12 Fla. L. Weekly Supp. 391a
Insurance — Personal injury protection — Coverage — Denial — Explanation of benefits — Medical provider/assignee’s claim for breach of contract for not providing adequate EOB — Date of loss, date of claim, date of service, and amount of claim are sufficient “itemization” where complete denial of claim is made — However, where insurer failed to specify reason for denial, insurer’s responses failed to meet “specification” requirement of section 627.736(4)(b) — As section 627.736(4)(b) has become part of PIP insurance contract, provider is entitled to assert insurer’s failure to provide required EOB as separate cause of action for breach of contract — Summary judgment granted in favor of provider
MIAMI CHIROPRACTIC ASSOCIATES (a/a/o Fernando Monch), Plaintiff, vs. UNITED AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 03-02261 COSO (62). January 20, 2005. Robert W. Lee, Judge. Counsel: Russel Lazega, North Miami, for Plaintiff. Leandro E. Lissa, Coral Gables, for Defendant.
ORDER GRANTING PLAINTIFF’S RENEWED MOTION FOR SUMMARY JUDGMENT (COUNT II)
THIS CAUSE came before the Court on December 3, 2004 for hearing of the Plaintiff’s Motion for Summary Judgment as to Count II of the Complaint, and the Court’s having reviewed the Motion, Court file, and relevant legal authorities; having heard argument; and having been sufficiently advised in the premises, the Court hereby finds as follows:
Background. This is a PIP case. On May 24, 2004, this Court denied the Plaintiff’s Motion for Summary Judgment. The Court held that a disputed material issue of fact existed as to whether the Plaintiff provided a notice of claim to the Defendant, thus triggering the responsibility of the Defendant under FS §627.736(4)(b) to provide the claimant “an itemized specification of each item that the insurer ha[s] reduced, omitted, or declined to pay.”
On November 2, 2004, the Plaintiff filed its Renewed Motion for Summary Judgment. The Renewed Motion included a copy of the transcript of the claims adjuster’s deposition. The Plaintiff asserts that this sworn deposition provides unrebutted evidence that the Defendant received notice of the claim. The adjuster, Tracy Chase, testified as follows:
Q: What’s the coverage issue on the claim?
A: Material misrep.
Q: Was United Automobile Insurance Company ever notified of a loss involving Fernando Monch?
A: Yes.
Q: When was United Automobile notified of a loss involving Fernando Monch?
A: December 6th, 2002.
Q: How was United Automobile notified?
A: It was a telephone call from the clinic.
(Depo, p. 10, ll. 16-25).
Q: Now, did you at any point receive medical bills for treatment of Fernando Monch?
A: Yes.
Q: Did you have a PIP log detailing those charges received?
A: Yes.
Q: I present you one page, Ma’am. Could you identify this document?
A: It’s a no fault payment register.
(Depo, unpaginated page, ll. 6-14).
Thereafter, the deposition testimony authenticated the no fault payment register and established it as a business record. The register, which was attached as Exhibit A to the Deposition, provides that eight claims were received from the Plaintiff in amounts ranging from $250.00 to $1,695.00.
The matter was heard before the Court on December 3, 2004. This Motion pertains only to Count II of the Complaint. (Count I of the Complaint has previously been dismissed; Count III remains pending.)
Conclusions of Law. In the Defendant’s Brief in Opposition to Plaintiff’s Motion for Summary Judgment, the Defendant acknowledges that the Florida Statutes “require[ ] the insurer only to explain to the claimant why some or all of the claim was denied.” (Brief, p. 3, ¶9). The Defendant then goes on to argue that even if it failed to comply with the statute, the only remedy available to the Plaintiff is to bring suit and seek penalties, interest and attorneys’ fees. (Brief, p. 4, ¶10). The Defendant further argues that the Plaintiff cannot add remedies not set forth in the PIP law, and as a result, the Plaintiff’s claim for breach of contract for not providing an adequate explanation of benefits cannot lie.
Clearly, the letters provided by United Auto in response to the claims are not sufficient to meet the requirements of the statute. They merely parrot the language of the statute with a single, uninformative sentence, “We do not consider your correspondence notice of a covered loss or notice loss of the claim” [sic]. Prior to this point, on January 2, 2003, the Defendant had provided notice to the insured that it was investigating whether “[t]he vehicle involved in this may not qualify as a covered auto.” (Exhibit B to Brief). However, the same letter advises the insured that “[t]his letter does not mean that you do not have coverage for this loss.” Nevertheless, just five weeks later, the Defendant provided its first denial of a claim to the Plaintiff, with no further detail other than the date of service and the amount of the claim.
The operative statute, FS §627.736(4)(b), requires that the insurer “provide at the time of the partial payment or rejection an itemized specification of each item that the insurer has reduced, omitted or declined to pay.” The only other information to be provided is that desired by the insurer to explain any issue of medical necessity or reasonableness of the charge. The statute does not define further what an “itemized specification” is.
In the instant case, each denial sets forth the date of loss; date of claim; date of services; and amount of claim. No where does the insurer state why the claim is being denied. Because the letter represents a complete denial of the claim, the Court holds that no further “itemization” is required because the information given is clear as to which claim is being addressed. The question, then, is whether the letters further provide a “specification.” In other words, although each letter is itemized as to the claim, does each letter provide a specification? To reach this question, the Court must consider the meaning of “specification” and how it applies to the instant case.
In the absence of a statutory definition, Florida law requires that we use the standard dictionary definition for words in a statute. See Smith v. American Airlines, Inc., 606 So.2d 618, 620 (Fla. 1992). To specify something means “to name or state explicitly in detail.”Webster’s New Collegiate Dictionary 1108 (1980) (emphasis added). Thus, when added to the word itemized, the requirement is that the insurer set forth each claim and state explicitly in detail the reason for rejecting the claim or portion thereof. When the reason involves medical necessity or reasonableness of the charge, the insurer has the discretion to provide whatever further information the insurer desires the claimant to consider.
In the instant case, while the Defendant itemized its responses to the complete denial of the claims, it failed to specify anything about the denial. The Court holds that insurer’s responses in the instant case therefore fail to meet the requirements of FS §627.736(4)(b).
This does not, however, end the inquiry. The Court must next address whether the Plaintiff is entitled to assert the insurer’s failure as a separate cause of action for breach of contract. The Defendant obviously contests this point.
As a matter of general contract law, the Florida Supreme Court has held that the provisions of the Florida Statutes governing insurance become part of the insurance contract between the parties. Grant v. State Farm Fire & Casualty Company, 638 So.2d 936, 938 (Fla. 1994) (statutory definitions apply to terms used in insurance contracts). See also Addison v. American Medical Security, 2002 WL 1454102 (Fla. 15th Cir. Ct. 2002) (“Florida courts have consistently held that insureds may bring [. . .] a breach of contract action when an insurer violates statutory provisions which are deemed incorporated into the insurance policy”).
In the instant case, there is nothing in FS §627.736(4)(b) that provides for exclusive remedies. As a result, there is nothing in the statute which suggests that the general insurance contract law discussed above would not apply in this case. Cf. Alexdex Corp. v. Nachon Enterprises, Inc., 641 So.2d 858 (Fla. 1994) (in absence of words of exclusivity, both provisions of law apply if can be harmonized). This Court sees no inconsistency in the two legal provisions. For instance, for this particular count, the Defendant would not be entitled to statutory penalties and interest. Moreover, even though the Plaintiff may not be able to prove actual damages for this count, it would still be entitled to an award of nominal damages. See M. Frey & T. Bitting, Introduction to Contracts and Restitution 344 (1988) (“If the nonbreaching party proves a breach of contract but is unable to prove damages, the nonbreaching party is entitled to nominal damages [. . .]. A judgment for nominal damages, while not compensating the nonbreaching party in dollars and cents, does clarify the rights of the parties”). As a result, the Court holds that Florida Statute §627.736(4)(b) has become part of the PIP insurance contract in the case. When the insurer failed to provide the required explanation of benefits, it was subjecting itself to an action for breach of contract.
The record evidence establishes that no material dispute of fact exists as pertains to Count II of the Complaint. Therefore, the Plaintiff is entitled to the relief it is seeking as to Count II. The Court holds that the Defendant has breached its contract with the Plaintiff by failing to provide an explanation of benefits as required by statute. Accordingly, it is hereby
ORDERED and ADJUDGED that the Plaintiff’s Motion for Summary Judgment is GRANTED as to Count II only. This Order does not address Count III of the Complaint which remains pending before this Court.
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