17 Fla. L. Weekly Supp. 479a
Online Reference: FLWSUPP 1706SCHO
Insurance — Personal injury protection — Coverage — Exhaustion of policy limits — Bad faith — Insurer’s reliance on controlling case law, subsequently overruled on appeal, to deny claim based on failure to provide disclosure and acknowledgment form cannot be deemed bad faith that would permit insurer to be held responsible for claim despite exhaustion of benefits — Insurer’s destruction of original claim documents after scanning, including any D&A form that medical provider submitted, does not demonstrate bad faith or establish spoliation of evidence where medical provider retained duplicate D&A form that it could have provided to insurer to resolve matter before benefits were exhausted and could use in prosecution of case — Even if documents revealed that insurer had received D&A form, subsequent exhaustion of benefits vitiates any liability of insurer for mistakenly not paying claim
PEMBROKE PINES MRI, INC. (a/a/o Brian Schoedinger), Plaintiff, vs. USAA CASUALTY INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 08-9857 COCE (53). March 29, 2010. Robert W. Lee, Judge. Counsel: Charles J. Kane, Boca Raton, for Plaintiff. Reuven T. Herssein, Miami, for Defendant.
[Reversed in part and Affirmed in part, Case No. 10-017384 CACE14, 5/18/2012]
FINAL SUMMARY JUDGMENTIN FAVOR OF DEFENDANT
THIS CAUSE came before the Court on March 26, 2010 for hearing of the Plaintiff’s Renewed Motion for Summary Judgment and the Defendant’s Renewed Motion for Summary Judgment, and the Court’s having reviewed the Motion, 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 relatively narrow issue: whether an insurer relying solely on then-existing legal authority is liable for a claim upon exhaustion of benefits when the legal authority is subsequently overruled on appeal. In this case, the Defendant denied the Plaintiff’s claim because, according to the insurer, the provider did not provide the requisite disclosure and acknowledgment form. At that time, controlling legal authority in the Seventeenth Judicial Circuit held that the failure to provide the form was fatal to a provider’s PIP claim. Subsequent to this denial, the PIP benefits were exhausted by paying other providers. The Plaintiff claims that the Defendant acted in bad faith or otherwise improperly manipulated the claims process so that this particular provider would not be paid. In particular, the Plaintiff argues that the Defendant either actually received the required form but destroyed it, or in the alternative, destroyed all the original claims documents so that the Plaintiff could not determine from the provider’s file if the form had actually been provided. Finally, the Plaintiff argues that it need not even cross the threshold of demonstrating “bad faith or manipulation” because the Defendant never had “reasonable proof” that it was not responsible for the claim. The parties agree that the exhaustion of benefits issue is the only issue remaining in the case.
The record further demonstrates that the Plaintiff still retains an “original” disclosure and acknowledgment form in its file. The Plaintiff asserts that it always maintains duplicate originals of these types of documents in the event it is asserted that they were lost or not provided. The Plaintiff was unable, however, to offer any reasonable argument as to why it did not subsequently submit this duplicate original to the insurer, particularly when it had plenty of time to do so prior to benefits being exhausted.
Conclusions of Law. Florida law has well established that an insurer is not responsible for payment of any further benefits once PIP benefits have been exhausted under the policy, unless the insurer acts in bad faith in denying the claim or improperly manipulates the claim to avoid paying it. In this case, there is no dispute that the PIP benefits were exhausted by paying other legitimate claims. At that time, the Defendant acted in accordance with controlling legal authority in denying the claim when it did not receive the disclosure and acknowledgment form. The insurer’s actions in relying on controlling case law cannot, of course, be deemed to be in bad faith. Further, it is without dispute that the insurer continued to process claims and pay legitimate claims until the benefits were ultimately exhausted. Such conduct is also not bad faith. The provider should not be heard to complain when it held the key to resolving this issue by holding a duplicate original of the disputed form in its file which it could have provided to the insurer to resolve the matter before benefits were exhausted. The Court has reviewed the record carefully and determines that there is simply no other evidence of bad faith or manipulation other than mere speculation. Speculation does not demonstrate a disputed issue of material fact; rather, competent evidence does. Rule 1.510(e).
Finally, the Court rejects the Plaintiff’s argument concerning spoliation of evidence because the Plaintiff was not prevented in prosecuting its case as a result of the scanning of the original documents and the subsequent destruction of the originals. Even had a review of the original documents revealed that the insurer had in fact received the disclosure and acknowledgment form, its subsequent exhaustion of benefits vitiates any insurer liability for mistakenly not paying the claim. Accordingly, it is hereby
ORDERED and ADJUDGED that the Defendant’s Renewed Motion for Summary Judgment is GRANTED, and the Plaintiff’s Renewed Motion for Summary Judgment is DENIED. The Plaintiff shall take nothing in this action, and the Defendant shall go hence without day. The Court reserves on the issue of attorney’s fees and costs.
