17 Fla. L. Weekly Supp. 55b

Online Reference: FLWSUPP 1701TRUJ

Insurance — Personal injury protection — Coverage — Priority — Hospital lien — Hospital that failed to comply with requirement to file verified claim of lien within ten days after patient was discharged was unsecured creditor until it perfected lien by filing claim, at which time it became secured creditor subject to priority payment — Medical provider/assignee has no standing to challenge hospital’s failure to perfect lien and insurer’s payments to hospital — Further, provider/assignee is bound by insured’s request that insurer pay hospital bill prior to paying provider — Insurer was not required to reserve benefits for disputed claim

MIAMI MEDICAL GROUP, INC., A/A/O GLADYS TRUJILLO, Plaintiff, vs. UNITED AUTOMOBILE INSURANCE CO., Defendant. County Court, 17th Judicial Circuit in and for Miami-Dade County. Case No. 06-11209 CC 05 (06), Civil Division. September 9, 2009. Bronwyn C. Miller, Judge. Counsel: Virginia Best. Catherine Massard.

ORDER GRANTING DEFENDANT’S MOTION FOR FINAL SUMMARY JUDGMENT

THIS CAUSE, having come before the Court upon Defendant’s Motion for Final Summary Judgment on July 16, 2009, July 24, 2009, and July 31, 2009 and the Court having heard argument of counsel for both parties, reviewed the procedural history, all affidavits and exhibits, and relevant legal authority, and having otherwise been fully advised in the premises, hereby ORDERS and ADJUDGES as follows:

Background:

1. MIAMI MEDICAL GROUP, INC. seeks payment from UNITED AUTOMOBILE INSURANCE CO. for services rendered to GLADYS TRUJILLO following an automobile accident. Defendant contends it is entitled to summary judgment, as it paid the full policy limits to one of TRUJILLO’s medical providers. The relevant chronology is detailed below.

2. On June 27, 2005, Trujillo was injured in an automobile accident. She was transported from the scene of the accident to South Miami Hospital, where she received treatment until July 3, 2005. While treating at South Miami Hospital, Trujillo incurred medical bills in the amount of $39,266.00. Trujillo retained the law firm of Lopez & Best to represent her.

3. On July 7, 2005, the law firm of Lopez & Best sent a letter to UNITED requesting payment of Trujillo’s medical bills. Lopez & Best directed UNITED to pay “. . . all benefits in the following priority: (1) Hospital bills, ambulance bills, rescue bills, or radiology bills: (2) Doctor bills or medical care provider bills; and (3) Diagnostic bills.” See Letter of July 7, 2005. Lopez & Best further specified: “If there is a deductible, do not apply the hospital bills, ambulance bills, rescue bills, or radiology bills to the deductible. Pay these bills first a full 80% after applying the deductible to the doctor’s bills or medical care provider’s bills.” Id.

4. On July 29, 2005, Trujillo began treating with MIAMI MEDICAL GROUP, INC. She executed an assignment of benefits in favor of MIAMI MEDICAL GROUP, INC. and relinquished her right to sue for the medical bills incurred at MIAMI MEDICAL GROUP, INC.¹ Bills were submitted to UNITED for medical care rendered by MIAMI MEDICAL GROUP, INC. The bills were submitted on October 7, 2005, November 4, 2005, and December 13, 2005. UNITED did not respond to the request.

5. UNITED received bills from provider Miguel Garcia on July 29, 2005 and August 19, 2005. It received bills from Randle Eastern on August 29, 2005. It received bills from MIAMI MEDICAL GROUP, INC. on October 12, 2005, November 7, 2005, December 14, 2005, and December 23, 2005. It received bills from South Miami Hospital on April 5, 2006. See PIP Payout Log.

6. MIAMI MEDICAL GROUP, INC. submitted a demand letter on March 28, 2006. UNITED generated a response in the form of a letter indicating that the bills would not be paid due to the following: “(1) bills were not in compliance with the Florida Statute based on disclosure not properly completed; (2) treatments received were not listed; and (3) charges for initial treatment applied to the deductible.” See Deposition of Aliea Khayoum dated June 16, 2009, Exhibit 2.

7. UNITED received a peer review from Richard Glatzer, M.D. opining as to the reasonableness, relatedness, and medical necessity of certain bills. Id. at 30. Glatzer opined that the MIAMI MEDICAL GROUP, INC. bills were not reasonable, related, and medically necessary, but that the South Miami Hospital bills were. Id.

8. MIAMI MEDICAL GROUP, INC. filed suit against UNITED on July 18, 2006. On July 26, 2006, Baptist Health Systems perfected its lien.

9. On July 30, 2007, UNITED submitted a check to South Miami Hospital for the PIP policy limits. Id., Exhibit 11. In compliance with the request of Lopez & Best, Defendant did not apply a deductible to the bills. Moreover, United paid the full policy limits of $10,000.00.

Conclusions of Law:

Lien Law:

Defendant asserts that it is entitled to final summary judgment as a matter of law due to the fact that it exhausted available PIP benefits in rendering payment of the $10,000.00 policy limits to South Miami Hospital.

Plaintiff contends that South Miami Hospital failed to comply with the secondary requirements imposed by the Dade County Hospital Lien Ordinance as set forth in section 25C-4 of the Code of Metropolitan Dade County. It, thus, asserts that South Miami Hospital was an unsecured “second in time” creditor at the time Plaintiff filed suit, thus, the payment was “gratuitous.” See Coral Imaging Services v. Geico Indemnity Ins. Co., 955 So. 2d 11 (Fla. 3d DCA 2006) (holding that an insurer’s payment of untimely claims was improper, thus gratuitous).

The Court disagrees. Although “. . . a hospital lien attaches the moment an injured person is admitted as a patient,” Section 25C-4 Code of Metropolitan Dade County sets forth the requirements with which a hospital must comply in perfecting a lien. Public Health Trust of Dade County v. Carroll, 509 So. 2d 1232, 1234 (Fla. 4th DCA 1987), citing, State Farm Mut. Auto. Ins. Co. v. Palm Springs Gen. Hospital, Inc., 232 So. 2d 737, 738 (Fla. 1970); Dade County v. Pavon, 266 So. 2d 94, 96 (Fla. 3d DCA 1972).

In addition to requiring the filing of a verified claim in the Office of the Clerk of the Circuit Court within ten (10) days after a patient is discharged, section 25C-4 requires: “such claimant shall also, within one (1) day after filing of such claim of lien, mail a copy thereof by registered mail, postage prepaid, to each person, firm or corporation so claimed to be liable on account of such illness or injuries at the address so given in such statement.” Id.

It is axiomatic that, as it relates to the case sub judice, South Miami Hospital/Baptist Health Systems failed to comply with the ten (10) day filing requirement imposed by section 25C-4. The hospital was required to file its verified claim of lien prior to or on July 13, 2005; however, it failed to do so until July 27, 2006.

However, Florida Courts have recognized that “a tardy filing [of a claim of lien] does not invalidate a hospital lien, but only results in the lienor or creditor being an unsecured creditor, at least until such time as the lien is filed.” Public Health Trust v. Carroll, 509 So. 2d at 1234 (emphasis supplied); Palm Springs General Hospital of Hialeah v. State Farm Mut. Auto. Ins. Co., 218 So. 2d 793, 798 (Fla. 3d DCA 1969) (“[W]e hold that that [section] 1 and [section] 2 of the statute be construed to mean that, (a) a lien in favor of the hospital attaches from the moment an injured person falling within the provisions of [section] 2 is admitted as a patient; and (b) the lien is perfected, i.e., the claim and interest of the hospital vests, upon compliance with [section] 2, but not before.”(emphasis supplied).

In the instant case, South Miami Hospital was an unsecured creditor until it perfected its lien. Thus, on July 27, 2006, its interest vested and it became a secured creditor subject to priority payment.

Plaintiff is without standing to challenge Defendant’s payment to the hospital. Although “another creditor, who may have been somehow prejudiced by the late filing, has standing to challenge the lien based on its late filing,” Plaintiff filed suit pursuant to an assignment of benefits, thus stands in the shoes of the insured. Id. Thus, Plaintiff is without standing to challenge the payment of benefits to the hospital. Id. at 1233 (holding that patient has no standing to challenge a hospital’s failure to perfect a lien due to the fact that the patient has “actual knowledge of the accident and of the hospital services rendered. The timely recording has no bearing upon [the patient’s] obligation to the hospital.”).

Assignee is Bound by Actions of Assignor:

Furthermore, MIAMI MEDICAL GROUP, INC., standing in the shoes of the assignor, is bound by the July 7, 2005 correspondence of counsel to UNITED wherein counsel requested that UNITED pay the hospital bills prior to paying MIAMI MEDICAL GROUP, INC.

It is a well-established principle of law that an assignee is bound where his assignor would be bound. See Cadle Co. II, Inc. v. Stamm, 633 So.2d 45, 46 (Fla. 1st DCA 1994). (“As to all defenses, he stands in the shoes of the former,”); Einstein’s Sons v. Shouse, 24 Fla. 490, 500 (Fla. 1888) (An assignment does not change the rights and benefits available under the policy, and does not invest in the assignee any right of action or defense which before the assignment, the assignor did not have).

In Union Indemnity Co. v. City of New Smyrna, 100 Fla. 980, 130 So. 453 (Fla. 1930), the Florida Supreme Court held that the assignee of a contract could acquire no greater right through assignment than that which the assignor himself might assert. Thus, the Plaintiff in this case has no greater rights than the insured. See also Chrysler Credit Corporation v. United Services Automobile Association, 625 So.2d 69 (Fla. 1st DCA 1993) (the assignee took the assignment subject to the specific language in the policy); Resolution Trust Corp. v. Broad & Cassel, P.A., 889 F. Supp. 475 (M.D. Fla. 1995); Sans Souci v. Division of Florida Land Sales & Condominiums, 448 So.2d 1116 (Fla. 1st DCA 1984); Dubbin v. Capital National Bank, 264 So.2d 1 (Fla. 1972).

Attorney Binds Client:

A client is bound by the actions of his attorney. See McArthur v. State, 303 So. 2d 359 (Fla. 3d DCA 1974); Epperson v. Rupp, 157 So. 2d 537 (Fla. 3d DCA 1963) (The acts of an attorney are binding on the client even when done without consulting with the client and against the client’s wishes); State v. Daniels, 826 So. 2d 1045 (Fla. 5th DCA 2002) (It is a general rule that a client is bound by the acts of his attorney within the scope of the attorney’s authority); Tesini v. Zawistowski, 479 So. 2d 775 (Fla. 4th DCA 1985) (Real estate purchaser was bound by his attorney’s grant of a one-day extension on the date of a closing; purchaser could only look to attorney for redress); Brooks Tropicals, Inc. v. Acosta, 959 So. 2d 288 (Fla. 3d DCA 2007) (Professionals, such as attorneys and accountants, are always agents of their clients); Small v. Colonial Inv. Co., 109 So. 433 (Fla. 1926) (Attorney, acting within scope of authority, represents client; acts of omission, aswell as acts of commission, by attorney acting in scope of authority, are regarded as acts of person he represents). Thus, MIAMI MEDICAL GROUP, INC. is bound by the requests of counsel.

Lastly, in Progressive American Ins. Co. v. Stand-up MRI of Orlando, 990 So. 2d 3 (Fla. 5th DCA 2008), the Fifth District Court of Appeal held that no requirement exists to set aside a reserve for disputed claims, and, in the absence of showing of bad faith, a PIP insurer is not liable for benefits once benefits have been exhausted. Moreover, the Court found that the mere serving of a “demand letter” does not require an insurer to hold monies in a reserve fund. It merely satisfies the condition precedent imposed by sec. 627.736(11) Fla. Stat. that such a letter be sent before filing suit against the insurer. Thus, UNITED was not required to establish a reserve fund for MIAMI MEDICAL GROUP, INC.’s claim.

WHEREFORE, the Court hereby GRANTS Defendant’s Motion for Final Summary Judgment.

Defendant shall go hence without day.

__________________

¹Lopez & Best represents MIAMI MEDICAL GROUP, INC. in the instant case.