18 Fla. L. Weekly Supp. 312b
Online Reference: FLWSUPP 1803DOUG
Insurance — Personal injury protection — Demand letter — Where insurer failed to raise issue of noncompliance with pre-suit demand letter requirement as affirmative defense, insurer waived defense — No merit to claim that demand letter is defective for failing to attach copy of insurer’s notice withdrawing payment for further treatment where demand letter was not seeking payment for future treatment but for services already rendered — Moreover, insurer waived any deficiency in demand letter by failing to raise issue in response to letter or initial answer
DOUGLAS RAPID REHABILITATION, INC., a/a/o Nicole Bowen, Patient, Plaintiff(s), vs. UNITED AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 08-005454 CONO 70. November 30, 2010. Edward Merrigan, Judge. Counsel: Andrew J. Weinstein, Weinstein Law Firm, Coral Springs, for Plaintiff. Jacqueline Whittingham, Office of the General Counsel for United Automobile Insurance Company, Miami, for Defendant.
ORDER DENYING DEFENDANT’S MOTION FOR FINAL SUMMARY JUDGMENT & RESERVINGAS TO PLAINTIFF’S MOTION FOR ATTORNEY’SFEES AND COSTS PURSUANT TO FLA. STAT. §57.105
THIS CAUSE came before the Court on July 9, 2010 for hearing of Defendant’s Motion for Final Summary Judgment and Plaintiff’s Motion for Attorney’s Fees and Costs Pursuant to Fla. Stat. §57.105; the Court having reviewed the Motions and entire court file; heard arguments; reviewed relevant legal authorities; and been sufficiently advised in the premises, the Court finds as follows:
BACKGROUND:
1. This lawsuit arises out of the denial of Personal Injury Protection (“PIP”) benefits to DOUGLAS RAPID REHABILITATION, INC, as assignee of Nicole Bowen, an insured of the Defendant, United Automobile Insurance Company, (“UNITED”) for treatment rendered by the Plaintiff.
2. Plaintiff filed a Breach of Contract Complaint, on or about December 8, 2008, against the Defendant UNITED AUTOMOBILE INSURANCE COMPANY (hereinafter “UNITED”), as assignee of the policy benefits of Nicole Bowen.
3. On or about January 13, 2009, UNITED filed its Answer and Affirmative Defenses. In its Answer Defendant plead two (2) affirmative defenses, lack of cooperation and payment.
4. On or about March 31, 2010, UNITED served its [Amended] Answer and Affirmative Defenses without first seeking the leave of court. UNITED’s Answer and Affirmative Defenses is in violation of Fla. R. Civ. P. 1.190(a), notwithstanding United’s failure to comply with the Rules of Civil Procedure, in its second Answer, Defendant only plead two (2) affirmative defenses: failure to cooperate and payment.
5. On or about April 1, 2010 UNITED served its Motion for Final Summary Judgment re: Defective Demand Letter. Albeit UNITED failed to raise the issue of defective demand letter in its Answer and Affirmative Defenses.
ISSUE TO BE DETERMINED
The question before this Court was whether or not the Plaintiff’s pre-suit demand letter was in compliance with Florida Statute 627.736(11).
FINDINGS OF FACT
6. On or about October 3, 2008, Plaintiff submitted its “Demand Letter pursuant to Florida statute 627.736(11)”. UNITED stamped the letter as received on October 6, 2008.
7. On or about October 22, 2008 UNITED responded to the Pre-Suit Demand Letter alleging that Independent Medical Examinations by Dr. Joseph Marfisi, D.C. and Dr. Alphonse Dufreney, M.D. on May 22, 2008 determined that further Chiropractic treatment would not be reasonable, related, or medically necessary and therefore suspended benefits for any services thereafter.
8. Nowhere in the response to the Plaintiff’s Pre-Suit Demand Letter did Defendant make mention of any issue regarding the noncompliance of the letter with the requirements of Florida Statute 627.736(11).
9. UNITED’s entire demand letter defense is based on the premise that the Plaintiff failed to attach two letters dated July 17, 2008, commonly known as IME cut off letter, to its Pre-Suit Demand Letter dated October 3, 2008.
10. UNITED relied upon Progressive Express Ins. Co. v. Menedez, 979 So.2d 324 (Fla. 3d DCA 2008) [32 Fla. L. Weekly D2891a], and stated that because the Plaintiff failed to comply with the pre-suit demand letter requirements, it must move to abate or voluntarily dismiss the action and send a compliant demand letter before refiling the lawsuit.
11. Although the issues in the Menedez case are not applicable to this case, the Court notes that the Supreme Court of Florida in a April 2010 revised opinion reversed the Third District Court of Appeals decision in Progressive by determining that the Third District should not have been given retroactive application to statutory pre-suit notice. Menedez v. Progressive Express Ins. Co., No. Sc08-789 (April 22, 2010).
CONCLUSIONS OF LAW:
12. UNITED failed to raise the alleged non-compliance with §627.736(11) as an affirmative defense, and thus said defense is waived.
13. Florida Rule of Civil Procedure 1.140(h)(1) states, “A party waives all defenses and objections that the party does not present under subdivisions (b), (e), or (f) of this rule.” Subsection (b) in pertinent part, “Every defense in law or fact to a claim for relief shall be asserted in a responsive pleading if one is required.”
14. The failure to plead an affirmative defense waives that defense and a court will not consider it in reviewing a summary judgment motion. Goldberg v. Regency Highland Condo. Ass’n, 452 So.2d (Fla. 4th DCA, 1984). By failing to plead an affirmative defense, such defense is waived and cannot later form the basis of a motion for summary judgment. Hussain v. Side, 16 Fla. L. Weekly D. 2456 (3rd DCA, 1991).
15. In Copeland v. Albertsons Inc., 32 Fla. L. Weekly D322a (Fla. 2d DCA 2007), the Court reversed an order granting summary judgment because the defendants did not plead as an affirmative defense that the plaintiff’s claims were barred by a particular statute. The Court held “a defendant cannot present evidence of a statutory defense unless that defense is pleaded.” Id. (citing to Protective Cas. Ins. Co. v. Killane, 459 So.2d 1037, 1038 (Fla. 1984); Tobias v. Osorio, 681 So.2d 905, 908 (Fla. 4th DCA 1996))
16. Even if this Court were to consider Defendant’s position that because the Plaintiff failed to comply with the pre-suit demand letter requirements, it must move to abate or voluntarily dismiss the action and send a compliant demand letter before refiling the lawsuit, United’s contention that Plaintiff’s demand letter is defective due to the failure to attached a copy of the insurer’s notice withdrawing payment is flawed.
17. Plaintiff’s pre-suit demand letter was not seeking payment for “future treatment not yet rendered” but demanding payment for services already provided by the Plaintiff, therefore Plaintiff was not required to attach copies of Defendant’s IME suspension letters.
18. In relevant part Florida Statute § 627.736 states:
(10) Demand Letter —
(a) As a condition precedent to filing any action for benefits under this section, the insurer must be provided with written notice of an intent to initiate litigation. Such notice may not be sent until the claim is overdue, including any additional time the insurer has to pay the claim pursuant to paragraph (4)(b).
(b) The notice required shall state that it is a “demand letter under s. 627.736(10)” and shall state with specificity:
1. The name of the insured upon which such benefits are being sought, including a copy of the assignment giving rights to the claimant if the claimant is not the insured.
2. The claim number or policy number upon which such claim was originally submitted to the insurer.
3. To the extent applicable, the name of any medical provider who rendered to an insured the treatment, services, accommodations, or supplies that form the basis of such claim; and an itemized statement specifying each exact amount, the date of treatment, service, or accommodation, and the type of benefit claimed to be due. A completed form satisfying the requirements of paragraph (5)(d) or the lost-wage statement previously submitted may be used as the itemized statement. To the extent that the demand involves an insurer’s withdrawal of payment under paragraph (7)(a) for future treatment not yet rendered, the claimant shall attach a copy of the insurer’s notice withdrawing such payment and an itemized statement of the type, frequency, and duration of future treatment claimed to be reasonable and medically necessary. (Emphasis added)
19. Furthermore, Defendant waived any deficiency with respect to its alleged defective demand letter defense since it failed to raise the issue in its response to Plaintiff’s pre-suit demand letter and failed to raise the issue in its initial answer.
20. Florida Statute 627.736(11) imposes a statutorily duty requiring a medical provider to furnish the insurer with a notice advising of its intent to initiate litigation as a condition precedent to filing an action for benefits. It is undisputed that on October 3, 2008 Plaintiff served Defendant with its notice of intent to initiate litigation.
21. On or about October 22, 2008 UNITED responded to Plaintiff’s pre-suit demand letter. No wherein Defendant’s response does UNITED indicate that Plaintiff’s pre-suit demand letter is deficient for payment and instead issued payment, albeit less than the amount demanded.
22. The issue in this case is analogous to that in Florida Medical & Injury v. Progressive, 29 So.3d 329 (Fla 5th DCA 2010). In FMI the provider failed to submit a “completed” Disclosure and Acknowledgment form. Progressive argued that FMI failed to satisfy is statutorily duty and therefore failed to satisfy a condition precedent baring FMI from recovery. In this case, UNITED is attempting to argue that DOUGLAS RAPID REHABILITATION, INC. (hereinafter “DOUGLAS”) failed to submit a proper pre-suit demand letter and therefore failed to satisfy is statutorily duty and therefore failed to satisfy a condition precedent baring DOUGLAS from recovery.
23. Just like the instant case, Progressive failed to notify the provider by way of an EOB [demand response] or any other means that it found FMI’s D&A form to be insufficient. Moreover, Progressive issued payment at a reduced amount. The FMI court reasoned that “[e]ven if the insurers’ theory about “notice” were to prevail, when an insurer receives a claim and the provider’s D&A form is deemed deficient for some reason, the insurer can either pay or refuse to pay on the ground that proof without the proper D&A form is not notice. If the insurer fails to specify the defect in the form so that it can be rectified as contemplated by subsection (4), it will be deemed to have waived its objection to payment.” “There may be other measures that the insurer could take to obtain the form but once the insurer pays, it will not be heard to refuse payment because of a defect in the form.” Id. In Lake Worth Emergency Chiropractic, 15 Fla. Supp. 1227a (Fla. 17th Jud. Cir. 2008), the court pointed out that subsection (4)(b) requires an insurer to notify a claimant if it considers providers’ submissions to be incomplete or defective and held that failure to do so and to afford the claimant an opportunity to correct any asserted defect estops the insurer from asserting any defect in the D&A form as a defense to payment. See also United Auto. Ins. Co. v. Amador, 15 Fla. Supp. 320a (Fla. 11th Cir. Ct. 2008).
24. The Florida Legislature included the tolling provisions in section 627.736 to allow an insurer to receive properly computed statements and bills from which to make an informed decision to pay, as well as to allow the medical providers an opportunity to correct any mistakes in those billings.
Florida Medical & Injury v. Progressive.
25. The Third District Court in its recent United Automobile opinion observed, that even if submission of the D&A form were a component of notice, the provider can certainly cure a defect in the completion of the form and submit it at any time before filing suit. Had United advised the Plaintiff in this action of its alleged deficient pre-suit demand, the Plaintiff could have cured the defect prior to the filing of the instant lawsuit. Instead, United waited over a year and a half to assert this defense by way of a Motion for Final Summary Judgment.
26. Nowhere in the legislative history did the legislature contend that a minor defect invalidates the obligation to pay for the legitimately and lawfully rendered medical care. To allow a party to take advantage of an alleged mistake under circumstances such as this encourages “gotcha” litigation condemned by the Courts. See Salcedo v. Asociacion Cubana, Inc., 368 So.2d 1337, 1339 (Fla 3rd DCA 1979); “A gotcha school of litigation cannot succeed” Berkman v. Foley, 709 So.2d 628 (Fla. 4th DCA 1998) [23 Fla. L. Weekly D975a].
27. In Lake Worth Emergency Chiropractic, 15 Fla. Supp. 1227a (Fla. 17th Jud. Cir. 2008), the court pointed out that subsection (4)(b) requires an insurer to notify a claimant if it considers a providers’ submission to be incomplete or defective and held that failure to do so and to afford the claimant an opportunity to correct any asserted defect estops the insurer from asserting any defect as a defense to payment. See also United Auto. Ins. Co. v. Amador, 15 Fla. Supp. 320a (Fla. 11th Cir. Ct. 2008). Giving the purpose of the Statute as well as the plain meaning, there is no reason to believe that the Plaintiff would not be afforded the same opportunity to correct any asserted deficiency in a notice of intent to initiate litigation.
28. On or about April 26, 2010 Plaintiff served Defendant with its notice of intent to seek attorneys fees and costs pursuant to Florida Statute 57.105 regarding Defendant’s Motion for Final Summary Judgment.
29. Florida Statute §57.105(1)(b) states:
(1) Upon the court’s initiative or motion of any party, the court shall award a reasonable attorney’s fee to be paid to the prevailing party in equal amounts by the losing party and the losing party’s attorney on any claim or defense at any time during a civil proceeding or action in which the court finds that the losing party or the losing party’s attorney knew or should have known that a claim or defense when initially presented to the court or at any time before trial:
(b) Would not be supported by the application of then-existing law to those material facts.
30. Plaintiff argues that UNITED knew or should have known that the claims raised in Defendant’s Motion for Final Summary Judgment were not supported by the application of existing law to material fact. Defendant was served with Plaintiff’s Motion for Attorney’s Fees and Costs pursuant to Fla. Stat. §57.105 on or about April 26, 2010, and given 21 days to withdraw its motion before said Motion was filed with the Court.
31. UNITED failed to withdraw its motion within the 21 days as provided by the Statute, and accordingly Plaintiff’s Motion for Attorney’s Fees and Costs pursuant to Fla. Stat. §57.105 is ripe for determination by the court.
It is therefore,
ORDERED and ADJUDGED, the Defendant’s Motion for Final Summary Judgment be and the same is hereby Denied.
It is further,
ORDERED AND ADJUDGED that Plaintiff’s Motion for Attorney’s Fees and Costs Pursuant to Fla. Stat. §57.105 is deferred and entitlement to same shall be determined upon notice and hearing.
