2 Fla. L. Weekly Supp. 2a
Contracts — Insurance — State employee was not required to exhaust administrative remedies before filing breach of contract action to contest denial of health insurance claims — Although state must offer administrative review as option to employees, nothing in regulatory or statutory framework indicates that employees are limited to such review — Attorney’s fees — As governmental unit providing plan of self-insurance, employing agency qualified as “insurer” under section 627.752, and attorney’s fees were available to plaintiff at trial and on appeal pursuant to statute specifically addressing attorney’s fees in cases involving group health insurance policies — No abuse of discretion in awarding attorney’s fees incurred by insured in connection with two interlocutory appeals which trial court found to be frivolous — Competent substantial evidence supported trial court’s determination that contingency fee multiplier was necessary to compute reasonable fee
STATE OF FLORIDA, DEPARTMENT OF MANAGEMENT SERVICES, Appellant, v. PAMELA MCMEEKIN, Appellee. 8th Judicial Circuit in and for Alachua County. Case Nos. 91-28-AP and 89-756-SC. Opinion filed November 1, 1993. Robert P. Cates, Judge. An appeal from the County Court for Alachua County; Aymer L. Curtin, Judge. John M. Carlson, Tallahassee, for appellant. George F. Schaefer, Gainesville, for appellee.
ORDER ON APPEAL
Appellant, the State of Florida Department of Management Services (DMS), appeals a final judgment and attorney fees awarded in favor of Appellee, Pamela McMeekin, in a breach of contract action. DMS argues that the case should not have gone to trial because Ms. McMeekin was required to exhaust administrative remedies, and because sovereign immunity barred her breach of contract suit against the state. DMS appeals the award of attorney fees on grounds that (1) the statute relied upon to award attorney fees does not apply because DMS is not an insurer; (2) the trial court abused its discretion in applying a statute regarding frivolous appeals; and (3) the trial court erred in applying a contingency fee multiplier.
Upon consideration of the arguments of the parties, the record on appeal, and relevant statutory and case law, the appellate court makes the following findings.
Ms. McMeekin had a constitutional right to a jury trial, which she did not waive. The stipulation to abate proceedings while Ms. McMeekin pursued administrative review of her claim did not affect her right to a jury trial, because Ms. McMeekin never agreed to be bound by the administrative determination. Ms. McMeekin had an express written contract with the state of Florida for health insurance, and had a right to sue for breach of that express written contract. Pan-Am Tobacco Corporation v. Department of Corrections, 471 So.2d 4 (Fla. 1984). It was within the province of the jury to determine if the state breached that contract, and the jury verdict in this case should remain undisturbed.
Furthermore, although Ms. McMeekin had the administrative right to a hearing pursuant to Florida Statute ch. 120, this administrative route is merely an option which Ms. McMeekin may pursue to contest denied health insurance claims. If a state employee opts to pursue administrative review, he or she must exhaust the administrative remedies. However, the permissive, rather than mandatory, language in the health insurance policy indicates that administrative review is merely an option for disputing denied claims. No statutory, regulatory, or policy language indicates that review of denied claims is limited to Chapter 120 administrative review. Similar federal cases, addressing federal employee group health insurance plans, indicate that where statutes or regulations do not interpret agency policy regarding mandatory administrative review of a specific type of claim, exhaustion should not be required. See Kobleur v. Group Hospitalization & Medical Services, 954 F.2d 705, 710 (11th Cir. 1992); Eidler v. Blue Cross-Blue Shield of Wisconsin, 671 F. Supp. 1213 (E.D.Wis. 1987); Skoller v. Blue Cross-Blue Shield of Greater N.Y., 584 F.Supp. 288, 291 (S.D. N.Y. 1984). It is within the trial court’s discretion in such a case to determine whether exhaustion is required. Kobleur, 954 F.2d at 711. In the instant case, while the state must offer administrative review as an option to employees, nothing in the regulatory or statutory framework indicates that employees are limited to such review.
The trial court properly awarded attorney fees to Ms. McMeekin, albeit based on the wrong statute. As a governmental unit providing a plan of self-insurance, DMS qualifies as an “insurer” under Fla. Stat. §627.652. See Florida Automobile Dealers Industry Benefit Trust v. Small, 592 So.2d 1179, 1181 (Fla. 1st DCA 1992); Fla. Stat. §627.652(2)(c), §110.123(2)(h), §624.031 (1992). Attorney fees are thus available to Ms. McMeekin at trial and on appeal pursuant to Fla. Stat. §627.6698, which specifically addresses attorney fees in cases involving group health insurance policies. This statute is nearly identical in language to the statute upon which the trial court based its award of attorney fees, also contained in Florida Statute ch. 627.
The trial court did not abuse its discretion in awarding attorney fees to Ms. McMeekin for two interlocutory appeals, based on a finding that the appeals were frivolous. See T.I.E. Communications v. Toyota Motors Center, 391 So.2d 697 (Fla. 3d DCA 1980); Fla. R. App. P. 9.130(a)(3) (1993). Further, competent substantial evidence supports the trial court’s determination that a contingency fee multiplier was necessary to compute a reasonable attorney fee in the instant case. The trial court adopted specific factors supporting a multiplier and found that such factors were supported by the record. Standard Guaranteed Insurance Company v. Quanstrom, 555 So.2d 828, 834 (Fla. 1990); State Farm Fire & Casualty Co. v. Palma, 555 So.2d 836, 838 (Fla. 1990). The court further found that success was unlikely at the outset of this contract case, thus properly applying a multiplier of 2.5. Quanstrom, 555 So.2d at 834.
Accordingly, it is ADJUDGED that the final judgment and award of attorney fees in favor of Appellee is Affirmed.
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