18 Fla. L. Weekly Supp. 348a
Online Reference: FLWSUPP 1804DIAZ Insurance — Personal injury protection — Examination under oath — Failure to attend — No error in excluding adjuster’s testimony regarding EUO department’s mailing procedures where proffered testimony was cumulative to that of EUO department supervisor — Evidence was insufficient to prove that insured unreasonably refused to submit to EUO — Attendance at EUO is not condition precedent to PIP coverage — Further, insurer suffered no prejudice as result of missed EUO where all information sought through EUO was provided in other documents — Directed verdict in favor of insured is affirmed
UNITED AUTOMOBILE INSURANCE COMPANY, A Florida Corporation, Appellant, v. FRANCISCO DIAZ, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Dade County. Case No. 09-115 AP, 09-638 AP. L.T. Case No. 05-17092 SP 25. February 3, 2011. An appeal from the County Court for Miami-Dade County. Don S. Cohn, Judge. Counsel: Thomas L. Hunker, United Automobile Insurance Company, Office of the General Counsel, for Appellant. Marlene S. Reiss, Law Offices of Marlene S. Reiss, P.A. for Appellee.
(Before COHEN, CYNAMON, and SAMPEDRO-IGLESIA, JJ.)
(SAMPEDRO-IGLESIA, Judge.) United Auto appeals a directed verdict entered in favor of its insured, Francisco Diaz, after a four-day trial. We affirm based on the reasons discussed herein, and on the authority of the Florida Supreme Court’s newly issued decision in Custer Medical Center (a/a/o Maximo Masis) v. United Auto. Ins. Co., 35 Fla. L. Wkly. S640a (Fla. Nov. 4, 2010). Mr. Diaz was injured in an automobile accident on February 10, 2005. He sought treatment for his injuries and submitted his medical bills to United for payment under his Personal Injury Protection (PIP) policy. He attended two physical examinations at United’s request, and provided United with all other requested information, including a No-Fault Application, a Statement of Driver, an affidavit, and the police report. United failed to pay any PIP benefits, and Mr. Diaz was forced to file suit.
Relevant to this appeal is United’s affirmative defense, which stated:
Plaintiff failed to perform all of the conditions precedent to entitle Plaintiff to recovery in that Plaintiff failed to attend scheduled sworn statement.
The parties did not dispute that Mr. Diaz did not appear at two scheduled Examinations Under Oath (EUOs). However, Mr. Diaz testified that he never received notice of either of the scheduled appointments, and further testified that had he received an EUO notice, he would have attended, in the same manner that he attended his IMEs.
On appeal, United raised two issues; (1) that the trial court erred by excluding certain testimony of its adjuster, Bessie Meza; and, (2) that the directed verdict was error because United was entitled to rely on the Mailbox Rule to prove that Mr. Diaz received notice of the scheduled EUOs.Exclusion of Adjuster Testimony ofEUO Department Procedures
First, we address the exclusion of Ms. Meza’s testimony regarding United’s EUO Department procedures. United asserts that the trial court committed reversible error by excluding certain testimony, but provides no legal support for that asserted standard of review. In fact, we review evidentiary rulings for abuse of discretion. Urquiza v. State, 971 So. 2d 926 (Fla. 3d DCA 2007) [33 Fla. L. Weekly D30b] (trial court’s evidentiary rulings are reviewed for abuse of discretion); Forester v. Norman Roger Jewel & Brooks Intl., Inc., 610 So. 2d 1369 (Fla. 1st DCA 1992) (evidentiary rulings are within the sound judicial discretion of the trial judge, whose decision in such regard must be viewed in the context of the entire trial.)
Next, we address the excluded testimony. Contrary to United’s assertion that the trial court refused to allow the adjuster to testify based on the claims file, the record demonstrates that the trial court excluded only the introduction of a single document — United’s EUO notice — and Ms. Meza’s testimony relating solely to the manner in which the EUO notice is prepared and sent to the insured. The record demonstrates that Ms. Meza was permitted to testify at length from the claims file about the EUO, the fact that Mr. Diaz did not attend the EUO, as well as many other matters. Moreover, the record demonstrates that the trial court did not just exclude the testimony. Rather, the trial court permitted a lengthy voir dire to determine whether Ms. Meza was competent to testify to matters relating to the EUO Department’s mailing procedures.
After the trial court’s determination that Ms. Meza was not competent to testify to such matters because she did not have personal knowledge of the procedures used in a department in which she does not work, United presented the testimony of the EUO Department’s supervisor, Freddie Garcia. He provided testimony identical to that which Ms. Meza would have provided.1 Thus, the adjuster’s testimony would have been cumulative to Mr. Garcia’s.
Mr. Diaz contends that the exclusion of Ms. Meza’s testimony regarding the EUO Department was harmless, since Mr. Garcia testified to all the same matters. We agree.
The test for harmful error is whether, but for the error, a different result would have been reached. See §59.041, Fla. Stat. (2010); Katos v. Cushing, 601 So. 2d 612 (Fla. 3d DCA 1992); see also National Union Fire Ins. Co. of Pittsburgh v. Blackmon, 754 So. 2d 840 (Fla. 1st DCA 2000) [25 Fla. L. Weekly D885b].
United cannot demonstrate that the testimony of Ms. Meza would have yielded a different result, her proffered testimony was identical to that of Mr. Garcia. Thus, United is not entitled to a new trial on the basis that its adjuster was not permitted to testify to cumulative matters.The Directed Verdict
To prove its defense, United took the position that all it was required to demonstrate was that it sent notice to Mr. Diaz, and that he received such notice.
The trial court found that United presented no admissible evidence that proved that Mr. Diaz received United’s EUO notice, or otherwise had knowledge of the EUO. The trial court determined that, for a jury to find in favor of United, it would have to engage in impermissible stacking of inferences. The trial court also found that there was no evidence that United satisfied all of the elements of the Mailbox Rule; specifically, there was no evidence that either EUO notice was mailed with proper postage.
Freddie Garcia, the supervisor of the EUO Department, testified to the Department’s procedures, and more specifically about the EUO notices sent to Mr. Diaz. The basis of the trial court’s entry of the directed verdict was a finding that Mr. Garcia’s testimony failed to address an element of the Mailbox Rule, on which United relied to attempt to prove its defense.
The Mailbox Rule establishes a rebuttable presumption that the addressee has received U.S. Mail that has been “duly mailed” according to established office mailing practices. See §90.302, Fla. Stat. (2010).
Mr. Diaz argues that the directed verdict was proper because before United was entitled to the presumption, it had to prove that the EUO notice had proper postage, and Mr. Garcia did not present any testimony to that effect. See Brown v. Giffen Indus., Inc., 281 So. 2d 897 (Fla. 1973) (Mail properly addressed, stamped, and mailed is presumed to have been received by the addressee.); Bernstein v. Liberty Mutual Ins. Co., 294 So. 2d 63 (Fla. 3d DCA 1974) (“bare testimony as to the defendant’s practice of its mailing out to each policyholder a notice of the insurer’s amending the uninsured liability limit of . . . policy . . . without additional evidence that the plaintiff in the instant action specifically received such notification, does not constitute sufficient proof of notice. For proof of practice, habit, or custom, alone, does not constitute proof of performance of an act on a specific occasion; there also must be some proof that the practice was followed in the particular instance in issue.”) In addition, Mr. Diaz argues an alternative bases to affirm the directed verdict. Specifically, Mr. Diaz argues that United’s affirmative defense alleged that the EUO is a condition precedent, but EUOs cannot be a condition precedent either to coverage or to benefits.
Although the Court is not persuaded that Mr. Garcia had to specifically testify that a forty-four cent stamp was placed on the envelope, we affirm the directed verdict on another basis. United failed to satisfy its burden of demonstrating that Mr. Garcia unreasonably refused to submit to an EUO. Moreover, the Florida Supreme Court’s newly issued decision in Custer Medical Center (a/a/o Maximo Masis) v. United Auto. Ins. Co., 35 Fla. L. Wkly. S640a (Fla. Nov. 4, 2010) states that an EUO cannot be a condition precedent. Thus, United cannot prevail on a condition precedent defense in this case.Custer Medical (a/a/o Maximo Masis)
Since the oral argument in this case, the Florida Supreme Court has issued its decision in Custer, 35 Fla. L. Wkly. at S640a. In Custer, the Court held that a simple failure to appear at an IME does not equate to an unreasonable refusal. Moreover, the Court has reiterated well established law that holds that a defendant must prove its own affirmative defense. Thus, United had the burden of proving that Mr. Diaz unreasonably refused to attend his EUO, and failed to satisfy that burden. Simply demonstrating notice and receipt of notice does not prove an unreasonable refusal. Id.
Although United’s defense in Custer was that its insured unreasonably refused to attend an Independent Medical Examination (IME), we find that the Florida Supreme Court’s rationale, and its result, equally apply in the context of an EUO No-Show defense. Moreover, it was the Third District’s decision in Custer Medical Center (a/a/o Maximo Masis) v. United Auto. Ins. Co., 990 So. 2d 633 (Fla. 3d DCA 2008) [35 Fla. L. Weekly S640a], on which United relied below.
In addition, the Custer opinion discusses EUOs. This Court is of the opinion that the Florida Supreme Court has called into question the viability of such provisions in insurance contracts, particularly if such a provision is contrary to the PIP statute.
The Court in Custer states:
A purported verbal exam under oath without counsel in the PIP context is invalid and more restrictive than permitted under the statutory provisions. The prohibition of policy exclusions, limitations, and non-statutory condition on coverage controlled by statute is clear. See Flores v. Allstate Ins. Co., 819 So. 2d 740, 745 (Fla 1972)(noting that courts have an obligation to invalidate exclusions on coverage that are inconsistent with the purpose of the statute that mandates the coverage); Salas v. Liberty Mut. Fire Ins. Co., 272 So. 2d 1, 5 (Fla. 1972) (recognizing that insurance coverage that is a creature of statute is not susceptible to the attempts of the insurer to limit or negate the protection afforded by the law); Mullis v. State Farm Mut. Auto. Ins. Co., 252 So. 2d 229, 232-34 (Fla. 1971) (stating that automobile liability insurance and uninsured motorist coverage obtained to comply with or conform to the law cannot be narrowed by the insurer through exclusions and exceptions contrary to the law); Diaz-Hernandez v. State Farm Mut. Casualty Co., 19 So. 3d 996, 1000 (Fla. 3d DCA 2009) [34 Fla. L. Weekly D2112b] (concluding that a provision in a policy was invalid because it was against the public policy of the statute) Vasques v. Mercury Cas. Co., 947 So. 2d 1265, 1269 (Fla. 5th DCA 2007) [32 Fla. L. Weekly D363a] (stating that restrictions on statutorily mandated coverage must be carefully examined because exclusions that are inconsistent with the purpose of the statute are invalid) (citing Flores, 819 So. 2d at 745). PIP insurance is markedly different from homeowner’s/tenants insurance, property insurance, life insurance, and fire insurance, which are not subject to statutory parameters and are simply a matter of contract not subject to statutory requirements.
Custer, 35 Fla. L. Wkly. S640a at n. 1.
The Florida Supreme Court further notes that the PIP statute does not impose an EUO condition upon the insured. In fact, the statute is silent as to EUOs. Thus, to the extent that a PIP policy may include an EUO provision at all, any such provision clearly cannot be contrary to the statute, or impose any greater limitation or restriction upon the insured, than the statute does. Construing an EUO provision as a condition precedent to coverage or the recovery of PIP benefits, conflicts with the PIP statute to the extent that the statute itself does not make attendance at an EUO a condition precedent. In contrast, the statute does provide a condition precedent upon insureds by the provision requiring the submission of a pre-suit Demand Letter. See §627.736(10), Fla. Stat. (2010).
United Failed to Prove or Allege an “Unreasonable Refusal”
The law is well established that a defendant must prove its own affirmative defense. See Custer, 35 Fla. L. Wkly. at S640a; Dorse v. Armstrong World Indus., Inc., 513 So. 2d 1265 (Fla. 1987), Hough v. Menses, 95 So. 2d 410 (Fla. 1957). Here, United failed to prove its own affirmative defense.
We note, first, that United alleged that its EUO provision is a condition precedent. It did not even allege an unreasonable refusal on the part of Mr. Diaz to attend an EUO. But, more importantly, United failed to present any evidence whatsoever that Mr. Diaz unreasonably refused to submit to an EUO.2 See Custer, 35 Fla. L. Wkly. at S640a. Instead, all that United attempted to demonstrate was that it sent notice to Mr. Diaz with a presumption that Mr. Diaz received such notice. Evidence of a “refusal” is distinct from evidence that establishes only that an insured “failed” to attend a medical examination. Id.
United then impermissibly attempted to shift the burden to Mr. Diaz to demonstrate that his failure to appear (which is not the correct standard; “refusal” is the correct standard3) was reasonable. Id. (“United advances an incorrect principle that once it presented evidence of notice and the insured’s failure to attend the medical examination with explanation or objection, the burden of proof allegedly shifted to Custer to demonstrate a reasonable reason for Masis’s failure to attend.”)
Even before issuing its decision in Custer, the Florida Supreme Court held in U.S. Security Inc. Co. v. Cimino, 754 So. 2d 697 (Fla. 2000) [25 Fla. L. Weekly S186a], in the context of IMEs, that “there are scenarios where the insured ‘reasonably refuses to submit’ to the examination.” 754 So. 2d at 702. In the same manner, there are situations in which an insured reasonably refuses to submit to an EUO.
In this instance, United failed to prove its affirmative defense, because it presented no evidence of an unreasonable refusal on the part of Mr. Diaz to submit to an EUO. See Custer, 35 Fla. L. Wkly. at S640a (“the failure to attend a medical examination may or may not be unreasonable depending upon the evidence presented by the insurer.”)An EUO in the Context of PIP is Not a Condition Precedent
We are persuaded that the analysis in Custer, that an IME in the context of PIP is not a condition precedent, applies equally to EUOs in the context of PIP. The Court in Custer distinguishes PIP insurance — which is governed by statute — from other types of insurance policies, which are governed by purely contractual principles. See Custer, 35 Fla. L. Wkly. at S640a.
In this case, United relied on cases that dealt with insurance policies other than PIP, some of these cases were distinguished by the Florida Supreme Court in Custer. See Pervis v. State Farm Fire & Cas. Co., 901 F. 2d 994 (11th Cir. 1990) (fire loss); Goldman v. State Farm Fire Gen. Ins. Co., 660 So. 2d 300 (Fla. 4th DCA 1995) [20 Fla. L. Weekly D1844a] (home burglary); Stringer v. Fireman’s Fund Ins. Co., 622 So. 2d 145 (Fla. 3d DCA 1993); American Reliance Ins. Co. v. Riggins, 604 So. 2d 535 (Fla. 3d DCA 1992) (fire loss).
As is the case with IMEs, EUOs are not scheduled prior to the existence of the policy or prior to an injury, but instead, are scheduled only after the insured has sustained an accident and submits notice to the insurer, after a policy has been issued and is in effect, and after injuries have been sustained. See Custer, 35 Fla. L. Wkly. at S640a. When parties to a PIP policy dispute attendance at an EUO, neither the insurer nor the insured is contesting the policy’s existence. Thus, the EUO cannot be a condition precedent. To the contrary, the parties are in a dispute with regard to the insured’s right to payment of his or her medical bills under an existing insurance policy. See Custer, 35 Fla. L. Wkly. at S640a.
United Presented No Evidence of Prejudice
Finally, the Court notes that this case presents a prime example of the insurer suffering no prejudice as a result of an insured’s non-attendance at an EUO. Ms. Meza, the adjuster, testified that she sent the EUO Department a request to inquire about the treatment, the injuries, and the accident.
She then testified that the purpose of the EUO is: to check that documents received are accurate and to see the type of treatment the insured is receiving, how the accident happened, whether there are prior injuries or accidents, whether there is any bodily injury claim or other type of suit involved, to verify documents already received, to obtain information about household members, information about the accident, how the accident occurred, the injuries suffered by the insured, the treatment received, whether treatment is helping, whether there are prior injuries unrelated to the auto accident. She further testified that the IME provides United with information about the injuries sustained, information about the accident, and whether treatment and bills are reasonable, related and necessary.
The record demonstrates that United received all of the information that Ms. Meza requested the EUO Department obtain, and more, from the information provided to it by Mr. Diaz in: (1) a Claim Report, which provided the circumstances of the accident and the injuries that Mr. Diaz sustained, the name, address and contact information of the other driver involved in the accident; (2) his attendance at two IMEs; (3) a police report provided by Mr. Diaz at Untied’s request; (4) a Statement of Driver, which provided information about Mr. Diaz, his address, contact information, the location of the accident, the type of vehicle involved in the accident, whether the insured was the driver or a passenger, and information about the other driver; (5) an attending physician’s report and Mr. Diaz’s medical records from his treating physicians, which provided a medical history, including whether Mr. Diaz had any previous accidents or injuries; (6) the medical records also included information about the treatment that Mr. Diaz was receiving and his improvement and progress with the treatment; and, (7) an affidavit provided by Mr. Diaz at United’s request, which provided information about Mr. Diaz, his address, vehicles in the household, household members; an Application for No-Fault Benefits, provided by Mr. Diaz at the request of United, which provides information about the insured, address, telephone number, date of birth, how the accident happened, the date of the accident, the time of the accident, the address of the accident, if the insured went to the hospital, information regarding the medical providers, employment information, whether there would be additional medical bills, whether there is worker’s compensation available, information about all vehicles in the household, authorization for medical information, authorization for wage and salary information.
The adjuster testified that all of the documents were completed to her satisfaction. She further testified that she never looked at all of the documents that Mr. Diaz provided to United until the day she sent the letter of denial based on the missed EUO. United’s adjuster testimony demonstrated that United suffered no prejudice as a result of the missed EUO.
For the foregoing reasons, the directed verdict in favor of the Plaintiff is AFFIRMED. Further, Mr. Diaz’s pending Motion for Appellate Attorney’s Fees and Costs is GRANTED as the prevailing insured, pursuant to section 627.428, Florida Statutes. (CYNAMON, Judge, concurs.)
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(COHEN, Judge, partially dissenting with opinion.) United Auto appeals a directed verdict entered in favor of its insured, Francisco Diaz. A motion for directed verdict should be granted only where no view of the evidence, or inferences made from the evidence, could support a verdict for the nonmoving party. Goolsby v. Qazi, 847 So. 2d 1001, 1002 (Fla. 5th DCA 2003) [28 Fla. L. Weekly D917a]; Williamson v. Superior Ins. Co., 746 So. 2d 483, 485 (Fla. 2d DCA 1999) [24 Fla. L. Weekly D2014a]. In considering a motion for directed verdict, the court must evaluate the testimony in the light most favorable to the nonmoving party and every reasonable inference deduced from the evidence must be interpreted in the light most favorable to the nonmoving party. Marriot Int’l, Inc. v. Perez-Melendez, 855 So. 2d 624, 628 (Fla. 5th DCA 2003) [28 Fla. L. Weekly D2240a]; Azar v. Richardson Greenshields Sec., Inc., 528 So. 2d 1266, 1269 (Fla. 2d DCA 1988). If there are conflicts in the evidence, or different reasonable inferences that may be drawn from the evidence, the issue is factual and must be submitted to the jury. Marriot Int’l, Inc., 885 So. 2d at 628. The standard of review on appeal is the same as the standard for the trial court. Nunez v. Lee County, 777 So. 2d 1016 (Fla. 2d DCA 2000) [26 Fla. L. Weekly D33b]. Thus, appellate review of the trial court’s ruling is de novo. Premier Lab Supply, Inc., v. Chemplex Indus., Inc., 10 So. 3d 202, 205 (Fla. 4th DCA 2009) [34 Fla. L. Weekly D772a].
The trial court erred when it directed a verdict in favor of Diaz/Appellee based on the fact that a United employee did not actually see a stamp being placed on the EUO letter. Clearly, this application of the “Mailbox Rule” is contrary to case law. See Progressive American Insurance Co. v. Kurtz, 518 So. 2d 1339; Allstate Insurance Co. v. Eckert, 472 So. 2d 807, 809; Brown v. Giffen Industries, Inc., 281 So. 2d 897, 900; Lumbermen’s Mut. Cas. Co. v. Alvarez, 443 So. 2d 279, 280; §90.803(6)(a), Fla. Stat. (2010). Freddie Garcia, the supervisor of the EUO Department, testified to United’s procedures, and more specifically to the EUO notices sent to Mr. Diaz. United met its burden at trial by offering competent evidence that the EUO letters were prepared and mailed in the ordinary course of business, and accordingly, there is a rebuttable presumption that the EUO letter was received by its intended recipient. Brown v. Giffen Industries, Inc., 281 So. 2d 897 (Fla. 1973); 23 Fla. Jur. 2d Evidence and Witnesses §149. A jury should have been able to weigh United’s testimony regarding its usual business practice of mailing EUOs, Diaz’s testimony that he did not receive notice, as well as all other competent evidence in the case concerning United and Diaz’s conduct, to determine whether Diaz unreasonably failed to appear at the EUO. See Scutieri v. Miller, 584 So. 2d 15, 16 (Fla. 3d DCA 1991), reh’g and reh’g en banc denied and clarification granted September 16, 1991 (denial of receipt does not automatically overcome the presumption but instead creates a question of fact for the fact finder).
The trial court did, however, correctly deny United’s motion for directed verdict. United’s affirmative defense alleged that Appellee, by failing to attend the EUO, violated a “condition precedent” in its PIP contract with United, and therefore, was not entitled to benefits. The trial court did not directly address this argument, since it predicated its granting of the directed verdict for Appellee on its erroneous interpretation of the “Mailbox Rule.” Moreover, Appellee never contested at the hearing that attendance at the EUO was a condition precedent to recovery of benefits. Subsequent to the oral argument of this appeal, however, the question of whether an EUO constitutes a condition precedent to the recovery of benefits has been answered by a recent Supreme Court case that speaks to both the issue of both IMEs and EUOs in PIP contracts. Custer Medical Center (a/a/o Maximo Masis) v. United Auto Ins. Co., 36 Fla. L. Wkly. S640a (Fla. Nov 4, 2010). While Custer‘sprimary holding addressed second tier certiorari review of the Circuit Court Appellate Division, dicta in the case is persuasive on both the IME and EUO issues, and may even constitute an alternative holding in the case. Studivant v. State, 2010 WL 3464984, ___So. 3d ___ (Fla. 1st DCA Sept. 7, 2010); Aldert v. State, 592 So. 2d 264, 266 (Fla. 1st DCA 1991), quashed on other grounds, 606 So. 2d 1156 (Fla. 1992); Patterson v. Brafman, 530 So. 2d 499, 501 n. 4 (Fla. 3d DCA 1988);. Accordingly, we agree with Appellee’s argument on appeal that an EUO is not a condition precedent to recovery of PIP benefits, and the insurer has the burden of showing that any failure to appear must be unreasonable, and then only as to benefits that are requested subsequent to the request for the EUO, and not those incurred and submitted prior to the request. Custer, 35 Fla. L. Wkly. at S640a.
Accordingly, this case should be reversed and remanded to the trial court with the following instructions:
1. The trial court should identify those bills incurred and submitted to United prior to the request for an EUO. The directed verdict as it pertains to those expenses should be affirmed, and Appellee should be entitled to attorney’s fees for litigation pertaining to any bills submitted prior to the request for both EUOs. If all bills were submitted to United prior to the request for the EUO, then the case should be affirmed.
2. Any expenses incurred and submitted to United subsequent to the request for the EUO should be submitted to the fact-finder to determine whether Diaz’s failure to attend the EUO was unreasonable. The trial court should rely on language in Custer as its guide. Attorney’s fees in connection with those bills should be denied.
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1The Court notes that Ms. Meza was not excluded from testifying. Only her testimony relating to the EUO Department procedures was excluded.
2The “unreasonable refusal” standard that is applied to IMEs is equally applicable to EUOs. See Northeast Pain Mgmt., LLC v. United Auto. Ins. Co., 13 Fla. L. Wkly. Supp. 545a (Fla. 11th Jud. Cir., Mar 23, 2006).
3See Custer, 35 Fla. L. Wkly. at S640a, citing Lamora v. United Auto. Ins. Co., 8 Fla. L. Wkly. Supp. 542[a] (Fla.11th Cir. Ct., Jun 19, 2001) (failure to attend an IME is not automatically considered a refusal).
