17 Fla. L. Weekly Supp. 223a
Online Reference: FLWSUPP 1703FAZI
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, statutory change is substantive, and contract language stating that if contract fails to comply with insurance laws it is amended to comply with laws is insufficient to demonstrate clear and unambiguous consent to incorporate amendments to PIP statute
RONALD J. TRAPANA, M.D., P.A., a Florida Corporation (assignee of Fazio, Nicola) Plaintiff, v. PEAK PROPERTY AND CASUALTY INSURANCE CORP., Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 09-01469 COCE 55. January 6, 2010. Sharon L. Zeller, Judge. Counsel: Jonathan J. Warrick, for Defendant.
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 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 November 24, 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 expenses. The accident occurred on or about April 3, 2008 and the services were rendered from July 22, 2008 through July 24, 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 November 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 both the Supreme Court of Florida and the United States, and its progeny, in finding that, “[i]n 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).
Florida Courts that have considered a near identical set of facts as those presented to this Court have also agreed with the Plaintiff. See Fidel Goldson, D.C., P.A. (a/a/o Trishella Jean-Louis) v. GEICO Indemnity Co., Case No.: 08-13521 (Broward County, Judge Lisa Trachman, 2009); Glen Corkins, D.C., PH.D., P.A. (a/a/o Yamileth Rodriguez) v. GEICO Indemnity Co., Case No.: 08-15105 (Broward County, Judge Robert W. Lee, 2009); OMI of Orange Park, Inc. (a/a/o Catherine Lynn) v. GEICO General Ins. Co., Case No.: 08-11345 (Broward County, Judge Linda R. Pratt, 2009); Physicians Group LLC v. GEICO Indemnity Co., 15 Fla. L. Weekly Supp. 1207c (Sarasota County, Judge Kimberly C. Bonner, 2008), inter alia.
The policy holder received a policy and paid a premium for an insurance policy which expressly provided how medical benefits would be paid. The policy had a “present fixed right of future enjoyment” of a certain level of benefits, which is diminished by the amendment to the statute.
The court looked at this particular policy to see whether the insured consented to the retroactive application of the statute. The policy states that if the policy conflicts with or fails to comply with any insurance laws the policy is amended to comply with those laws. There was no statute in effect for the policy to comply with. It says nothing about amendments to statutes and its effect on this policy.
In Kosow v. Condominium Ass’n of Lakeside, 512, So 2d 349 (Fla. 4th DCA 1987), the contract noted that it “incorporated by reference the Condominium Act. . .as the same may be amended from time to time.” There the contract clearly showed the express consent to incorporate a specific statute and its future amendments into the contract.
The Court finds that the language in this contrast is insufficient on its own to demonstrate clearly and unambiguously that the policy holder has “expressly consented” to the incorporation of future amendments to the statue.
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.
