15 Fla. L. Weekly Supp. 394b
Insurance — Personal injury protection — Coverage — Medical expenses — Exhaustion of policy limits — Insurer is not required to escrow or reserve PIP benefits for claims that are reduced or denied — Right to contest PIP claim, including claims for past due interest and attorney’s fees, can be extinguished through exhaustion of benefits after demand letter has been submitted and before suit is filed absent showing of bad faith — Summary judgment granted
DC SERVICES, L.L.C., as assignee of Kristina Labrie, Plaintiff(s), vs. PROGRESSIVE EXPRESS INSURANCE COMPANY, Defendant. County Court, 18th Judicial Circuit in and for Seminole County, Civil Division. Case No. 07-SC-001479. February 21, 2008. Donald L. Marblestone, Judge. Counsel: Michael Tierney, for Plaintiff. Michael P. Liebgold, Reynolds, Stowell and Parrino, St. Petersburg, for Defendant.
ORDER ON THE DEFENDANT’S MOTION FOR SUMMARY JUDGEMENT
THIS CAUSE having come on for hearing on the Defendant’s Motion for Summary Judgement, on February 21, 2008, and the Court being fully advised in the premises, it is hereby,
ORDERED and ADJUDGED
1. The Plaintiff/healthcare provider filed this suit seeking personal injury protection (“PIP”) benefits for its January 13 and February 22, 2005 dates of service, alleging that the Defendant did not correctly pay the Plaintiff for said charges.
2. The Defendant timely made payment of those charges at a reduced rate as it determined that said charges were not reasonable in amount. Fla. Stat. 627.736(5)(a) mandates that a PIP insurer only pay for reasonable charges.
3. Fla. Stat. 627.736(5)(a) states in pertinent part:
Any physician, hospital, clinic, or other person or institution lawfully rendering treatment to an injured person for a bodily injury covered by personal injury protection insurance may charge the insurer and injured party only a reasonable amount pursuant to this section for the services and supplies rendered. . . .In no event, however, may such a charge be in excess of the amount the person or institution customarily charges for like services or supplies. With respect to a determination of whether a charge for a particular service, treatment, or otherwise is reasonable, consideration may be given to evidence of usual and customary charges and payments accepted by the provider involved in the dispute, and reimbursement levels in the community and various federal and state medical fee schedules applicable to automobile and other insurance coverages and other information relevant to the reasonableness of the reimbursement for the service, treatment, or supply. Emphasis added.
UNDISPUTED FACTS
4. The Defendant’s policy of insurance with the insured provided $10,000.00 in Personal Injury Protection (“PIP”) benefits per the uncontroverted Affidavit of the Defendant’s representative, Charisse Willis.
5. The Defendant only agreed to underwrite $10,000.00 of PIP risk associated with this policy per the uncontroverted Affidavit of the Defendant’s representative, Charisse Willis.
6. The insurance premium that Kristina Labrie was charged was based upon exactly $10,000.00 of exposure per the uncontroverted Affidavit of the Defendant’s representative, Charisse Willis.
7. The Defendant received the Plaintiff’s January 13, 2005 charge on February 22, 2005 and paid that charge, albeit at a reduced amount due to the Defendant’s belief the charge was unreasonable in amount, on March 7, per the uncontroverted Affidavit of the Defendant’s representative, Charisse Willis.
8. The Defendant received the Plaintiff’s February 22, 2005 charge on March 1, 2005 and paid that charge, albeit at a reduced amount due to the Defendant’s belief the charge was unreasonable in amount, on March 11, 2005 per the uncontroverted Affidavit of the Defendant’s representative, Charisse Willis.
9. The insured’s PIP benefits became exhausted with the Defendant’s January 4, 2006 payment to another of Ms. Labrie’s medical providers per the uncontroverted Affidavit of the Defendant’s representative, Charisse Willis.
10. All of the payments the Defendant made out of Ms. Labrie’s limited pool of PIP benefits were for reasonable amounts per the uncontroverted Affidavit of the Defendant’s representative, Charisse Willis.
11. All of the payments the Defendant made out of Ms. Labrie’s limited pool of PIP benefits were for bills timely received per the uncontroverted Affidavit of the Defendant’s representative, Charisse Willis.
12. All of the payments the Defendant made out of Ms. Labrie’s limited pool of PIP benefits were reasonable, necessary, and related to Ms. Labrie’s January 6, 2005 motor vehicle accident per the uncontroverted Affidavit of the Defendant’s representative, Charisse Willis.
13. The Defendant never received any additional information from the Plaintiff before Ms. Labrie’s PIP benefits became exhausted to support its position that the amounts of the charges at issue were reasonable in amount per the uncontroverted Affidavit of the Defendant’s representative, Charisse Willis.
14. The Plaintiff/assignee pled standing as a result of an assignment of benefits with the Defendant’s insured, Kristina Labrie/assignor.
15. As of the Defendant’s January 4, 2006 payment, the Defendant had paid at least $10,000.00 in PIP benefits as required by the policy of insurance and by Fla. Stat. 627.736(1).
16. The Plaintiff served its PIP pre-suit demand letters for its charges at issue before PIP benefits became exhausted, but chose not to file the present suit until well after exhaustion of benefits occurred, on April 10, 2007.It is undisputed that the Plaintiff filed suit more than two years after it received notice from the Defendant that its charges at issue were being paid at a reduced rate.
17. There has been no allegation and proof presented to this Court that the Defendant acted in bad faith when it issued payment to the insured’s other medical providers.
LEGAL ARGUMENT THE PLAINTIFF GAINS NO GREATER RIGHTS THAN THAT OF ITS ASSIGNOR
18. An insured cannot gain more from the insurance company than the contractual benefit amount in the absence of showing a bad faith on the part of the insurer. GEICO v. Robinson, 581 So.2d 230 (Fla. 3rd DCA 1991); see also Allstate v. Shilling, 374 So.2d 611 (Fla. 4th DCA 1979); Atkins v. Bellefonte Insurance Co., 342 So.2d 837 (Fla. 3rd DCA 1977); Dixie Insurance Co. v. Lewis, 484 So.2d 89 (Fla. 2nd DCA 1986).
19. An assignee obtains no greater rights than the rights its assignor possessed. An assignee gets no more rights than those possessed by its assignor. State Farm Fire and Casualty Company v. Ray, 556 So.2d 811, (Fla. 5th DCA 1990), MTM Diagnostic, Inc. v. State Farm Automobile Ins. Co., 9 Fla. L. Weekly Supp. 581e (13th Circuit Appellate 2000) citing Resolution Trust Corp. v Broad & Cassel, P.A., 889 F.Supp. 475 (M.D. Fla. 1995).
20. An assignee’s interests are extinguished when the assignor’s interests are extinguished. Id., Orthopaedic Specialties of Tampa Bay, P.A. o/b/o Deborah Rath v. Progressive Express Ins. Co., 10 Fla. L. Weekly Supp. 1018b (Pinellas County Ct. 2003).
21. The assignor/insured only possessed $10,000.00 in PIP benefits and those benefits have been paid by the Defendant in accordance with the policy of insurance per the uncontroverted Affidavit of the Defendant’s representative, Charisse Willis.
22. Forcing the Defendant to pay more than it contractually agreed to pay and was statutorily required to pay is tantamount to rewriting the contract of insurance and the PIP statute. Furthermore, it would be forcing the Defendant to insure a greater risk than it agreed to underwrite per the uncontroverted Affidavit of the Defendant’s representative, Charisse Willis.
A PIP INSURER CANNOT BE FORCED TO ESCROW OR RESERVE PIP BENEFITS
23. However, there is no PIP reserve provision under Florida law. Simon v. Progressive Express Insurance Company, 904 So.2d 449, 450, 30 Fla. L. Weekly D1156 (Fla. 4th DCA May 4, 2005). “We decline to create a requirement that an insurance company set aside a ‘reserve’ fund for claims that are reduced or denied.” Id., emphasis added.
If we were to accept Simon’s theory that a “reserve” or “hold” provision must be automatically applied to any available funds at the time a claim is submitted, it 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. Under such a theory, all potential payments to a service provider that were denied, or were subject to a reduction, would have to be held in reserve until the statute of limitations period expired or a suit was filed and concluded. This would delay and reduce availability of funds for the payment of claims to other providers and would be inconsistent with the PIP statute’s “prompt pay” provisions. See §§ 627.613, and 627.662(7), Fla. Stat. (provision established to expedite payment to service providers). It is the obligation of insurance companies to attempt to settle as many claims as possible. Farinas v. Florida Farm Bureau General Insurance Co., 850 So.2d 555, 560 (Fla. 4th DCA 2003). It is also a prerogative of insurance companies to pay, reduce, or deny claims. Id. Emphasis added.
See also, State Farm Mut. Auto Ins. Co. v. JRA Diagnostics, Inc. f/k/a ROM Diagnostics of Orange County, a/a/o Mary Taylor, Case No. CVA1-05-60 (Fla. 9th Circ. Appell. March 8, 2007) [14 Fla. L. Weekly Supp. 438b].
24. The PIP statute specifically states that a PIP insurer is required to pay up “to a limit of $10,000.00” in PIP benefits payable at an eighty percent rate. Fla. Stat. 627.736(1), (1)(a) (2003).
25. The PIP statute contains no provision allowing for any amounts, disputed or otherwise, to be escrowed or reserved. Allowing a Plaintiff to demand that a disputed amount of PIP benefits be set aside is tantamount to allowing the Plaintiff to amend the [PIP] statute. Chambers Medical Group, Inc. a/a/o Wilson Soto v. Progressive Auto Pro Insurance Company, 13 Fla. L. Weekly Supp. 367a (Fla. Hillsborough County Ct. December 16, 2005), Florida Medical & Injury Center, Inc., a/a/o Dave Saunders v. Progressive Consumers Insurance Company, 12 Fla. L. Weekly Supp. 592b (Fla. Seminole County Ct. February 15, 2005), Ginger L. Chouinard, D.C. d/b/a Chiropractic Café a/a/o Jessica Robinson v. Progressive Express Insurance Company, 10 Fla. L. Weekly Supp. 926c (13th Circ. Hillsborough County Ct., September 25, 2003), see also Celpha Clinic, Inc. a/a/o Sandra Alvarez v. Progressive Express Insurance Company, 11 Fla. L. Weekly Supp. 113a (13th Circ. Hillsborough County Ct., December 18, 2003), Naresh B. Dave, M.D., a/a/o Maria Martinez v. Progressive Express Insurance Company, 10 Fla. L. Weekly Supp. 834a (13th Circ. Hillsborough County Ct., August 5, 2003), Sapien Diagnostics, Inc., d/b/a Sapien Health Network, a/a/o Gerald Erickson v. Progressive Express Insurance Company, 10 Fla. L. Weekly Supp. 1036a (13th Circ. Hillsborough County Ct., September 30, 2003), Chiropractic Center of Lakeland, Inc., a/a/o Monica Williams v. Progressive Express Insurance Company, 11 Fla. L. Weekly Supp. 248b (13th Circ. Hillsborough County Ct., January 7, 2004), H.G. Smith, D.C., P.A. a/a/o Javadga Fountain v. Southern Group Indemnity, Inc., 11 Fla. L. Weekly Supp. 248a (13th Circ. Hillsborough County Ct., January 7, 2004).
25. As Judge Huey stated in Celpha:
This Court is unaware of any statutory or common law right of an insured to demand that PIP benefits be escrowed. To the contrary, it has consistently found that such right could never exist because, if it did, it would constitute a rewrite of the PIP statutes the effect of which would collapse the PIP scheme. Such a right would essentially anoint the health care provider as legislature and governor with authority at the stroke of a pen to alter the PIP carrier’s duty. For example, insured within one day after a car accident obtained the services of 10 different health care providers, each of whom obtained assignments and submitted bills to the insured’s PIP carrier. Either at the time of billing or at the time of receipt of insufficient payment each demands that PIP benefits be escrowed. Assume that the facts are such that if the carrier complies with any of the 10 escrow demands, it will not be able to pay the other claims in full in accordance with its statutory duty. With which escrow demand should the carrier comply? Why should one provider via a one sentence escrow demand letter have the authority to require the carrier to litigate with the nine other health care providers? What if the escrow demand is baseless, do the nine other providers get to sue the one for interference with a contractual right or some other cause of action? Should the actions be consolidated? Does the carrier and each of the other providers have a right to bring a declaratory judgment action on the escrow demand? Are statutory attorney fees allowed in all these actions? Is there an “American Rule” or an “English Rule” that governs the priority of escrow demand letters? Should the carrier prioritize by the receipt date of the first escrow demand or should it relate back to the time of the filing of the claim? The examples and questions are limitless. The Court believes the legislature understood these issues when it wrote and repeatedly revised the PIP law providing no right for an insured or his assigns to demand escrowing benefits. Emphasis added.
26. One purpose of the PIP statute is for the relatively quick and efficient payment of reasonable and necessary charges. Reserve requests such as the Plaintiff’s could potentially thwart this policy by withholding benefits payments for providers’ charges that are in compliance with the PIP statute, in the event of the chance that the requestor wins its PIP suit. Even if this Court was to hold that a provider can make a reserve demand, contravening the above case law on the subject, the reserve requests also put the insurer at risk of breaching its contract to the insured. “For example, if the insurer errs by escrowing too much, it may fail to pay legitimate claims, and if too little, it puts itself at risk with respect to the one on whose behalf the escrow request was being made. It is effectively a no-win situation for the insurer.” Vincent DiCarlo, M.D. & Associates a/a/o Bonita Thurston v. American Home Assurance Co., 11 Fla. L. Weekly Supp. 305b (Circuit Court Appellate, 13th Circ. Hillsborough County, January 20, 2004), see also Advanced Imaging Group, Inc. a/a/o Frank Midulla v. Progressive Auto Pro Insurance Company, 11 Fla. L. Weekly Supp. 569d (13 Circ. Hillsborough County Ct., April 16, 2004).
27. There is no provision in the PIP statute permitting a reserve request.
28. Permitting such reserve requests equates to re-writing the PIP statute. The legislature has obviously seen fit not to permit PIP reserve requests or else it would have written such a provision into the PIP statute, as the PIP statute has been amended numerous times since its original adoption in 1971.
29. Such reserve requests may put the Defendant in the position of possibly breaching its contract with the insured and possibly causing the violation of the PIP statute by potentially causing it not to provide the required amount of PIP benefits to providers who have billed for reasonable and necessary related charges.
30. Senate Bill 32-A promulgated by the 2003 Florida Legislature, details the policy and goals of the PIP Statute, and more particularly, the 2003 version of the PIP statute.
31. “However, the goals behind the adoption of the no-fault law in 1971. . . to reduce the volume of lawsuits by eliminating minor injuries from the tort system, and to reduce overall motor vehicle costs, have been significantly compromised due to the fraud and abuse that has permeated the PIP insurance market.” SB 32-A § 1(2)(c). Emphasis added.
32. “. . .[T]he system has become increasingly litigious with attorneys obtaining large fees by litigating, in certain instances, over relatively small amounts that are in dispute.” SB 32-A § 1(2)(e). Emphasis added.
33. “It is further a matter of great public importance that, in order to protect the public’s health, safety, and welfare, it is necessary to enact the provisions contained in this act in order to prevent PIP insurance fraud and abuse and to curb escalating medical, legal, and other related costs, and the Legislature finds that the provisions of this act are the least restrictive actions necessary to achieve this goal.” SB 32-A § 1(2)(h). Emphasis added.
34. Permitting reserve requests would actually serve to generate more PIP litigation as other providers who have submitted reasonable, necessary and related charges may not get timely paid as the insured’s finite and limited pool of PIP benefits would be not made available until this suit is resolved. Those other providers would then potentially be able to sue the Defendant PIP insurer for late payment. At the very least they might be entitled to the PIP penalty provision of Fla. Stat. 627.736(11). These penalties would be made necessary by the Plaintiff’s reserve requests. As stated above, the legislature sought to decrease the amount of litigation and costs when it passed the 2003 version of the PIP statute. . . .such a reserve requirement would contravene that stated policy by spurring more needless litigation and costs.
35. Such a reserve request is also tantamount to the insured unilaterally rewriting the contract for the policy of insurance. It is a basic tenet of contract law that a change to a term of a contract must be agreed to by all parties to the contract. “Modifications of contracts must be supported by new consideration as well as the consent of both parties.” Newkirk Constr. Corp. v. Gulf County, 366 So.2d 813, 815 (Fla. 1st DCA 1979), Wilson v. Odom, 215 So.2d 37, 39 (Fla. 1st DCA 1968). The Defendant has not agreed to such a change in its contract with the insured, nor has any additional consideration been agreed to and exchanged.
36. Such reserve requests would thwart a stated policy of the PIP statute which is to ensure the prompt and efficient payment of covered charges.
AS THE PLAINTIFF WAITED TO FILE THE PRESENT SUIT UNTIL WELL AFTER EXHAUSTION OF BENEFITS OCCURRED IT DID SO AT ITS OWN PERIL
37. The Plaintiff served its PIP pre-suit demand letters for its charges at issue before PIP benefits became exhausted, but chose not to file the present suit until well after exhaustion of benefits occurred, on April 10, 2007. Furthermore, the Plaintiff waited over two years from the time it received notice from the Defendant that its charges at issue were being paid at a reduced rate.
38. As discussed above, the Plaintiff did not submit any additional information to the Defendant to support its claim that its charges at issue to the Defendant and the Defendant was therefore free, and actually statutorily obligated, to pay subsequent bills received from other providers. There has been no showing that the Defendant did so in bad faith. This is precisely the same situation as had occurred in Simon, where exhaustion of PIP benefits had occurred, where no supporting information had been provided in the interim, and where the Defendant PIP insurer’s similar Motion for Summary Judgment based upon that exhaustion had been granted. That decision had been rendered by the 4th DCA and it is therefore binding upon this Court as there is no conflicting decision on point rendered by the 5th DCA.
39. In a similar case, a Seminole County Court had granted an insurer’s Motion for Summary Judgment where the insured’s benefits became exhausted. M. Eugene Kaye, D.C. d/b/a Network Chiropractic of Orlando v. Allstate Insurance Company, 9 Fla. L. Weekly Supp. 877b (Fla. 18th Circ. Seminole Cty. Oct. 3, 2002). In that case, the Court granted the insurer’s motion for summary judgment due to exhaustion of PIP benefits where it paid a provider’s bill submitted later than the plaintiff’s bill but within the 30 day window provided by the PIP statute. Here, the Defendant exhausted payment on a billing from another provider for an earlier date of service than the date of service at issue (November 18, 2003 vs. December 17, 2003). Citing United Automobile Insurance Company v. Stat Technologies, Inc., 787 So.2d 920, 922 (Fla. 3rd DCA 2001), the Court in Kaye recognized: “1. ‘We are not unmindful that the purpose of the PIP statute is to provide a swift and virtually automatic payment of PIP benefits,’ and 2. ‘We do not believe the legislators intended to punish insurers for undergoing the appropriate investigation contemplated under the statute.’ ” Further, the Court in Kaye held:“Payment of a ‘simple, routine’ bill that is paid after receipt of a ‘complicated’ bill, appears to be encouraged by the first proposition cited above and certainly allowed by the second.” Emphasis added.
40. In addition, other Courts have held that a PIP insurer is not responsible for any payments to a Plaintiff once it has fulfilled its contractual and statutorily-imposed duty of paying $10,000.00 in PIP benefits, as has occurred here. Heartland Rehabilitation Services of Florida, Inc. v. Progressive Express Insurance Company, 11 Fla. L. Weekly Supp. 826a (Fla. 4th Circ. Clay Cty. June 24, 2004), citing MTM Diagnostic, Inc. v. State Farm Mut. Auto. Ins. Co., 9 Fla. L. Weekly Supp. 581 (13th Circ. 2000), Neuro-Imaging Associates, P.A. v. Nationwide Ins. Co. of Florida, 10 Fla. L. Weekly Supp. 738 (Palm Beach Cty. 2002), Wise Diagnostic Solutions v. Nationwide Mut. Fire Ins. Co., 11 Fla. L. Weekly Supp. 440 (Duval Cty. 2004), Simon v. Progressive Express Ins. Co., 11 Fla. L. Weekly Supp. 470 (Palm Beach Cty 2004), Heartland Rehabilitation Services of Florida, Inc. v. Nationwide Mut. Fire Ins. Co., (Clay Cty. Case # 2003-50-SC-D). See also Vincent DiCarlo, M.D. & Assoc.’s v. American Home Assur. Co., 11 Fla. L. Weekly Supp. 305b (Fla. 13th Circ. Hillsborough Cty. 2004), Ann Lovejoy, f/k/a Anne King, d/b/a Genesis Diagnostics, o/b/o Maria Barreto v. Progressive Express Ins. Co., (Fla. 6th Circ. Pinellas Cty. April 8, 2004), Florida Joint Replacement Center v. Progressive Express Ins. Co., (Fla. 6th Circ. Pasco Cty. May 10, 2004) citing MTM and Neuro Imaging.
41. A key theme in many of the above cases is that it is not equitable to hold an insurer responsible for any amount over what it contracted for and over what the PIP statute mandates.
42. If an insurer is to be held liable for any amount above what it contracted for it would not be able to accurately determine the risk involved and set its rates accordingly.
43. The risk the Defendant undertook to insure was the payment of $10,000.00 in PIP benefits, as required by the PIP statute, and nothing more per the undisputed Affidavit of the Defendant’s representative, Charisse Willis.
44. The premium charged by the Defendant and agreed to be paid by its insured in this case for PIP benefits was based upon the potential for the insured to pay a maximum of $10,000.00 in PIP benefits per the uncontroverted Affidavit of the Defendant’s representative, Charisse Willis.
45. As the Defendant paid what it was contractually and statutorily required to pay in PIP benefits, it owes nothing to the Plaintiff in this suit.
46. This Court concludes that the right to contest a PIP claim including for past due interest and attorneys’ fees, absent a showing of bad faith, can be extinguished through an exhaustion of benefits by the insured after the contested claim has been submitted and before suit has been filed. To hold otherwise would unfairly subject a PIP insurer to an undeterminable amount of exposure and risk.
LEGAL STANDARD FOR GRANTING SUMMARY JUDGMENT
47. Pursuant to Rule 1.510 of the Florida Rules of Civil Procedure, Summary Judgment is proper when there is no genuine issue of material fact and defendant is entitled to judgment as a matter of law. Summary judgment is an appropriate and necessary means of terminating litigation short of a jury trial and it satisfies the constitutional right of access to the courts as a means of resolving civil disputes. Cassel v. Price, 396 So. 2d 258, 262 (Fla. 1st DCA 1981), review denied, 407 So. 2d 1102 (Fla. 1981). “So long as our system of laws recognizes a dividing line between conduct which may properly require a party to be subjected to the burden of trial and the risk on an adverse jury verdict for damages, and conduct which will not, the trial and appellate courts often have a duty, difficult as the task may be, of drawing that line.” Id. at 261.
48. Summary judgment is properly granted where the moving party conclusively demonstrates that no genuine issues of material fact exist between the parties and that the moving party is entitled to a judgment as a matter of law. Holl v. Talcott, 191 So. 2d 40, 43 (Fla. 1966). Based on the pleadings, the attached exhibits, discovery matters of record, and applicable case law, Summary Judgment should be granted in favor of Defendant.
49. As there are no issues of fact remaining and the insured’s benefits have become exhausted, the Defendant is entitled to Summary Judgment as a matter of law.
WHEREFORE, as there are no issues of fact remaining, the insured’s PIP benefits have been exhausted and there is no legal basis for holding the Defendant responsible for the outstanding amount of the Plaintiff’s charges at issue, past due interest, or its attorneys’ fees and costs, the Defendant’s Motion for Summary Judgment is hereby GRANTED. This Court reserves jurisdiction to determine the Defendant’s entitlement to its attorneys’ fees and costs and the amount thereof.
