12 Fla. L. Weekly Supp. 563b
Attorney’s fees — Insurance — Personal injury protection — Confession of judgment — Payment of benefits after suit filed — Where insurer denied claim and then paid claim post-suit after being noticed for second time through unnecessary “demand letter” from medical provider’s billing agent, payment operates as confession of judgment and provider is entitled to award of attorney’s fees
NORTHEAST FLORIDA NEUROLOGY CLINICS, INC., f/k/a FIRST COAST MEDICAL CENTER, (as assignee for Amy Johnson), Plaintiff, v. PROGRESSIVE EXPRESS INSURANCE COMPANY, Defendant. County Court, 4th Judicial Circuit in and for Duval County. Case No. 2003-CC-002458, Division J. April 5, 2005. Eleni E. Derke, Judge. Counsel: Vincent P. Gallagher, The Gallagher Law Firm, Jacksonville, for Plaintiff. Patrick J. Snyder, Rinaman and Associates, for Defedant.
ORDER GRANTING PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT
This matter came before the court on Plaintiff’s Motion for Partial Summary Judgment. The facts are not in dispute. Plaintiff, Northeast Florida Neurological Clinics treated the assignee, Amy Johnson, for injuries related to a November 14, 2002 motor vehicle accident. Defendant, Progressive, provided PIP benefits to Johnson, who assigned those benefits to Plaintiff. During the course of treatment, Progressive declined to make some payments to Plaintiff questioning the medical necessity of the billed treatment. Progressive also made some reductions alleging the billed price exceeded the usual and customary charge for the area.
Plaintiff filed a breach of contract suit on February 21, 2003 alleging Progressive failed to properly pay PIP benefits within 30 days as required by statute. Progressive filed an answer denying those allegations. Both parties sent out discovery and took depositions. While several treatment dates and charges were at issue, this immediate Motion for Partial Summary Judgment only involved treatment rendered on November 22 and November 25, 2002.
On November 22, 2002, Plaintiff allegedly administered vapor coolant on the assignee. Plaintiff timely billed $18.00 for CPT code 97139. On November 25, 2002, Plaintiff again allegedly administered vapor coolant, CPT code 97139, to the assignee. Plaintiff timely billed $18.00 for that procedure and Progressive declined to make any payment for either date of service.
In 2003, the Florida Legislature amended §627.736 to require, as a prerequisite to filing any action under that statute, a demand letter be sent to the insurer specifying the contested issues. If the insurer tendered the request payment, along with the statutory penalties, within 15 days of receipt, then no lawsuit could be initiated. This “demand letter” requirement took effect for any PIP lawsuit filed after July 31, 2003. Both parties concede that no demand letter was necessary in the present litigation as the lawsuit was filed on February 21, 2003.
On October 3, 2003, Medical Billing Services, Plaintiff’s independent billing agent, sent Progressive a “demand letter” for unpaid medical benefits rendered to the assignee. The “demand letter” requested payment for CPT codes 99499 and 97139 which were rendered on November 22, and November 25, 2002. Both dates of service were already being litigated in the present suit. On October 17, 2003 Progressive, in response to the October 3, 2003 “demand letter” paid Plaintiff for CPT code 97139 for both dates of service, November 22 and November 25, 2003. The evidence shows that neither Medical Billing Services, nor the Progressive adjuster making the decision to pay these amounts, knew that the October 3, 2003 “demand letter” disputed amounts were already the subject of litigation.
Plaintiff avers that any insurer payment related to disputed amounts currently involved in litigation, constitute a confession of judgment for those disputed issues. Thus, Plaintiff argues that, Progressive paid the disputed amounts during litigation and that Plaintiff is now entitled to attorney fees and cost.
Defendant avers that Defendant had a statutory duty to respond to the demand letter and should not be penalized for making a voluntary payment in response to Plaintiff’s demand letter. The court believes that Ivey v. Allstate, 774 So. 2d 679 (Fla. 2000) is dispositive on this issue.
In Ivey, an Allstate motorist struck Ivey, a pedestrian. Ivey, who did not own a motor vehicle, timely applied to Allstate for PIP benefits. Ivey submitted charges for treatment to the lower left leg and right shoulder. Due to a misunderstanding, Allstate believed that only one date of service took place and only paid for that date. Allstate further reduced the amount payable claiming the amount exceeded the usual and customary charge. Ivey filed a PIP suit for the reduction and the unpaid date of treatment. During discovery, Allstate realized that the submitted medical bills were for two dates of treatment and Allstate made payment for the second date. Ivey requested an award of attorney fees claiming that the Allstate payment constituted a confession of judgment.
The county court held that since Allstate paid within 30 days of learning of the “mistake”, that Ivey had two dates of treatment, that no attorney fee was owed. The county court reasoned that the misleading medical bill caused the mistake and that Allstate was not bound to clarify any ambiguities that might have existed. The circuit court, sitting in its appellate capacity, reversed, holding that a simple investigation by Allstate, within the required thirty day period, would have revealed that the amount was owed.
Allstate, dissatisfied with the circuit court appellate decision, sought and was granted certiorari review by the Third District Court of Appeal which reversed the circuit court’s appellate decision, reasoning that the medical provider’s mistake caused the delay in payment and therefore, the payment was not a confession of judgment and Ivey was not entitled to attorney fees. The Florida Supreme Court accepted jurisdiction and reversed the Third District Court of Appeal.
The Court found that, “(W)ithout a doubt, the purpose of the no-fault statutory scheme is to “provide swift and virtually automatic payment so that the injured insured may get on with his life without undue financial interruption.” Government Employees Ins. Co. v. Gonzalez, 512 So. 2d 269, 271 (Fla. 3d DCA 1987) (citing Comeau v. Safeco Ins. Co., 356 So. 2d 790 (Fla. 1978)). To this end, section 627.736(4)(b), Florida Statutes (1995), clearly provides that PIP insurance benefits “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.” Ivey at 684.
In the instant case, Progressive had 30 days to investigate and either pay or deny the claim. Progressive chose to deny the claim, and then for unknown reasons, when noticed a second time via the “demand letter”, Progressive chose to make payment. As Ivey holds however, it is the original refusal to pay within 30 days that subjects Progressive to attorney fee liability. The Ivey court further stated:
Florida law is clear that in ‘any dispute’ which leads to judgment against the insurer and in favor of the insured, attorney’s fees shall be awarded to the insured. See §§ 627.736(8), 627.428(1); see also Dunmore, 301 So. 2d at 503. That is, under PIP law, the focus is outcome-oriented. If a dispute arises between an insurer and an insured, and judgment is entered in favor of the insured, he or she is entitled to attorney’s fees. It is the incorrect denial of benefits, not the presence of some sinister concept of “wrongfulness,” that generates the basic entitlement to the fees if such denial is incorrect. Ivey at 684.
Progressive timely received the November 22 and November 25, 2002 medical billing information and had 30 days to investigate and render an appropriate response. Progressive, after investigating, chose not to make payment. It was only after the October 2003 “demand letter” that Progressive chose to make payment. Progressive’s October 2003 payment clearly implies that the original 2002 denial was incorrect. It was that incorrect denial which necessitated the need for Plaintiff to obtain an attorney and litigate the denial of payments. Absent Progressive obtaining a release from the Plaintiff prior to correcting the earlier denial, this court is unaware of any “safe harbor” provision in the PIP statute or voluminous PIP cases which would disallow attorney fee liability for payment after litigation has begun.
Plaintiff’s Motion for Partial Summary Judgment is granted. Progressive’s payment to the Plaintiff operates as a confession of judgment as to those dates of service.
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