13 Fla. L. Weekly Supp. 1108a

Insurance — Personal injury protection — Coverage — Medical expenses — Exhaustion of policy limits — Insurer’s motion for summary judgment based on exhaustion of benefits subsequent to reduced payment of medical provider’s bills is denied where deposition testimony of litigation adjuster, which does not establish that adjuster has personal knowledge of how independent review company determined what is usual and customary rate, failed to show that insurer had reasonable proof to make reduced payment — Further, summary judgment cannot be granted because jury would have to determine whether medical provider’s charges were reasonable within meaning of statute and whether insurer’s reductions were based on reasonable proof — Summary judgment is also improper because insurer is liable for statutory interest and attorney’s fees if jury finds that provider’s charges were reasonable or decides that insurer did not have reasonable proof to reduce bills

FLORIDA EMERGENCY PHYSICIANS KANG & ASSOCIATES, MD, PA, as assignee of Terri Walker, Plaintiff, vs. PROGRESSIVE AMERICAN INSURANCE COMPANY, Defendant. County Court, 18th Judicial Circuit in and for Seminole County. Case No. 05-SC-2632. August 8, 2006. John R. Sloop, Judge. Counsel: Richard Oliver Hale, IV, Orlando. Neil Andrews, Orlando.

ORDER DENYING DEFENDANT’S MOTION FOR FINAL SUMMARY JUDGEMENT

THIS MATTER having come before this Court on Defendant’s Motion for Summary Final Judgment, and this Court having heard arguments of counsel and being otherwise fully advised in the premises, finds as follows:

STATEMENT OF FACTS:

1. This is a claim for PIP benefits arising out of a motor vehicle collision that occurred on or about 12/10/2004.

2. Plaintiff, FLORIDA EMERGENCY PHYSICIANS KANG & ASSOCIATES, MD, PA, accepted an assignment of benefits from Terri Walker.

3. On December 10, 2006, the Plaintiff provided medically necessary services to Terri Walker.

4. Specifically, the Plaintiff performed an evaluation and management of the patient and submitted a medical bill to the Defendant for payment.

5. The service provided was both medically necessary and related to the above-referenced motor vehicle accident.

6. The Plaintiff charged the Defendant $354.00.

7. The Defendant reduced the amount charged by Plaintiff by $34.20, and reimbursed the Plaintiff at eighty-percent of the allowed amount, $249.00.

8. As evidenced by the Defendant’s PIP log, at the time the Defendant received the bill at issue and made payments at the reduced amount, there were more than enough remaining benefits to Terri Walker for Progressive to make payment in full at the amount charged.

9. The Plaintiff in this matter filed suit, seeking “judgment for personal injury protection benefits, extended medical benefits, together with pre-judgment interest, costs and attorney’s fees pursuant to Florida Statute §627.428 and §627.736(8)”.

10. The Defendant moves for Summary Final Judgment based solely on the issue that subsequent to the payment of the bill at issue, Terri Walker’s PIP benefits have been exhausted.

11. As such, the Defendant requests this Court enter a “Summary Final Judgment in favor of the Defendant,” contending there are, “. . .no genuine issues as to any material fact”.

12. The Plaintiff contends that genuine issues of material fact exist that preclude Summary Final Judgment.

LEGAL ANALYSIS:

In order to determine the propriety of a summary judgment, this Court must resolve whether there exists any “issue as to material fact,” and whether, the moving party is entitled to summary judgment as a matter of law. Krol v. City of Orlando, 778 So. 2d 490 (Fla. 5DCA 2001) citing, Fla.R.Civ.P. 1.510(c). The party moving for summary judgment, in this case the Defendant, has the burden to prove conclusively the non-existence of any genuine issue of material fact. Id. at 492. This court must consider the evidence contained in the record, including any supporting affidavits, in the light most favorable in the non-moving party, and if the slightest doubt exists, the summary judgment should not be granted. Id.

I. SUMMARY JUDGMENT CANNOT BE GRANTED AS THERE REMAINS GENUINE ISSUES OF MATERIAL FACT REGARDING THE REASONABLE PROOF NECESSARY FOR DEFENDANT TO LAWFULLY REDUCE THE CHARGES SUBMITTED BY PLAINTIFF.

A material fact, for purposes of a summary judgment motion, is a fact that is essential to the resolution of the legal questions raised in the case. If the record raises the slightest doubt that an issue might exist, then summary judgment is improper. Holland v. Verheul, 583 So. 2d 788, 789 (Fla. 2d DCA 1991); see, Fine Arts Museums Found. v. First Nat. In Palm Beach, a Div., of First Union Nat. Bank of Florida, (633 So. 2d 1179 (Fla. 4th DCA) review denied sub nom. Olean Gen. Hosp., Inc. v. Fine Arts Museums Found., 641 So. 2d 1346 (Fla. 1994). Defendant’s Motion for Summary Judgment cannot be granted as there remains genuine issues of material fact concerning the lawfulness of Defendant’s unilateral reduction of Plaintiff’s submitted bills based upon a database analysis.

Making conclusory statements to create no genuine issue of fact cannot be relied upon to support a summary judgment — these statements are inadmissible. See O’Brian Associates of Orlando, Inc., v. Tully, 184 So. 2d 202 (Fla. 4th DCA 1966) (Statements contained in proof submitted in support of Motion for Summary Judgment which stated conclusions and not facts admissible as evidence were insufficient to serve as basis for summary judgment); See also Jones Construction of Cent. Florida v. Florida Workers’ Compensation JUA, Inc., 793 So. 2d 978 (Fla. 2d DCA 2001) (The affidavit in support of summary judgment may not be based upon factual conclusions or conclusions of law).

As such, Defendant has failed to show there is no genuine issue of material fact that Defendant had “reasonable proof” to make payment in a lesser amount than that charged by Plaintiff. There is not a sufficient showing that the litigation adjuster has personal knowledge as to how the “independent review company” determined what the “reasonable” charge was/is. To the contrary, the deposition testimony of Mr. Gimbert suggests that she has no working knowledge of the Mitchell Medical database, how it operates, and/or how it arrives at a “usual and customary” rate. In fact, Mr. Gimbert deferred such questions to Doug Helton, Michelle Iacabocci, and Carla Gee, who have provided no testimony of any kind before this Court in the case at bar. Furthermore, because a jury would have to determine whether the Plaintiff’s charges were reasonable within the meaning of Fla. Stat. §627.736(5)(a) and whether Defendant’s reductions were based on “reasonable proof” pursuant to Fla. Stat. §627.736(4)(b), summary judgment can not be granted to Defendant and their motion must be denied. Chiro Plus of Deerfield Beach v. Progressive Express Ins. Co., 10 Fla. L. Weekly Supp. 934a (County Crt. 15th Judicial Circuit Co. No. 2002 CC028682-RD Sept. 22, 2003) (In an exhaustion case, the factual issue here is whether the Defendant paid the medical provider the proper amount for the services provided — this is a factual issue that precludes summary judgment). Thus, because Defendant cannot demonstrate, through legally admissible means, there exists no genuine issue of fact that Defendant had the statutorily required reasonable proof necessary to reduce payment than that what was charged, its motion must fail. Therefore, this Court has no choice but to deny Defendant’s Motion for Summary Judgment.

II. PLAINTIFF IS ENTITLED TO STATUTORY INTEREST ON THE DISPUTED AMOUNTS REGARDLESS OF THE REMAINING POLICY BENEFITS PURSUANT TO FLA. STAT. §627.736(4)(b)&(c).

The penalty provisions of statutory interest and attorney’s fees are always a part of a claim for overdue PIP benefits. To be sure, Fla. Stat. §627.736(4)(b) states: Personal injury protection insurance benefits paid pursuant to this section 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.

Fla. Stat. §627.736(4)(c) demands:

. . .all “overdue” payments shall bear simple interest at the rate established under Fla. Stat. §55.03 or the rate established in the insurance contract, whichever is greater, for the year in which the payment became overdue, calculated from the date the insurer was furnished with written notice of the amount of covered loss. Interest shall be due at the time payment of the overdue claim is made. Id. The Supreme Court stated that the legislative intent evinced in the penalty provisions is clear: The provisions were intended to promote the prompt resolution of PIP claims by imposing several reasonable penalties on insurers who pay late. United Auto. Ins. Co. v. Rodriguez 808 So. 2d 82, 85 (Fla. 2001). Thus, if an insurer does not have reasonable proof that they are not responsible for payment of a claim and does not pay within 30 days of the claim submission, they are exposed to the statutory penalties attendant to an “overdue” claim. Jones v. State Farm Mut. Auto. Ins. Co., 694 So. 2d 165 (Fla. 5 DCA 1997). Most recently, the 5th DCA reiterated that the holding in United Auto does not mean that an insurer is automatically obligated to pay a claim when the thirty-day period has passed, the insurer may contest the claim after the thirty days, but accepts the risk that if the insurer pays the contested claim, the insurer will be liable to pay interest on the claim and the insured’s attorney’s fees. January v. State Farm Mut. Ins. Co., 838 So. 2d 604, 607 (Fla. 5 DCA 2003). As such, the PIP insurer is given thirty days to investigate and to either pay the claim or discover the facts that warrant a refusal to pay. Id. at 606. “If it does not do so, then the claim is overdue and the statutory penalties for failing to pay the claim timely (interest and fees) are due.” Id. Nowhere in the statute or cases stemming from it, is there an interpretation that extinguishes the clear statutory liability imposing penalties and interest on overdue claims. By the plain language of the statutory definitions, the claims submitted by Plaintiff are now “overdue” and if the charges are found to be “reasonable” or if a jury decides Defendant did not have “reasonable proof” to reduce the bills, Defendant is liable for statutory interest on the unpaid sums and attorney’s fees. See, Walter A. Afield, M.D., P.A. v. USAA Casualty Ins. Co., 10 Fla. L. Weekly Supp. 546a (County Crt. 13th Judicial Cir. Case No. 2002-6072 Div. H Feb. 2003)(Although PIP benefits have been exhausted, the Plaintiff is entitled to receive statutory interest and attorney’s fees and costs): Steven A. Wilson, D.C. v. Maryland Casualty Co., 10 Fla. L. Weekly Supp. 532b (County Crt. 6th Judicial Cir. Case No. 01-1014 CO-42 Feb. 21, 2003) (Although the PIP benefits have exhausted, the Plaintiff is entitled to statutory interest for the late payments made and the court reserves jurisdiction on the amount to attorney’s fees and costs).

Lastly, statutory interest is an element of damage in any PIP suit and inures to the benefit of the insured. Leigh Taylor v. Fla. Farm Bureau, 8 Fla. L. Weekly Supp. 209b (County Crt. 18th Judicial Cir. Case No. 99-cc-3779-20 Nov. 27, 2000). As such, this Court cannot ignore the statutory requirements imposing interest as a penalty for eventually paying an overdue claim, as this would deprive Plaintiff of a legislatively granted right that has been in existence since 1971.

CONCLUSION

Defendant’s Motion for Summary Judgment must be denied as there remains genuine issues of material fact regarding the reasonableness of the charges submitted by Plaintiff and the reasonable proof necessary for Defendant to lawfully reduce the charges submitted by Plaintiff. Further, a jury must determine whether Defendant had the statutorily required “reasonable proof” sufficient to allow Defendant to reduce Plaintiff’s bills.

Lastly, summary judgment is improper in this case as statutory interest and attorney’s fees that follow any recovery is a legislatively created penalty imposed on insurers found liable for “overdue” claims and this penalty can not be extinguished by an insurer who pays out policy limits. As such, even if this Court finds that the Plaintiff can no longer recover under the policy of insurance issued to Terri Walker, the Court can not overlook the Plaintiff’s right to recover statutory interest in the event payment for his overdue claims are made.

Whereby, it is ORDERED AND ADJUDGED that:

1. Defendant’s Motion for Summary Final Judgment is HEREBY DENIED.

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