17 Fla. L. Weekly Supp. 701a

Online Reference: FLWSUPP 1708PARR

Insurance — Personal injury protection — Coverage — Policy issued during statutory gap period — Language of policy issued during time when there was no PIP statute in effect, which provides for payment of 80% of reasonable charges, rather than PIP statute in effect at time of treatment, which provides for payment of 200% of Medicare fee schedule, is applicable where statutory change is substantive and statement in policy that insurer “will pay in accordance with Florida Motor Vehicle No-Fault Law, as amended” does not clearly and unambiguously provide that insured has expressly consented to future statutory changes

PLANTATION OPEN MRI, LLC., (Octavia Parrish), Plaintiff(s), vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant(s). County Court, 17th Judicial Circuit in and for Broward County. Case No. CONO 09-9637 (72). May 19, 2010. Jill K. Levy, Judge. Counsel: Amir Fleischer, Marks & Fleischer, Ft. Lauderdale. Michael A. Rosenaberg, Deerfield Beach.

ORDER ON PLAINTIFF’S MOTION FOR FINAL SUMMARY JUDGMENT

THIS CAUSE having come before the Court on Plaintiff’s Motion for Final Summary Judgment on May 10, 2010 and the Court having reviewed the Motion as well as the entire Court file; having heard argument of counsel and reviewed applicable case law, and otherwise being fully advised in the premises, hereby finds:

FACTS

This is a PIP case where an automobile insurance policy was issued by Defendant, State Farm Mutual Automobile Insurance Co. (“STATE FARM”) to the insured, Octavia Parrish (“PARRISH”) on November 8, 2007. The policy was in effect for a term of six (6) months and was thereafter renewable. PARRISH was involved in an automobile accident on March 19, 2008 and received treatment at Plaintiff, Plantation Open MRI, LLC (“PLANTATION OPEN”) on July 16, 2008.

STATE FARM paid PLANTATION OPEN for services provided on the insured based upon the Medicare fee limitation effective January 1, 2008. PLANTATION OPEN argues that the 2007 PIP statute (F.S. §627.736 (1)(a) (2007)) applies because the insurance contract was entered into in November 2007. STATE FARM argues that although the contract was entered into in 2007, the 2008 fee schedule (F.S. §627.736(5)(a)(2) (2008)) applies as the 2008 statute consists of procedural changes, thus rendering a retroactive application appropriate. Additionally, STATE FARM argues that the legislature intended the 2008 statute to be applied retroactively as set forth in F.S. §627.7407 (2008) entitled, “Application of the Florida Motor Vehicle No-Fault Law” and which states in pertinent part:

(2) Any personal injury protection policy in effect on or after January 1, 2008, shall be deemed to incorporate the provisions of the Florida Motor Vehicle No-Fault Law, as revived and amended by this act.

Florida’s No-Fault (PIP) law sunset on October 1, 2007. The Florida Legislature reenacted the No-Fault (PIP) law on October 11, 2007 to become effective January 1, 2008. The 2008 law changed the payout to medical providers from . . .80% of all reasonable expenses for medically necessary medical, surgical, x-ray, dental and rehabilitative services. . . Fla.Stat. §627.736(1)(a) (2007), to . . .200% of the Medicare Part B fee schedule pursuant to Fla. Stat. §627.736(5)(a)(2) (2008).

CONCLUSIONS OF LAW

As a general rule, “the statute in effect at the time an insurance contract is executed governs substantive issues arising in connection with that contract.” Menendez, Jr. v. Progressive Express Insurance Co., 2010 WL 1609785 (Fla. 2010) citing Hassen v. State Farm Mutual Ins. Co., 674 So.2d 106 (Fla. 1996), “Where the statute in question was not in effect at time of contracting, it cannot be retroactively applied to alter the obligations of that contract. This is true even though the act which triggers the obligation occurs after the statute is enacted.” Hausler v. State Farm Mutual Ins. Co., 374 So.2d 1037 (Fla. 2d DCA 1979) citing Article 1, Section 10 of the Florida Constitution.

The statute in this case was enacted after the issuance of the insurance policy. The operative inquiry is whether the statute should be applied retroactively. The Supreme Court of Florida in Menendez, supra, applied a two-pronged test. “First, the Court must ascertain whether the Legislature intended for the statute to apply retroactively. Second, if such intent is clearly expressed, the Court must determine whether retroactive application would violate any constitutional principles.” Metro. Dade County v. Chase Fed. House. Corp., 737 So.2d 494, 499 (Fla. 1999). It appears that Fl. St. §627.7407 (2008) makes application of the Florida Motor Vehicle No-Fault Law retroactive. “However, even where the Legislature has expressly stated that a statute will have retroactive application, this Court will reject such an application if the statute impairs a vested right, creates a new obligation, or imposes a new penalty. State Farm Mut. Auto Ins. Co. v. Laforet, 658 So.2d 55 (Fla. 1995) “An impairment occurs. . .when a contract is made worse or is diminished in quantity, value, excellence or strength. Lawnwood Medical Center, Inc. v. Seeger, 959 So.2d 1222 (Fla. 1 DCA 2007) citing Pomponio v. Claridge of Pompano Condominium, Inc., 378 So.2d 774 (Fla. 1979).

The 2008 law limits the scope of coverage and scope of services as well as limiting reimbursement to medical providers. It provides a fee schedule which allows the insurance companies to pay substantially less in benefits. Fla. Stat. §627.736(1)(a), §627.736(5)(a)(2). “The amendments do not merely alter the process of applying and enforcing the parties’ rights and liabilities; they substantially redefine the actual rights and liabilities.” Alamo Rent-A-Car, Inc. v. Mancusi, 632 So.2d 1352 (Fla. 1994). Upon reviewing the 2008 amendments, the court finds the amendments viewed as a whole, are substantive in nature, not procedural. Therefore, the 2008 PIP statute cannot be applied retroactively.

STATE FARM argues that the insured, PARRISH, expressly consented to the application of the 2008 amendment. The Court finds this argument to be without merit. The insurance policy issued to PARRISH states that the insurer “will pay in accordance with the Florida Motor Vehicle No-Fault Law, as amended.” See State Farm Mutual Auto Insurance Endorsement 6910.3 Since Florida’s adoption of the Florida Motor Vehicle No-Fault law in 1971, the law has been amended multiple times. Endorsement 6910.3 went into effect in 2003. The law has been amended more than once since then. The Court finds that this language does not “clearly and unambiguously” provide that the policy holder has “expressly consented” to future amendments, only amendments that have been made at the time the policy was issued. Kosow v. Condominium Ass’n. of Lakeside Village, Inc., 512 So.2d 349 (Fla. 4 DCA 1987), Angora Enterprises, Inc. v. Cole, 439 So.2d 832 (Fla. 1983). If STATE FARM desired an express consent to the 2008 amendment which had not yet been in effect when the policy issued, it would have provided for same. Therefore, it is hereby

ORDERED AND ADJUDGED that the Plaintiff’s Motion for Final Summary Judgment is GRANTED. The court shall retain jurisdiction to award attorney’s fees and costs.