13 Fla. L. Weekly Supp. 1107a
Insurance — Personal injury protection — Priority of payments — Where hospital did not timely perfect its lien, lien lost its priority until such time as it was properly recorded, and provider’s bill, which was received both before the hospital’s bill and before recording of lien, was entitled to priority under English rule — English rule applies to assignees of PIP benefits — With regard to insurer’s contention that it had 30 days to investigate claim and make determination on whether to pay provider’s bill, insurer cannot shuffle priority of payments in that 30-day period
FLORIDA EMERGENCY PHYSICIANS KANG & ASSOCIATES, MD, PA as assignee of Celeste Mejia, Plaintiff, vs. PROGRESSIVE AMERICAN INSURANCE COMPANY, Defendant. County Court, 18th Judicial Circuit in and for Seminole County. Case No. 06-SC-000180. August 8, 2006. John R. Sloop, Judge. Counsel: Richard Oliver Hale, IV, Rutledge Bradford, Orlando. Fotini Z. Manolakos, St. Petersburg.
ORDER GRANTING PLAINTIFF’S MOTION FOR FINAL SUMMARY JUDGMENT
THIS MATTER having come before this Court on PLAINTIFF’S MOTION FOR FINAL SUMMARY JUDGMENT and this Court having heard arguments of counsel and being otherwise fully advised in the premises, finds as follows:
STATEMENT OF ISSUE
The Plaintiff moved for final summary judgment contending that the Defendant wrongfully reserved benefits for a hospital lien that was not timely perfected. Pursuant to Florida law, set forth below, the failure of a hospital to timely perfect its lien does not invalidate the hospital lien, but results in the hospital being an unsecured creditor (not entitled to priority) at least until such time as the lien is filed. Because the Plaintiff’s bill was received and in Defendant’s possession before the lien was perfected, payment should have been made on the Plaintiff’s bill, pursuant to the English Rule law of priorities.
UNDISPUTED FACTS
Celeste Mejia sought treatment in the Emergency Room of Florida Hospital on August 14, 2005, for injuries sustained in automobile collision. Her initial treatment was rendered by the Plaintiff, who are the contracted Emergency Room Doctors for Florida Hospital, and she was discharged from the hospital on August 19, 2005. The charges for Celeste Mejia’s treatment by the Plaintiff totaled $731.00.
The charges were received by the Defendant on September 23, 2005, but the Plaintiff’s bill was not paid. According to the Deposition testimony of the Defendant’s Corporate representative, Monique Brown, taken on June 7, 2006, an explanation of benefits was generated saying the benefits were exhausted, however, she confirmed that as of September 23, 2005, the benefits were not exhausted.
Ms. Brown testified that the Defendant was on “constructive notice” of a lien based on a conversation she had with a representative from Florida Hospital on September 20, 2005. However, she also testified that the bill from Florida Hospital was not received until September 30, 2005. Defendant did not pay the Plaintiff’s bill within thirty days of receipt or at any time thereafter, and instead, chose to exhaust the patient’s benefits by paying the hospital on or about October 13, 2005.
Ms. Brown testified that she eventually received a copy of the lien, which had been filed on October 26, 2005, 67 days after discharge.
ANALYSIS OF THE LAW
There is no dispute that the Plaintiff’s bill was submitted timely and prior to the hospital bill. Further, the Plaintiff does not dispute, that when a hospital lien is timely filed with the Clerk of the Court in Orange County, it receives preferential treatment under Florida law. However, when a lien fails to be timely filed, it loses its preferential status and takes its place in line for payment based upon when bills are received.
In the present case, the hospital lien indicates that Celeste Mejia was discharged from Florida Hospital on August 19, 2005. Pursuant to Article IV Section 20-157 of the municipal code of Florida:
in order to perfect a lien under this article, the executive officer or agent of a hospital or responsible governmental officer, before or within ten (10) days after, any suchperson shall have been discharged from such hospital, shall file in the office of the clerk of the circuit court ofthe county in which such hospital shall be located, a verified claim in writing. . . . .
Section 20-158 states:
the clerk of the circuit court shall endorse on such claim the date and hour of filing, [and] shall provide a hospital lien book with proper index in which he shall record such claim.
Florida law makes it clear that failure to timely perfect a lien does not void the lien, but does cause it to lose its priority until such time as it has properly been recorded. Public Health Trust of Dade County v. Carroll, 509 So.2d 1232 (Fla. 4th DCA 1987). Here, the hospital lien should have been recorded no later than August 29, 2005, in order to take priority over all other billings. It was recorded by Martha Haynie, Comptroller on October 26, 2005, approximately 57 days late. Accordingly, the bill submitted by the Plaintiff was entitled to payment as it was received before both the hospital’s bill and the recording of the lien, thereby giving Plaintiff’s bill priority.
The Defendant contends that it had 30 days to investigate this claim and make a determination on whether to pay the Plaintiff’s bill. The Plaintiff does not disagree with the Defendant’s contention, but the Defendant assumes the risk for deciding not to make payment. The Defendant cannot shuffle the priority of payments in that 30 day period. The Florida Supreme Court in Boulevard National Bank of Miami v. Air Metal Industries, Inc., 176 So.2d 94 (Fla. 1965) adopted the English rule establishing priorities of assignees as to claims asserted the rule provides essentially first come, first pay. The English rule applies to assignees of PIP benefits, according to the Fifth District Court of Appeal, which is binding upon this Court. State Farm Fire and Casualty vs. Ray, 556 So. 2d 811 (Fla. 5th DCA 1990).
ORDERED AND ADJUDGED that:
1. The Plaintiff was entitled to payment of its bill received before both the hospital bill and its untimely filed lien.
2. The Plaintiff is entitled to payment in full of its bill (at 80%), plus interest calculated 30 days after September 23, 2005.
