16 Fla. L. Weekly Supp. 622a
Online Reference: FLWSUPP 167RICHA
Insurance — Personal injury protection — Penalty for overdue benefits should be imposed only on benefits themselves, not on interest accrued on benefits
PEACHTREE CASUALTY INSURANCE COMPANY, Appellant, vs. SPINE & REHAB MEDICINE, P.A., (a/a/o Jason Richardson), Appellee. Circuit Court, 13th Judicial Circuit (Appellate) in and for Hillsborough County. Case No. 08-16240, Division X. L.C. Case No. 07-246540. May 1, 2009. Counsel: Matthew S. Brown, Ponte Vedra Beach, for Appellant; Dorothy Venable DiFiore, Haas Dutton Lewis, P.L. Tampa, Co-Counsel for Appellant. Timothy A. Patrick, Nicholas, Lipscomb & Patrick, P.A., Tampa; and David La Croix, Homosassa Springs, Co-counsel for Appellee.
(WILLIAM LEVENS, J.) Appellant Peachtree Insurance Company (“Peachtree”) appeals the final summary judgment in favor of Appellee healthcare provider (“provider”) as assignee of Peachtree’s insured. In the final judgment, the trial court concluded that Peachtree was required to pay a 10 percent penalty on interest accrued on benefits due, in addition to the penalty on the benefits themselves. Peachtree made payment pursuant to a pre-suit notification letter sent pursuant to §627.736 (11), Florida Statutes. In so doing, it calculated both the interest and the penalty only on the principal amount due. We conclude that the trial court erred in entering judgment in favor of the provider. This court has jurisdiction over the timely appeal.
The amount in dispute is very small: $0.89. The question presented is whether the statutory 10 percent penalty must be applied to accrued interest on an overdue claim.
The relevant statutory provisions are as follows:
§627.736(4) Benefits; when due. — Benefits due from an insurer under ss. 627.730-627.7405 shall be primary . . . and shall be due and payable as loss accrues, upon receipt of reasonable proof of such loss and the amount of expenses and loss incurred. . .
(b) Personal injury protection insurance benefits paid pursuant to this section shall be overdue if not paid within 30 days after the insurer is furnished written notice of the fact of a covered loss and of the amount of same. . . . .
(c) All overdue payments shall bear simple interest at the rate established under s. 55.03 or the rate established in the insurance contract, whichever is greater, for the year in which the payment became overdue, calculated from the date the insurer was furnished with written notice of the amount of covered loss. Interest shall be due at the time payment of the overdue claim is made.
. . . . . . . . . . . . . . .
§627.736(11) Demand letter. —
. . . .
(d) If, within 15 days after receipt of notice by the insurer, the overdue claim specified in the notice is paid by the insurer together with applicable interest and a penalty of 10 percent of the overdue amount paid by the insurer, subject to a maximum penalty of $250, no action may be brought against the insurer. . . . For purposes of this subsection, payment or the insurer’s agreement shall be treated as being made on the date a draft or other valid instrument that is equivalent to payment, or the insurer’s written statement of agreement, is placed in the United States mail in a properly addressed, postpaid envelope, or if not so posted, on the date of delivery. The insurer shall not be obligated to pay any attorney’s fees if the insurer pays the claim or mails its agreement to pay for future treatment within the time prescribed by this subsection.
(Emphasis supplied.)
The healthcare provider argued below that §627.736(11)(d), Florida Statutes (2005), provides that an overdue claim includes the applicable interest and that the penalty of 10 percent must be calculated on the principal sum of the claim plus interest, just as the trial court concluded. In contrast, Peachtree argued below and in this appeal that interest does not comprise part of an overdue payment; therefore, a penalty does not accrue as to interest. Stated another way, interest is due only when payment is made. Thus, when payment is made — whenever it is made — interest must also be paid; it cannot simultaneously be overdue. We agree with Peachtree on this point. In AIU Ins. Co. v. Daidone,1the court wrote “if benefits are not due, they cannot be overdue.” While this case does not apply to interest payments per se, the rationale is applicable. Section 627.736(4)(c), Florida Statutes states that “interest shall be due at the time payment of the overdue claim is made.” Not before and not after. On the other hand, a 10 percent penalty is due for overdue benefits payments. Section 627.736(11)(d), Florida Statutes (2005). Peachtree paid both the interest and the penalty on the overdue benefits. It properly did not pay a penalty on the interest.
Policy considerations also affect our decision in this case. The provider’s argument that a penalty is payable on the accrued interest results in what is tantamount to assessing a penalty upon a penalty, an unreasonable result when the insurer paid late but without the necessity of filing a lawsuit. Viewed another way, it has the effect of compounding the interest, which is also prohibited. United Services Auto. Ass’n v. Smith, 527 So.2d 281, 283 (Fla. 1st DCA 1988) (interest should not have been ordered on the interest awarded, as this amounts to an invalid award of compound interest.). See also Cadillac Fairview Corp. Ltd. v. Resort at Indian Spring, Ltd., 664 So. 2d 1041 (Fla. 4th DCA 1995) (post-judgment interest not payable on prejudgment interest). We note that §627.736(4)(c), Florida Statutes states that interest will be “simple.”
Based upon the foregoing, we REVERSE the judgment entered in favor of the provider and direct the trial court to enter judgment in favor of Peachtree. Accordingly, we DENY the insured’s motion for appellate attorney’s fees inasmuch as it is not the prevailing party. We further DENY the insurer’s motion for appellate attorney’s fees as untimely pursuant to Florida Rule of Appellate Procedure 9.400. (HONEYWELL, J., Concurs.)
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(BARTON, J., dissents, with opinion.) While I agree that the final judgment should be reversed, I would go a step further than the majority and dismiss this case based on the doctrine of de minimis non curat lex.
As noted in the majority opinion, Appellee filed this lawsuit to recover an alleged unpaid penalty payment in the amount of $.89. The attorneys for the parties and the trial court have expended considerable energy in resolving the procedural and substantive issues raised by the pleadings. Now, the appellate court has devoted comparable effort in reviewing the briefs and record on appeal.
In my view, the time has come to say, “Enough!” The ancient legal maxim “de minimis non curat lex” (literally, “the law does not care about small things”) has been used, mainly in equitable actions involving real property, to distinguish between substantial and trivial matters. E.g., Loeffler v. Roe, 69 So. 2d 331, 337 (Fla. 1953).
As long ago as 1858, the Florida Supreme Court refused to remand a cause to the trial court for further proceedings, when considering an excessive award of interest totaling between $9.00 and $11.00, a sum too small, according to the Court, to subject the parties to further litigation. Milton v. Blackshear, 8 Fla. 161, 169-170 (Fla. 1858). See also, Florida Nat’l Bank v. Bisson, 240 So. 2d 870 (Fla. 1st DCA 1970) (Judgment affirmed, in part, based on de minimis non curat lex).
In more recent times, the legal doctrine discussed above has been applied to justify the denial of an otherwise mandatory award of appellate attorney’s fees. Sanchez v. State Farm Ins. Co., 997 So. 2d 1209 (Fla. 3rd DCA 2008). The Third District Court of Appeal noted that, in view of the de minimis amount of activity in an appeal that was voluntarily dismissed, the appellee’s motion for attorney’s fees would be denied.
Although the issue raised in the instant appeal (i.e., whether a penalty should be imposed on interest accruing on late payments in PIP cases) is worthy of consideration, I would await a case in which more than $1.00 is at stake. I would, therefore, reverse the final judgment, with directions to dismiss the case.
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1760 So. 2d 1110, 1112 (Fla. 4th DCA 2000)
