13 Fla. L. Weekly Supp. 682a
Attorney’s fees — Insurance — Personal injury protection — Justiciable issues — Voluntary dismissal — Abuse of discretion to deny insurer’s motion for section 57.105 attorney’s fees where medical provider did not have written assignment of benefits and was claiming payment for treatment when it was not lawfully treating insured because it was not registered with Department of Health; and where provider did not dismiss case until after expiration of safe harbor period, although both issues were pointed out in insurer’s answer and motion for attorney’s fees — There need not be determination on merits in order for insurer to pursue section 57.105 fees, and motion for such fees is cognizable where voluntary dismissal has been taken — On remand, trial court is also directed to hold evidentiary hearing on whether provider’s attorney acted in good faith based on representations of provider as to existence of material facts
INSURANCE CORPORATION OF NEW YORK, Appellant, vs. M & J HEALTH CENTER, INC. a/a/o JULIO RUIZ, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 05-206 AP. L.C. Case No. 03-14941 SP 05. April 4, 2006.
This appeal is taken from an Order Denying Defendant Insurance Corp. of New York’s (“Inscorp”) Motion for Attorney’s Fees pursuant to Fla. Stat. §57.105.
Inscorp’s Motion arises from a dispute over personal injury protection benefits. Julio Ruiz, Inscorp’s insured, was in an automobile accident on April 6, 2003. He was treated by the Plaintiff below, M & J Health Center, Inc. (“M & J”) When the center’s bills for services were not paid, the center’s attorney sent two notices of intent to initiate litigation: one from services rendered from April 8, to April 30, 2003 and one for services rendered May 8 to May 23, 2003. No assignment of benefits from Ruiz to M & J was attached.
M & J filed its Complaint on August 20, 2003, alleging that all conditions precedent to the filing of the lawsuit had been satisfied. Inscorp’s Answer to the Complaint raised several affirmative defenses; including specifically M & J’s failure to register with the Florida Department of Health, as required by statute, during the treatment period and failure to provide the assignment of benefits.
The case moved forward. On September 29, 2004, Inscorp filed its motion for Fla. Stat. §57.105 attorneys fees based on the issues raised in its affirmative defenses. Inscorp waited during the twenty-one day “safe harbor” period provided by the statute, Fla. Stat. §57.105(4), during which M & J could have dismissed its case without incurring liability for Inscorp’s fees. After the expiration of the “safe harbor period”, Inscorp moved for summary judgment on its affirmative defenses. At the hearing on January 2004, M & J took a voluntary dismissal of the case. Inscorp proceeded to pursue its Fla. Stat. §57.105 attorney’s fee claim. After two hearings, the trial court denied the motion. This appeal results.
We reverse. M & J’s main contention is that because there was not a determination on the merits, fees are not appropriate under Fla. Stat. §57.105. M & J convinced the trial court that, in light of the voluntary dismissal, it could not examine the merits of the claim in considering the fee motion. The statute requires the court to determine whether the party or the attorney knew, or should have known, that a claim was not supported by the law or material facts necessary to establish the claim. There need not be a determination of liability on the merits in order for a party to pursue Fla. Stat. §57.105 fees, and such a motion is cognizable where a voluntary dismissal has been taken. Tobin v. Bursch, __ So. 2d.__, 2005 WL 714050 (Fla. 3rd DCA 2005) [30 Fla. L. Weekly D873a]; Davis v. Bill Williams Air Conditioning and Heating, Inc., 765 So.2d 114 (Fla. 4th DCA 2000).
M & J’s claim in the case was without merit from the outset. The Notice of Intent to Sue provides a treatment period from April 8, 2003 to May 23, 2003. It is undisputed in pleading by M & J that it failed to register with the Department of Health, until May 28, 2003. Therefore, it had no valid claim for payment for treatment rendered before that date, an issue raised in fall 2003 in Inscorp’s answer and that M & J had ample opportunity to consider during the “safe harbor” period.
M & J also failed to provide an assignment of benefits to the insurance company. In Hartford Co. of the Southeast v. St. Mary’s Hospital, Inc., 771 So. 2d 1210 (Fla. 4th DCA 2000) the hospital pursued PIP benefit pursuant to a “Patient Consent and Authorization Form”. The appeals court held that the form was insufficient to constitute an assignment under Florida law, as it was not signed or counter-signed by the insured, a prerequisite under Fla. Stat. §627.736. The Fourth District concluded the hospital lacked standing to sue. As noted by the Second District in Progressive Express Ins. Co. v. McGrath Community Chiropractic, 913 So. 2d 1281 (Fla. 2nd DCA 2005), “For a medical provider to bring an action for PIP benefits, the insured must assign his or her right to such benefits under the policy to the medical provider. . . Thus, the assignment of PIP benefits is not merely a condition precedent to maintain an action on a claim held by the person or entity who filed the lawsuit. Rather, it is the basic of the claimants’ standing to invoke the process of the court in the first place.” Judge Davis’ concurrence in that case specifically notes that an equitable assignment, such as the verbal assignment argued here, is insufficient under the statutory PIP scheme. Some writing countersigned by the insured is required by the statute. Id. at 1288.
In this matter, the lack of support for the claim may be determined when the claim was initially filed. M & J did not have a written assignment and it was claiming payment for treatment when it was not lawfully treating Ruiz. Both these issues were pointed out in Inscorp’s answer and motion for attorney’s fees. M & J could have dismissed the case during the safe harbor and avoided fees. It failed to do so. The language of Fla. Stat. §57.105 is mandatory: “shall award fees.” (emphasis added) Therefore, we find the lower court abused its discretion and we reverse denial of the motion for attorney’s fees and remand. The motion sought Fla. Stat. §57.105 fees against plaintiff and its counsel. Upon remand, the trial Court is also directed to hold an evidentiary hearing to determine whether the plaintiffs’ attorney “acted in good faith, based upon the representations of his or her client, as to the existence of those material facts.” Fla. Stat. §57.105(1); see also O’Hara Gallery, Inc. v. Nader, 892 So. 2d 512 (Fla. 3rd DCA 2004).
For the reasons stated above, this case is REVERSED and REMANDED for further proceedings. (JENNIFER D. BAILEY, JOEL H. BROWN, and RONALD M. FRIEDMAN, JJ.)
* * *
