16 Fla. L. Weekly Supp. 592a

Online Reference: FLWSUPP 166MARK

Insurance — Personal injury protection — Lost wages — Holidays — PIP insurer that is liable for lost wages is not obligated to pay for holiday when insured was paid by employer for holiday

MARK C. CAPWELL, P.A., Plaintiff, vs. PROGRESSIVE AMERICAN INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 08-5782 COCE (53). April 15, 2009. Robert W. Lee, Judge. Counsel: Mark Capwell, Coral Springs; and J. Clark Dixon, Fort Lauderdale, for Plaintiff. Don Mathews, Don Mathews, & Associates, P.A., Fort Myers, for Defendant.

ORDER DENYING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT; ORDER DENYING COUNTER-DEFENDANT’S MOTIONFOR SUMMARY JUDGMENT ON COUNTER CLAIM; ORDER GRANTING DEFENDANT’S AMENDED MOTION FOR SUMMARY JUDGMENT; and FINAL SUMMARY JUDGMENT IN FAVOR OF DEFENDANT

THIS CAUSE came before the Court on April 13, 2009 for hearing of the above-referenced Motions, and the Court’s having reviewed the Motions, the entire Court file, and the relevant legal authorities; having heard argument; having made a thorough review of the matters filed of record; and having been sufficiently advised in the premises, the Court finds as follows:

Background: This case involves a claim for lost wages under a PIP policy. The insurance company, in response to a demand letter, paid the insured’s claim for lost wages. The insured’s attorney, Mark Capwell, calculated the interest when he received the payment and determined that while Progressive had tendered the majority of interest due, the payment was short by the remarkably insubstantial sum of $1.37. Rather than contact the insurer to request that the difference be paid, or simply write off the nominal balance due, the attorney took an assignment of the claim from the client and, without further notice,¹ brought suit against Progressive for the sum of $1.37. The lawsuit understandably startled Progressive, when it noted the quite insubstantial amount in dispute. Nevertheless, Progressive defended the case, and reviewed the claim. Needless to say, by the time Progressive was in a position to agree to pay the $1.37 (the Plaintiff’s interest calculation was correct), significant attorney’s fees² and costs had been incurred by Mr. Capwell. Progressive therefore conducted a review of the claim anew, as it was entitled to do, and concluded that it had erroneously paid the insured for a day of work which was a holiday and for which the insured had in fact been paid by her employer. As a result, it brought a counterclaim against the Plaintiff seeking a return of the amount paid in error. When the $1.37 miscalculated interest is subtracted from the amount due Progressive, Progressive argues that it is actually entitled to a net judgment under the theory of setoff. After numerous hearings and motions, the legal issues have boiled down to a single one — is a PIP insurer who is liable for lost wages obligated to pay for a holiday when the insured is paid by its employer for the holiday?

Conclusions of Law. To analyze this issue, the Court initially looks at the controlling language of the statute:

Every insurance policy complying with the security requirements [. . .] shall provide personal injury protection [. . .] as follows:

Sixty percent of any loss of gross income and loss of earning capacity per individual from inability to work proximately caused by the injury sustained.

Fla. Stat. §627.736(1) & (1)(b) (emphasis added). It is undisputed that the insured did not suffer any loss on December 26, 2006 “from inability to work” because she was not expected nor required to work that day, and she was paid for that day by her employer. The Plaintiff attempts to argue that she lost the “benefit” of that paid holiday because, in essence, she could have enjoyed the benefit of the holiday rather than nurse an injury. The Court notes that such a theory seemingly contradicts one of the rationales buttressing the no-fault system — that is, that special damages, such as pain, suffering and inconvenience are not recoverable in exchange for swift and virtually automatic payment of actual damages for personal injuries and property damage. See R. Lazega, Florida Motor Vehicle No-Fault Law §1:1 (2006). See also McClellan v. Industrial Fire & Cas. Ins. Co., 475 So.2d 1015, 1016 (Fla. 4th DCA 1985) (distinguishing between benefits recoverable in a PIP suit and “pain, suffering, mental anguish and inconvenience” recoverable only in a suit outside the PIP policy).

There is no reported case directly on point. The Plaintiff relies on two cases which it claims are analogous to show that it should be reimbursed for holiday pay, even when the holiday is paid by the employer, Stewart v. Allstate Ins. Co., 618 So.2d 771 (Fla. 5th DCA 1993), and United Services Automobile Ass’n v. Holland, 283 So.2d 381 (Fla. 1st DCA 1973). The Court concludes, after a careful review of these cases, that they do not entitle the Plaintiff to the relief it is seeking.

In Stewart v. Allstate Ins. Co., the insured sought payment of health insurance premiums which were paid by her employer as part of her compensation. 618 So.2d at 772. The insurance company argued that the premiums were not part of her “wages” but rather a fringe benefit which is not compensable under a PIP policy. Id. The insured was seeking compensation for premiums her employer was no longer going to pay. In such a case, the appellate court concluded that these unpaid premiums were part of the insured’s “gross income” which the PIP insurer was obligated to pay. Id. at 773. The instant case presents quite a different scenario in which the insured’s employer has in fact paid the employee for her holiday time. If it had not, then the holding of Stewart could have arguably applied to require the Defendant to pay for the time.

In United Services Automobile Ass’n v. Holland, an admittedly more analogous case than Stewart, the insured sought PIP benefits for lost wages even though his employer continued to pay him during his period of disability. 283 So.2d at 383. The insured’s employer, the United States Navy, had a “wage continuation plan” by which an employee is paid his regular wages during his period of disability. Id. at 383-84. The appellate court found that the existence of disability coverage — a benefit provided by the employer — did not vitiate payments due under a PIP policy. Id. The rationale pointed out by the appellate court was that the PIP law did not preclude an “injured policyholder from recovering from his insurer gross income which he was unable to earn during the period of his disability.” Id. at 384 (emphasis added). The instant case presents quite a different scenario, in which the insured was paid for a holiday during which she was not expected to work. Not only is this not a “wage continuation plan,” but it is also not the loss of income due to inability to work. The insured does not claim that she could have worked the holiday for extra pay, but was now unable to do so.

Although not controlling on this Court, the Court notes that the appellate court for the State of Washington faced a scenario in which an insured sought no-fault (PIP) benefits for holiday pay not received, and vacation and sick leave not accrued, due to absence from work due to injury. Boag v. Farmers Ins. Co. of Washington, 69 P.3d 370, 374 (Wash. App. 2003). In Boag, the appellate court found that the insured was entitled to recover for vacation and sick leave not accrued due to the injury. The insured’s employer did not pay her wages during her absence, but required that she use accrued sick time and vacation time. The court found she was entitled to reimbursement. Again, in the instant case, the insured did not lose any time. She got paid for her holiday time and did not have to make it up in any other way. Had it been her vacation time instead, then arguably she would be entitled to payment because she has lost the paid vacation time. (Perhaps stated better another way, while employees often get paid for “unused” vacation or sick time, the Court believes it general knowledge that there is really no such thing as “unused holiday time.”)

As noted in a prior Order of this Court in the matter, an insurance company is clearly entitled to seek recoupment of any amounts mistakenly paid. See First State Bank of Fort Meade v. Singletary, 124 Fla. 770, 773, 169 So. 407, 408 (1936); Watson Clinic, LLP v. Verzosa, 816 So.2d 832, 834 (Fla. 2d DCA 2002); 40 Fla. Jur. 2d Pleadings §76 (2001). Because the amount mistakenly paid is clearly in excess of the $1.37 in interest claimed due, the Defendant is entitled to setoff its claim against the unpaid interest, resulting in the Defendant’s being the prevailing party on the Plaintiff’s claim.

Accordingly, it is hereby

ORDERED and ADJUDGED that the Plaintiff’s Motion for Summary Judgment is DENIED; the Counter-Defendant’s Motion for Summary Judgment on Counterclaim is DENIED; and the Defendant’s Amended Motion for Summary Judgment is GRANTED.

Final Judgment is hereby entered in favor of the Defendant. The Plaintiff shall take nothing in this cause, and the Defendant shall go hence without day. The Court reserves jurisdiction to consider the issue of attorney’s fees and costs.

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¹As recently stated by the Third District Court of Appeal, in a case also involving a nominal sum in dispute ($25.00), a lawyer is “expected to make a renewed, good faith effort to settle the matter before commencing a lawsuit.” Ocean Two Condominium Ass’n, Inc. v. Kliger, 983 So.2d 739, 741 n.3 (Fla. 3d DCA 2008). If such an expectation exists for a $25.00 dispute, it exists a fortiori for a dispute involving $1.37. In the instant case, the Plaintiff failed, as the plaintiff in Ocean Two, to attempt to mitigate its damages.

²This Court need not determine whether any fees incurred by Plaintiff’s counsel were reasonable when compared to the nominal amount sued for.