12 Fla. L. Weekly Supp. 693a
Insurance — Personal injury protection — Deductible — Appeal of judgment in favor of insurer in action by medical provider seeking amount of reductions to bills applied to deductible at 80% of reduced amount — Where total amount of bills at issue as originally billed is less than amount of deductible and bills were submitted before deductible was met, insurer was under no obligation to pay bills in whole or in part, and provider was not entitled to recover amount of reductions from insurer — Insurer correctly applied reduced medical bills rather than original amount to deductible
PHYSICIANS INJURY CARE CENTER, INC., as assignee of GAIL SCOTT, Appellant, v. PROGRESSIVE EXPRESS INSURANCE COMPANY, a foreign corporation, Appellee. Circuit Court, 9th Judicial Circuit (Appellate) in and for Orange County. Case No. CVA1-04-39. L.C. Case No. SCO-03-4342. May 13, 2005. Appeal from County Court for Orange County, Leon B. Cheek, III, Judge. Counsel: Herbert V. McMillan, The Law Office of Herbert McMillan, Orlando, for Appellant. Douglas H. Stein, Anania, Bandklayder, Blackwell, Baumgarten, Torricella & Stein, Miami, for Appellee.
(Before Whitehead, O’Kane, and Gridley, JJ.)
FINAL ORDER AFFIRMING THE LOWER COURT’S ORDER
(PER CURIAM.) Appellant Physicians Injury Care Center, Inc. (“PICC”) seeks review of a Final Judgment entered by the lower court on July 12, 2004, in favor of Appellee Progressive Express Insurance Company, a foreign corporation (“Progressive”). We have jurisdiction pursuant to Florida Rule of Appellate Procedure 9.030(c). We dispense with oral argument pursuant to Florida Rule of Appellate Procedure 9.320.
Factual and Procedural Background
On or about January 24, 2003, Gail Scott (“Scott”) was injured in a motor vehicle accident. At the time of the accident, Scott was insured under a personal injury protection (“PIP”) policy issued by Progressive. The insurance policy provided $10,000.00 in PIP benefits with a $2,000.00 deductible for reasonable, medical treatment and lost wages. Scott sought treatment from PICC for injuries sustained related to the automobile accident. As consideration for the services rendered, Scott executed an assignment of benefits, assigning her rights and benefits of her insurance policy to PICC. PICC, as an assignee of Scott, submitted bills to Progressive for payment.
Progressive, however, reduced the first two bills submitted by PICC from $1,035.00 to $959.00, and applied 80% or $767.20 to the services rendered on January 29 and 31, 2003.1 On April 25, 2005, PICC filed suit alleging that Progressive failed to apply the full amount of the benefits charged by PICC for Scott’s treatment to the deductible, and sought to have the benefits applied to the deductible in full.
On June 8, 2004, Progressive moved for summary judgment. After hearing on the matter, the county court granted Progressive’s motion for summary judgment and found that the amount of the bills at issue, even if not reduced by Progressive, would have been applied to Scott’s $2,000.00 deductible because at the time the bills were submitted for payment, the deductible had not been met. On July 12, 2004, the lower court entered a final judgment in favor of Progressive and reserved on attorney’s fees and costs. On July 30, 2004, PICC filed its notice of appeal.
Standard of Review
The standard of review of a summary judgment is de novo. See Lawyers Title Ins. Corp. v. Wells, 881 So. 2d 668 (Fla. 5th DCA 2004); Dr. Phillips, Inc. v. L&W Supply Corp., 790 So. 2d 539 (Fla. 5th DCA 2001). Summary judgment is appropriate only if there is no genuine issue of material fact, and if the moving party is entitled to a judgment as a matter of law. See also Krol v. City of Orlando, 778 So. 2d 490, 491-92 (Fla. 5th DCA 2001).
Discussion
PICC argues on appeal that the trial court erred in finding that PICC could not legally challenge Progressive’s reductions to medical claims even if Scott had not met her deductible at the time these bills were submitted for payment. PICC asserts that the reduced medical bills, which were applied to Scott’s PIP deductible, had the effect of changing Scott’s deductible from $2,000.00 to a higher amount because Scott still owed PICC the full amount of the bills.
Although PICC contends that Progressive should have applied the amount of the original bills from PICC to the deductible rather than the reduced amount, the main issue on appeal is whether PICC can recover from Progressive the amount of reductions Progressive made to those bills when the full amount of those medical bills fall within Scott’s $2,000.00 deductible, and are not payable by Progressive.
The law is well settled in Florida that the functional purpose of a deductible is to alter the point at which the insurance carrier’s obligation to pay will ripen. See Int’l Bankers Ins. Co. v. Arnone, 552 So. 2d 908 (Fla. 1989). In the present case, the facts are undisputed that Scott selected a $2,000.00 deductible2 with Progressive. As illustrated in Hannah v. NewKirk, 675 So. 2d 112, 114 (Fla. 1996), the Supreme Court of Florida held that an insured who elects a PIP deductible pays a lower premium for PIP coverage, and therefore, is presumed that the insured do so with knowledge of the consequences, including possibly incomplete coverage. See also Chapman v. Dillon, 415 So. 2d 12 (Fla. 1982) (finding that purchasers of insurance contracts who choose one of the optional deductibles do so with the knowledge of the consequences).
According to section 627.739(2), Florida Statutes, the insurance company’s obligation to pay for reasonable medical expenses do not become due until after the deductible is met. See § 627.739(2), Fla. Stat. (2004); see also Int’l Bankers Ins. Co. v. Govan, 502 So. 2d 913 (Fla. 4th DCA 1987) (holding that the application of 80% should be made before the deductible is subtracted to determine the amount of benefits due). In the instant case, Progressive applied two bills dated January 29 and 31, 2003, to Scott’s PIP deductible. Progressive reduced PICC’s first medical bill dated January 29, 2003, from $375.00 to $371.00, and applied 80% or $296.80 to the deductible. In addition, Progressive reduced PICC’s second medical bill dated January 31, 2003, from $660.00 to $588.00, and applied 80% or $470.40 to the deductible. Thus, the total amount of reductions taken by Progressive on the medical bills, i.e., the difference between the original amount and the allowed amount, $76.00, and applied 80% or $60.803 is the amount that PICC asserts should have been applied to the deductible.
PICC argues that Progressive failed to exercise the correct application of Scott’s medical bills to her deductible, and therefore, is in breach of contract pursuant to section 627.736, Florida Statutes. The Eleventh Judicial Circuit confronted this issue in Cosme v. Fidelity Nat’l Ins. Co., 5 Fla. L. Weekly Supp. 656a (Fla. 11th Cir. Ct. 1998), and held that a PIP policy that covers 80% of medical expenses and insured pays a 20% co-payment, that co-payment is to mean no more than 20% of the reasonable amount, subsequently agreed, and not the first amount billed, citing Botero v. Fidelity Nat’l Ins. Co., 4 Fla. Weekly Supp. 440a (Fla. 11th Cir. Ct. 1996), cert. denied No. 97-00924 (Fla. 3d DCA, Aug. 8, 1997) (emphasis added). Since the bills at issue total $1,035.00 were incurred and submitted before the $2,000.00 deductible was met, Progressive was not under any obligation to pay those bills in whole or in part until Scott has met her PIP deductible.
PICC relies on Allstate Ins. Co. v. Kaklamanos, 843 So.2d 885 (Fla. 2003) for the proposition that an insured need not have incurred any damages prior to filing suit because the focus should be on the alleged breach of contract by the PIP carrier, not the damages sustained by the insured. However, Kaklamanos isdistinguishable upon its facts in that Allstate refused to pay PIP benefits for medical services and the medical provider had not instituted suit against Allstate for nonpayment. Id. at 887. In the instant case, PICC did indeed bring suit against Progressive for not applying the full amount of the medical bills to Scott’s PIP deductible. In addition, central to the holding in Kaklamanos was the recognition that an insured may be damaged by an insurance carrier’s failure to pay a claim and need not wait to be sued by the medical provider before initiating suit against the insurance carrier who is obligated to pay the medical bills, but fails to do so. Unlike Kaklamanos, Progressive was not obligated to pay the medical bills, in whole or in part, because Scott had not met her deductible at the time these bills were submitted for payment. Therefore, PICC has suffered no damages as a result of the reductions Progressive made to those bills.
As an assignee, PICC obtains no greater rights than Scott had the ability to assign, and therefore, is also subject to the $2,000.00 deductible. This is because Scott, having elected a $2,000.00 deductible, cannot expect a right greater than bargained for, nor assign rights beyond those that she held. See Lockett v. Robinson, 12 So. 649 (Fla. 1893); Guaranty Mortgage & Ins. Co. v. Harris, 193 So. 2d 1 (Fla. 1967). The amount of total bills at issue, even if not reduced by Progressive, would have been applied to the $2,000.00 deductible, and not paid to PICC. There is nothing in the record establishing that Progressive failed or refused to pay subsequent medical bills at 80% after the deductible was met.
More importantly, PICC had not sued Progressive for amounts not paid on any subsequent medical bills; rather, it specifically sued Progressive on the January 29 and 31, 2003 bills for which Progressive was not responsible to pay. Even if the focus were on the alleged breach of contract by Progressive instead of the damages sustained by the insured, Progressive did not breach its obligation to pay because it was only responsible for paying a reasonable amount, not the original amount billed as maintained by PICC.
Accordingly, we find that Progressive correctly applied PICC’s reduced medical bills rather than the original amount to the deductible in order to determine the amount owed by both Progressive and Scott.
Appellate Attorney’s Fees
Both parties have timely filed motions seeking an award of appellate attorney’s fees pursuant to section 768.79(3), Florida Statutes. Since Appellant PICC is not the prevailing party on appeal, its motion for appellate attorney’s fees is denied. Appellee Progressive has also requested an award of appellate attorney’s fees pursuant to section 768.79(3), Florida Statutes, and Florida Rule of Appellate Procedure 9.400(b). Pursuant to Florida Rule of Appellate Procedure 9.400, Progressive is granted an award of its appellate attorney’s fees and that the assessment of those fees is remanded to the lower tribunal. Additionally, Progressive is entitled to have costs taxed in its favor by filing a proper motion with the lower tribunal within thirty days after the issuance of the mandate in this case.
Based upon the foregoing, it is hereby ORDERED AND ADJUDGED that the lower court’s final judgment entered on July 12, 2004, is AFFIRMED.
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1The allowed amount was based on the usual and customary amount in the area in which the services were rendered.
2Scott initiated suit after the deductible was met.
3The complaint, however, reflects a slightly different amount, $67.20, as the total amount of reductions taken by Progressive.
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