1 Fla. L. Weekly Supp. 64a

Attorney’s fees — Insurance — Insured entitled to award of attorney’s fees where insurer failed to pay personal injury protection benefits within 30 days of claim, notwithstanding that delay was caused mainly by insurer’s need to determine whether car driven by insured was a rental car, and insured could have clarified matter when he initially submitted claim for PIP benefits — Burden of authenticating claim within statutory time period lies solely with insurer

DIOSDADO CASTILLO, Appellant, vs. STAR CASUALTY INSURANCE CO., Appellee. 11th Judicial Circuit in and for Dade County, FL, Appellate Division. Case No. 91-083 AP. Opinion filed June 5, 1992. An Appeal from COUNTY COURT for Dade County, Florida, LAWRENCE A. SCHWARTZ, Judge. Marc L. Goldman, Tony Sirven, for Appellant. Warren Jacobs, for Appellee.

(Before ESQUIROZ, KORNBLUM, and GREEN, JJ.)

(GREEN, J.) Appellant DIOSDADO CASTILLO (“CASTILLO”) appeals a final order denying his motion for attorneys’ fees based upon the alleged failure of appellee STAR CASUALTY INSURANCE CO. (“STAR”) to pay personal injury protection (PIP) benefits under an automobile insurance policy. For the reasons which follow, we reverse, albeit reluctantly.

CASTILLO sustained personal injuries in an automobile accident on April 17, 1990, while driving an automobile owned by his employer, General Rent-A-Car Company. CASTILLO had not rented the automobile from his employer at the time.

In a letter dated June 14, 1990, CASTILLO gave notice to his insurer, appellee STAR, of the accident and of his intent to seek PIP benefits. At that time, CASTILLO also provided STAR with a copy of the police accident report which reflected that the automobile was owned by General Rent-A-Car Company. STAR, under the mistaken assumption that the subject automobile had been rented by CASTILLO, made several written requests of CASTILLO for a copy of the rental agreement. CASTILLO never responded to these requests.

On October 19, 1990, CASTILLO submitted a PIP application and affidavit to STAR. There were several inconsistencies in the information provided in these documents. In a letter dated October 24, 1990, STAR again requested a copy of the rental agreement, a clarification of the inconsistencies and a mutually convenient time for STAR to take a recorded statement from CASTILLO.

CASTILLO submitted his medical bills to STAR for PIP benefits and clarified the discrepancies in the PIP application in a letter dated November 6, 1990. He did not, however, advise STAR that the car he had been operating was not a rental car nor did he make any arrangements for his recorded statement to be taken by STAR. On November 16, 1990, STAR made yet another written request for a copy of the car rental agreement and convenient time to take CASTILLO’s recorded statement.

CASTILLO’s recorded statement was finally taken on December 19, 1990. It was during this statement that STAR learned for the first time that CASTILLO was employed by General Rent-A-Car Company and that the automobile operated by CASTILLO was a company vehicle and not a rental car. On that same day, an adjuster for STAR agreed that PIP benefits were owing and due to CASTILLO. STAR’s adjuster also requested STAR on December 19, 1990, to make payment to CASTILLO’s health care providers after the deductible had been applied.

CASTILLO instituted suit against STAR on January 9, 1991, because STAR had not yet made payment to his health care providers. After the suit was filed, STAR mailed the PIP benefit checks on January 17, 1991. Thereafter, CASTILLO filed his motion for a determination of his entitlement to attorneys’ fees.

Pursuant to Florida Statute 627.736(4)(b) (1990):

…Personal injury protection insurance benefits pursuant to this section shall be overdue if not paid within 30 days after the insurer is furnished written notice of the fact of a covered loss and of the amount of same… However, any payment shall not be deemed overdue when the insurer has reasonable proof to establish that the insurer is not responsible for the payment, notwithstanding that written notice has been furnished to the insurer…

Additionally, section 627.736(8) states that “With respect to any dispute under the provisions of ss. 627.730 – 627.7405 between the insured and the insurer the provisions of s. 627.428¹ shall apply.”

Accordingly then, CASTILLO would be entitled to recover his reasonable attorneys’ fees herein unless STAR had reasonable proof within thirty (30) days of CASTILLO’s claim of November 6, 1990, that STAR was not responsible for payment of PIP benefits. We conclude that STAR did not have such reasonable proof by December 6, 1990, and as such should have provided CASTILLO with his PIP benefits.

We are somewhat troubled by this result because the payment of CASTILLO’s PIP benefits were delayed mainly because STAR needed to ascertain whether the car driven by CASTILLO was a rental car. CASTILLO certainly could have clarified this entire matter when he initially submitted his claim to STAR for PIP benefits.

Nevertheless, we recognize that the legislative intent of 627.736(4)(b) is to place the burden solely upon the insurer to authenticate the claim within the statutory time period. See Dunmore v. Interstate Fire Insurance Co., 301 So.2d 502 (Fla. 1st DCA 1974). Thus, we find that STAR had an affirmative duty to verify CASTILLO’s claim for PIP benefits, independently of CASTILLO if necessary.

For all of these reasons, we reverse with instructions to the lower court to award appropriate attorneys’ fees, including fees for this appellate proceeding.

REVERSED. (GREEN, J., concurs. ESQUIROZ, J., dissents with separate written opinion.)

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¹Section 627.428(1) provides: Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of any named or omnibus insured or the named beneficiary under a policy or contract executed by the insurer, the trial court or, in the event of an appeal in which the insured or beneficiary prevails, the appellate court shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured’s or beneficiary’s attorney prosecuting the suit in which the recovery is had.

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(ESQUIROZ, MARGARITA, J., dissenting.) I respectfully dissent. Florida Statutes section 627.736(4)(b) (1991) provides that personal injury projection benefits become overdue if not paid within 30 days after the insurer is furnished with written notice of a “covered loss” and of its amount. The statute further provides, however, that

… any payment shall not be deemed overdue when the insurer has reasonable proof to establish that the insurer is not responsible for the payment, notwithstanding that written notice has been furnished to the insurer.

Fla. Stat. 627.736(4)(b), Fla. Stat. (1991).

As the majority correctly notes, the insurer appellee promptly made inquiry from appellant Castillo regarding several inconsistencies appearing on his application for PIP benefits. Early in the process, the police accident report had listed a car rental company as the owner of the automobile that Castillo was driving at the time of the accident. This original information prompted the insurer to request from Castillo a copy of the rental agreement allegedly covering the car in question. Indeed, the first such request for the rental agreement information, made on August 3, 1990, preceded Castillo’s PIP application by over two months. After Castillo submitted his application on October 19, 1990, the insurer again made repeated requests for the car rental agreement, but Castillo did not honor these inquiries. It was not until the insurer took Castillo’s recorded statement on December 19, 1990, that Castillo informed the insurer for the first time that he was merely employed by the car rental company, and that the car at issue was a company car rather than a rental car. On that same day, the insurer accepted responsibility for PIP benefits by informing both Castillo and his attorney that it would pay all PIP benefits due and owing. Shortly thereafter, the insurer cut the drafts and subsequently mailed them within 30 days from December 19, 1990. Nonetheless, Castillo’s attorney filed suit for PIP benefits on January 9, 1991, only three weeks following the insurer’s unequivocal acceptance of responsibility for those benefits on December 19, 1990, and just a few days before the insurer mailed the checks to Castillo on January 17, 1991.

The insurer’s request for the car rental agreement was reasonable. Indeed, information concerning the status of the car as a rental vehicle or otherwise was essential to a determination of the insurer’s responsibility for payment of PIP benefits. The rental agreement itself was probably necessary as well. For example, Florida Statutes section 627.7263 (1991) provides that:

(1) The valid and collectible liability insurance or personal injury protection insurance providing coverage for the lessor of a motor vehicle for rent or lease shall be primary unless otherwise stated in bold type on the face of the rental or lease agreement. Such insurance shall be primary for the limits of liability and personal injury protection coverage as required by ss. 324.021(7) and 627.736.

(2) Each rental or lease agreement between the lessee and the lessor shall contain a provision on the face of the agreement, stated in bold type, informing the lessee of the provisions of subsection (1) and shall provide a space for the names of the lessee’s insurance company if the lessor’s insurance is not to be primary.

Fla. Stat. s. 627.7263 (1991). See Southeastern Fidelity Ins. Co. v. Cole, 493 So.2d 445 (Fla. 1986); Allstate Insurance Company v. Fowler, 480 So.2d 1287 (Fla. 1985); Metropolitan Property and Life Insurance Co. v. Chicago Insurance Co., 478 So.2d 1068 (Fla. 1985).

In Fernandez v. South Carolina Insurance Company, 408 So.2d 753 (Fla. 3d DCA 1982), our Third District Court of Appeal had occasion to interpret the 30-day payment provision contained in Section 627.736(4)(b), as well as the exception thereto which arises when the insurer has “reasonable proof to establish that the insurer is not responsible for the payment,” notwithstanding written notice of the loss. In that case, the Third District upheld the trial court’s denial of a request for attorneys’ fees based on late payment of PIP benefits. It reasoned that the delay in payment was attributable to the appellant’s refusal to accept the draft representing payment for such benefits, ostensibly because such draft was not made payable solely to appellant. The insurer had acted properly, the Third District ruled, in making the draft payable jointly to the appellant and to a hospital, whose lien was valid and had priority over PIP benefits. Thus, the insurer was not accountable for the delay in payment and was therefore not liable for attorney’s fees.

In a similar vein, the lower court judge found that any delay in payment of PIP benefits to appellant Castillo was attributable to Castillo’s own conduct in failing to provide relevant information requested by the insurer in order to determine its responsibility for the payment of such benefits.¹ I must conclude that the lower court’s ruling in this regard is amply supported by the record, and I would therefore decline to disturb the same.

I must add that in my view, the majority places an unnecessarily heavy burden on the insurer by imposing on it an affirmative duty to verify the insured’s claim for PIP benefits independently of the insured if necessary. This is particularly true where, as here, information clearly relevant to the legitimacy of the claim finds itself easily available in the hands of the insured himself, or is otherwise readily accessible to him. Under those circumstances, it is far more realistic and sensible to require the insured to cooperate by furnishing relevant information in his possession, rather than to burden the insurer with the unnecessary and often tedious task of securing that same information from third sources, at the risk of incurring additional responsibility for attorney’s fees if the insurer is unable to accept and pay the claim within 30 days of notice thereof. I believe that this interpretation of Florida Statutes section 627.7263 (1991), is reasonable and does no violence to the legislative intent behind the statute.

For the foregoing reasons, I would affirm the lower court’s order denying appellant Castillo’s motion for attorney’s fees.

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¹The record reflects the following testimony given by the insurer’s claims supervisor in charge of processing Castillo’s claim:

Q. Did Star Casualty have any reasonable proof to believe that Mr. Castillo was not entitled to PIP benefits prior to him giving a recorded statement?

A. Yes. The PIP Application showed him as an owner of a different car that was insured and it showed him also with a different address, and also the second one, the Affidavit of Ownership showed him as a owner of a different car, not the insured car and insured through Trans-Florida Insurance Casualty Company.

Also, before the recorded statement we didn’t know what the circumstances of the rental car was, so, those were the main reasons.

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Q. All right. Why did Star in the first place ever request a copy of the rental agreement?

A. Before we knew of the circumstances that he was — acting as an agent for his employer and driving the car, we have — in other words, everytime [sic] a person insured is driving a rental car we have to find out what the circumstances are surrounding the rental car, whether he qualifies for coverage in the policy or whether it was an additional car he was driving while his car is in the household was not out of commission for mechanical breakdown or an accident, and that is an important question to determine coverage.

Q. Was that concern of yours something you would consider reasonable proof to believe Mr. Castillo was not entitled to PIP benefits?

A. Definitely, because that is the first line of questioning to find out whether there is coverage or not for the accident.

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