Law School Case Brief
Found. Health v. Westside EKG Assocs. - 944 So. 2d 188 (Fla. 2006)
To establish an action for breach of a third party beneficiary contract, a plaintiff must allege and prove the following four elements: (1) existence of a contract; (2) the clear or manifest intent of the contracting parties that the contract primarily and directly benefit the third party; (3) breach of the contract by a contracting party; and (4) damages to the third party resulting from the breach.
A medical service provider sued petitioner health maintenance organizations (HMOs) for failing to pay for services it provided to their members within the time frame set out in § 641.3155, Fla. Stat. (2001), the "prompt pay" provisions of the HMO Act. The trial court granted the HMOs judgment on the pleadings. On appeal, however, the Florida Fourth District Court of Appeal reversed finding that the provider stated a claim for breach of a third-party beneficiary contract. Nevertheless, it certified the question, "could a provider sue for breach of a third-party beneficiary contract for an HMO's alleged violations of the Act's "prompt pay provisions"?
Can a medical provider sue for breach of a third-party beneficiary contract for an HMO's alleged violations of the "prompt pay provisions" of the Florida statute?
The Supreme Court of Florida agreed with the court of appeal's holding that a medical service provider could bring a cause of action as a third-party beneficiary to the contract between an HMO and its subscriber based on allegations that the HMO failed to comply with § 641.3155, which could be incorporated into the HMO contract. Recognizing that medical service providers were considered the intended beneficiaries of insurance contracts under Florida law, the state supreme court extended the same recognition to HMO contracts. Unless the language of the specific contracts properly provided otherwise, a party's status as a nonparticipating provider did not preclude it, as a matter of law, from establishing the intent element in a breach of third-party beneficiary contract claim against an HMO. Thus, the court approved the decision of the intermediate appellate court and remanded the case for further proceedings.
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