11 Fla. L. Weekly Supp. 113a
Insurance — Personal injury protection — Exhaustion of benefits — Action against insurer by provider/assignee whose bills were reduced by insurer — Insurer’s motion for summary judgment on ground that benefits were exhausted prior to suit is denied on ground that issues of fact, and maybe of law, remain
CELPHA CLINIC, INC. (As Assignee of Sandra Alvarez), Plaintiff(s), v. PROGRESSIVE EXPRESS INSURANCE COMPANY, Defendant(s). Circuit Court, 13th Judicial Circuit in and for Hillsborough County, Civil Action. Case No. 02-14726. Division “H”. December 18, 2003. Paul L. Huey, Judge. Counsel: Matthew Brumley, Timothy A. Patrick, P.A., Tampa, for Plaintiffs. Lisa S. Del Vecchio.
ORDER DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
THIS CAUSE having come on before this Court on October 15, 2003 on Defendant’s Motion for Summary Judgment and the Court having heard argument of counsel for the respective parties and being otherwise fully advised in these premises, it is hereby
ORDERED and ADJUDGED:
The Court finds the following facts to be undisputed.
1. On or about June 19, 2003, Plaintiff filed a PIP suit against Progressive alleging that Progressive failed to pay Plaintiff in accordance with the PIP Statute and the subject policy of automobile insurance.
2. This case involved the Defendant’s reduction of Plaintiff’s bills. The policy of insurance issued to Sandra Alvarez provided for ten thousand dollars ($10,000.00) in available PIP benefits with no Med-pay coverage and no deductible.
3. PIP benefits should have been exhausted in this matter on March 13, 2001, when payment was made to Ultra Open MRI. However, due to a clerical error benefits were exhausted on September 11, 2002 by payment to Ultra Open MRI of an additional fifteen cents. Plaintiff did not dispute this.
4. The Court finds that the fifteen cent error was clerical and therefore has the effect of benefits being exhausted prior to suit being filed by this Plaintiff.
5. The issue is whether the Defendant is entitled to summary judgment because benefits have been exhausted.
6. The Court has been provided with various authority from counsels for the Defendant and Plaintiff. The Defendant has focused on MTM Diagnostics, Inc. v. State Farm Mutual Automobile Insurance Company, 9 Fla. L. Weekly Supp. 581e (13th Circuit App., Case Number: 00-238-X, November 20, 2000, Judge Barton). The Court finds MTM Diagnostics and the cases cited therein not controlling here. See AIU Insurance Company v. Daidone, 760 So.2d 1110 (Fla. 4th DCA 2000); Jones v. State Farm Mutual Insurance Company, 694 So.2d 165 (Fla. 5th DCA 1997) ; Perez v. State Farm Fire and Casualty Company, 746 So. 2d 1123 (Fla 3rd DCA 1999), quashed, 808 So. 2d 82 (Fla. 2001). Rather Pinnacle Medical, Inc. v. Allstate, 5 FLW [Fla. L. Weekly] Supp. 663 (17th Circuit 1998); Nu-Wave Diagnostics, Inc. v. Fortune Insurance, 8 FLW [Fla. L. Weekly] Supp. 229 (17th Circuit 2001); Med+Plus Medical Clinics, Inc. v. Allstate, 8 FLW [Fla. L. Weekly] Supp. 250 (12th Circuit 2001) are more factually on point and more consistent with the rationale of Livingston v. State Farm, 774 So. 2d 716 (Fla. 2d DCA 2000) and its progeny, which hold that the assignee holds a claim at the time of the assignment and that the assignor cannot unilaterally usurp assignee’s right to pursue that claim, including indirectly doing so by necessarily receiving treatment from another medical provider who also takes an assignment of benefits in the normal course of business as contemplated by the PIP statutes.
The Court acknowledges that there are uncertainties in the PIP framework that complicate the underwriting process. On one level, based on fundamental tenets of contract law, it appears that an insurance company should never have to pay more than the $10,000 for which it bargained. On a deeper level, however, as explained by the decisions cited above and in further detail below, this apparent clarity becomes murky. Implicitly included within the PIP insurance policy are duties imposed upon insurance companies to handle claims pursuant to legal methodologies and priorities, which in the PIP context are to be construed in favor of the insured and its assigns. See, Derius v. Allstate, 723 So. 2d 271, 274 (Fla. 4th DCA 1998) and cases cited therein. Although a black-line rule that exhaustion of benefits moots all potential or pending claims arising out of the PIP covered accident at issue would be favored by the overburdened courts, the law, reason and fairness do not support such a rigid rule. For example, Medical Provider provides the exact same treatment to Insured 1 and Insured 2 on August 1, 2002, for the exact same injuries arising out of independent automobile accidents. Insured 1 and 2 have the same PIP carrier and their policies contain the exact same provisions and no deductibles. At the date Medical Provider bills the PIP carrier, both Insureds have sufficient PIP benefits available to satisfy the claim. The PIP carrier chooses to pay neither claim. Insured 1 and its subsequent assigns make no further claims for any PIP benefits so that at all times all $10,000 is available to pay Medical Provider. Medical Provider as assignee of Insured 1, sues PIP carrier and prevails at trial in showing that the treatment and resultant billing were reasonable, necessary and related. Insured 2, on the other hand, subsequently obtains the services of other medical providers, all of whom bill the PIP carrier and are timely and fully paid, exactly exhausting the $10,000 benefit. The last such timely payment is made the day before Medical Provider’s PIP suit as assignee for Insured 2 is to commence jury trial. At trial, the insurance company seeks a directed verdict on the theory that benefits have been exhausted. Under Defendant’s theory espoused here, the judge must grant a verdict in favor of the PIP carrier. It appears to this Court that such result is arbitrary, capricious and contrary to the spirit and expressed intent of the PIP statutory scheme.
The Court has taken the effort to express these issues because it is unaware of what was briefed and argued to the Thirteenth Judicial Circuit in MTM Diagnostics. The MTM Diagnostics opinion does not expressly address the principles discussed above. Also, the MTM Diagnostics court appears to have focused on whether or not the plaintiff there made a demand for escrow. This Court is unaware of any statutory or common law right of an insured to demand that PIP benefits be escrowed. To the contrary, it has consistently found that such right could never exist because, if it did, it would constitute a rewrite of the PIP statutes the effect of which would collapse the PIP scheme. Such a right would essentially anoint the health care provider as legislature and governor with authority at the stroke of a pen to alter the PIP carrier’s duty. For example, insured within one day after a car accident obtained the services of 10 different health care providers, each of whom obtained assignments and submitted bills to the insured’s PIP carrier. Either at the time of billing or at the time of receipt of insufficient payment each demands that PIP benefits be escrowed. Assume that the facts are such that if the carrier complies with any of the 10 escrow demands, it will not be able to pay the other claims in full in accordance with its statutory duty. With which escrow demand should the carrier comply? Why should one provider via a one sentence escrow demand letter have the authority to require the carrier to litigate with the nine other health care providers? What if the escrow demand is baseless, do the nine other providers get to sue the one for interference with a contractual right or some other cause of action? Should the actions be consolidated? Does the carrier and each of the other providers have a right to bring a declaratory judgment action on the escrow demand? Are statutory attorney fees allowed in all these actions? Is there an “American Rule” or an “English Rule” that governs the priority of escrow demand letters? Should the carrier prioritize by the receipt date of the first escrow demand or should it relate back to the time of the filing of the claim? The examples and questions are limitless. The Court believes the legislature understood these issues when it wrote and repeatedly revised the PIP law providing no right for an insured or his assigns to demand escrowing benefits. MTM Diagnostics cited no authority for its statement and this Court is not unaware of any.
In United Automobile Insurance Co. v. Rodriguez and State Farm v. Perez, 808 So. 2d 82 (Fla. 2001), the Florida Supreme Court cautioned courts to not rewrite the PIP statute by their decisions. There, the trial court was reversed for reading into the PIP statute’s requirement that PIP insurers have “reasonable proof” a limitation that such proof must be in the form of a “medical report.”
The MTM Diagnostics court also stated that the medical provider “has recourse against the insured for claims of payment after its rights under the assignment are exhausted;” however, that right does not diminish medical provider’s rights against the PIP carrier any more than the rights of a bank against the guarantor of a loan diminishes bank’s rights against the maker of the note. That is, both rights are legally distinct.
Further, as the above Insured 2 scenario indicates, to tell a medical provider that he loses his case, not because he or she has done anything improper or unlawful, but rather because of (1) the fortuity of the insured’s subsequent actions,(ii) what other medical providers charge, or (iii) whatever other reason totally out of medical provider’s control and undertaken after he or she has properly asserted a ripe, legal claim, cannot be the correct result, especially under a statutory scheme created for the primary purpose of protecting insureds against insurers economic might and leverage.
The common law includes defenses of estoppel, waiver, and accord and satisfaction, each of which requires a knowing act by the plaintiff, not an unknowing act by an unknown third-party or the defendant itself, to eviscerate an otherwise ripe claim.
Also, the law does not allow a medical provider to seek PIP benefits through third party beneficiary theories. See, Parkway General Hospital v. Allstate, 393 So. 2d 1171(Fla. 3rd DCA 1981). It thus seems illogical that the medical provider’s rights can be cut-off through, in essence, the reverse third-party beneficiary analysis proposed by defendant, i.e., subsequent, third-party medical provider is paid the balance of the PIP benefits thus mooting the prior claim to the benefit of the insurer.
It must be remembered that whether the PIP lawsuit arises in the first instance is primarily in the control of the PIP carrier. The PIP carrier is not blind-sided by the suit, but rather is protected by statutory provisions that mandate that it be put on notice of the claim and given a reasonable time to investigate its bona fides before it can be found in breach of its duties. Also, PIP law has always held PIP carriers liable for interest and attorney’s fees in excess of policy limits. For these, among other reasons, it appears consistent with constitutional, contract, procedural and PIP principles to allow this case to proceed, and inconsistent with them to do otherwise. This position does not open the floodgates or expose PIP carriers to unforeseen liability because the amount at issue is discrete, usually less than $50 and rarely more than a few thousand, and within the control of the PIP carriers.
Accordingly, because issues of fact and, maybe, law remain, the motion is denied.
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