14 Fla. L. Weekly Supp. 339a
Insurance — Personal injury protection — Summary judgment — Error to enter summary judgment in favor of medical provider prior to filing of answer — Fact that motion to dismiss was pending, that provider made claims for conflicting dates of service and that significant amount of time had passed between accident and treatment demonstrate existence of material issues of fact — Failure to pay or investigate within 30 days — Insurer is entitled to rely on peer review report indicating that claimed medical expenses are not reasonable, related, and necessary despite fact that medical report was not obtained within 30-day period to investigate and authenticate claim
PROGRESSIVE EXPRESS INSURANCE COMPANY, Appellant, vs. OUTPATIENT PAIN & WELLNESS CENTER (a/a/o Christine Scobee), Appellee. Circuit Court, 13th Judicial Circuit (Appellate) for Hillsborough County. Case No. 05-7692. Division X. L.C. Case No. 03-18710. December 11, 2006. Counsel: Douglas Stein, Miami; and Randall A. Wainoris, Haas, Dutton, Blackburn, Lewis, Guerra & Wainoris, Tampa, for Appellant. V. Rand Saltsgaver, Orlando; and Timothy Patrick, Tampa, for Appellee.
[Editor’s note: County court order at 12 Fla. L. Weekly Supp. 789a]
(MARVA L. CRENSHAW, J.) Appellant Progressive Express Insurance Company appeals on both substantive and procedural grounds the summary judgment entered in favor of Appellee Outpatient Pain & Wellness Center (the provider). The substantive issue is whether an otherwise valid peer review (physician’s) report obtained pursuant to §627.736(7)(a), which disputed the necessity and relatedness of treatment, obtained more than 30 days after a claim for payment, precluded Progressive from defending against the claims on that basis. Progressive contends that the trial court misconstrued the law and overlooked material issues of fact when it gave no effect to the report. With respect to procedure, Progressive argues that the trial court entered summary judgment prematurely, given that a motion to dismiss was pending and it had filed no answer and affirmative defenses. On both procedural and substantive grounds, we conclude the trial court erred when it entered summary judgment against Progressive. The facts are as follows.
On or about October 1, 2001, Progressive’s insured, Christine Scobee, was involved in an automobile accident. Approximately 18 months after the date of the accident, on April 25, 2003, she received medical treatment at the provider’s medical clinic for injuries which the provider, as her assignee, alleged to be “reasonable, necessary and related to Ms. Scobee’s motor vehicle accident of October 1, 2001.” Although the order granting motion for summary judgment states that Progressive made no payments, the record supports the provider’s assertion that Progressive may have made one payment. Progressive referred the remaining bills and related medical records for a peer review pursuant to §627.736(7)(a)1 and sent the provider an Explanation of Benefits (“EOB”) advising the provider that benefits were delayed pending review. The peer review report was completed on July 16, 2003, and on August 15, 2003, Progressive denied payment for the claimed medical bills on the ground that the treatment was not related to the October 1, 2001 automobile accident.
The provider filed suit on July 29, 2003. The complaint was not specific about the dates of service at issue. In response, on September 15, 2003, Progressive filed a motion to dismiss or for more particular statement. Subsequently, the provider filed a statement of particulars, but did not commit to any particular dates of service, indicating its desire to amend to reflect any changes that might be ascertained during discovery. Progressive filed an amended motion on March 22, 2005. Notwithstanding the pending motion to dismiss and lack of an answer, the trial court entered its order granting summary judgment on May 16, 2005, and granted summary judgment on July 29, 2005, without considering the report because it was obtained more than 30 days after the claims became due. This appeal followed.
We agree with Progressive that summary judgment should not have been entered when no answer had been filed and a motion to dismiss was pending. Although the absence of an answer is not an absolute bar to summary judgment, “[t]he burden of the moving party in such a case is an unusually heavy one.” Rodriguez v. Tri-Square Constr., Inc., 635 So.2d 125, 126 (Fla. 3d DCA 1994). See also Brakefield v. CIT Group/Consumer Finance, Inc., 787 So.2d 115 (Fla. 2d DCA 2001), in which the Second District stated:
Florida Rule of Civil Procedure 1.510(a) permits a plaintiff to move for summary judgment twenty days after suit has been filed, even if the defendant has not filed an answer. Beach Higher Power Corp. v. Granados, 717 So.2d 563, 565 (Fla. 3d DCA 1998). However, the burden for such a movant is extremely heavy in that “the movant must demonstrate conclusively and to a certainty from the record that the defendant cannot plead or otherwise raise a genuine issue of material fact.”
The fact that a motion to dismiss was pending, that the provider made claims for conflicting dates of service, and that a significant amount of time had passed between the accident and the treatment, even without a physician’s report, all gave rise to the existence of material issues of fact, making the entry of summary judgment inappropriate. Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126 (Fla. 2000).
Even if there were no facts at issue, summary judgment is inappropriate unless the moving party is entitled to judgment as a matter of law. Id. As a matter of law, Progressive argues that an insurer is not precluded from asserting that a claim was unrelated, unnecessary, or unreasonable simply because a peer review report was not obtained before 30 days have passed. Instead, the insurer simply becomes liable for the payment of interest on the unpaid claim, and for the insured’s attorney’s fees if it is later determined that the insurer had a duty to pay the claims. The provider counters that the peer review report was inadmissible because it was not obtained within 30 days of Progressive’s withdrawal of payment, and, moreover, that it was hearsay. This latter is nonsense. A peer review report is required by statute. It cannot at once be required and dismissed as hearsay.
In their briefs, both parties consider the distinction between withdrawn payments, as opposed to those rejected entirely, significant. The provider contends that the withdrawal of benefits once payment has commenced triggers the provisions of §627.736(7)(a) and United Automobile Ins. Co. v. Viles, 726 So.2d 320 (Fla. 3d DCA 1998), rev. denied, 842 So.2d 843 (Fla. 2003), which together have been interpreted as operating to support the trial court’s decision to strike the peer review report. On the other hand, Progressive argues that §627.736(4)(b) and United Automobile Insurance Company v. Rodriguez, 808 So.2d 82 (Fla. 2002) apply, which allow Progressive to contest the legitimacy of claims with a late report, but impose liability for interest and attorney’s fees if an insurer is later found to be liable for payments. Although we agree with Progressive that an insurer may contest claims despite obtaining the statutorily required report after payment is due, we disagree with both parties that there is a conflict between §§ 627.736(4)(b) and 627.736(7)(a), Florida Statutes, on this issue.
The 30-day period has been the subject of a significant amount of litigation. Section 627.736(4)(b), Florida Statutes, allows an insurer 30 days to investigate and authenticate a claim. It also provides that a claim is not “overdue” when the insurer has reasonable proof to establish that it is not responsible to pay the claim, regardless of the expiration of 30 days’ time:
[N]otwithstanding 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 payment. . .
Id. Even if an insurer does not pay the claim within the 30-day time period, the insurer is not precluded from continuing its investigation and later asserting that no benefits are due:
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.
Id.
In short, an insurer has 30 days in which to pay a claim without consequences, and if it does not do so, the statute imposes potential liability for interest and attorney’s fees if the insurer is ultimately found to be liable for payment. See §627.736(4)(c), Florida Statutes (liability for interest); and §627.736(8) (liability for attorney’s fees).
Notwithstanding the foregoing, in its ruling, the trial court relied solely upon §627.736(7)(a), which states:
. . . An insurer may not withdraw payment of a treating physician without the consent of the injured person covered by the personal injury protection, unless the insurer first obtains a valid report by a Florida physician licensed under the same chapter as the treating physician whose treatment authorization is sought to be withdrawn, stating that treatment was not reasonable, related or necessary. (Emphasis ours.)
When viewed separately from §627.736(4)(b), §627.736(7)(a) seems to take on a different meaning, particularly when viewed with cases interpreting the Third District’s decision in United Automobile Ins. Co. v. Viles, 726 So. 2d 320 (Fla. 3d DCA 1998), rev. denied, 842 So. 2d 843 (Fla. 2003).2 We believe Viles has been misinterpreted in this context.
In Viles, the insured moved for a directed verdict on the basis that the insurer could not withdraw further payments of her medical bills because the insurer had not obtained a report pursuant to §627.736(7)(a). The question related to payments — already commenced — which were later withdrawn or denied without benefit of a physician’s report. Therein, the Court said that the report was necessary under the statute:
The statute plainly provides that an insurer must first obtain the referenced report before electing to withdraw payment. . . . The quoted language from section 627.736(7)(a) sets up a procedural requirement that an insurer cannot withdraw payment of a treating physician unless the decision is supported by an expert that the treatment does not comply with the statutory criteria. If the insurer were to act without complying with such a procedural requirement, any termination of payment would be ineffective. In this procedural hurdle, we do not discern a legislative intent to alter the burden of proof in a lawsuit for PIP benefits.
***
We also agree . . . that because United Auto failed to comply with the statutory condition precedent, its termination of PIP benefits was ineffective.
The provider contends that Viles stands for the proposition that failure to obtain a report within 30 days, once payment has commenced, precludes any defense by the insurer that treatment was unnecessary or unrelated to an otherwise covered incident. Progressive does not argue this point. Rather, it contends that the 30-day rule is inapplicable because it made no payments.
This denial vs. withdrawal distinction is, ultimately, meaningless.3 Although Viles states that an insurer must obtain a physician’s report as a condition precedent to withdrawing benefits, it does not address the question of timing. In Viles, the facts are not clear that a report was ever obtained. Thus, it simply cannot be read as removing an insurer’s ability to contest the legitimacy of treatment even though more than 30 days have passed prior to the insurer’s obtaining the required report. Although §627.736(7)(a) requires the report before withdrawing benefits, if the report is late, and it does not serve the purpose of proving that the treatment was unnecessary, we conclude that the withdrawal would simply be ineffective, thus giving rise to interest and attorney’s fees. On the other hand, if the report is late, but proves that treatment was unnecessary or unrelated to the accident, benefits were never due in the first place. This analysis is consistent with §627.736(4)(b).
The leading case on this issue is currently the Supreme Court’s decision in United Automobile Insurance Company v. Rodriguez, 808 So.2d 82 (Fla. 2002), which we find to be on point. With respect to proof and penalties, the court stated:
an insured may seek the payment of benefits for a covered loss by submitting “reasonable proof” of such loss to the insurer; (2) if the benefits are not paid within thirty days and the insurer does not have reasonable proof that it is not responsible for the payment, the payment is “overdue;” (3) all “overdue” payments shall bear simple interest at a rate of ten percent per year; and (4) whenever an insured files an action for payment of PIP benefits and prevails, the insured is entitled to attorneys’ fees. Id.
In concluding that a physician’s report is included within the statutory “reasonable proof” set forth in §627.736(4)(a), the Supreme Court stated:
Further, the district court held that in order to escape the thirty-day rule, an insurer must obtain a “medical report” showing that the insurer is not responsible for payment. [The insurers] point out that this requirement of a medical report is not mentioned anywhere in section 627.736(4) and they contend it is erroneous. [They] are correct. The statute does not mention “medical report” in this regard; the statute simply says that the insurer must pay benefits within thirty days unless the insurer “has reasonable proof to establish that the insurer is not responsible for the payment.” The statute does not limit “reasonable proof” to a “medical report.” Thus, to the extent that the present district court opinion defines “reasonable proof” to mean only a medical report, the district court has rewritten the statute. This too was error.
Rodriguez at 87. Significantly, Rodriguez expressly quashes Perez v. State Farm Fire and Casualty Co., 746 So.2d 1123 (Fla. 3d DCA 1999), which asked the following question, and answered it in the affirmative:
In an action to recover medical benefits in a lawsuit under Fla. Stat. §627.736 where the only defense by an insurer is that the medical treatment was not related, not reasonable and/or not necessary, must an insurer obtain the report required under Fla. Stat. § 627.736(7) constituting “reasonable proof” within 30 days of receiving written notice of the fact of a covered loss and of the amount of same before it can defend on the basis that the medical bills are not reasonable, not related and /or not necessary?
Perez at 1123-1124. In quashing Perez, the Rodriguez opinion states:
Under the language of the Florida No-Fault Law, an insurer is subject to specific penalties once a payment becomes “overdue”; the penalties include ten percent interest and attorneys’ fees. The insurer, however, is not forever barred from contesting the claim.
* * *
Based on the foregoing, we quash Perez v. State Farm Fire and Casualty Co., 746 So.2d 1123 (Fla. 3d DCA 1999).
Id. at 87-88 (italics in original). In short, the 30-day period after which personal injury protection (PIP) benefits become overdue applies only to benefits which are reasonable and necessary as a result of the accident; if benefits are not due, they cannot be overdue. AIU Ins. Co. v. Daidone, 760 So.2d 1110 (Fla. 4th DCA 2000). We therefore conclude that the physician’s report, albeit late, constitutes reasonable proof that the trial court should have considered.
Thus, on procedural as well as legal grounds, it is
ORDERED that the decision of the trial court be REVERSED and the cause REMANDED for proceedings consistent with this opinion.
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1The report must be prepared by a healthcare provider licensed under the same chapter as the treating physician.
2The following cases follow the reasoning that Viles requires an insurer to obtain a peer review within 30 days of terminating benefits: Garrido, DC, P.A. v. United Automobile, 12 Fla. L. Weekly Supp. 970a (Dade Co. Ct. 2005); United Automobile Ins. Co. v. Professional Medical Group, a/a/o Sol Angel Hurtado, 11 Fla. L. Weekly Supp. 877a (Fla. 11th Jud. Cir. App. 2004); Milian v. United Automobile Ins. Co., 12 Fla. L. Weekly Supp. 249a (Dade Co. Ct. 2004); Mark A. Cereceda, DC, PA, a/a/o Manuel Escala v. Granada Ins. Co., 12 Fla. L. Weekly Supp. 969a (Dade Co. Ct. 2005); MGA Massages Rehabilitation Center, Inc. a/a/o Bertha Cortina v. Mercury Ins. Co. of Florida, 12 Fla. L. Weekly Supp. 899a (Dade Co. Ct. June 20, 2006).
3We cannot imagine that the legislature intended such dramatically different results depending upon whether an insurer has made at least one payment or none at all. The provider’s position effectively imposes a 30-day statute of limitations on insurers.
