16 Fla. L. Weekly Supp. 258a
Online Reference: FLWSUPP 163ALARC
Insurance — Personal injury protection — Withdrawal of benefits — Where insurer notified insured that it was refusing to pay benefits for any care after date of independent medical examination, but insured continued treatment nonetheless and submitted last set of bills after discharge from treatment; insurer, upon receipt of last bills, failed to make any payments, including payment for care that occurred prior to IME; and, on date suit was filed, insurer did not possess peer review report opining that some of treatment was not medically necessary or related, denial of benefits could not have occurred later than date insured filed suit — Peer review report obtained after denial of benefits is inadmissible — Question certified whether expert testimony based on a physician’s report that was not first obtained by the insurer before PIP benefits were withdrawn or denied in violation of the statutory predicate under § 627.736(7)(a), Fla. Stat. (2003) is admissible to support an insurer’s legal defense on medical necessity and relatedness in an action for PIP benefits? — Demand letter — Where no payments were made, demand letter that failed to specify amount due at 80% and take deducible into account but to which bills were attached substantially complied with statute
Affirmed in part; reversed in part, and remanded. Rephrased question answered in the negative. 34 Fla. L. Weekly D2218b (United Auto Ins. Co. v. Garrido, Fla. 3DCA, 10-28-09)
EDUARDO J. GARRIDO, D.C., P.A., as assignee of Joseph Alarcon, Plaintiff, v. UNITED AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami Dade County, Civil Division. Case No. 06-5017 SP 26 (4). October 21, 2008. Gloria Gonzalez-Meyer, Judge. Counsel: Christian Carrazana, Panter, Panter & Sampedro, Miami, for Plaintiff. Chastity Perez, Pacheco, Perez, & Ortiz, P.A., for Defendant.
ORDER SUSTAINING PLAINTIFF’S OBJECTION TO THE ADMISSIBILITY OFDR. MERRIT’S EXPERT OPINIONS; ORDER GRANTING PLAINTIFF’S MOTION FOR FINAL SUMMARY JUDGMENT; AND FINAL JUDGMENT THERE ON WITH CERTIFIED QUESTION OF GREAT PUBLIC IMPORTANCE
THIS ACTION came before the Court on Plaintiff’s motion for final summary judgment on October 1st, 2008; and which time, Plaintiff objected to the admissibility of Dr. Merrit’s expert opinions pursuant to his affidavit in opposition to Plaintiff’s motion; and upon hearing the arguments of counsel, the Court makes the following findings of fact and law:
FINDINGS OF FACT
1. This is a breach of contract action for personal injury protection benefits governed by the Florida No Fault Law.
2. At all times material, Defendant, United Auto. Ins. Co., (hereafter “United”) and Ana Perez De Alarcon, entered into a contract of insurance for no fault insurance benefits.
3. The effective dates of the policy are as follows: February 10th, 2006 through February 10th, 2007.
3. At all times material, the claimant, Joseph Alarcon, was a resident relative of the named insured.
4. According to the terms of the policy, a covered loss is defined in part as reasonable medical expenses for medical, chiropractic, rehabilitative, diagnostic services that are medically necessary and related to an automobile accident regardless of fault.
5. United, moreover, agreed to reimburse the insured and all resident relatives of the insured eighty percent of the reasonable amount of same.
6. The claimant was involved in a motor vehicle accident on or about March 18th, 2006 in the State of Florida; and as a result of the accident, the claimant suffered personal injuries.
7. Following the accident, the claimant began a course of chiropractic care with the Plaintiff, EDUARDO J. GARRIDO D.C., P.A., on March 24th, 2006.
8. After United was notified that the claimant began treatment with the Plaintiff, United requested the insured to submit to an independent medical examination with Dr. Joseph Marfisi D.C. and Dr. Pierre Gaston M.D., pursuant to F.S. 627.736(7)(a).
9. The claimant appeared for the independent medical examination with Dr. Marfisi D.C., and Dr. Gaston M.D., on April 13th, 2006.
10. Shortly after the IME, United advised the claimant’s attorney in writing on April 21st, 2006 that benefits are suspended for further chiropractic care after April 13th, 2006 based on Dr. Marfisi’s opinion that no further care would be reasonable, related or necessary.
11. United received Plaintiff’s first set of medical expenses in the sum of $3,345.00 of dates of service March 24th, 2006 through May 17th, 2006 on May 23rd, 2006.
12. United received a second set of bills on June 7th, 2006 in the sum of $745.00 for dates of service May 19th, 2006 through May 26th, 2006.
13. United did not pay the foregoing expenses submitted by the Plaintiff.
14. Although United advised the claimant in writing that it was refusing to pay benefits for services rendered after the IME, United did not, on the other hand, provide an explanation of benefits before suit regarding why United was withholding payment for the services rendered before the IME.
15. Before suit commenced, Plaintiff served a pre-suit demand letter on or about July 17th, 2006 pursuant to F.S. 627.736(11) demanding payment. Plaintiff attached an assignment of benefits and all the bills previously submitted to United.
16. United, however, did not respond to the demand letter.
17. Plaintiff filed a breach of contract complaint on September 18th, 2006 against United to enforce the policy.
18. United served an answer to the complaint on November 30th, 2007.
19. United asserted in the answer that the services provided by the Plaintiff were neither medically necessary nor related; and that Plaintiff’s demand letter was defective in that it failed to state the exact amount due at 80%.
20. Plaintiff served a motion for summary judgment on April 8th, 2008 asserting that Plaintiff is entitled to summary judgment because there is no genuine issue of material fact whether the services rendered were medically necessary and related; and that Plaintiff’s demand letter substantially complies with F.S. 627.736(11) or in the alternative, United waived or is estopped from, asserting its right to challenge the sufficiency of the demand.
21. Plaintiff’s motion for summary judgment was scheduled to be heard on October 1st, 2008.
22. In opposition to Plaintiff’s motion for summary judgment, United served an affidavit from Dr. Marvin Merrit D.C., in which he opined based on a report that he prepared, that some of the services were neither medically necessary nor related.
23. Dr. Merrit’s report was based on his review of the claimant’s treatment records and the independent medical examination report by Dr. Gaston M.D.; but Dr. Merrit did not review Dr. Marfisi’s IME report.
24. Dr. Merrit’s report, moreover, was prepared on September 15th, 2008; which is nearly two years after Plaintiff commenced suit; and two years and three months after the claimant was discharged from treatment.1
25. When Plaintiff’s motion for summary judgment was heard on October 1st, 2008, Plaintiff’s counsel objected to the admissibility of Dr. Merrit’s opinions per his affidavit on the grounds that (1) Dr. Merrit’s report was not first obtained before benefits were denied or withdrawn in violation of the statutory predicate under F.S. 627.736(7)(a); and (2) that Dr. Merrit’s report did not meet the criteria of a valid report where Dr. Merrit did not review the independent medical examination report of Dr. Marfisi D.C.
FINDINGS OF LAW
26. Before the Court can decide the merits of Plaintiff’s motion for summary judgment, the Court must first issue a ruling with respect to Plaintiff’s objection regarding the admissibility of Dr. Merrit’s opinions.
27. The issue raised by Plaintiff’s counsel objection is whether Dr. Merrit’s opinions are admissible to support United’s legal defense on necessity and relatedness in the present action where United did not first obtain Dr. Merrit’s report pursuant to § 627.736(7)(a) before benefits were denied or withdrawn?
28. The plain language under F.S. 627.736(7)(a) requires that to the limited extent where the insurer is seeking to withdraw or deny benefits to a treating physician based on a medical opinion, the insurer must first obtain a valid report stating care is neither medically necessary nor related from a physician licensed under the same chapter as the treating physician before the insurer can withdraw or deny benefits:
“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 reportby 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 added).
29. The Court is cognizant that Third District in United Auto. Ins. Co. v. Bermudez, 980 So.2d 1213 (Fla. 3rd DCA 2008) clarified that ‘denial’ and ‘withdrawal’ are synonymous; and as such, the requirements of F.S. 627.736(7)(a) applies to the limited extent where the insurer relying on a medical report to withhold payment regardless if the refusal to pay is labeled as a ‘withdrawal’ or ‘denial.’ See also Open MRI of Miami Dade Ltd., as assignee of Rafael Perez v. United Auto. Ins. Co., 15 Fla. L. Weekly Supp. 924a (Fla. Dade Cty. Ct. 2008) (J. King).
30. In deciding whether Dr. Merrit’s report was first obtained before benefits were denied or withdrawn entails a two prong analysis in which the Court must first decide when United denied the claim.
31. The Court, for reasons discussed hereafter, finds that the denial of the claim in the present case could not have occurred no later than the time when Plaintiff filed suit on September 18th, 2006. Although it could be argued that the denial occurred on April 21st, 2006 when United advised the claimant of the IME suspension, the IME suspension letter, on the other hand, suspends benefits for future care and is silent regarding prior care.
32. The Court, in deciding that the denial could not have occurred no later than September 18th, 2006 (i.e., the date when suit commenced), reaches that conclusion based on the following material facts: (1) the claimant was discharged from treatment on May 26th, 2006; and after receipt of the last set of bills, United failed to make any payments, including the bills for the pre-IME care which was not affected by Dr. Marfisi’s IME report; and when Plaintiff filed suit on September 18th, 2006, United did not possess Dr. Merrit’s report to support its claim that the pre-IME care was neither medically necessary nor related.2
33. Because United could not have denied payment for the pre-IME care no later than the date when suit was filed based on the forgoing material facts, the Court concludes that Dr. Merrit’s report was not first obtained before United denied or withdrew benefits pursuant to § 627.736(7)(a) where Dr. Merrit’s report was obtained on September 15th, 2008 (i.e., 2 years into the litigation) for the sole purpose of defeating Plaintiff’s motion for summary judgment. Thus, Dr. Merrit’s opinions are inadmissible because his report was obtained in contravention of the predicate under F.S. 627.736(7)(a). To rule otherwise would eviscerate the statutory predicate and allow insurers to circumvent the statute. In addition, to permit the admissibility of Dr. Merrit’s report would defeat the purpose of the statutory requirement of an explanation of benefits under F.S. 627.736(4)(a) because an insurer cannot comply with the notice requirements under F.S. 627.736(4)(a) if the insurer were permitted to obtain a medical report to justify nonpayment years after the claim is denied and well into the course of litigation.3
34. The Court also finds that holding in United Auto. Ins. Co. v. Rodriguez, 808 So.2d 82 (Fla. 2001) and its progeny is not controlling principle of law on this issue. The only question decided by the Supreme Court in Rodriguez is whether the failure to obtain a medical report or reasonable proof within the 30 day statutory time period under § 627.736(4)(b) results in forfeiture of the insurer’s defenses to a claim, including the insurer’s right to defend a suit on the grounds that care is neither medically necessary nor related.4 Simply put, Rodriguez only deals with the legal consequence for failure to obtain reasonable proof within 30 days. Further, whether United can defend this action on the grounds that the bills are not reasonable, related or necessary is not the issue because United can still defend the action on the foregoing grounds notwithstanding the inadmissibility of Dr. Merrit’s opinions. The Supreme Court in Rodriguez clarified that reasonable proof is not limited to a physician’s report under F.S. 627.736(7)(a); and thus, by extrapolating that principle from Rodriguez to the present case, it is logical to conclude that United can demonstrate lack of necessity with other evidence besides Dr. Merrit’s report or his opinions thereon assuming such alternate proof is competent and admissible. There is more than one way to skin a cat.
35. It has been argued on prior occasions in PIP actions presided by this Court that Rodriguez stands for the proposition that a physician’s report can be obtained at ‘any’ time. The Court disagrees because that interpretation is based on implication or inference for a point of law undecided by Rodriguez. Although the report in Rodriguez was obtained after thirty days, the Supreme Court only decided whether an insurer forfeits its legal defenses, including a defense on necessity, as a consequence for failure to obtain reasonable proof within 30 days. The litigants in Rodriguez did not raise nor did the Supreme Court decide whether opinion testimony based on a medical report obtained at ‘any’ time by the insurer in contravention of the statutory predicate under § 627.736(7)(a) is admissible to support an insurer’s legal defense on necessity and relatedness. “For a case to be stare decisis on a particular point of law, that issue must have been raised in the action, decided by the court, and its decision made part of the opinion of the case.” 20 Am. Jur. 2d., Courts § 134 (2nd Ed. 2008) (emphasis added) (footnotes omitted); See also 21 C.J.S., Courts § 220 (2008) (“The authority of a former decision as a precedent must be limited to the points actually decided on the facts before the court.”). “[A] case is not binding precedent on a point of law where the holding is only implicit or assumed in the decision but is not announced.” 20 Am. Jur. 2d., Courts § 134; See 21 C.J.S., Courts § 223 (“A case is not binding precedent if its holding is only implicit or assumed or the issue was decided sub silencio.”) (emphasis added). Further, the thirty day provision under § 627.736(4)(b) has no bearing on the question at issue in the case at bar. The thirty day provision under § 627.736(4)(b) is intended as a grace period where the insurer can make payments without interest penalties unless the insurer is found liable for overdue payments. See AIU Insurance Co. v. Daidone, 760 So.2d 1110 (Fla. 4th DCA 2000).
36. The Court, having sustained Plaintiff’s objection to the admissibility of Dr. Merrit’s opinions, now decides whether there is a genuine issue of material fact regarding whether the bills at issue are for services that are medically necessary and related. The Court, upon review of the affidavits in support of Plaintiff’s motion for summary judgment, finds that Plaintiff has met its burden; and as such, the burden has shifted to United to come forth with competent evidence to create a genuine issue of material fact. United, however, did not submit competent admissible evidence to create a genuine issue of material fact. Assuming arguendo United served an affidavit from Dr. Joseph Marfisi, who performed an IME in this case, or a deposition transcript where the treating physician was severely impeached or the underlying facts upon which his opinions are based were severely impeached, such evidence would create a question of fact to preclude summary judgment. The Court, however, has no choice but to grant Plaintiff’s motion for summary judgment on necessity and relatedness because of United’s failure to come forward with competent admissible evidence to create a fact question on necessity and relatedness for a jury to decide.5 See Landers v. Milton, 370 So.2d 368 (Fla. 1979).
37. The Court also finds that Plaintiff is entitled to summary judgment on Defendant’s affirmative defense alleging Plaintiff’s pre-suit demand letter is defective in that it fails to state 80% of the exact amount due. The Court finds that in a case such as this, where no payments are made, a demand letter that fails to specify the amount due at 80% taking the deductible into account substantially complies with statute where the bills previously submitted are attached to the demand letter. See Rapid Rehabilitation Inc., as assignee of Veronica Graham v. United Auto. Ins. Co., 14 Fla. L. Weekly Supp. 180a (Fla. Broward Cty. Ct., 2006) (J. Beller). Assuming the statute does require Plaintiff to state the exact amount ‘due’ as Defendant claims, Defendant was not prejudiced by the failure to strictly adhere to the statute considering Defendant was in a better position to know what principle amount, if any, it may be liable for since no payments were made. See Russell v. Farrey’s Wholesale Hardware Co., 163 So.2d 513 (Fla. 3rd DCA 1964) (Trial court did not err in granting a mechanics lien on the basis of substantial compliance with the mechanics lien statute; and where the appellant was not prejudiced by the lack of strict adherence to the statute.).
38. WHEREFORE it is hereby ORDERED & ADJUDGED that Plaintiff’s objection to the admissibility of Dr. Merrit’s opinions is SUSTAINED; that Plaintiff’s motion for final summary judgment is GRANTED; Plaintiff, EDUARDO J. GARRIDO D.C., P.A., as assignee of Joseph Alarcon, shall recover from Defendant, UNITED AUTOMOBILE INSURANCE COMPANY, the sum of $2,472.00 on principle; $449.83 in late interest penalties, making a total of $2,921.83 that shall bear interest at the rate of 11% for which let execution issue. The Court also finds that Plaintiff is entitled to attorney fees and costs for prosecution of this action pursuant to §§ 57.401 and 627.428; and Plaintiff shall recover the reasonable amount of same from Defendant. The Court reserves jurisdiction to fix the reasonable amount of Plaintiff’s attorney’s fees & costs incurred for prosecution of this action.
39. Whether expert testimony based on a physician’s report obtained in violation of the statutory predicate under F.S. 627.736(7)(a) is admissible to support an insurer’s legal defense on necessity and relatedness in a PIP action is a question that has yet to be decided by a District Court. Likewise, there is no guiding precedent on the issue from the circuit appellate court. Precedent is needed from the District Courts regarding this issue in order to provide guidance to the lower courts. Accordingly, this Court pursuant to Fla. R. App. P. 9.160 hereby certifies the following question of great public importance to the Florida Third District Court of Appeal:
WHETHER EXPERT TESTIMONY BASED ON A PHYSICIAN’S REPORT THAT WAS NOT FIRST OBTAINED BY THE INSURER BEFORE PIP BENEFITS WERE WITHDRAWN OR DENIED IN VIOLATION OF THE STATUTORY PREDICATE UNDER § 627.736(7)(a), FLA. STAT. (2003) IS ADMISSIBLE TO SUPPORT AN INSURER’S LEGAL DEFENSE ON MEDICAL NECESSITY AND RELATEDNESS IN AN ACTION FOR PIP BENEFITS?
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1The claimant was discharged from treatment on May 26th, 2006.
2Unlike the IME report by Dr. Marfisi D.C., Dr. Merrit’s report addresses whether the pre-IME care, in addition to the post IME care, was medically necessary and related.
3Section 627.736(4)(b) states in pertinent part:
“When an insurer pays only a portion of a claim or rejects a claim, the insurer shall provide at the timeof the partial payment or rejection an itemized specification of each item that the insurer had reduced, omitted, or declined to pay and any information that the insurer desires the claimant to consider related to the medical necessity of the denied treatment or to explain the reasonableness of the reduced charge . . . .” (emphasis added).
4The thirty day provision under § 627.736(4)(b) has no bearing on the question at issue in the case at bar. The thirty day provision in § 627.736(4)(b) is a grace period where the insurer can make payments without interest penalties unless the insurer is found liable for overdue payments.
5The reasonableness of the charges is a moot issue because Plaintiff has agreed to stipulate to the usual and customary reductions by the adjuster pursuant to his deposition testimony.
