003), the Seventh Circuit held:
[A] person who opts out receives the right to go it alone, not to
launch a competing class action. Preserving the right to litigate
individually, as one's own champion, is the point of opting out. The
opt-out avoids any risk of the class's loss on the merits and also
forswears any opportunity to take advantage of the class's victory.
BAIRS contends that the Supreme Court rejected Bridgestone's reasoning in Smith v.
Bayer Corp., 131 S. Ct. 2368, 2380 (2011). Not so. Bayer abrogated only
Bridgestone's holding that denial of class certification binds unnamed class members.
Bayer, 131 S. Ct. at 2375 n.4. Bayer agreed with In re Bayshore Ford Truck Sales, Inc.,
471 F.3d 1233, 1245 (11th Cir. 2006), and In re General Motors Corp. Pick-Up Truck
Fuel Tank Products Liability Litigation, 134 F.3d 133, 141 (3d Cir. 1998), that denial of
class certification prevents courts from binding anyone other than the parties before it
and does not bind putative class members who cannot be bound when no class is
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certified. We find Bridgestone's reasoning compelling and easily applied here: a party
who opts out of a class action retains the right to proceed individually, but not to launch
a competing class action of opt-outs seeking the same relief resolved on a class basis
in a prior lawsuit.
Our supreme court has observed that "[t]he purpose of the class action is
to provide litigants who share questions of law and fact with an economically viable
means of addressing their needs in court." Johnson v. Plantation Gen. Hosp. Ltd.
P'ship, 641 So. 2d 58, 60 (Fla. 1994). But the trial court correctly pointed out that the
class action vehicle contemplates one case that will confer these perceived benefits
upon the class members.
In further support of its argument that a class of opt-outs can be certified,
BAIRS points us to Harper v. Trans Union, LLC, No. 04-3510, 2005 WL 697490, at *3
n.3 (E.D. Pa. Mar. 24, 2005). In Harper, the court observed that
Rule 23 [the federal counterpart to Rule 1.220] does not explicitly
bar opt-outs in one class action from bringing a subsequent class
action and it may be that allowing the opt-outs here to proceed as a
class will further the purposes of Rule 23 (i.e., to provide for judicial
economy in the litigation of similar claims).
Id. In this case, the trial court did not ignore the possibility that a second class action of
Goodwiller opt-outs might conserve judicial resources. In the end, however, the trial
court properly recognized the evil of serial class actions involving similar issues:
[B]eyond these perceived benefits lay some serious concerns
which give the Court great pause. First, no authority provided by
BAIRS, nor found by the Court, reveals precisely where these serial
class actions would end, if they were allowed. The Court can easily
imagine a scenario in which, for example, an original class of 1,000
becomes two classes of 500, becomes four classes of 250,
becomes eight classes of 125, and so on until the Court hardly has
a situation better than a single class and individual opt-outs.
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BAIRS argues that even if that scenario could possibly happen, it would
be far superior to have several class actions than to have 1000 identical individual
lawsuits clogging the judicial system. The trial court, however, acutely observed that
serial class actions would promote a marketplace for competing class actions and erode
the benefits of proceeding in a single class action. The underlying lawsuits could
proceed ad infinitum. Indeed, these competing class actions would weigh down the
mechanism of providing litigants with an economically viable means of addressing their
common claims in court through a single representative action. Instead, as the trial
court reasoned, litigants may "opt out in favor of a perceived greater benefit in a
different, competing class action, leaving remaining litigants in the original class action
with fewer members and the high costs and fees associated with class action."
As is apparent from our discussion, a trial court would normally have
limited authority to permit a class action of opt-outs. We find it noteworthy that BAIRS
did not allege any justification or necessity for its decision to opt out of the Goodwiller
class action. Often, parties elect to opt out because their claim for damages has some
special component or their case is unique for some reason. Those reasons to opt out
are not good grounds to create another class action. When a party's claim is similar to
the others in the class, our class-action rules will likely function better if the party has
incentives to remain in the class action and, if necessary, object to any proposed
settlement. Although we do not hold in this case that a class action of opt-outs is legally
impossible, the need for such a class action would seemingly require exceptional
circumstance.
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The trial court did not abuse its discretion in concluding that serial class
actions do not promote the purpose behind class actions. BAIRS cannot proceed on a
class action basis with any claims adjudicated in Goodwiller, especially those monetary
claims that are the subject of its claims in Count III. BAIRS, of course, may pursue its
monetary claims on an individual basis.
IV. INJUNCTIVE RELIEF AND DECLARATORY JUDGMENT
The declaratory relief claim (Count I) and the injunction claim (Count II)
purport to assert claims not raised or considered in Goodwiller.
We see no error by the trial court in dismissing the declaratory judgment
claim. Its reasoning is sound. However, the portion of the nonfinal order that dismisses
Count I is not appealable. See Fla. R. App. P. 9.130(a)(3); Ratliff, 552 So. 2d at 303.
Accordingly, we dismiss that portion of the appeal involving Count I.
As for injunctive relief, BAIRS argues that the trial court incorrectly
determined that monetary recovery was the predominant issue in this case. Therefore,
BAIRS argues that the trial court abused its discretion by striking the class allegations
seeking injunctive relief. As we stated in Addison, and as BAIRS agrees, "rule
1.220(b)(2) requires that the party opposing the class has acted or refused to act on
grounds applicable to all class members, thereby making final injunctive . . . relief
appropriate." City of Tampa v. Addison, 979 So. 2d 246, 251 (Fla. 2d DCA 2007).
Nonetheless, we see no error in the trial court characterizing the class claims in Count II
as predominantly seeking monetary relief, thus precluding certification of an injunction
class. See Fla. R. Civ. P. 1.220(b)(2), (3). Moreover, dismissal of Count II is
adequately supported by the trial court's conclusion that BAIRS failed to state a cause
of action for injunctive relief.
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V. CONCLUSION
Having carefully reviewed the record before us, we affirm the trial court's
decision regarding class certification. BAIRS cannot proceed on a class action basis for
claims adjudicated in Goodwiller on behalf of a class of Goodwiller opt-outs. The trial
court did not bar BAIRS from seeking class certification of claims arising post-
Goodwiller. Additionally, BAIRS is free to pursue its monetary claims against USAA
individually.
We dismiss that portion of the order dismissing the declaratory judgment
claims. In all other respects, we affirm.
Affirmed in part; dismissed in part.
ALTENBERND and NORTHCUTT, JJ., Concur.
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