13 Fla. L. Weekly Supp. 903b
Insurance — Personal injury protection — Coverage — Medical expenses — Exhaustion of policy limits — Where PIP benefits were exhausted after insured filed suit for bills denied by insurer, and there is no allegation that insurer acted in bad faith, insurer satisfied statutory and contractual obligations to insured — Insurer has no duty to escrow funds pending resolution of contested claim
REBECCA BURRESS, Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 13th Judicial Circuit in and for Hillsborough County, Civil Division. Case No. 04-CC-2549, Division L. June 16, 2006. John N. Conrad, Judge. Counsel: William Finn, Orlando, for Plaintiff. Kimberly A. Sandefer, Gale L. Young, P.A., Tampa, for Defendant.
Affirmed. 17 Fla. L. Weekly Supp. 164b
ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
THIS CAUSE having come before the Court on May 24, 2006 pursuant to Defendant’s Motion for Summary Judgment, and the Court having reviewed the file, considered the argument and Memorandum of Law submitted by the parties, and being otherwise fully advised in this matter, does hereby make the following findings of fact and conclusions of law:
FINDINGS OF FACT
1. On February 20, 2003, Plaintiff, Rebecca Burress, was involved in an automobile accident. At the time of the accident, Plaintiff was insured by Defendant, State Farm Mutual Automobile Insurance Company, under a policy which provided personal injury protection (PIP) benefits to Plaintiff in the amount of $10,000.00.
2. As a result of injuries sustained in the accident, Plaintiff received medical treatment from Gulfcoast Chiropractic Clinic. The bills for said medical treatment were submitted to Defendant for payment, and included bills for services provided in 9/03, 10/03, 11/03, and 12/03, which are attached to Plaintiff’s complaint as Exhibit “A”.
3. At Defendant’s request, Plaintiff submitted to an independent medical examination performed by Dr. Hochman on or about July 31, 2003. Based upon Dr. Hochman’s opinion, Defendant denied payment of the aforementioned bills on the basis that further chiropractic treatment was not necessary.
4. Plaintiff filed suit in this case on January 30, 2004. At the time of filing suit, Defendant still had policy benefits available within which to satisfy the claim submitted by Plaintiff.
5. In support of its Motion for Summary Judgment, Defendant filed the Affidavit of Jennifer Haschel, who is employed as a Claims Representative for Defendant. In the Affidavit, Ms. Haschel states that the “full amount of Personal Injury Protection benefits available under the policy, in the amount of $10,000.00, was exhausted on October 29, 2004.” There are no facts in the record to dispute that benefits were exhausted on October 29, 2004.
6. This Court finds that the personal injury protection (PIP) benefits available to Plaintiff, in the amount of $10,000.00, were exhausted on or before October 29, 2004.
7. There has been no allegation by Plaintiff that the actions taken by Defendant were done in bad faith.
CONCLUSIONS OF LAW
The issue presented to this Court is whether an insurance company, which issued a personal injury protection policy to an insured, has a legal obligation to pay medical bills submitted by its insured, as well as the statutory penalties of interest and attorney’s fees, based upon the following facts:
a) Plaintiff received medical treatment following an automobile accident and submitted bills relating to said treatment to Defendant when PIP benefits were available under the policy.
b) Defendant denied payment of the bills following an independent medical examination performed at its request, wherein the doctor concluded that no further chiropractic treatment was necessary.
c) Plaintiff filed suit against Defendant when PIP benefits were still available under the policy.
d) The PIP benefits available under the policy were exhausted after suit was filed.
e) There is no allegation by Plaintiff that Defendant acted in bad faith.
The decision in this case is controlled by Fla. Stat. §§ 627.730-627.7405, commonly known as the Florida Motor Vehicle No-Fault Law (“No-Fault Law”), and the case law interpreting these statutes. In particular, Fla. Stat. § 627.736 sets forth the specific obligations of an insurance company with respect to a claim submitted under a personal injury protection benefits policy. Fla. Stat. § 627.736(4)(b) states that 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.” This section further provides that “notwithstanding the fact that written notice has been furnished to the insurer, any payment shall not be deemed overdue when the insurer has reasonable proof to establish that the insurer is not responsible for the payment.” This provision concludes with the following language:
This paragraph does not preclude or limit the ability of the insurer to assert that the claim was unrelated, was not medically necessary, or was unreasonable or that the amount of the charge was in excess of that permitted under, or in violation of, subsection (5). Such assertion by the insurer may be made at any time, including after payment of the claim or after the 30-day time period for payment set forth in this paragraph.
The language of this statute clearly allows an insurance company the right to deny or contest a PIP claim without imposing liability and penalties. It is only when the insurer is ultimately found liable for a contested claim that the statutory penalties of interest and attorney’s fees become applicable. See United Automobile Insurance Company v. Rodriguez, 808 So. 2d 82 (Fla. 2001) and Allstate Insurance Company v. Kaklamanos, 843 So. 2d 885 (Fla. 2003). See also Fla. Stat. § 627.736(4)(c) (“Interest shall be due at the time payment of the overdue claim is made.”). Therefore, the primary issue for the Court’s determination is whether Defendant can still be held liable for payment of the claim submitted by Plaintiff, including the statutory penalties, when Plaintiff exhausted her PIP benefits prior to a determination of potential liability on behalf of Defendant to pay the claim.
This case presents a very difficult issue which requires the Court to analyze the right of an insured to recover PIP benefits pursuant to Florida’s No-Fault law in light of the rights and obligations of an insurance company pursuant to its contract of insurance with the insured. This Court finds that by continuing to incur medical expenses until the exhaustion of the policy limits, Plaintiff imposed a continuing, contractual obligation on Defendant to satisfy those claims. Defendant’s failure to pay those additional claims until the pending claim was resolved would have exposed Defendant to multiple lawsuits by other medical providers whose bills would have been placed on hold until the merits of Plaintiff’s pending claim could be resolved. This process would clearly frustrate the intent of the PIP statute to provide for prompt payment of these claims.
The insurance company has an obligation to settle as many claims as possible, and has discretion, subject to the requirement of good faith, in how it elects to settle claims, even the ability to settle certain claims to the exclusion of others. See Farinas v. Florida Farm Bureau General Insurance Co., 850 So. 2d 555 (Fla. 4th DCA 2003). Under the particular circumstances of this case, Defendant’s decision to deny the claim was based upon an independent medical examination performed by Dr. Hochman, who concluded, on or about July 31, 2003, that further chiropractic treatment was not necessary. Given this information, Defendant chose to deny the pending claim and to settle other claims submitted on behalf of Ms. Burress until the policy limits had been exhausted. This Court concludes that Defendant’s decision to pay other claims submitted on behalf of Ms. Burress, absent a showing of bad faith, satisfies its statutory obligations under Florida’s No-Fault law, as well as its contractual obligations to the insured. See Government Employees Insurance Company v. Robinson, 581 So. 2d 230 (Fla. 3rd DCA 1991) and Neuro-Imaging Associates, P.A. v. Nationwide Insurance Company of Florida, 10 Fla. L. Weekly Supp. 738a (Fla. 15th Jud. Cir. January 7, 2002).
Florida law further provides that an insurer has no duty to escrow funds pending the resolution of a contested claim. See Chambers Medical Group, Inc. v. Progressive Auto Pro Insurance Company, 13 Fla. L. Weekly Supp. 367a (Fla. 13th Jud. Cir. December 16, 2005) and Dr. Robert Simon, M.D., P.A., (a/a/o Hon) v. Progressive Express Insurance Company, 904 So. 2d 449 (Fla. 4th DCA 2005). In Simon, the Court specifically held that the automatic application of a “reserve” or “hold” provision to funds available at the time a claim is submitted “would result in unreasonable exposure of the insurance company and would be to the detriment of the insured and other providers with properly submitted claims. Id. at 450. Additionally, Florida’s “No-Fault” law has no provision allowing funds to be escrowed or reserved for contested claims. The failure of the legislature and the courts to recognize a duty on behalf of an insurance company to reserve funds pending the litigation of a contested PIP claim leads this Court to conclude that the right to contest the denial of a PIP claim, absent a showing of bad faith, can be extinguished through an exhaustion of benefits by the insured after the claim has been submitted, or after the lawsuit has been filed.
In making its decision, the Court is also relying upon the following opinions: Premier Open MRI, LLC v. Progressive Express Insurance Company, 11 Fla. L. Weekly Supp. 839a (Fla. 13th Jud. Cir. May 26, 2004); Back In Action Health, LLC v. Progressive Express Insurance Company, 11 Fla. L. Weekly Supp. 1092a (Fla. 15th Jud. Cir. September 17, 2004); Comprehensive Physicial Services v. The Hartford Insurance Company of Midwest, 12 Fla. L. Weekly Supp. 351a (Fla. 13th Jud. Cir. January 20, 2005); and Dr. Robert D. Simon, M.D., P.A. v. Progressive Express Insurance Company, 13 Fla. L. Weekly Supp. 502a (Fla. 15th Jud. Cir. December 7, 2005).
WHEREFORE, it is ORDERED and ADJUDGED as follows:
1. That Defendant’s Motion for Summary Judgment is hereby GRANTED.
2. That the Court reserves jurisdiction to award attorney’s fees and costs to Defendant, if any. Defendant shall have thirty (30) days from the date of this Summary Judgment to assert said claim.
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