15 Fla. L. Weekly Supp. 682b
Insurance — Personal injury protection — Coverage — Exhaustion of policy limits — Priority of payments — Hospital lien — Trial court did not err in finding that insurer improperly exhausted benefits in favor of hospital where provider’s bill was received by insurer long before hospital lien was properly recorded and became entitled to priority — Demand letter — Sufficiency — Where demand letter erroneously requested reimbursement of full amount of single medical bill that has been partially paid by Medicare, but insurer was able to easily verify partial payment from attached patient account information sheet and note balance due, insurer should not be permitted to escape liability due to form of demand letter
GEICO GENERAL INSURANCE COMPANY, Appellant, vs. EMERGENCY PHYSICIANS OF CENTRAL FLORIDA, LLP, a/a/o Carlos Lopez, Appellee. Circuit Court, 18th Judicial Circuit (Appellate) in and for Seminole County. Case No. 06-27-AP. April 22, 2008. Appeal from the County Court for Seminole County, Honorable John R. Sloop, County Court Judge. Counsel: Robert Bartels, Rissman, Barrett, Hurt, Donahue & McLain, P.A., Orlando, for Appellant. Thomas Andrew Player, Weiss Legal Group, P.A., Maitland, for Appellee.
[Editor’s note: County court order published at 14 Fla. L. Weekly Supp. 305a]
(GALLUZZO, J.) Geico General Insurance Company (“Geico”) appeals a Final Summary Judgment in favor of Emergency Physicians of Central Florida, LLP (“EPCF”).
Summary judgment is proper if there is no genuine issue of material fact and if the moving party is entitled to a judgment as a matter of law. Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126, 130 (Fla. 2000).
Geico correctly states that the well-settled law in Florida has clearly established that a hospital lien takes priority over all other PIP bills, including lost wages, attorney’s fees, and funeral expenses. See Public Health Trust of Dade County, d/b/a Jackson Memorial Hospital v. Teresa Carroll, et al., 509 So.2d 1232 (Fla. 4th DCA 1987). Geico maintains, however, that the trial court erred in granting EPCF’s Motion for Final Summary Judgment finding that Geico improperly exhausted benefits in favor of the hospital pursuant to the hospital’s bill and claim of lien.
The Orange County Hospital Lien Ordinance states that to perfect a lien, the hospital must file its claim with the Clerk of the Circuit Court of the county in which the hospital is located within 10 days after the patient has been discharged from the hospital. Lopez was discharged on December 7, 2004. To be considered timely filed, ORMC’s lien would need to have been filed on or before December 17, 2004. The lien was filed on December 30, 2004.
EPCF’s Motion for Summary Judgment asserted that because ORMC’s bill was received subsequent to EPCF’s bill, as an unsecured creditor, ORMC’s claim was subordinate to EPCF’s claim under the laws governing priority of payment.
The trial court found that the failure of a hospital to timely perfect its lien does not invalidate the hospital lien, but results in the lienor or creditor being an unsecured creditor that is not entitled to priority, at least until such time as the lien was filed. (R. 134). The trial court further found that because EPCF’s bill was received first and was in Geico’s possession during the period the lien was not timely perfected, payment should, as a matter of law, have been made on EPCF’s bill, pursuant to the English Rule law of priorities. Id.
These findings are supported by case law. The 4th DCA held in Public Health Trust of Dade County v. Carroll, 509 So.2d 1232 (Fla. 4th DCA 1987) that the tardy filing of the hospital lien did not invalidate the lien but only resulted in the hospital’s being an unsecured creditor, at least until such time as the lien was filed. The 3d DCA held (and Florida Supreme Court affirmed) that the claim and interest of the hospital vests upon compliance with the statutory procedure and not before. Palm Springs General Hospital, Inc. of Hialeah v. State Farm Mut. Auto Ins. Co., 218 So.2d 793 (Fla. 3d DCA 1969), decision aff’d 232 So.2d 737 (Fla. 1970).
Geico contends that in granting EPCF’s Motion for Summary Judgment, the trial court determined that EPCF’s bill took priority over a hospital lien, which directly contradicts the established case law in Florida. The trial court stated that there is no dispute that EPCF’s bill was submitted timely and prior to the hospital bill. EPCF does not dispute that when a hospital lien is timely filed with the comptroller’s office in Orange County, it receives priority under Florida law. Pursuant to the holding in Public Health Trust of Dade County, supra, the lien loses priority when it is not timely filed. The lien is not void or unenforceable due to the untimely filing, it merely loses its preferential status until such time that filing is perfected.
Geico argues that EPCF relied upon Boulevard National Bank of Miami v. Air Metal Industries, Inc., 176 So.2d 94 (Fla. 1965) and State Farm Fire & Casualty v. Ray, 556 So.2d 811 (Fla. 5th DCA 1990), which established the English Rule of Priorities in Florida. Geico states that these cases are clearly not applicable and have been rejected by other courts.
Geico maintains that the 5th DCA, in Ray, declined to apply the English Rule in PIP cases. (Appellant’s Initial Brief at 14). This is incorrect. The 5th DCA merely stated “While we do not disagree with the English Rule, we disagree with its applicability here.” Ray, supra at 812 (emphasis added). Ray involved a claim by the hospital for medical expenses and a claim by Ray for lost wages. Ray’s PIP policy provided benefits to the extent of 80% of Ray’s medical bills up to $10,000 and 60% of lost wages up to $5,000. Ray’s counsel contacted State Farm and instructed it to pay no more than 20% of the PIP benefits for medical expenses. State Farm made payments to the hospital totaling $6,997.94, and to Ray for lost wages totaling $3,476.36, thus exhausting the remainder of his coverage. Ray filed suit seeking the unpaid balance of his lost wages, a sum of $4,525.64, maintaining that State Farm received his apportionment instructions before learning of the hospital assignment, and should have honored the former first. The 5th DCA held that “Under these circumstances, we can only find that the priority of assignment under the English Rule does not apply, since there is only one assignment involved, Ray’s assignment to the hospital.” Id. at 813.
The facts in this case clearly involve two assignments, that of EPCF and ORMC. As such, and consistent with the 5th DCA’s ruling in Ray, the trial court did not err in applying the English Rule of Priorities. The court held that ORMC’s lien should have been recorded no later than December 17, 2004, in order to take priority over all other billings, and that EPCF’s bill was entitled to payment as it was received long before the lien in this matter was properly recorded.
EPCF further contends that the trial court erred when it denied Geico’s Motion for Summary Judgment, finding that EPCF’s demand letter was compliant with section 627.736, Florida Statutes.
Section 627.736(11), Florida Statutes, governs the requirements of a demand letter. EPCF billed Geico for a single charge of $420.00 for a single date of service. (R. 125). EPCF maintains that there could be no ambiguity or question about what services EPCF billed for or the amount of the charge for those services or the payment sought from Geico. (Appellee’s Answer Brief at 31).
Geico contends that EPCF attached a patient ledger to its demand letter. The patient ledger clearly showed a partial payment by Medicare, yet the demand letter requested reimbursement for the full amount of the bill. (App. B, Page 42, Lines 3-9). Geico maintains that the amount requested on the demand letter was therefore not the correct amount owed and did not provide Geico with the exact amount due as required by statute. This forms the basis for Geico’s contention that the demand letter was statutorily deficient, as section 627.736(11), Florida Statutes, requires an “itemized statement specifying each exact amount, the date of treatment, service or accommodation, and the type of benefit claimed to be due.”
EPCF states that attached to the demand letter were a copy of the assignment of benefits and a form entitled “Patient Account Information.” The Patient Account Information form stated the provider’s name, the account balance of $420.00, the patient’s name, date of birth, Social Security number, and address, the Geico policy number and claims office address, the name of the specific EPCF physician that rendered the services, the diagnosis code, the date of service, the CPT code for the services rendered, the amount charged for the services, and contained an itemized statement of the billing history, transaction information, and explanatory comments. This form illustrates a payment made on March 31, 2005, in the amount of $161.79, leaving a balance due of $258.21. (Appendix to Appellant’s Initial Brief at PLF 5).
Geico’s response on May 23, 2005 clearly states “Reimbursement is not due because all benefits were being held to satisfy the hospital lien.” (Appendix to Appellant’s Initial Brief at PLF 5). There is no indication in this response that the EPCF’s demand letter was deemed statutorily insufficient.
EPCF argues that Geico’s position is merely an attempt to avoid liability for their wrongful denial of payment of EPCF’s bill. EPCF maintains that even if this Court finds that it did not fully comply with the requirements of section 627.736(11), its compliance was so substantial that it should be deemed to have satisfied the requirements. Tactics of trial counsel that elevate form over substance are disapproved of by Salcedo v. Asociacion Cubana, Inc., 368 So.2d 1337, 1339 (Fla. 3d DCA 1979).
The Patient Account Information sheet was attached to the demand letter, and is therefore considered to be part of the demand letter. Geico should easily have been able to verify the Medicare payment and note that the total amount outstanding was $258.21, rather than the original billed amount of $420.00. There is no dispute that EPCF provided medical services to Lopez as a result of the covered accident. Exclusive of the exhaustion of benefits issue discussed above, Geico should not be permitted to completely escape liability for payment of such services merely because of the form of EPCF’s demand letter.
As such, the trial court did not err in denying Geico’s Motion for Summary Judgment.
ACCORDINGLY the Final Summary Judgment is AFFIRMED.
