17 Fla. L. Weekly Supp. 221b
Online Reference: FLWSUPP 1703AYAL
Insurance — Personal injury protection — Coverage — PIP policy, which provides for payment of 80% of reasonable charges, rather than version of PIP statute in effect at time of treatment, which provides for payment of 80% of 200% of Medicare Part B fee schedule, is applicable where no PIP statute was in effect at time of policy execution and statutory change is substantive and impairs vested rights
ANTHONY MICHAEL CROTHERS, P.A. D/B/A INDIAN TRACE CHIROPRACTIC CENTER, a Florida Corporation (assignee of Ayala, Monica) Plaintiff, v. MERCURY INSURANCE COMPANY OF FLORIDA, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 09-001887 COCE 51. January 14, 2010. Martin Dishowitz, Judge. Counsel: Russel Lazega. George Shirejian.
ORDER GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT AND DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
THIS CAUSE came before the Court for hearing on November 17, 2009 on Plaintiff’s Motion for Summary Judgment (on the issue of whether Defendant improperly and retroactively applied the 2008 P.I.P. fee schedule to a claim made under a 2007 policy) and Defendant’s Motion for Summary Judgment regarding the same. The Court, having reviewed the motion and entire Court file; relevant legal authorities; heard argument, and been sufficiently advised in the premises, finds as follows:
Background: This is a P.I.P. case. Monica Ayala obtained medical treatment from Plaintiff commencing on June 11, 2008. The date of the accident was June 3, 2008. The applicable policy was in effect from December 16, 2007 through June 16, 2008. Defendant reduced the allowable amount for the Plaintiff’s medical services based upon the fee schedule set forth in F.S. s. 627.736 (“2008 fee schedule”). Defendant maintains that the 2008 fee schedule applies. Plaintiff responds that no P.I.P. statute was in effective at the time the policy was entered, and therefore, the language of the contract is controlling and the insurer must tender payment of P.I.P. benefits in the manner provided in the contract, as to do otherwise would affect the provider’s substantive rights to payment (namely, the contracted payment amount).
Legal Conclusions: This Court agrees with the Plaintiff. The Court finds that while the 2008 P.I.P. statute is clear and unambiguous in its intent to be applied retroactively, it is well settled law that the statute in effect at the time an insurance contract is executed governs substantive issues arising in connection with that contract. Hassen v. State Farm Mut. Auto. Ins. Co., 674 So. 2d 106 (Fla. 1996); see also Lumbermen’s Mutual Casualty Co. v. Ceballos, 440 So. 2d 612 (Fla. 3rd DCA 1983), and the legislature may not retroactively impair vested substantive contract rights without running afoul of Article I, Section 10 of the Florida Constitution. Id.
Therefore, in order to apply the statutory amendment to the insurance policy at issue, the Court must determine whether the application of the statutory amendment impairs the substantive, vested rights of the insured. The Court, in applying this three-pronged analysis, finds as follows:
Whether The Rights Under the Policy are Substantive
The amendments to the 2008 statute do not merely alter the process of applying and enforcing the parties’ rights and liabilities; they substantially re-define the actual rights and liabilities. See Alamo Rent-A-Car Inc. v. Mancusi, 632 So. 2d 1352, 1358 (Fla. 1994).
Accordingly, the Court finds that the rights affected by the application of the 2008 P.I.P. statute, which is how much is paid under the insurance contract, are clearly substantive.
Whether The Rights Under the Policy are Vested
“A vested right has been defined as ‘an immediate, fixed right of present or future enjoyment’ and also as ‘an immediate right of present enjoyment, or a present, fixed right of future enjoyment.” City of Sanford v. McClelland, 163 So. 513, 514-15 (Fla. 1935); see also Romine; Earnhardt.
The Court finds that the rights under the policy of insurance at issue are substantive and that these rights vested at the time the policy was purchased on December 16, 2007 as the policy that the insured was issued “had a ‘present fixed right of future enjoyment’ of a certain level of benefits which is diminished by the statutory amendment.” Glenn Corkins, D.C. PH.D., P.A. d/b/a Advanced Spine Center of the Palm Beaches (Yamileth Rodriguez) v. GEICO Indemnity Co., Case No.; 08-15105 (Broward County Court, Judge Robert W. Lee, 2009).
Whether The Application Of The Statutory Amendment Impairs The Substantive, Vested RightsUnder the Policy of Insurance
Defendant asserts that the contract of insurance has not been impaired since the patient still has $10,000 in available P.I.P. coverage and the fee limitations of the 2008 P.I.P. Statute enable the insured to get more treatment for the available $10,000. Plaintiff responds that the application of the statutory amendment diminishes the value of the contract as it impairs an insured’s ability to seek quality care as not every physician will accept the reduced payment under the 2008 fee schedule (in other words, the fee limitation reduces the insureds available pool of doctors).1
There, is no balancing test when it comes to impairment. If the contract is substantively diminished, there is an impairment. As such, this Court finds that there is a diminution of value to the contract when the 2008 fee schedule is applied to a contract commenced in 2007 that effects the substantive, vested rights under the policy of insurance.
ORDERED AND ADJUDGED the Plaintiff’s Motion for Partial Summary Judgment is GRANTED and Defendant’s Motion for Summary Judgment is DENIED.
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1Defendant objected to the Court’s finding that there was an impairment to the contract and the Court overruled said objection.
