17 Fla. L. Weekly Supp. 43b
Online Reference: FLWSUPP 1701GOLD
Insurance — Personal injury protection — Coverage — Policy issued during statutory gap period — Where PIP policy was executed during statutory gap period when there was no PIP statute, policy language requiring that medical expenses be paid at 80% of reasonable charges controls reimbursement
FIDEL S. GOLDSON, D.C., P.A., a Florida Corporation (assignee of Jean-Louis, Trishella), Plaintiff, v. GEICO INDEMNITY COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 08-13521 COCE 54. September 24, 2009. Lisa Trachman, Judge. Counsel: Jonathan J. Warrick, Law Office of Russel Lazega, North Miami. Dale Parker, Banker Lopez Gassler, St. Petersburg.
ORDER GRANTING PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT AND DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
(Re: Retroactive Application of the 2008 Fee Schedule)
THIS CAUSE came before the Court on hearing 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 the Court’s having reviewed the Motion and entire Court file; reviewed the relevant legal authorities; heard argument, and been sufficiently advised in the premises, finds as follows:
Background:This is a P.I.P. case. The applicable policy of insurance commenced on or about October 17, 2007, when no P.I.P. statute was in effect (and no mandatory P.I.P. insurance was required). The relevant policy language indicates medical expenses will be paid at 80% of the medically necessary reasonable expenses. The accident occurred on or about March 31, 2008 and the services were rendered from April 14, 2008 through April 25, 2008. Defendant reduced the allowable amount for the chiropractic services provided to 200% of the 2008 participating physician’s fee schedule under Medicare Part B pursuant to F.S. s. 627.736 (“2008 fee schedule”). Defendant maintains that the 2008 fee schedule applies. Plaintiff responds that the policy of insurance is controlling because the insurance contract was entered into in October of 2007, during which time there was no P.I.P. statute in effect, and prior to the effective date of the 2008 P.I.P. statute. As such, the insurer must apply the P.I.P. law in place at the time the contract was executed (and since there was none in effect, the policy is controlling), 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. “In the context of a policy of insurance issued to an insured, Courts have held that ‘the statute in effect at the time the insurance contract is executed governs any issues arising under that contract.’ ” See MR Services, LLC v. United Auto. Ins. Co., 16 Fla. L. Weekly Supp. 678a (Broward County, Judge Robert W. Lee, 2009) quoting Lumbermens Mutual Casualty Company v. Ceballos, 440 So.2d 612 (Fla. 3rd DCA 1983); citing to Metropolitan Life Insurance Co. v. Fugate, 313 F.2d 788 (5th Cir. 1963); Allison v. Imperial Casualty & Indemnity Co., 222 So.2d 254 (Fla. 4th DCA 1969); Poole v. Travelers Ins. Co., 130 Fla. 806, 179 So. 138 (1937); See also Hassen v. State Farm Mut. Auto. Ins. Co., 674 So.2d 106, 108 (Fla. 1996), citing with approval Lumbermens for this well settled legal proposition.
Moreover, the Florida Supreme Court has consistently adhered to the sound legal principle that neither the Courts nor the legislature may retroactively modify or impair established substantive rights under a contract. See Smiley v. State, 966 So. 2d 330 (Fla. 2007). Courts are clear to note the distinction between changes to substantive rights under a contract which are prohibited) and changes to procedural rights under a contract (which are permitted). See Id; compare Progressive Express Ins. Co. v. Menendez, 979 So. 2d 324, 331 (Fla. Dist. Ct. App. 3d Dist. 2008) (holding, “[b]ecause we conclude that the application of subsection 627.736(11) to the plaintiffs’ claim for PIP benefits is procedural in nature, and it does not alter any contractual or vested rights of the plaintiffs, we find that to require the plaintiffs to provide presuit notice before filing their lawsuit after the enactment of the statute does not violate the general rule against retrospective operation.”). In the instant case, the Defendant has retroactively affected the substantive rights of the Plaintiff (how much is paid under the insurance contract) by its unilateral, retroactive application of the fee schedule in the 2008 P.I.P. statute (which undisputedly pays less than contract/policy of insurance). This fee schedule application clearly affects the substantive rights and obligations of both the insurance companies and the policyholders, and cannot properly be deemed a remedial amendment. See State Farm Mutual Automobile Ins. Co. v. Laforet, 658 So. 2d 55 (Fla. 1995).
Moreover, Defendant’s argument that the Plaintiff’s rights had not vested until the accident occurred is misplaced. The binding case law states that “retroactive application of a statute that alters the substantive, vested, or contractual rights is prohibited absent clear legislative intent”, this Court need not answer the question of whether Plaintiffs rights have vested (as this Court expressly finds that the application affects Plaintiff’s substantive and contractual rights). Progressive Express Ins. Co. v. Menendez, 979 So. 2d 324, 331 (Fla. Dist. Ct. App. 3d Dist. 2008) (emphasis added).
Accordingly, it is hereby
ORDERED AND ADJUDGED the Plaintiff’s Motion for Summary Judgment is GRANTED. Summary judgment is entered in favor of Plaintiff as to liability. Plaintiff is the prevailing party and, pursuant to Florida Statute 627.428, Plaintiff has obtained a “judgment or decree” entitling Plaintiff to recover from Defendant attorney’s fees and costs in an amount to be determined at a later hearing. The court reserves jurisdiction to determine the amount of fees and costs.
