12 Fla. L. Weekly Supp. 80b
Insurance — Personal injury protection — Demand letter — Insurer’s nonpayment of medical provider’s charges prior to effective date of 2003 amendment to section 627.736(11), requiring presuit demand letter even when charges have been denied or reduced, vested in provider substantive right to file cause of action without necessity of filing presuit demand letter — Although 2003 amendment expressly provides for retroactive application, such application shall not be permitted where it impairs vested rights — Motion to dismiss denied
MILLENNIUM DIAGNOSTIC IMAGING CENTER, INC., as assignee for LISETTE MORALES, Plaintiff, vs. PROGRESSIVE EXPRESS INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 04-838 CC-24. October 5, 2004. Jeffrey D. Swartz, Judge. Counsel: Richard Shuster, Shuster & Saben, LLC, Miami Beach. Rafael Katz, Hollywood.
ORDER DENYING DEFENDANT’S MOTION TO DISMISS
THIS MATTER having come before the Court for hearing on September 21, 2004 on Defendant’s Motion to Dismiss. Defendant’s motion to dismiss was filed based upon Plaintiff’s failure to serve a demand letter.
The parties stipulated that the following facts are undisputed:
1. Millennium Diagnostic provided diagnostic imaging services to the assignor on our about February 26, 2003.
2. Progressive Express issued an explanation of benefits, on or about April 14, 2003 wherein in paid for the technical component of a lumbar M.R.I., and denied payment for the professional component.
3. Millennium Diagnostic did not serve a demand letter upon Progressive prior to filing suit in this claim.
4. This lawsuit was filed on April 6, 2004.
The Court having reviewed the Court file, the Defendant’s motion and supporting documents, and the Court having heard argument of counsel and being otherwise fully advised in the premises.
It is hereby ORDERED and ADJUDGED as follows:
1. This Court is presented the issue of whether it is constitutionally permissible for the 2003 changes to Florida Statute 627.736(11) to be applied retroactively.
2. Florida Statute 627.736(11), 2001 edition set forth:
(11) DEMAND LETTER. —
(a) As a condition precedent to filing any action for an overdue claim for benefits under paragraph (4)(b), the insurer must be provided with written notice of an intent to initiate litigation; provided, however, that, except with regard to a claim or amended claim or judgment for interest only which was not paid or was incorrectly calculated, such notice is not required for an overdue claim that the insurer has denied or reduced, nor is such notice required if the insurer has been provided documentation or information at the insurer’s request pursuant to subsection (6). Such notice may not be sent until the claim is overdue, including any additional time the insurer has to pay the claim pursuant to paragraph (4)(b).
3. In 2003, Florida Statute 627.736(11) was amended and now provides:
(11) DEMAND LETTER. —
(a) As a condition precedent to filing any action for benefits under this section, the insurer must be provided with written notice of an intent to initiate litigation. Such notice may not be sent until the claim is overdue, including any additional time the insurer has to pay the claim pursuant to paragraph (4)(b).
4. Article I, Section 10 of the Florida Constitution provides:
SECTION 10. Prohibited laws. — No bill of attainer, ex post facto law or law impairing the obligation of contracts shall be passed.
5. When determining whether statutes should be retroactively applied, two inquiries arise. Metro. Dade County v. Chase Fed. Hous. Corp., 737 So.2d 494, 499 (Fla. 1999). See Campus Communications, Inc. v. Earnhardt, 821 So.2d 388, 395 (Fla. 5th DCA 2002). The first is a question of statutory construction and requires the application of a legal presumption that statutes, in the absence of clear legislative intent to the contrary, should apply prospectively. See id. If the Legislature clearly expresses an intent that the statute applies retroactively, the court must then determine whether retroactive application is constitutionally permissible. Chase Fed., 737 So.2d at 499(citing State Farm Mut. Auto. Ins. v. Laforet, 658 So.2d 55, 61 (Fla. 1995)). Courts will not permit the retroactive application of a statute if the statute impairs vested rights, creates new obligations, or imposes new penalties, even when the Legislature expressly states that a statute is to have retroactive application. See Laforet, 658 So.2d at 61; see also Chase Fed.; McCord v. Smith, 43 So.2d 704, 708-09 (Fla. 1949).
6. In that the 2003 version of Florida Statute 627.736(11) requires a demand letter regardless of whether a carrier denied a claim prior to the effective date of the statute, the statute expressly provides for retroactive application.
7. In determining whether the requirement to submit a demand letter is a procedural or substantive change, this Court is guided by the Florida Supreme Court’s holding in Alamo Rent-A-Car, Inc. v. Mancusi, 632 So.2d 1352, 1358 (Fla. 1994), where the court said that “substantive law prescribes duties and rights and procedural law concerns the means and methods to apply and enforce those duties and rights.” A substantive, vested right is “an immediate right of present enjoyment, or a present, fixed right of future enjoyment.”
8. When the Defendant issued an explanation of benefits that denied payment for the professional component of the subject M.R.I., the Plaintiff accrued a cause of action. The Plaintiff’s right to bring suit based upon the denial was vested and perfected prior to the August 1, 2003 effective date of the 2003 amendments to 627.736(11).
9. Florida Statute 627.736(11), the demand letter requirement, prescribes a duty, i.e., the duty to submit a demand letter and wait seven business days under the prior version of the statute and fifteen days under the current version of the statute. The demand letter requirement also creates a right to a 10% penalty (capped at $250.00) where payment is made after receipt of a demand letter. Since 627.736(11) prescribes a duty and creates substantive rights the 2003 amendments to this statute are substantive in nature.
10. This Court finds that Progressive’s non-payment for some of Plaintiff’s charges vested in Plaintiff a substantive right to file a cause of action against Progressive pursuant to Florida Statute 627.736 without the necessity of filing a presuit demand letter. The retroactive application of the amendments to Florida Statute 627.736(11) would affect this substantive right of the Plaintiff by removing Plaintiff’s vested, pre-existing substantive right to file the suit and prosecute this cause of action without first filing a presuit demand letter.
11. In those matters where no demand letter was served, the retroactive application of 627.736(11) would grant to the Defendant the additional substantive right to avoid being sued and paying attorney fees and costs in claims it denied prior to the effective date of the 2003 amendments to 627.736(11).
12. The retroactive application of the 2003 amendments to 627.736, is in violation of Section 10 of the Florida Constitution, is contrary to the cases discussed herein, and shall not be permitted by this Court.
13. Defendant’s motion to dismiss is denied.
14. The Defendant shall answer Plaintiff’s Complaint within fourteen (14) days.
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