18 Fla. L. Weekly Supp. 337a
Online Reference: FLWSUPP 1804GOVE
Insurance — Personal injury protection — Demand letter — Error to strike insurer’s defense of insufficient demand letters where demand letters included bills for total amounts of MRIs that did not account for partial payments made by insurer — Attorney’s fees — Even if judgment below had been properly entered against insurer, medical provider should not have been awarded attorney’s fees where litigation was necessitated by insurer’s inability to comply with unclear demand letters
GOVERNMENT EMPLOYEES INS. CO., Appellant, vs. OPEN MRI OF MIAMI-DADE, LTD., Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case Nos. 08-253 AP, 08-254 AP, 08-256 AP, 08-257 AP, 08-258 AP, 08-259 AP, and 08-484 AP. February 16, 2011. An appeal from the County Court for Miami-Dade County, the Honorable Caryn Canner Schwartz, presiding. Counsel: Robert H. Peterson, and Chad C. Guzzo, for Appellant. Marlene S. Reiss, for Appellee.
(Before GORDON, SHAPIRO, and ARECES, JJ.)
(ARECES, Judge.) Upon consideration by the Court of “Appellee’s Motion for Rehearing/Clarification,” and of “Appellant’s Response to Appellee’s Motion for Rehearing/Clarification,” we hereby DENY the request for rehearing but GRANT the request for clarification. As such, we hereby withdraw the opinion of June 18, 2010 and substitute the following opinion in its stead.
In these seven PIP cases, GEICO defended, among other bases, on the ground that Open MRI’s pre-suit demand letters failed to comply with the requirements of section 627.736(11), Florida Statutes (2004). The trial court struck that defense, along with others, and entered judgment against GEICO. We reverse, based on our conclusion that the defense of failure to comply with the requirements of section 627.736(11) was improperly stricken.1Section 627.736(11) Defense
Section 627.736(1), Florida Statutes (2004) requires that a pre-suit demand letter specify the exact amount claimed to be due. See Fountain Imaging of West Palm Beach, LLC v. Progressive Express Ins. Co., 14 Fla. L. Weekly Supp. 614a (Fla. 15th Cir. Ct. App. Mar. 30, 2007). Open MRI asserts that its demand letters complied with this requirement because HCFA Forms/Bills were attached to the letters. However, the attached bills cannot reasonably be seen as specifying the exact amount claimed to be due. This is because when Open MRI originally sent the bills to GEICO, GEICO made payments to Open MRI, although in an amount less than the amount set forth in the bills. Open MRI then attached the same bills to its demand letters, rather than including statements that took into account that it had already received payments from GEICO. This caused the demand letters to be ambiguous to such an extent that they were meaningless. From the information that Open MRI gave it, there was no way for GEICO to ascertain whether Open MRI was again seeking the amounts originally billed even though it had already received partial payments, whether it was seeking the amounts of the original bills minus what it had received, or whether it was seeking some other amounts altogether (which is what turned out to be the case). Eventually, it was revealed, through the course of litigation, that Open MRI was asserting that the payments received from GEICO were insufficient because they failed to properly calculate the adjustment for the Consumer Price Index (CPI). However, the “demand letters”2 did not reflect this amount claimed to be due. Instead, as noted, the original bills, which did not reflect the actual amount that Open MRI sought (the difference between what GEICO paid and what it should have paid if it had correctly calculated the CPI), were attached to the letters. As argued by GEICO, it defies reason that the law would permit merely attaching a bill that has absolutely no relation to the amount claimed due. Therefore, the “demand letters” failed to satisfy the itemized statement requirement of section 627.736(11). Accordingly, GEICO pled a valid defense. That defense should not have been stricken and judgment should not have been entered against GEICO.
Attorney’s Fees
It would appear that the reason Open MRI did not present demand letters to GEICO actually specifying the amounts that it claimed to be due is because Open MRI did not truly want GEICO to pay those amounts, but instead wanted to sue GEICO for failing to pay those amounts in order to collect attorney’s fees. GEICO’s incorrect CPI calculation resulted in differences between what GEICO paid and what it should have paid ranging from $31.50 to $93.15. Open MRI spent four years in the lower court litigating these claims, and obtained judgments granting those amounts, plus interest.3 The amounts awarded in attorneys fees for these claims, however, was astronomically higher. In each case, Open MRI was awarded $15,500.00 in attorney’s fees and costs by the trial court.
Thus, it is not difficult to surmise Open MRI’s motivation in bringing these actions. As in United Automobile Insurance Co. v. Alfonso, a recent case by another panel of this court, this case “presents a classic example of a lawsuit brought . . . for no other justification than the award of attorney’s fees.” See United Auto. Ins. Co. v. Alfonso, Nos. 08-120 AP and 08-344 AP (Fla. 11th. Cir. Ct. July 1, 2010) at 1.
Attorney’s fees were sought and granted in the instant case pursuant to section 627.428, Florida Statutes, which provides for granting attorney’s fees in favor of insureds who prevail against insurers. Section 627.428 is a penalty in derogation of the common law, and thus is strictly construed. Liberty Nat’l Life Ins. Co. v. Bailey, 944 So. 2d 1028, 1030 (Fla. 2d DCA 2006) [31 Fla. L. Weekly D1643a]. The purpose of this statute “is to discourage insurers from contesting valid claims and to reimburse successful insureds for attorney’s fees when they must sue to enforce their insurance contracts.” State Farm Florida Ins. Co. v. Lorenzo, 969 So. 2d 393, 397 (Fla. 5th DCA 2007) [32 Fla. L. Weekly D1791e] (emphasis added). Thus, the statute “penalize[s] a carrier from wrongfully causing its insured to resort to litigation to resolve a conflict when it was reasonably within the carrier’s power to do so.” GEICO v. Battaglia, 503 So. 2d 358, 360 (Fla. 1st DCA 1987). Therefore, when the insured is not forced to bring suit in order to receive benefits, the penalty of the statute should not be applied. See Lorenzo, 969 So. 2d at 398.
In the instant case, Open MRI was not forced to bring suit in order to receive the additional payments which it argued that it was entitled to due to GEICO’s miscalculation of the CPI adjustment. Open MRI could have simply notified GEICO of the actual amount that it sought from GEICO. Instead, Open MRI chose to send its “demand letter” to GEICO, specifying a meaningless amount due, from which GEICO could not determine the actual amount that Open MRI sought. Open MRI’s action in sending the letter that it sent made it impossible for GECIO to comply with the “demand” in the letter. Then Open MRI brought suit based upon GEICO’s failure to comply with its unclear demand. Allowing Open MRI to benefit from GEICO’s inability to comply with its “demand” by obtaining an attorney’s fee award punishes GEICO for failing to do something that it was impossible to do. GEICO did not engage in wrongful conduct justifying the imposition of an award of attorney’s fees against it. See Liberty Nat’l ife Ins. Co. v. Bailey, 944 So. 2d 1028, 1030 (Fla. 2d DCA 2006). Thus, even if the judgments below had been properly entered against GEICO, Open MRI should not have been granted attorney’s fees.
Accordingly, the instant cases are REVERSED and REMANDED.
Appellant’s motion for appellate attorney’s fees is GRANTED. (GORDON and SHAPIRO, JJ., concur.)
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1This is the only defense which we find was improperly stricken.
2A “demand letter” from which it is impossible to determine what demand is being made is not really making a demand at all.
3The amounts that Open MRI was awarded in these cases were $36.98, $117.81, $56.63, $56.63, $39.84, and $57.85.
