13 Fla. L. Weekly Supp. 862a
Attorney’s fees — Insurance — Personal injury protection — Prevailing medical provider — Where insurer paid PIP claim in full on sixteenth day after service of demand letter but before suit was filed, medical provider was not entitled to attorney’s fees award, as provider did not obtain judgment or functional equivalent — Waiver — Insurer did not waive right to appeal trial court’s ruling on entitlement to fees by participating in bifurcated hearing on amount of fees — Fifteen-day pre-suit period for payment of claim after receipt of demand letter does not create cause of action for attorney’s fees if claim is not paid within fifteen days
U.S. SECURITY INSURANCE CO., Appellant, vs. TMJ TESTING, INC., (a/a/o Ana Norberto), Appellee. Circuit Court, 13th Judicial Circuit (Appellate) in and for Hillsborough County. Case No. 05-3985, Division X. L.C. Case No. 04-7348 SC. April 12, 2006. Review of a final order of the County Court, Hillsborough County. Counsel: David B. Pakula, Pembroke Pines, and Catherine Aebel, Tampa, for Appellant. William C. Rocker, Tampa, and V. Rand Saltsgaver, Orlando, for Appellee.
Appellant U.S. Security Insurance Co. (“U.S. Security”) appeals a final judgment awarding attorney’s fees and costs arising from a claim for personal injury protection (PIP) benefits. Because the issue involved in this appeal is a question of law, we review the decision of the trial court de novo. Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126 (Fla. 2000). After careful consideration of the argument presented and the record on appeal, we reverse.
Before any lawsuit was filed, U.S. Security paid the claim in full on the sixteenth day after receipt of the demand letter required by F.S. §627.736(11)1. Thereafter, TMJ filed the instant lawsuit alleging entitlement to attorney’s fees. The trial court granted TMJ’s motion for attorney’s fees and costs.
Pursuant to F.S. §627.736(8) and 627.428(1), a PIP insured or assignee is entitled to fees only after obtaining a judgment or the functional equivalent of a judgment against the insurer subsequent to the filing of a complaint for PIP benefits. See, Ivey v. Allstate Ins. Co., 774 So. 2d 679 (Fla. 2000); Nationwide Prop. & Cas. Ins. v. Bobinski, 776 So. 2d 1047 (Fla. 5th DCA), rev. denied, 791 So. 2d 1094 (Fla. 2001). Payment of a PIP claim after a lawsuit is filed satisfies the requirement of obtaining a judgment.
Conceding that the claim was paid in full prior to suit being filed, TMJ advances two arguments to support the final judgment. First, TMJ argues that U.S. Security admitted in open court that TMJ was entitled to fees. Our review of the record leads us to a contrary conclusion. As is common in considering the issue of attorney’s fees, the trial court bifurcated the issues and conducted two separate hearings: the first on entitlement, the second on amount. After the initial hearing where the parties vigorously contested the issue of entitlement to fees, the trial court ruled in favor of TMJ. The second hearing was conducted solely to determine the amount of the fees. At no time at the second hearing did U.S. Security indicate that it was withdrawing its previous opposition on the entitlement issue. By participating in the hearing on the amount of attorney’s fees, U.S. Security did not waive its right to appeal the trial court’s ruling on the entitlement issue or the final judgment.
TMJ additionally argues that even when the insurer pays a PIP claim prior to the filing of a lawsuit, the legislature has implicitly created a new statutory right to attorney’s fees. F.S. §627.736(11) does not expressly provide for attorney’s fees, but merely states that an insurer can avoid attorney’s fees by paying the claim with interest and penalty within the fifteen day period. Because statutes awarding attorney’s fees are in derogation of the common law, they must be strictly construed. Pepper’s Steel & Alloys, Inc. v. United States, 850 So. 2d 462 (Fla. 2003); Sheraton v. Greenberg, 391 So. 2d 234 (Fla. 3rd 1980). The Court cannot create an implied right to attorney’s fees.
The obvious underlying policy behind the creation of F.S. §627.736(11), is to provide an insurer a final 15 day pre-suit period in which to pay a PIP claim in full. The express aim of the legislature was to encourage PIP carriers to pay valid claims and to avoid lawsuits2. A holding that the legislature has created a cause of action for attorney’s fees would directly contravene the intention of the legislature by spawning a new category of litigation.
The dissent asserts that the legislature created a bright line test for establishing a claimant’s right to attorney’s fees. That assertion ignores the role that the fifteen day demand letter plays in PIP litigation. Service of the demand letter is a “. . .condition precedent to filing any action for benefits . . .” under F.S. 627.736(11)(a). If there is no possible action for benefits, as specifically defined in F.S. 627.736(1),3 because the claim has been paid in full prior to the commencement of litigation, there is no right to obtain an award of attorney’s fees.
The final judgment appealed herein is reversed and remanded for entry of judgment in favor of U.S. Security. TMJ’s motion for appellate attorney’s fees is denied. (HOLDER, J., concurs. STODDARD, J., dissents, with opinion.)
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1Ch. 03-411, Laws of Florida extended the period within which the insurer has to respond to a PIP claimant’s demand letter from seven to fifteen days.
2In Ch. 03-411, § 1, the legislature states, “The no-fault system has been weakened in part due to certain insurers not adequately or timely compensating injured accident victims or health care providers. In addition, the system has become increasingly litigious with attorneys obtaining large fees by litigating, in certain instances, over relatively small amounts that are in dispute.”
3The enumerated “benefits” are categorized as medical, disability and death. F.S. §627.736(1)(a)(b) and (c). Attorney’s fees are not contained in the list of PIP benefits.
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(STODDARD, J. dissenting.) I respectfully dissent and would affirm the decision of the learned trial judge. If it is assumed that paying the claim after the lawsuit was filed satisfies the requirement triggering fees pursuant to Florida Statute 627.736(8) and 627.428, it is not logical to assume that a specifically delineated fifteen day “safe harbor” can be extended arbitrarily to then forgive the fee.
I would hold that the statute is clear in its intent, that is, fees, once potentially triggered, can be only avoided by the § 627.736(11)(d) fifteen day window, a bright line test. An analysis of the entire chapter 627 statutory fee scheme shows no need for an express provision for fees within 627.736(11)(d).
If, however, one finds that the lack of mention of fees in 627.736(11)(d) leaves the statute unclear, then the court must apply statutory construction and explore legislative history to determine legislative intent. Freeman v. First Union National Bank, 865 So. 2d 1272 (Fla. 2004). The legislative intent is the “polestar” of the court’s interpretation of the statute. Montgomery v. State, 897 So. 2d 1282 (Fla. 2005).
The purpose of the no-fault statutory scheme is to “provide swift and virtually automatic payment so that the injured insured may get on with his life without undue financial interruption” and to “level the playing field so that the economic power of insurance companies is not so overwhelming that injustice may be encouraged because people will not have the necessary means to seek redress in the courts.” Ivey v. Allstate Insurance Co., 774 So.2d 679, 683 (Fla. 2000) citing Comeau & Safeco Insurance Company, 356 So.2d 790 (Fla. 1978). Although the Ivey court specifically addresses §627.736(4)(b), the portion of the statute requiring notice and payment within 30 days, the court is addressing the purpose of no-fault statutes in general. Because the court discusses the “purpose of the no-fault statutory scheme,” it follows that the purpose would also include §627.736(11)(d). Ivey v. Allstate Insurance Co. 774 So.2d 679, 683 (Fla. 2000).
Applying the purpose of no-fault found in Ivey to the facts at hand it makes sense that section 627.736(11)(d) be interpreted to mean that if the insurer does not pay within the 15 days, the insurer should pay attorneys fees. By allowing the insurer to avoid paying attorneys fees by paying on day sixteen, the court extinguishes the bright line and creates a slippery slope. Does the insurer pay attorney fees at day seventeen? Eighteen? Nineteen? The only number the legislature gave is the fifteen day safe harbor deadline. Thus, it follows the court should interpret the fifteen day limit in favor of the insured.
