author: PARIENTE, J.

text:
    O’KEEFE ARCHITECTS, INC., Petitioner, v. CED CONSTRUCTION PARTNERS, LTD., et al., Respondents.
    No. SC05-1417.
    Supreme Court of Florida.
    Oct. 19, 2006.

      Lee L. Haas of Haas and Castillo, P.A., Clearwater, FL and Deborah A. Gibson of the Marks Law Firm, P.A., Orlando, FL, for Petitioner.
    Kevin P. Kelly and Amanda G. Simmons of GrayRobinson, P.A., Orlando, FL, and Kerey Marie Carpenter, Maitland, FL, for Respondent.
   PARIENTE, J.

We have for review O’Keefe Architects, Inc. v. CED Construction Partners Ltd., 909 So.2d 370 (Fla. 5th DCA 2005), in which the Fifth District Court of Appeal certified conflict with Reuter Recycling of Florida, Inc. v. City of Dania Beach, 859 So.2d 1271 (Fla. 4th DCA 2003). The conflict issue is whether under the Florida Arbitration Code, a statute of limitations defense is subject to arbitration when the arbitration agreement provides that claims, disputes or other matters arising out of or relating to the contract are to be decided by arbitration, but also provides that a demand for arbitration cannot be made when institution of legal or equitable proceedings based on the underlying claim would be barred by the applicable statute of limitations. We have jurisdiction. See art. V, § 3(b)(4), Fla. Const.

Because the Florida Arbitration Code allows parties to agree to arbitrate any controversy, the question of whether a dispute is subject to arbitration is a matter of contract interpretation. We hold that a broad agreement to arbitrate includes determining defenses to an otherwise arbi-trable claim, including the statute of limitations.

FACTS AND PROCEDURAL HISTORY

On August 30, 1997, O’Keefe Architects, Inc. (“O’Keefe”) contracted with Vero Club Partners Ltd. (“Vero Club”), to design a 184-unit housing project. On January 7, 1999, O’Keefe entered into a nearly identical contract with Clearwater Phase I Partners Ltd. (“Phase I”), to design a 240-unit housing project. CED Construction Partners Ltd. (“CED”) was the general contractor on both projects.

After discovering latent construction and design defects on their properties, Vero Club and Phase I demanded that CED fix the problems. CED did so and Vero Club and Phase I assigned CED their rights to make a claim for damages against O’Keefe for the defects. CED then filed a demand with the American Arbitration Association for arbitration against O’Keefe and several subcontractors for damages arising from negligent design and construction of both projects. O’Keefe objected to the arbitration on several grounds, including that some of the claims were barred by the statute of limitations and, therefore, were not subject to arbitration under the contracts.

Relevant to the statute of limitations issue, the arbitration clauses in both contracts provide:

7.1 Claims, disputes or other matters in question between the parties to this Agreement arising out of or relating to this Agreement or breach thereof shall be subject to and decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association currently in effect unless the parties mutually agree otherwise.
7.2 Demand for arbitration shall be filed in writing with the other party to this Agreement and with the American Arbitration Association. A demand for arbitration shall be made within a reasonable time after the claim, dispute or other matter in question has arisen. In no event shall the demand for arbitration be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statutes of limitations.

After the arbitrators ruled adversely to O’Keefe on several issues, including the statute of limitations, O’Keefe filed a complaint for declaratory relief against Vero Club, Phase I, and CED. O’Keefe asserted that only Vero Club and Phase I, and not CED, were authorized to bring the arbitration claims because the contracts were not assignable. O’Keefe also raised the statute of limitations defense and asserted that the trial court was required to decide this issue. The trial court entered an order compelling the completion of arbitration and staying the circuit court case. Regarding O’Keefe’s statute of limitations defense, the trial court found that this issue was a matter for the arbitrators to decide.

O’Keefe appealed the order to the Fifth District. In a brief decision, the Fifth District affirmed the trial court in all respects. See O’Keefe, 909 So.2d at 370. The district court wrote “only to reiterate that an issue concerning whether a demand for arbitration is timely is a question of fact to be decided by arbitration, and not the trial court. This concept encompasses the position that arbitration is unnecessary because of the expiration of the statute of limitations.” Id. (citations omitted). However, the Fifth District certified conflict with Reuter Recycling, in which the Fourth District reviewed an arbitration agreement that contained similar language regarding timeliness and reversed the trial court’s order refusing to enjoin the arbitration.

ANALYSIS

Both parties agree that the Florida Arbitration Code (FAC), rather than the Federal Arbitration Act (FAA), applies in this case. Because both parties are Florida corporations involved in Florida construction projects, interstate commerce is not involved and, thus, the provisions of the FAC control. Cf. Musnick v. King Motor Co., 325 F.3d 1255, 1258 n. 2 (11th Cir.2003) (“[T]he FAA applies to all arbitration agreements involving interstate commerce ....”) (citing Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001)); Wachovia Securities, LLC v. Vogel, 918 So.2d 1004, 1007 (Fla. 2d DCA 2006) (“Where ... interstate commerce is involved, federal law governs the analysis of the arbitration proceeding.”).

The FAC provides that “[t]wo or more parties ... may include in a written contract a provision for the settlement by arbitration of any controversy thereafter arising between them relating to such contract or the failure or refusal to perform the whole or any part thereof.” § 682.02, Fla. Stat. (2005) (emphasis supplied). If a dispute arises regarding a party’s refusal to comply with an agreement to arbitrate, the court is required to compel arbitration if it “is satisfied that no substantial issue exists as to the making of the agreement or provision.” § 682.03(1), Fla. Stat. (2005).

In ruling on a motion to compel arbitration of a dispute, the court must consider three issues: “(1) whether a valid written agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether the right to arbitration was waived.” Seifert v. U.S. Home Corp., 750 So.2d 633, 636 (Fla.1999). The issue here, whether O’Keefe’s statute of limitations defense to an otherwise arbitrable claim is also subject to arbitration, falls under the second of these considerations.

Arbitration clauses are creatures of contract. As a result, courts look to the intent of the parties as manifested in the contract to determine whether an arbitration clause compels arbitration of a particular dispute. Seifert, 750 So.2d at 636. Thus, whether O’Keefe’s statute of limitations defense is subject to arbitration is a matter of contract interpretation that is reviewed de novo. See Engle Homes, Inc. v. Jones, 870 So.2d 908, 910 (Fla. 4th DCA 2004); Hirshenson v. Spaccio, 800 So.2d 670, 674 (Fla. 5th DCA 2001).

In Stinson-Head, Inc. v. City of Sanibel, 661 So.2d 119 (Fla. 2d DCA 1995), the Second District Court of Appeal held that under the FAC, an arbitration clause almost identical to the clause in O’Keefe’s contracts required the parties to arbitrate a statute of limitations defense. Id. at 121. In reaching this decision, the district court recognized that doubts concerning the scope of arbitration agreements should be resolved in favor of arbitration and noted that the plain language of the parties’ broad arbitration provision required arbitration on all issues related to the contract. Id. at 120. The Second District acknowledged that the Fourth District had reached a contrary conclusion in Anstis Omstein Associates, Architects & Planners, Inc. v. Palm Beach County, 554 So.2d 18 (Fla. 4th DCA 1989), but agreed with then Judge Anstead’s dissent:

The arbitration clause in question is a broad and comprehensive one covering all disputes between the parties. Another clause provided that the claim for arbitration must be filed within a reasonable time, not to exceed the applicable legal limitation period. I see no reason why the arbitrators cannot properly resolve any dispute between the parties as to compliance with this provision.

Stinson-Head, 661 So.2d at 121 (quoting Anstis Ornstein, 554 So.2d at 19) (Anstead, J., dissenting).

Stinsorir-Head is consistent with decisions by the First and Third District Courts of Appeal, which have also held that in general, issues of timeliness are to be decided by the arbitrator. See Alderman v. City of Jacksonville, Fire and Rescue Div., 902 So.2d 885, 887 (Fla. 1st DCA 2005) (“[Qjuestions of timeliness are to be decided by an arbitrator, not a trial court.”); Pembroke Indus. Park P’ship v. Jazayri Constr., Inc., 682 So.2d 226, 227 (Fla. 3d DCA 1996) (“[TJhe issue of whether the demand for arbitration was timely is a question of fact for the arbitrator to decide, not the trial court.”).

Stinson-Head is also consistent with recent United States Supreme Court decisions addressing this issue under the FAA. See Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 85, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002). Howsam clarified the scope of the Supreme Court’s prior determination that a “ ‘question of arbitra-bility’ is ‘an issue for judicial determination [ujnless the parties clearly and unmistakably provide otherwise.’ ” Id. at 83, 123 S.Ct. 588 (quoting AT & T Techs., Inc. v. Commc’n Workers, 475 U.S. 643, 649, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986)). The Court explained that “[ljinguistically speaking, one might call any potentially dispositive gateway question a ‘question of arbitrability,’ for its answer will determine whether the underlying controversy will proceed to arbitration on the merits,” but concluded that the “Court’s case law ... makes clear that, for purposes of applying the interpretive rule, the phrase ‘question of arbitrability’ has a far more limited scope.” Id. Thus, the Court distinguished disputes about whether the parties are bound by an arbitration clause or whether a binding arbitration clause governs the controversy from “procedural” questions that grow out of a dispute and bear on its disposition:

[A] gateway dispute about whether the parties are bound by a given arbitration clause raises a “question of arbitra-bility” for a court to decide. Similarly, a disagreement about whether an arbitration clause in a concededly binding contract applies to a particular type of controversy is for the court.
At the same time the Court has found the phrase “question of arbitrability” not applicable in other kinds of general circumstance where parties would likely expect that an arbitrator would decide the gateway matter. Thus “ ‘procedural’ questions which grow out of the dispute and bear on its final disposition” are presumptively not for the judge, but for an arbitrator, to decide. So, too, the presumption is that the arbitrator should decide “allegation[s] of waiver, delay, or a like defense to arbitrability.” Indeed, the Revised Uniform Arbitration Act of 2000 (RUAA), seeking to “incorporate the holdings of the vast majority of state courts and the law that has developed under the [Federal Arbitration Act],” states that an “arbitrator shall decide whether a condition precedent to arbitrability has been fulfilled.” RUAA § 6(c), and comment 2, 7 U.L.A. 12-13 (Supp.2002).

Id. at 84-85, 123 S.Ct. 588 (some citations omitted).

Despite the clear thrust of the precedent placing the determination of issues such as this in the hands of the arbitrators, O’Keefe asks this Court to adopt the reasoning of Reuter Recycling and hold that because the contracts preclude the arbitration of time-barred claims, the trial court was required to decide O’Keefe’s statute of limitations defense. However, as explained more fully below, we conclude that the Fourth District’s analysis is flawed by its characterization of the statute of limitations issue as an “issue of arbitrability.” See Reuter Recycling, 859 So.2d at 1273 (concluding that even if the arbitration agreement were ambiguous, the court would still “find that the parties had not agreed to have the arbitrators determine the issue of arbitrability” because “the parties have not clearly and unmistakably manifested an intent to have arbitrators decide the issue as to what specific claims they have agreed to arbitrate”) (emphasis supplied).

In Wylie v. Investment Management & Research, Inc., 629 So.2d 898 (Fla. 4th DCA 1993), the Fourth District considered who, under federal law, was to decide whether a claim was ineligible for arbitration under a National Association of Securities Dealers (NASD) rule which provided that claims more than six years old are not eligible for arbitration. The district court reviewed divided federal precedent on the issue and followed the majority view that the limitations issue was for the arbitrators to decide. Id. at 900-01.

The Fourth District subsequently receded from Wylie and held that under the United States Supreme Court’s intervening decision in First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995), whether a claim is eligible for arbitration under the NASD time limit rule is for the court to decide. See Corporate Sec. Group v. Lind, 753 So.2d 151, 153 (Fla. 4th DCA 2000). In Lind, the plaintiff argued that under the NASD rule, her claim was outside the agreement to arbitrate. Id. at 151. The district court framed the issue as “whether the court or arbitrators should determine whether plaintiffs claims are covered by the arbitration agreement between the parties.... Conceptually, the issue is really who decides whether the claim is arbi-trable.” Id. Recognizing that the Supreme Court in First Options clarified that “[c]ourts should not assume that the parties agreed to arbitrate arbitrability,” absent clear and unmistakable evidence, Lind, 753 So.2d at 152 (quoting First Options, 514 U.S. at 944, 115 S.Ct. 1920), the Fourth District concluded that First Options had “the effect of overruling” Wylie. Lind, 753 So.2d at 153.

In Reuter Recycling, the Fourth District followed Lind in characterizing the statute of limitations dispute as an issue of arbi-trability. However, the court failed to consider the United States Supreme Court’s decision in Howsam, which reiterated that “questions of arbitrability” do not include “allegation[s] of waiver, delay, or a like defense to arbitrability,” Howsam, 537 U.S. at 84, 123 S.Ct. 588 (alteration in original) (quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983)), and expressly held that whether a claim is timely under the same NASD rule considered in Lind was for the arbitrators to decide. See id. at 85, 123 S.Ct. 588.

In this case, the parties agreed to a broad provision that requires arbitration of “[cjlaims, disputes, and other matters ... arising out of or relating to” the contract. The parties do not dispute that they are bound by the agreement or that the underlying claims, if timely, are subject to arbitration. Although the agreement provides that a demand for arbitration is untimely if the claim would be barred by the applicable statute of limitations, there is nothing in the agreement that establishes that the parties agreed to have this defense to an otherwise arbitrable claim decided by the court. Accordingly, the Fifth District correctly affirmed the trial court’s ruling that O’Keefe’s statute of limitations defense was to be decided during the arbitration.

CONCLUSION

We hold that under the FAC, a broad agreement to arbitrate, such as the one at issue in this case, includes the determination of statute of limitations defenses. Accordingly, we approve the Fifth District’s decision in O’Keefe and disapprove the Fourth District’s decision in Reuter Recycling.

It is so ordered.

LEWIS, C.J., and WELLS, ANSTEAD, QUINCE, CANTERO, and BELL, JJ., concur.

      . See §§ 682.01-682.22, Fla. Stat. (2005).

      . We decline to address the other issues raised by O'Keefe that are beyond the scope of the certified conflict. See Barnett v. Barnett, 768 So.2d 441, 442 n. 1 (Fla.2000) (declining to address an issue beyond the scope of the certified conflict).

      . The arbitration agreement interpreted by the Fourth District provided:
      All claims, disputes and other matters in question arising out of, or relating to, this Agreement or the breach thereof, shall be decided by arbitration.... The demand for arbitration shall be made within a reasonable time after the claim, dispute or other matter in question has arisen, and in no event shall it be made when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations.

        Reuter Recycling, 859 So.2d at 1273.

      . The parties agree that a valid written agreement exists and that the underlying claims are subject to arbitration. O'Keefe argues that it cannot be required to arbitrate with CED because CED is not a party to the contract but rather an assignee of Phase I and Vero Club. However, O’Keefe does not dispute that it is required to arbitrate any timely claims brought by Phase I and Vero Club. As noted above, we decline to address this or any other issues that are beyond the scope of the certified conflict.
      There is also no question of waiver. Waiver of the right to arbitration results from active participation in a lawsuit or from taking action inconsistent with that right. See Raymond James Fin. Servs., Inc. v. Saldukas, 896 So.2d 707, 711 (Fla.2005); see also Florida Educ. Ass’n/United v. Sachs, 650 So.2d 29, 30 (Fla.1995) ("[A] trial court may determine whether parties to an arbitration agreement have, by their subsequent conduct, waived their contractual right to arbitration.”). In contrast, "[mjere delay creating untimeliness is distinct from the active participation that creates waiver.” Alderman v. City of Jacksonville Fire & Rescue Div., 902 So.2d 885, 887 (Fla. 1st DCA 2005).

      . The Second District set forth the relevant provisions:
      The contract contained a provision requiring the parties to arbitrate "[a]ll claims, disputes and other matters ... arising out of, or relating to, the Contract Documents or the breach thereof.” It further provided that a demand for arbitration shall be made within a reasonable time after the claim has arisen, "and in no event shall it be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations.”

        Stinson-Head, 661 So.2d at 120.

      . Although not binding on our interpretation of the issue under the FAC, Howsam is persuasive because both the FAC and the FAA require the court to compel arbitration if it finds that a valid arbitration agreement exists and are silent on the issue of who should decide statute of limitations issues. See § 682.03(1), Fla. Stat. (2005) (requiring the court to compel arbitration if it "is satisfied that no substantial issue exists as to the making of the agreement”); 9 U.S.C. § 4 (2000) (requiring the court to compel arbitration "upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue”). This is in sharp contrast to New York’s arbitration law, which expressly provides that "[i]f, at the time that a demand for arbitration was made or a notice of intention to arbitrate was served, the claim sought to be arbitrated would have been barred by limitation of time had it been asserted in a court of the state, a party may assert the limitation as a bar to the arbitration on an application to the court.” N.Y.C.P.L.R. 7502(b) (McKinney Supp.2006) (emphasis supplied).

      . The Fourth District’s statement that it was addressing “an issue of arbitrability” could be construed as reflecting an assumption that the claims were in fact time-barred and therefore contractually exempt from arbitration. See Reuter Recycling, 859 So.2d at 1273 (concluding that that arbitration provision was unambiguous and "expressly excludes time-barred claims from the agreement to arbitrate,” and that the trial court erred in finding that the parties agreed "to have the arbitrators determine arbitrability as to time-barred claims”). However, Reuter Recycling is ambiguous as to whether the Fourth District was determining who decides whether the statute of limitations applies or instead who decides whether it is the judge or arbitrator who decides whether the statute of limitations applies. Because the Fifth District certified conflict with Reuter Recycling on the issue of who decides whether the statute of limitations applies, we treat Reuter Recycling as holding that the trial court was required to decide whether the claims were barred by the statute of limitations.


source: Caselaw Access Project

author: BELL, J.

license: Public Domain

text:
    FOUNDATION HEALTH, et al., Petitioners, v. WESTSIDE EKG ASSOCIATES, Respondent. Health Options, Inc., et al., Petitioners, v. Westside EKG Associates, Respondent. Humana Medical Plan, Inc., etc., Petitioner, v. Westside EKG Associates, Respondent.
    Nos. SC05-870, SC05-871, SC05-872.
    Supreme Court of Florida.
    Oct. 19, 2006.

      Craig J. Trigoboff and Glenn Jerrold Waldman of Waldman, Feluren, Hilde-brant and Trigoboff, P.A., Weston, FL, for Petitioners Foundation Health, A Florida Health Plan, Inc., and Vista Health Plan, Inc. f/k/a HIP Health Plan of Florida, Inc.
    Nancy W. Gregoire, W. Edward McIntyre, and Daniel Alter of Bunnell, Woulfe, Kirschbaum, Keller, McIntyre and Gre-goire, P.A., Fort Lauderdale, FL, for Petitioners Health Options, Inc. and Health Options Connect, Inc. f/k/a Principal Health Care of Florida, Inc.
    Andrew S. Berman of Young, Berman, Karpf and Gonzalez, P.A., North Miami Beach, FL, for Petitioner Humana Medical Plan, Inc.
    Philip M. Burlington of Burlington and Rockenbach, P.A., West Palm Beach, FL, Jeffrey M. Liggio and Jene P. Williams of Liggio, Benrubi and Williams, P.A., West Palm Beach, FL, and Edward H. Zebersky of Zebersky and Payne, LLP, Hollywood, FL, for Respondents Westside EKG Associates.
    Dorothy F. Easley and Steven M. Ziegler of Steven M. Ziegler, P.A., Hollywood, FL, on behalf of America’s Health Insurance Plans; George N. Meros, Jr. and Jason L. Unger of GrayRobinson, P.A., Tallahassee, FL, on behalf of Florida Association of Health Plans; Edward J. Pozzuoli and Stephanie Alexander of Tripp Scott, P.A., Fort Lauderdale, FL, on behalf of Florida Hospital Association, the Florida College of Emergency Physicians, the Florida Medical Association, and the American Medical Association; and Bradley Winston, Plantation, FL, Rochelle Bobroff and Michael Schuster, AARP Foundation Litigation, Washington, DC, on behalf of AARP, for Amici Curiae.
   BELL, J.

We have for review Westside EKG Associates v. Foundation Health, 932 So.2d 214 (Fla. 4th DCA 2005), in which the Fourth District Court of Appeal certified the following question to be one of great public importance:

ARE THE PROMPT PAY PROVISIONS OF THE HEALTH MAINTENANCE ORGANIZATION ACT ENFORCEABLE BY COURTS IN AN ACTION FOUNDED ON PRINCIPLES OF BREACH OF CONTRACT BROUGHT AGAINST A HMO BY A SERVICE PROVIDER?

Id. at 220. We have jurisdiction, and rephrase the question as follows:

MAY A MEDICAL SERVICE PROVIDER BRING A CAUSE OF ACTION FOR BREACH OF A THIRD-PARTY BENEFICIARY CONTRACT BASED ON ALLEGATIONS THAT THE HMO FAILED TO COMPLY WITH THE “PROMPT PAY PROVISIONS” OF THE HEALTH MAINTENANCE ORGANIZATION ACT?

We answer the rephrased question in the affirmative. A medical service provider may bring a cause of action as a third-party beneficiary to the contract between the health maintenance organization and its subscriber based on allegations that the health maintenance organization failed to comply with section 641.3155, Florida Statutes (2001), the “prompt pay provisions” of the Health Maintenance Organization Act.

FACTS

On September 20, 2001, Westside EKG Associates (“Westside”) filed a complaint against seven health maintenance organizations (“HMOs”). After the HMOs unsuccessfully attempted to remove the case to federal court, the case was returned to the Seventeenth Judicial Circuit Court in Broward County, where Westside filed an amended complaint that asserted three causes of action. The only cause of action at issue before us is Westside’s common law claim for breach of a third party beneficiary contract.

The amended complaint alleged that “the Defendants’ insureds [sic] members sought and received emergency and non-emergency medical services from [Westside] and its physicians under insurance/health maintenance policies.” Westside claimed it was a third-party beneficiary to “such insurance/health maintenance contracts,” and “[d]espite repeated demands,” the defendant-HMOs had breached this contract by, among other things, violating section 641.3155, Florida Statutes (2001), the “prompt pay provisions” of Florida’s Health Maintenance Organization Act (“HMO Act”), and sections 641.17-641.3923, Florida Statutes (2001). “As a direct and proximate result of such Breach of the Third Party Beneficiary Contracts,” Westside claimed it “suffered damages in the amount of outstanding balances for its charges for services, together with interest and reasonable attorneys fees and costs.”

Section 641.3155 provides a time frame in which HMOs must respond to and pay claims properly submitted by medical service providers. At the time Westside filed its complaint in 2001, the pertinent part of the statute read as follows:

641.3155 Payment of Claims.—
(2)(a) A health maintenance organization shall pay any clean claim or any portion of a clean claim made by a contract provider for services or goods provided under a contract with the health maintenance organization or a clean claim made by a noncontract provider which the organization does not contest or deny within 35 days after receipt of the claim by the health maintenance organization which is mailed or electronically transferred by the provider.
(b) A health maintenance organization that denies or contests a provider’s claim or any portion of a claim shall notify the provider, in writing, within 35 days after the health maintenance organization receives the claim that the claim is contested or denied. The notice that the claim is denied or contested must identify the contested portion of the claim and the specific reason for contesting or denying the claim, and, if contested, must include a request for additional information. If the provider submits additional information, the provider must, within 35 days after receipt of the request, mail or electronically transfer the information to the health maintenance organization. The health maintenance organization shall pay or deny the claim or portion of the claim within 45 days after receipt of the information.
(3) Payment of a claim is considered made on the date the payment was received or electronically transferred or otherwise delivered. An overdue payment of a claim bears simple interest at the rate of 10 percent per year. Interest on an overdue payment for a clean claim or for any uncontested portion of a clean claim begins to accrue on the 36th day after the claim has been received. The interest is payable with the payment of the claim.
(4)A health maintenance organization shall pay or deny any claim no later than 120 days after receiving the claim. Failure to do so creates an uncontestable obligation for the health maintenance organization to pay the claim to the provider.
(7)(a) A provider[’s] claim for payment shall be considered received by the health maintenance organization, if the claim has been electronically transmitted to the health maintenance organization, when receipt is verified electronically or, if the claim is mailed to the address disclosed by the organization, on the date indicated on the return receipt. A provider must wait 45 days following receipt of a claim before submitting a duplicate claim.
(8) A provider, or the provider’s des-ignee, who bills electronically is entitled to electronic acknowledgement of the receipt of a claim within 72 hours.
(9) A health maintenance organization may not retroactively deny a claim because of subscriber ineligibility more than 1 year after the date of payment of the clean claim.
(10) A health maintenance organization shall pay a contracted primary care or admitting physician, pursuant to such physician’s contract, for providing inpatient services in a contracted hospital to a subscriber, if such services are determined by the organization to be medically necessary and covered services under the organization’s contract with the contract holder.

§ 641.3155, Fla. Stat. (2001). In addition, this statute defined the term “clean claim,” imposed nearly reciprocal obligations on providers to respond to an HMO’s claim for overpayment, and required that the amount of overpayment be reconciled to specific claims unless the parties agree otherwise. § 641.3155(1), (5) — (6), Fla. Stat. (2001).

The HMOs moved for judgment on the pleadings, which the trial court granted after conducting a hearing on the motion and a later status conference. The trial court’s final judgment on the pleadings dismissed Westside’s amended complaint with prejudice because it did “not allege cognizable causes of action” under Villazon v. Prudential Health Care Plan, Inc., 843 So.2d 842 (Fla.2003).

On appeal, the Fourth District Court of Appeal reversed the trial court and remanded the case for further proceedings. Westside, 932 So.2d at 220. The Fourth District held that Villazon was not “applicable to an action founded on a theory of breach of contract,” because, while Villa-zon denies the existence of a private cause of action under the HMO Act, it also “ac-knowledgefs] the plaintiffs underlying right to bring a common law negligence claim based upon the same allegations.” Id. at 216 (citing Villazon, 843 So.2d at 852). In assessing whether Westside has an available breach of contract claim, the Fourth District relied on the “accepted principle of law that when parties contract upon a matter which is the subject of statutory regulation, the parties are presumed to have entered into their agreement with reference to such statute, which becomes a part of the contract.” Id. It then recognized that “[sjervice providers are recognized as third party beneficiaries of insurance contracts in other contexts” and that an insurer’s failure to pay a medical service provider is a valid basis for a breach of contract action. Id. at 219 (citing Allstate Ins. Co. v. Kaklamanos, 843 So.2d 885 (Fla.2003)). Based on this analysis, the Fourth District ultimately “conclude[d] that service providers, claiming as third party beneficiaries under a subscriber’s contract, may bring an action founded on the HMOs’ failure to comply with the prompt pay provisions of the [HMO] Act.” Id. at 220. “Recognizing the potential impact of this decision on the [HMO] industry,” the Fourth District certified the above stated question as one of great public importance. Id.

We agree with the Fourth District. As we explain below, medical service providers may bring a breach of contract action as a third-party beneficiary of the contract between the HMO and its subscriber based upon the HMO’s failure to comply with section 641.3155, Florida Statutes (2001).

ANALYSIS

I. Framework for Review

The question at issue requires us to interpret the HMO Act, particularly section 641.3155, its “prompt pay provisions;” therefore, the standard of review is de novo. See Aramark Unif. & Career Apparel, Inc. v. Easton, 894 So.2d 20, 23 (Fla.2004) (recognizing that questions of statutory interpretation are reviewed de novo).

The HMO Act does not expressly authorize a private cause of action to enforce its provisions. However, as the Fourth District correctly observed, “[t]his does not ... preclude the right to bring a common law ... claim based upon the same allegations.” Villazon, 843 So.2d at 852, cited in Westside, 932 So.2d at 216; see also Greene v. Well Care HMO, Inc., 778 So.2d 1037, 1041-42 (Fla. 4th DCA 2001) (finding that the HMO Act does not authorize a private cause of action, but permitting appellants to amend their complaint to state a common law cause of action based on the HMO’s allegedly improper action).

In this case, Westside has asserted the breach of a third-party beneficiary contract. Assuming the complaint sufficiently alleges each of the four elements of this cause of action, we must decide (1) whether the “prompt pay provisions” of the HMO Act can be incorporated into the contract between the HMO and its subscribers, and (2) whether Westside’s status as a nonparticipating provider precludes it, as a matter of law, from establishing that the contracting parties had a “clear or manifest intent” to benefit Westside. We conclude that, given the significant statutory regulation surrounding HMO contracts and the integral role the “prompt pay provisions” play in them, section 641.3155 may be incorporated into the HMO contract. Then, recognizing that medical service providers previously have been considered intended beneficiaries of insurance contracts under Florida law, we extend the same recognition to HMO contracts. In essence, we conclude that unless the language of the specific contracts properly provides otherwise, Westside’s status as a nonparticipating provider does not preclude it, as a matter of law, from establishing the intent element in a breach of third-party beneficiary contract claim. These conclusions are explained in more detail below.

A. Elements of Breach of a Third-Party Beneficiary Contract Claim

As the Fourth District correctly held, an allegation that an HMO violated the “prompt pay provisions” is not sufficient by itself to establish a private cause of action. Westside, 932 So.2d at 216 (citing Villazon, 843 So.2d at 852). Instead, a party must bring a recognized common law cause of action. As stated earlier, one of the claims Westside attempted to plead in its amended complaint was a common law cause of action for breach of a third-party beneficiary contract.

To establish an action for breach of a third party beneficiary contract, West-side 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.” Networkip, LLC v. Spread Enters., Inc., 922 So.2d 355, 358 (Fla. 3d DCA 2006) (citing Biscayne Inv. Group, Ltd. v. Guar. Mgmt. Servs., Inc., 903 So.2d 251, 254 (Fla. 3d DCA 2005)). While we decline to decide from the limited record on appeal whether Westside’s complaint is sufficient to establish each of these elements, we find no support for the HMOs’ assertion that Westside is precluded as a matter of law from pursuing such a cause of action. See A.R. Moyer, Inc. v. Graham, 285 So.2d 397, 402 (Fla.1973) (“Without viewing the [contract at issue], which is absent from the record, we are unable to speculate if a cause of action would exist.”). As the Fourth District correctly concluded, section 641.3155 can be incorporated into the HMO contract. Such an incorporation supports the first and third elements of the claim. Moreover, there is no basis to conclude that Westside is precluded, as a matter of law, from establishing the second element because of its status as a nonparticipating provider.

B. Statutory Incorporation

As stated earlier, we conclude that section 641.3155 (the “prompt pay provisions”) may be incorporated into an HMO contract for the purpose of establishing a breach of contract cause of action when the provider’s claim is for a service the HMO is required to provide under either the HMO Act or the HMO contract at the time the claim is filed.

Florida courts have long recognized that the statutory limitations and requirements surrounding traditional insurance contracts may be incorporated into an insurance contract for purposes of determining the parties’ contractual rights. See Citizens Ins. Co. v. Barnes, 98 Fla. 933, 124 So. 722, 723 (1929) (finding an ordinance is “part of the contract of insurance” because there was no reason not to apply the “general doctrine that, where parties contract upon a subject which is surrounded by statutory limitations and requirements, they are presumed to have entered into their engagements with reference to such statute, and the same enters into and becomes a part of the contract”); see also Weldon v. All Am. Life Ins. Co., 605 So.2d 911, 914 (Fla. 2d DCA 1992) (applying the general principle to determine the extent to which a chiropractor’s services were covered under an insurance policy). As are traditional insurance contracts, HMO contracts are surrounded by the extensive “statutory limitations and requirements” of the HMO Act. Therefore, for purposes of statutory incorporation, HMO contracts should be treated the same as traditional insurance contracts. See Pasteur Health Plan, Inc. v. Salazar, 658 So.2d 543, 544 (Fla. 3d DCA 1995) (upholding a trial court’s decision that used five Florida statutes to define a term in an HMO contract, and quoting U.S. Fid. & Guar. Co. v. Group Health Plan of SE. Mich., 131 Mich.App. 268, 345 N.W.2d 683, 685 n. 1 (1983), for the proposition that “[although ... HMOs are not (traditionally defined) insurance companies, ... the same contract construction rules apply”). So treated, the principles of statutory incorporation permit the “prompt pay provisions” of section 641.3155 to be considered an implicit part of every HMO contract. Cf. State Farm Fire & Cas. Co. v. Palma, 629 So.2d 830, 832 (Fla.1993) (finding a provision of the Florida Insurance Code was an “implicit part of every insurance policy issued in Florida” because the statute addressed a subject that was present in every insurance dispute and because another provision of the Florida Insurance Code supported incorporating this statute).

Admittedly, the HMO Act does not mandate that section 641.3155 be included in HMO contracts. Nonetheless, as a number of other provisions reveal, the “prompt pay provision” serves an integral role in providing substance or structure to the rights of subscribers and the responsibilities of HMOs established in the HMO Act. For example, section 641.3154 states that an HMO “is liable for services rendered to an eligible subscriber by a provider if the provider follows the [HMOJ’s authorization procedures and receives authorization,” § 641.3154(2); and that if an HMO is liable for services rendered, “regardless of whether a contract exists between the [HMO] and the provider ... the subscriber is not liable for payment of fees to the provider.” § 641.3154(1). Section 641.3156(1) requires HMOs to pay “any hospital-service or referral-service claim for treatment for an eligible subscriber which was authorized” by an appropriate person and in an appropriate manner. In fact, “[a] claim for treatment may not be denied” in this situation, “unless the provider provided information to the [HMO] with the willful intention to misinform the [HMO].” § 641.3156(2). The details set forth in the “prompt payment provision,” section 641.3155, provide essential substance to the HMO’s liability for services rendered to its subscribers.

Moreover, the HMO Act does not foreclose a common law contract action for breach of the statutorily imposed prompt payment provision. Indeed, the HMO Act contemplates actions “to enforce the terms and conditions of a[n] [HMO] contract,” and it recognizes that these actions may be brought against an HMO. § 641.28 (recognizing that attorney’s fees are available to the prevailing party in a civil action “brought to enforce the terms and conditions of a health maintenance organization contract,” and not including HMOs in the list of exempt persons); see also § 641.282 (requiring HMOs to pay “every judgment or decree entered in any of the courts of this state against” the HMO within a specified time frame). In addition, even the statute authorizing the statewide provider and managed care organization dispute resolution program (which was enacted in 2000 to address payment disputes) does not bar civil actions to enforce the HMO contract. See § 408.7057, Fla. Stat. (2001). To the contrary, this statute forbids the resolution organization from reviewing certain claims disputes, such as those “related to interest payments],” and those that either fail to meet a specified jurisdictional amount or form “the basis for an action pending in state or federal court.” § 408.7057(2)(b)(l), (6). Neither this statute nor the HMO Act provides that the dispute resolution program is the exclusive means of addressing these claims.

Here, the statutory language recognizing that a civil cause of action may be brought to enforce the HMO contract is particularly persuasive. HMOs enter into these contracts “to provide an agreed-upon set of comprehensive health care services to subscribers in exchange for a prepaid [fee].” § 641.31(1). As stated earlier, section 641.3155 simply provides essential details of how the HMOs are to pay medical providers for these services. In light of this, it is difficult to see how any HMO could enter into such contracts without assuming that the “prompt payment provision” is implicit therein.

Given the above, we conclude that unless the terms of the individual HMO contract or the HMO Act properly provides otherwise, section 641.3155 may be incorporated as a term in the HMO contract for the purpose of alleging a breach of third-party beneficiary contract claim.

C. Clear Intent to Primarily and Directly Benefit

Having concluded that the “prompt pay provisions” may be incorporated into the HMO contract, we next consider whether nonparticipating providers like Westside can overcome the significant hurdle of establishing the second element of a breach of third-party contract; that is, whether the HMO contract evinces a “clear or manifest intent” to “primarily and directly benefit” the provider. Jenne v. Church & Tower, Inc., 814 So.2d 522, 524 (Fla. 4th DCA 2002) (citing Marianna Lime Prods, v. McKay, 109 Fla. 275, 147 So. 264, 265 (1933), for the proposition that the test to determining whether a party is a third-party beneficiary to a contract is whether the contract language indicates that both parties intended that the contract “primarily and directly” benefit the third party). We find no basis to preclude nonparticipating providers from attempting to establish this element as a matter of law. As recognized by the Fourth District, Florida law recognizes medical service providers as intended beneficiaries of insurance contracts. See Vencor Hosps. v. Blue Cross Blue Shield of R.I., 169 F.3d 677, 680 (11th Cir.1999) (applying Florida law to determine that medical service providers are third-party beneficiaries to a contract between a health insurer and its subscriber); see also Orion Ins. Co. v. Magnetic Imaging Sys. I, 696 So.2d 475, 478 (Fla. 3d DCA 1997) (“Medical service providers ... have been recognized as third party beneficiaries of insurance contracts.”). Within the limitations of our holding, we extend this same recognition to the HMO context.

This recognition of medical services providers as third-party beneficiaries of HMO contracts is supported by statutory requirements. The HMO Act requires that the HMO contract indicate an intent to compensate nonparticipating providers for at least “emergency services and care.” See § 641.31(4), Fla. Stat. (requiring that a subscriber’s contract “clearly state all of the services to which a subscriber is entitled under the contract and ... where and in what manner the comprehensive health care services may be obtained”); § 641.513(3)(a) (requiring HMOs to “compensate the provider for emergency services and care”). The Act also prohibits an HMO from waiving this benefit in the contract, and it states that contractual provisions which contradict this provision must be construed in accordance with the Act. See § 641.31(11) (“No contract shall contain any waiver of rights or benefits provided to or available to subscribers under the provisions of any law or rule applicable to health maintenance organizations.”); § 641.3105(1) (contracts or portions thereof that do not comply with the HMO Act “shall be construed and applied” as if they complied). Since part of Westside’s complaint alleges the right to recover compensation for emergency services and care, Westside may be able to allege and establish that the language of the contract evinces “the clear or manifest intent of the contracting parties that the contract primarily and directly benefit” Westside. Networkip, LLC, 922 So.2d at 358; cf. Vencor Hospitals, 169 F.3d at 680 (finding medical service providers were intended beneficiaries because “[i]t would be hard to imagine a more direct benefit under a contract than the receipt of large sums of money”).

Furthermore, recognizing nonparticipating medical service providers as third-party beneficiaries is supported by a contract clause the HMOs referred to in their brief on appeal. In applicable part, the clause states:

For services rendered by Non-Participating Providers, Benefits are payable to the [subscriber] or other person as required by law. However, [the HMO] may pay all or a portion of any medical Benefits to the Health Care Provider on whose charge the claim is based unless the Covered Person directs otherwise in writing by the time proofs of loss are filed with [the HMO].

Like the language analyzed in Vencor Hospitals, 169 F.3d at 680, this clause grants the HMO discretion to pay nonpartieipat-ing providers for services rendered to the HMOs’ insureds. In Vencor Hospitals, the Eleventh Circuit viewed this discretion as evidence that the contracting parties intended to primarily and directly benefit the medical provider. Id. Moreover, the differences between the clause in this case and the language cited in Vencor Hospitals do not require a different conclusion. While the clause grants insureds the authority to remove the HMOs’ discretion, the HMOs do not allege that the insureds have done so in regard to any of West-side’s claims. Furthermore, this excerpt also requires HMOs to pay “other persons] as required by law,” and under the HMO Act, even nonparticipating providers may be persons entitled to payment by law. See, e.g., § 641.3155(4) (recognizing that an HMO’s failure to pay or deny “any claim no later than 120 days after receiving [it] ... creates an uncontestable obligation”). Therefore, contrary to the HMOs’ assertion, this clause actually appears to support Westside’s allegation that it is an intended third-party beneficiary to the HMO contracts with respect to at least some of its claims.

Based on the foregoing, we conclude that nonparticipating providers such as Westside are not precluded as a matter of law from alleging and establishing that the HMO contract evinces a “clear and manifest intent” to “primarily and directly benefit” them.

CONCLUSION

For the reasons explained above, we answer the certified question as rephrased in the affirmative. Accordingly, we approve the decision of the Fourth District Court of Appeal and remand this case for further proceedings.

It is so ordered.

LEWIS, C.J., and WELLS, ANSTEAD, PARIENTE, and QUINCE, JJ., concur.

CANTERO, J., recused.

      . See art. V, § 3(b)(4), Fla. Const.

      . In its amended complaint, Westside described itself as a professional association and alleged that its physicians provide various types of echocardiogram ("EKG”) interpretations, as well as Doppler color flow interpretations, Holier twenty-four-hour interpretations, stress test physician supervision, and stress test interpretations.

      . Although Westside’s count for breach of third-party beneficiaiy contract does not specifically mention section 641.3155, this count incorporated Westside’s general allegations concerning the prompt pay provision of section 641.3155, alleging that the HMOs failed to make payment or contest payment within forty-five days. Westside specifically alleged violations of section 641.3155 as well as section 627.613, Florida Statutes (2001), in the other two counts of its amended complaint. Section 627.613 provides time periods in which health insurers must pay claims for medical services. It imposes requirements similar to section 641.3155; however, HMOs with a valid certificate of authority are excluded from the provisions of the Florida Insurance Code, unless expressly stated otherwise. See §§ 641.201, 641.30(2), Fla. Stat.

      . In essence, a "clean claim" is defined in section 641.3155(1), Florida Statutes (2001), as a claim submitted without any defect or impropriety and with the proper substantiating paperwork. This term does not appear in the current version of section 641.3155, as the statute now defines a "claim” as the appropriate paper or electronic billing instrument. § 641.3155(1), Fla. Stat. (2005).

      . Section 641.3155 has been amended numerous times since Westside filed its complaint in 2001. We do not decide what effect, if any, these amendments may have on a party’s ability to establish the required elements of a breach of third-party beneficiary contract in its case. However, none of these amendments affect the holding that medical service providers, in general, may bring this cause of action based on an alleged violation of the prompt pay provision.

      . For the purpose of this appeal, we do not determine whether Westside’s complaint sufficiently pled each of the elements required to state this cause of action. See Caretta Trucking, Inc. v. Cheoy Lee Shipyards, Ltd., 647 So.2d 1028, 1031-32 (Fla. 4th DCA 1994) (providing the elements that must be pleaded to state a cause of action for breach of third-party beneficiary contract and granting the ■ plaintiff an opportunity to amend its complaint to explicitly allege the primary and direct intent element); see also Weimar v. Yacht Club Point Estates, Inc., 223 So.2d 100, 103 (Fla. 4th DCA 1969) ("[I]t behooves one seeking to establish a cause of action as a third party beneficiary to sufficiently allege the terms and provisions of the contract which he asserts was made for his benefit. Failure to do so may result in dismissal of the cause....”). We assume, arguendo, that Westside has stated a cause of action and recognize that the trial court may address this issue on remand.

      . See Initial Br. of Foundation Health Plan at 5; Amicus Br. of Florida Association of Health Plans at 16.

      . The contract language evaluated in Vencor Hospitals stated that "[bjenefit payments may be paid to the doctor, hospital or to [the insured] directly at our discretion.” 169 F.3d at 680.

      .To the extent other clauses in the individual HMO contracts evince a contrary intent, this is a determination we leave to the trial court.


author: PER CURIAM. ANSTEAD, J.,

text:
    THE FLORIDA BAR re Alan R. HOCHMAN.
    No. SC03-707.
    Supreme Court of Florida.
    Oct. 19, 2006.

      John F. Harkness, Jr., Executive Director, Kenneth L. Marvin, Director of Lawyer Regulation, The Florida Bar, Tallahassee, Florida, and Randi Klayman Lazarus, Bar Counsel, The Florida Bar, Miami, Florida, for Complainant.
    Richard B. Marx, Miami, Florida, and Joseph P. Klock, Jr., and Leslie Rothen-berg of Steel, Hector and Davis, LLP, Miami, Florida, for Respondent.
   PER CURIAM.

We have for review a referee’s report recommending that Alan R. Hochman be reinstated to the practice of law in Florida. We have jurisdiction. See art. V, § 15, Fla. Const. For reasons explained below, we reject the referee’s recommendation that Hochman be reinstated. By presenting no evidence of his drug or alcohol rehabilitation at the hearing below, Hoch-man failed to carry his burden of proving rehabilitation.

In 1998, attorney Alan Robert Hochman was suspended for three years for misappropriating clients’ funds. The underlying facts are set forth in our opinion in Florida Bar v. Hochman, 815 So.2d 624 (Fla.2002):

[AJfter suffering from drug addiction and alcoholism for five years, Hochman admitted himself into a facility for treatment; upon completing treatment he voluntarily informed the Bar and his clients that he had misappropriated funds; he entered into a guilty plea and consent judgment with the Bar under which he was suspended for three years and required to continue rehabilitation and make restitution....

Id. at 626. After he was suspended, Hoch-man was charged with two criminal counts of felony grand theft based on the same underlying misappropriation of client funds. Adjudication was withheld and he was sentenced to two years of community control. As a result of the criminal charges, Hochman was suspended for an additional three years, effective, nunc pro tunc, July 28, 1997, the effective date of the prior suspension. See id. at 627. On April 17, 2003, Hochman petitioned for reinstatement. The Bar opposed the petition.

The referee recommended that Hoch-man be reinstated, with the following conditions:

(1) Restitution
(a) A neutral accountant shall be appointed to review the records of the petitioner’s Trust Account, bank accounts, and any relevant documents in the possession of The Florida Bar to determine the names of each person owed restitution based on the Petitioner’s misconduct, the exact amount of restitution, the amount that has already been paid and by whom, and when the payments were made. Within sixty days of receiving this accounting, the Petitioner shall prepare a payment plan and submit it to The Florida Bar for their approval. If the parties cannot agree on an amount and terms, then the matter shall be set for a restitution hearing before the referee.
(b) The Petitioner’s payment plan shall also include full restitution to attorney Levy Gardner and Dennis Colton.
(c) All payments shall be made by the Petitioner to a member of The Florida Bar who shall act as a monitor for the duration of the restitution, accepting payments checks from the Petitioner which will be forwarded to The Florida Bar. The monitor shall maintain a record of all checks received and payments forwarded. No payments shall be made directly to the victims by the Petitioner. The Florida Bar will make all payments, and maintain an accounting of all checks received by the Petitioner and payments made to victims.
(d)The Petitioner shall have no authority to write checks on any business/operating checking account or trust account until full restitution has been made.
(2) Rehabilitation
The Petitioner shall not consume any alcohol, controlled substances, or any unprescribed medications. Until full restitution has been made, he shall:
(a) submit to weekly urinalysis testing, and the findings shall be forwarded to The Florida Bar;
(b) maintain a Sobrietor at this residence which shall be monitored by the Monitored Services Bureau, 15801 State Road # 9, Miami, Florida 33169, telephone (786) 263^4899. The Sobrietor is a remote alcohol testing system which enables reliable automatic and unsupervised remote breath test administration at the Petitioner’s own home. The Petitioner shall submit to random alcohol testing no less than five times per week. The results of these tests shall be forwarded to The Florida Bar.

The Bar has petitioned for review, opposing Hochman’s reinstatement. The Bar claims that Hochman has failed to show that he acted with unimpeachable character during his suspension.

The Court’s standard of review for evaluating a referee’s recommendation concerning reinstatement is broader than the standard applicable to our review of the referee’s factual findings because it is ultimately our responsibility to enter an appropriate judgment. See Fla. Bar re Inglis, 471 So.2d 38, 41 (Fla.1985); see also Fla. Bar re McGraw, 903 So.2d 905 (Fla.2005); Fla. Bar re Grusmark, 662 So.2d 1235 (Fla.1995). Specifically, where “the recommendation of reinstatement has a basis in existing caselaw, [the Court] will not second-guess the referee.” See Fla. Bar re Hernandez-Yanks, 690 So.2d 1270, 1272 (Fla.1997).

In the present case, the Bar contends that because Hochman presented no evidence concerning his alcohol and drug rehabilitation at the hearing below, the referee erred in recommending that Hoch-man be reinstated. We agree. The guilty plea and consent judgment that Hochman submitted in 1997 provided as follows in relevant part:

4. Respondent admits that the following facts are true and accurate and stipulates:
A. As a result of a significant problem %vith drug addiction, client trust funds were misappropriated.
5. Respondent admits that by reason of the foregoing facts Respondent has violated [various disciplinary rules involving the misappropriation of client funds].
6. Respondent hereby tenders a Consent Judgment for Discipline where Respondent agrees to the following discipline:
C. Ongoing participation in an appropriate directed rehabilitation program.

(Emphasis added.) In brief, Hochman admitted that he stole client funds due to a significant drug addiction problem. He agreed to participate in a rehabilitation program on an ongoing basis as a condition of his suspension.

Rule Regulating the Florida Bar 3-7.10, which governs reinstatement proceedings, sets forth certain criteria that a referee shall consider in determining if a petitioner should be reinstated:

(1) Disqualifying Conduct. A record manifesting a deficiency in the honesty, trustworthiness, diligence, or reliability of a petitioner may constitute a basis for denial of reinstatement. The following shall be considered as disqualifying conduct:
(K) evidence of drug or alcohol dependency;
(2) Determination of Character and Fitness. In addition to other factors in making this determination, the following factors should be considered in assigning weight and significance to prior conduct:
(G) evidence of rehabilitation;
(I) candor in the discipline and reinstatement processes; and
(J) materiality of any omissions or misrepresentations.

R. Regulating Fla. Bar 3 — 7.10(f) (emphasis added).

In light of Hochman’s failure to produce any evidence concerning his alcohol and drug rehabilitation at the hearing below, the referee’s recommendation of reinstatement is contrary to the above criteria. Further, Hochman cites no authority to support the proposition that an attorney who was suspended for alcohol or drug-based misconduct can be reinstated without producing any evidence of alcohol or drug rehabilitation. Accordingly, because Hochman failed to carry his burden of proving rehabilitation, we reject the referee’s recommendation that he be reinstated.

Based on the foregoing, we reject the referee’s recommendation that Hochman be reinstated. Hochman may submit a successive petition for reinstatement as provided in the rules. See R. Regulating Fla. Bar 3-7.10(k) (“No petition for reinstatement shall be filed within 1 year following an adverse judgment upon a petition for reinstatement filed by or on behalf of the same person. In eases of incapacity no petition for reinstatement shall be filed within 6 months following an adverse judgment under this rule.”). Thus, Hochman may not reapply for reinstatement until at least one year after the date of issuance of this opinion.

It is so ordered.

LEWIS, C.J., and WELLS, ANSTEAD, PARIENTE, QUINCE, CANTERO, and BELL, JJ., concur.

ANSTEAD, J., concurs specially with an opinion, in which PARIENTE and CANTERO, JJ., concur.

ANSTEAD, J.,

concurring specially.

I concur fully in the majority’s opinion. However, I would grant respondent leave to petition for reinstatement at any time he alleges he is in a position to demonstrate sufficient rehabilitation. Of course, the merits of such a claim will depend upon a referee’s evaluation of the claim and our review.

PARIENTE and CANTERO, JJ., concur.

      . See Fla. Bar v. Hochman, 717 So.2d 539 (Fla.1998) (table decision).

      . We note that rule 3-7.10(g)(5) was added, effective January 1, 2006, to directly address the confidentiality issue:
      (5) Evidence of Treatment or Counseling for Dependency or Other Medical Reasons. If the petitioner has sought or received treatment or counseling for chemical or alcohol dependency or for other medical reasons that relate to the petitioner's fitness to practice law, the petitioner shall waive confidentiality of such treatment or counseling for purposes of evaluation of the petitioner’s fitness.

        In re Amendments to Rules Regulating Fla. Bar, 916 So.2d 655, 680 (Fla.2005) (emphasis added).


author: PER CURIAM.

text:
    Edward BYRD, Petitioner, v. STATE of Florida, Respondent.
    No. SC05-327.
    Supreme Court of Florida.
    Oct. 19, 2006.
    James Marion Moorman, Public Defender and William L. Sharwell, Assistant Public Defender, Tenth Judicial Circuit, Bar-tow, FL, for Petitioner.
    Charles J. Crist, Jr., Attorney General, Tallahassee, FL, and Chandra Waite Das-rat, Assistant Attorney General, Tampa, FL, for Respondent.
   PER CURIAM.

We have for review Byrd v. State, 893 So.2d 620 (Fla. 2d DCA 2005), in which the Second District Court of Appeal cited Garcia v. State, 854 So.2d 758 (Fla.2d DCA 2003), quashed, 901 So.2d 788 (Fla.2005), and, as it had done in Garcia, certified conflict with the First District Court of Appeal’s decision in Goodman v. State, 839 So.2d 902 (Fla. 1st DCA 2003), approved by Garcia v. State, 901 So.2d 788 (Fla. 2005). At the time the Second District Court of Appeal issued its decision in Byrd, Garcia was pending review in this Court. We have jurisdiction. See art. V, § 3(b)(3)-(4), Fla. Const.; Jollie v. State, 405 So.2d 418 (Fla.1981).

In Garcia v. State, 901 So.2d 788 (Fla.2005), this Court quashed Garcia and approved Goodman. In response to an order of this Court dated January 27, 2006, the respondent/State has acknowledged that it “cannot show cause why this Court should not accept jurisdiction and remand for reconsideration in light of Garcia.” We accordingly grant the petition for review in the present case. The decision under review is quashed and this matter is remanded to the Second District Court of Appeal for reconsideration upon application of this Court’s decision in Garcia.

It is so ordered.

LEWIS, C.J., and WELLS, ANSTEAD, PARIENTE, QUINCE, CANTERO, and BELL, JJ., concur.


author: BELL, J. PARIENTE, J.,

text:
    Terry P. SANDERS, Petitioner, v. STATE of Florida, Respondent.
    No. SC05-2115.
    Supreme Court of Florida.
    Oct. 26, 2006.

      James Marion Moorman, Public Defender and Kimberly Nolan Hopkins, Special Assistant Public Defender, Tenth Judicial Circuit, Bartow, FL, for Petitioner.
    Charles J. Crist, Jr., Attorney General, Tallahassee, FL, Robert J. Krauss, Bureau Chief, Tampa Criminal Appeals and C. Suzanne Bechard, Assistant Attorney General, Tampa, FL, for Respondent.
   BELL, J.

We have for review a decision of a district court of appeal on the following question, which the court certified to be of great public importance:

IN ORDER FOR AN OFFENSE TO BE A LESSER-INCLUDED OFFENSE, MUST IT NECESSARILY RESULT IN A LESSER PENALTY THAN EITHER THE PENALTY FOR THE MAIN OFFENSE OR THE NEXT GREATER OFFENSE ON THE VERDICT FORM?

Sanders v. State, 912 So.2d 1286, 1291 (Fla. 2d DCA 2005). We have jurisdiction. See art. V, § 3(b)(4), Fla. Const. As explained below, we answer the certified question in the negative.

FACTS

The facts of this case as stated by the Second District Court of Appeal include:

Mr. Sanders shot a bouncer at Club Turbulence in Ybor City on May 16, 2002. Fortunately, the bullet passed through the bouncer’s leg without causing a fatal injury. The State charged Mr. Sanders with attempted first-degree murder. Because the State maintained that he discharged a firearm and inflicted great bodily harm, it sought to reclassify the felony and impose an enhanced penalty under section 775.087, Florida Statutes (2002), which is commonly referred to as the 10-20-life statute. In light of his prior record, the State also noticed Mr. Sanders of the possibility that he could receive a sentence as a habitual offender.
At the trial, the court had difficulty determining the appropriate list of lesser included offenses. The attorneys and the judge collectively decided that aggravated battery was a lesser [included] offense of the main offense because the information alleged the discharge of a firearm resulting in great bodily harm, but they ultimately concluded that an instruction on this lesser [included] offense would give the State “two bites at the apple,” because it resulted in the same penalty as another lesser [included] offense, attempted second-degree murder while discharging a firearm and inflicting great bodily harm. Accordingly, the trial court did not instruct on any variety of aggravated battery and instead instructed the jury on attempted second-degree murder and attempted voluntary manslaughter as the appropriate lesser [included] offenses.... Mr. Sanders did not object to these instructions or to the verdict form.

Id. at 1287-88. The eleven options of the verdict form included four variations of the charged offense of attempted first-degree murder (in descending degree depending on whether the offense was reclassified for use of a firearm), four variations of the lesser included offense of attempted second-degree murder (in descending degree depending on whether the offense was reclassified for use of a firearm), two variations of the lesser included offense of voluntary manslaughter (in descending degree depending on whether the offense was reclassified for use of a firearm), and not guilty. See id. at 1291-92. Ultimately, “[t]he jury found Mr. Sanders guilty of the lesser included offense of attempted second-degree murder with a firearm and specifically decided that Mr. Sanders discharged the firearm and inflicted great bodily harm. This was option E on the verdict form.” Id. at 1288. The trial court imposed a sentence of life imprisonment. Id.

On appeal, Sanders alleged that he was entitled to a new trial, arguing that the lesser included offense of which the jury found him guilty was not a true lesser included offense because the penalty imposed was not less than the penalty for the main offense charged. Id. The maximum sentence for the core offense of attempted first-degree murder is thirty years, while the sentence for attempted second-degree murder without any enhancements is fifteen years. However, with the application of the ten-twenty-life statute, the resulting maximum sentence for both attempted first- and second-degree murder while discharging a firearm and inflicting great bodily harm is the same — life.

The Second District affirmed Sanders’ conviction and life sentence for the lesser included offense of attempted second-degree murder while discharging a firearm and inflicting great bodily harm. The district court noted:

The offenses listed on Mr. Sanders’ verdict form began with life felonies and ended with a third-degree felony. The offenses were not listed in an order that guaranteed that the trial court must impose a lesser penalty, but if one considers all the various sentencing schemes, they are listed in an order that does give the trial court discretion to impose a sentence that is less severe than the preceding option on the verdict form.

Id. at 1289. Relying on this Court’s decision in Ray v. State, 403 So.2d 956 (Fla. 1981), the district court held that “an offense is lesser in ‘penalty’ not only when the conviction for the lesser [included] offense is guaranteed to result in a lesser penalty, but also when it will give the trial judge discretion to impose a lesser penalty than the offenses listed higher on the verdict form.” Sanders, 912 So.2d at 1290. However, in so holding, the district court expressed uncertainty about how this Court intends trial courts to analyze re-classifications and enhancements when preparing verdict forms. Because of the complexity of the sentencing options caused by reclassification and enhancement statutes, the Second District stated that it was “not inclined to force trial courts to devise verdict forms that always guarantee that the defendant will receive a lesser penalty for each successive option on the verdict form.” Id. at 1291.

We granted review based on the Second District’s certified question. Again, the certified question asks, “In order for an offense to be a lesser-included offense, must it necessarily result in a lesser penalty than either the penalty for the main offense or the next greater offense on the verdict form?”

We now explain our answer.

ANALYSIS

Sanders contends that a trial court may not list a necessary or permissible lesser included offense on the verdict form if, due to section 775.087, Florida Statutes (2002), the ten-twenty-life reclassification statute and its enhanced penalties, the potential sentence for the lesser included offense becomes equal to the potential sentence for the charged offense subject to the same reclassification statute and enhanced penalties. His argument arises from our opinion in Ray, 403 So.2d 956.

In affirming the Second District’s decision to uphold Sanders’ conviction and sentence, we first define lesser included offenses. Next, we distinguish Sanders’ case from our previous decision in Ray. Finally, we clarify how lesser included offenses relate to reclassifications and enhancements for purposes of fashioning a verdict form.

We begin by defining lesser included offenses. Lesser included offenses fall into two categories: necessary and permissive. Necessarily lesser included offenses are those offenses in which the statutory elements of the lesser included offense are always subsumed within those of the charged offense. State v. Paul, 934 So.2d 1167, 1176 (Fla.2006). A permissive lesser included offense exists when “the two offenses appear to be separate [on the face of the statutes], but the facts alleged in the accusatory pleadings are such that the lesser [included] offense cannot help but be perpetrated once the greater offense has been.” State v. Weller, 590 So.2d 923, 925 n. 2 (Fla.1991).

Now, we clarify and distinguish Ray. As the Second District recognized, Ray does not hold that a lesser included offense must be lesser in both degree and penalty than the charged offense. The issue in Ray was that the offense of which Ray was convicted did not meet the definition of a lesser included offense because its statutory elements were not subsumed by the statutory elements of the greater offense and it was not subsumed by the greater offense as pled. In that situation, this Court held that

it is not fundamental error to convict a defendant under an erroneous lesser included charge when he had an opportunity to object to the charge and failed to do so if: 1) the improperly charged offense is lesser in degree and penalty than the main offense or 2) defense counsel requested the improper charge or relied on that charge as evidenced by argument to the jury or other affirmative action.

403 So.2d at 961 (footnote omitted). In contrast, the offense of which Sanders was convicted does meet the definition of a lesser included offense, making it unnecessary to apply the test enunciated in Ray. Thus, as the Second District stated, Ray does not “limit lesser [included] offenses only to those guaranteed to result in a lesser penalty.” Sanders, 912 So.2d at 1290-91.

While Sanders takes issue with the fact that he received the same sentence for a lesser included offense with the applied enhancements as he would have for the charged offense subject to the same enhancements, this result does not constitute fundamental error. The jury in Sanders’ trial found him guilty of attempted second-degree murder and also made the requisite factual findings beyond a reasonable doubt for application of the firearm reclassification and sentence enhancement statute. Furthermore, as stated above, Ray does not require that the lesser included offense be lesser both in degree and in penalty. Because the lesser included offense here meets the definition of a lesser included offense, we find that it comports with our existing jurisprudence, especially since the trial judge here had the discretion to impose a lesser penalty. Therefore, Sanders’ conviction of the proper lesser included offense is not fundamental error.

Finally, we clarify how lesser included offenses relate to reclassification and enhancement statutes when fashioning a verdict form. While reclassification and enhancement statutes have made it difficult for trial courts to prepare appropriate verdict forms, the basic premise of what constitutes a proper lesser included offense has not changed. Trial courts should continue to rely primarily and ultimately upon the applicable statutory provisions for the charged crime when they are determining lesser included offenses. However, the Florida Standard Jury Instructions in Criminal Cases contain a schedule that assists in this task. The charged crime should be followed on the verdict form by the determined lesser included offenses in descending order by degree of offense. After the court has examined the requisite statute and the relevant criminal jury instructions for the charged crime, the court should consider any reclassification or enhancement statute brought into play by the charging document and evidence at trial. Any factor required to be found by the jury for reclassification or enhancement purposes may then be placed in a separate interrogatory at the appropriate place.

Conclusion

We answer the certified question in the negative and approve the Second District’s decision below to the extent it is consistent with the analysis herein.

It is so ordered.

LEWIS, C.J., and WELLS, ANSTEAD, PARIENTE, QUINCE, and CANTERO, JJ., concur.

PARIENTE, J., concurs with an opinion, in which ANSTEAD and CANTERO, JJ., concur.

PARIENTE, J.,

concurring.

I write separately to underscore two points in the majority opinion. First, trial courts should rely solely on the core or substantive offense in determining the order of lesser included offenses on a verdict form. Second, trial courts should provide an interrogatory separate from the verdict form for the core or substantive offenses for the jury to determine the existence of circumstances that can result in mandatory minimum sentences, sentence enhancements, or offense reclassifications. Interrogatories have been used successfully for many years under previous versions of section 775.087, Florida Statutes, which now includes the “10-20-life” mandatory penalties. We have noted that a “specific question or special verdict form is the clearest way by which the jury can make the finding necessary to support [a firearm] enhancement.” State v. Hargrove, 694 So.2d 729, 731 (Fla.1997). Further, these interrogatories setting forth specific jury findings have increased importance under the Sixth Amendment to support a sentence that exceeds the maximum sentence authorized by the jury verdict on the substantive offense alone. See Apprendi v. New Jersey, 530 U.S. 466, 490, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000) (“Other than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt.”); see also Blakely v. Washington, 542 U.S. 296, 303-04, 124 S.Ct. 2531, 159 L.Ed.2d 403 (2004) (“[T]he relevant ‘statutory maximum’ is not the maximum sentence a judge may impose after finding additional facts, but the maximum he may impose without any additional findings.”).

A jury interrogatory on sentence-aggravating facts facilitates jury decision-making by turning the determination of guilt and finding of additional circumstances into distinct, sequential tasks. The distinction prevents juries from mistakenly assuming that descending verdict choices correspond to descending sentence severity, which Sanders argues as grounds for invalidating the verdict in this case. Finally, separate findings on the substantive offense and sentence-aggravating circumstances would also ameliorate the difficulty, faced by the trial court in this case, of determining the appropriate list of lesser included offenses. See Sanders v. State, 912 So.2d 1286, 1291 (Fla. 2d DCA 2005).

In his majority opinion below, Judge Altenbernd stated that “it is not entirely clear to this court that the supreme court intends trial courts to analyze reclassifica-tions and enhancements in the same manner as lesser offenses when preparing verdict forms.” Id. at 1290. Today’s decision should resolve the uncertainty. Substantive or core offenses and the facts supporting reclassifications, enhancements, and mandatory minimum sentences for these offenses are distinct. Trial courts instructing juries on lesser included offenses should give instructions and provide verdict forms that comport with this distinction.

ANSTEAD and CANTERO, JJ., concur.

      . Sanders actually relied on the Fourth District Court of Appeal’s interpretation of Ray in Franklin v. State, 877 So.2d 19 (Fla. 4th DCA 2004).

      . As we addressed in our recent opinion in State v. Iseley, No. SC04-485, 944 So.2d 227, 231, 2006 WL 3025649 (Fla. Oct. 26, 2006), all that is required for the application of a reclassification or enhancement statute to an offense is a clear jury finding of the facts necessary to the reclassification or enhancement "either by (1) a specific question or special verdict form (which is the better practice), or (2) the inclusion of a reference to a firearm in identifying the specific crime for which the defendant is found guilty."

      . In addition to offenses subject to reclassifi-cations or enhancements via separate statutes such as section 775.087 (firearm reclassification and mandatory minimum term) or 784.07(2), Florida Statutes (2005) (law enforcement victim), interrogatories should be used for crimes such as burglaiy and robbery, in which the aggravating factor is part of the statute governing the substantive crime. See § 810.02, 812.13, Fla. Stat. (2005).