17 Fla. L. Weekly Supp. 699a

Online Reference: FLWSUPP 1708MUSC

NOT FINAL VERSION OF OPINION
Subsequent Changes at 17 Fla. L. Weekly Supp. 1042b

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

RONALD J. TRAPANA, M.D., P.A., a Florida Corporation (assignee of Muscarella, Frank), Plaintiff, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 08-10581 COCE 53. May 14, 2010. Robert W. Lee, Judge. Counsel: Russel Lazega, Law Office of Russel Lazega, P.A., North Miami. Dale L. Parker, Banker Lopez Gassler, P.A., St. Petersburg. Jeffrey B. Tutan, Roig, Kasperovich & Tutan, P.A., Deerfield Beach.

FINAL JUDGMENT

THIS CAUSE came before the Court for hearing on April 19, 2010 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 policy issued in 2007 when no P.I.P. statute was in effect) and the Court, having reviewed the motion and entire Court file; heard argument; reviewed the relevant legal authorities; and been sufficiently advised in the premises, the Court finds as follows:

Background: This is a P.I.P. case. Frank Muscarella obtained medical treatment and services from the Plaintiff from February 14, 2008 through July 29, 2008. The date of the accident was February 9, 2008. The applicable policy commenced December 15, 2007, which was at a time when Florida’s Motor Vehicle No-Fault law was not in effect (also known and hereafter referred to as the “gap period”). Defendant reduced the allowable amount for the medical treatment and services to 200% of the 2008 participating physician’s fee schedule under Medicare Part B Pursuant to F.S. s. 627.736 (“2008 fee schedule”).

The parties have stipulated that the charges and services were reasonable, related and necessary. Therefore, the only remaining issue in this suit is whether the Defendant was permitted to apply the 2008 fee schedule to a claim made under a policy that was issued during the gap period when no P.I.P. statute was in effect.

Plaintiff moves for summary judgment asserting that the policy language, which provides for payment at 80% of reasonable expenses for necessary medical services, is controlling because the insurance contract was entered into during a time when there was no P.I.P. statute in effect and prior to the effective date of the 2008 P.I.P. statute, as to do otherwise would affect the provider’s substantive rights to payment (namely, the contracted payment amount). Defendant maintains that the 2008 fee schedule applies because the loss occurred and the medical services were rendered in 2008.

Conclusions of Law: The Court bases its current decision off of its previous rulings in Glenn Corkins, D.C., PH.D., P.A. (Yamileth Rodriguez) v. GEICO Indemnity Company, (Case No.: 08-15105 COCE 53) [16 Fla. L. Weekly Supp. 1185a] and Dorsal Rehab, Inc. f/k/a United Diagnostic & Rehab Associates v. GEICO Indemnity Company, 17 Fla. L. Weekly Supp. 226a (Broward County, Judge Robert W. Lee, 2009), which concerned this very same issue and is supported by the analysis of the decision of the Florida Supreme Court in Menendez, Jr. Et Al. v. Progressive Express Ins. Co., 35 Fla. L. Weekly S81a (Fla. 2010).

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. 3d 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.

In order to apply the statutory amendment to the insurance policy at issue, the Court must first determine whether the statutory amendment is one that affects substantive rights. If so, the amendment can be applied to the insurance policy only if the insured policy holder expressly consented to the application of the amendment.

In Florida, “[a] ny legislative action which diminishes the value of a contract is repugnant to and inhibited by the [Florida] Constitution.” In re Advisory Opinion, 509 So.2d 292 314 (Fla. 1987) (emphasis added). The test to determine whether a substantive right is affected is whether the amended “statute impairs vested rights, creates new obligations, or imposes new penalties.” State Farm Mutual Automobile Ins. Co. v. Laforet, 658 So.2d 55, 61 (Fla. 1995). Stated another way, “[a]n 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, 1224 (Fla. 1 DCA 2007). A substantive right is vested if it is an “immediate right of present enjoyment, or a present fixed right of future enjoyment.” School Board of Miami-Dade County v. Carralero, 992 So.2d 353, 355 (Fla. 3d DCA 2008) (emphasis added).

In this case, the policy holder received a policy and paid a premium for an insurance policy that expressly provided how medical benefits would be paid over the course of the next six months. After the policy was issued, but before the policy expired, the 2008 Florida Motor Vehicle No-Fault Law Florida Legislature statutory amendment came into effect (on January 1, 2008). This statutory amendment is more advantageous to the insurer and results directly in the payment of a lesser amount for specific medical services. The Defendant’s argument that benefits continue to be capped at $10,000.00 is of no import. This argument assumes incorrectly that each automobile accident will result in treatment equal to or exceeding $10,000.00. This is clearly not the case. Because the insured at the time the policy was issued then had a “present fixed right of future enjoyment” of a certain level of benefits, which is diminished by the statutory amendment, the new law can only apply to the policy if the insured consented to the retroactive application. See Carralero, 992 So. 2d at 355; Lawnwood Medical, 959 So.2d at 1224.

Therefore, the Court next considers whether the insured consented to the retroactive application. In order to retroactively apply a change to a statute affecting substantive rights, a party has to expressly consent to the application. See Pomponio v. Claridge of Pompano Condominium, Inc., 378 So.2d 774, 782 (Fla. 1979); Kaufman v. Shere, 347 So.2d 627, 628 (Fla. 3d DCA 1977). Courts in Florida have upheld the retroactive application of a statutory amendment when the subject contract “clearly and unambiguously incorporates” future amendments to the statute. Kosow v. Condominium Ass’n of Lakeside Village, Inc., 512 So.2d 349, 350-51 (Fla. 4 DCA 1987). In Kosow, the contract noted that it “incorporated by reference the Condominium Act [. . .] as the same may be amended from time to time.” Id at 350. The key is whether the contract clearly evidences express consent to incorporate a specific statute and its future amendment into the contract. See Angora Enterprises, Inc. v. Cole, 439 So.2d 832, 835 (Fla. 1983). In Cole, similar to Kosow, the contract incorporated a statute “as the same may be amended from time to time.” Id. at 834. See also Halpern v. Retirement Builders, Inc., 507 So.2d 622, 623-24 (Fla. 4 DCA 1987) (incorporating provisions of a statute “as the same may be amended from time to time”).

In the instant case, the policy merely states that the insurer “will pay in accordance with the Florida Motor Vehicle No-Fault Law, as amended.” The question for the Court is whether this language is sufficient on its own to demonstrate “clearly and unambiguously” that the policy holder has “expressly consented” to the incorporation of future amendments to the statute. See Kosow, 512 So.2d at 351; Cole, 439 So.2d at 835.

The Florida Motor Vehicle No-Fault law was originally adopted in 1971. Ch. 71-252, s1 , Fla. Laws. Since then, it has been amended numerous times. Therefore, at the time the policy in the instant case was issued, the No-Fault Law had already been amended up to that point. The Court agrees with Plaintiff’s argument that the mere language “as amended” more likely refers to the No-Fault Law as it had been amended to that point. In any event, the Court finds that the meager language in the policy does not “clearly and unambiguously” provide that the policy holder has “expressly consented” to future amendments and the Court’s finding is consistent with the analysis of the Fifth District Court of Appeal in State Farm Florida Ins. Co. v. Boyd Nichols and Linda Nichols, et al., 34 Fla. L. Weekly D2275b (Fla. 5th DCA 2009).

Furthermore, Florida law renders applicable to contracts of insurance the principle that, where a contract of insurance is prepared and phrased by the insurer, it is to be construed liberally in favor of the insured and strictly against the insurer, where the meaning of the language is doubtful, uncertain, or ambiguous. Financial Fire & Cas. Co. v. Callaham, 199 So.2d 529, 532-533 (Fla. 2nd DCA 1967) citing to Fireman’s Fund Ins. Co. of San Francisco, Cal. v. Boyd, 45 So.2d 499 (Fla. 1950). The general rule is that, if there are terms in an insurance policy which are ambiguous, equivocal, or uncertain to the extent that the intention of the parties is not clear and cannot be clearly ascertained by the application of ordinary rules of construction, these terms are to be construed strictly and most strongly against the insurer and liberally in favor of the insured so as to effect the dominant purpose of payment to the insured. Callaham, 199 So.2d 529 at 533 citing to Beasley v. Wolf, 151 So.2d 679 (Fla. 3rd DCA 1963). The accepted rationale back of this rule is that insurance policies are prepared by experts in this complex area, and the intricate interplay of their various provisions is difficult for a layman to understand. Callaham, 199 So.2d 529 at 533 citing to Praetorians v. Fisher, 89 So.2d 329 (Fla.1956). Where there are two interpretations which may fairly be given to language used in a policy, the one that allows the greater indemnity will govern. Callaham, 199 So.2d 529 at 533 citing to Howard v. American Service Mut. Ins. Co., 151 So.2d 682 (Fla. 3rd DCA 1963).

Where the meaning of the insurer’s language is doubtful, uncertain or ambiguous, the doubt is resolved in favor of greater coverage. State Farm Mut. Auto. Ins. Co. v. Mallard, 548 So.2d 733, 735 (Fla. 3rd DCA 1989) citing to Joseph Uram Jewelers, Inc. v. Liberty Mutual Fire Insurance Company, 273 So.2d 111, 113 (Fla. 3rd DCA 1972).

In the instant case, the policy language that provides that the insurer “will pay in accordance with the Florida Motor Vehicle No-Fault Law, as amended,” is, at the very least ambiguous and, as such, must be construed against the Defendant, who drafted the policy, and in favor of the insured.

Accordingly, it is hereby ORDERED AND ADJUDGED, that Final Summary Judgment is entered in favor of the Plaintiff. The Plaintiff, RONALD J. TRAPANA, M.D., P.A., 4018 Sheridan St., Hollywood, FL 33021, shall recover from the Defendant, GEICO EMPLOYEES INSURANCE COMPANY, 3535 West Pipkin Rd., Lakeland, FL 33811, the principal sum of $2,665.58 together with interest at the rate of 11% pursuant to F.S. s. 627.736(4) in the amount of $621.84.

This judgment shall bear interest at the rate of 6% per year from date of entry until satisfied. The draft shall be made payable to RONALD J. TRAPANA, M.D., P.A., and delivered to Russel Lazega, Esq. at the Law Office of Russel Lazega, 13499 Biscayne Blvd., Suite 107, North Miami, Florida 33181 or current business address at the time of payment.

This Court reserves jurisdiction to award attorney’s fees and costs in favor of the Plaintiff, and to enter a Final Judgment for Attorney’s Fees and Costs accordingly.

Let execution issue for the above sums.