20 Fla. L. Weekly Supp. 668b
Online Reference: FLWSUPP 2007JCASInsurance — Personal injury protection — Coverage — Exhaustion of policy limits — In absence of any evidence of bad faith, where benefits were exhausted in payment of other medical providers before plaintiff medical provider filed suit, insurer is entitled to summary judgment — Insurer was not required to reserve funds for claim reduced through erroneous application of fee schedule in 2008 PIP statute and is not liable for payment of balance of reduced claim after exhaustion of benefits — As matter of law, provider is barred from seeking interest, penalties or attorney’s fees on disputed benefits that will never be paid due to exhaustion of benefits
GABLES INSURANCE RECOVERY, INC. a/a/o Jose L. Castro, Plaintiff, vs. MGA INSURANCE COMPANY, INC., Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County, Civil Division. Case No. 11-00801 SP 25. November 26, 2012. Nuria Saenz, Judge. Counsel: Matthew E. Ladd, Law Offices of Matthew E. Ladd, for Plaintiff. Victor Y. Guerra, Law Offices of Felipe E. Diez, P.A., Miami, for Defendant.
ORDER GRANTING DEFENDANT’S MOTIONFOR SUMMARY JUDGMENT ON THE ISSUEOF EXHAUSTION OF BENEFITSFINDINGS OF FACT
1. The above-captioned case involves a suit for personal injury protection (“PIP”) benefits by the Plaintiff, GABLES INSURANCE RECOVERY, INC. a/a/o Jose L. Castro, against the Defendant, MGA INSURANCE COMPANY, INC. (“MGA”). Zangronis Aff. at ¶ 4 (filed with the court as Exhibit “A” to Defendant’s Motion for Summary Judgment on the Issue of Exhaustion of Benefits and hereinafter incorporated by reference).
2. On March 26, 2008, the Plaintiff’s assignor, Jose L. Castro, was allegedly involved in an automobile accident and, thereafter, sought treatment from the Plaintiff’s predecessor in interest, All X Ray Diagnostic Services, Corp. (“All X-Ray”), for the injuries that he allegedly sustained in the accident. Id. at ¶ 5
3. All X-Ray provided the Plaintiff’s assignor with treatment on date of service April 1, 2008 and thereafter submitted its bill in the amount of $1,050.00 to the Defendant for payment. Id. at ¶ 6.
4. On or about June 24, 2008, the Defendant paid All X-Ray $141.98 in PIP benefits and $1.67 in statutory interest in accordance with Fla. Stat. § 627.736(5)(a)2.f. (2008) and the Defendant’s policy of insurance with the named insured, Jeovany Castro, which inured to the benefit of his brother, Jose L. Castro. Id. at ¶ 7. See the PIP Payout Sheet attached to the Affidavit of Jeannine Zangronis as Exhibit “1.”
5. On July 29, 2008;* the Defendant received the Plaintiff’s Notice of Intent to Initiate Litigation (“demand letter”), which sought medical payments in the amount of $696.35, or the difference between 80 percent of All X-Ray’s bill ($840.00) and the Defendant’s total payment to date ($143.65). Id. at ¶ 8.
6. More than two and a half years after receiving, and responding to, the Plaintiff’s demand letter, the Defendant was served with Plaintiff’s Statement of Claim (“Complaint”) on February 3, 2011. The Complaint seeks “damages for overdue No-Fault Benefits in the amount of $696.35, interest on overdue No-Fault Benefits, and interest on late payment of No-Fault Benefits.” Id. at ¶ 9.
7. However, the policy limits for Mr. Castro’s PIP benefits were exhausted on or about August 7, 2010, when the Defendant paid $3,774.42 to Atlantic Medical Specialty, another of the claimant’s medical providers, in satisfaction of its claim for PIP benefits under the subject policy of insurance. Id. at ¶ 10.
8. Accordingly, there is no coverage for the Plaintiff’s claim for PIP benefits as the limits of insurance coverage available under the policy, $10,000.00 in PIP benefits, were exhausted almost six months prior to the date the Defendant was served with the instant action.
9. The Defendant fully performed its contractual obligations under the insurance contract by paying 100 percent of the insurance benefits available under the PIP portion of the subject policy to All X-Ray and all other medical providers and entities lawfully entitled to receive said PIP benefits. Id. at ¶ 11.
FINDINGS OF LAW
1. The Florida Rules of Civil Procedure allow a court to enter summary judgment when the pleadings, depositions, discovery, and other facts show that there are no genuine issues of material fact and that the moving party is entitled to a judgment as a matter of law. Fla.R.Civ.P. 1.510(c). The Florida Supreme Court has also held that “once there is a motion for summary judgment that is supported by affidavit or other factual showing, the burden shifts to the opposing party to show by appropriate means that genuine and material issues do remain to be tried.” Holl v. Talcott, 191 So. 2d 40, 43 (Fla. 1966).
2. First, this Court finds that the Defendant is entitled to judgment as a matter of law as a PIP insurer — absent a showing of bad faith — is not liable for benefits once they have been exhausted.
3. In an action for contractual insurance benefits, the amount of the judgment should be limited to the amount of available insurance coverage. Government Employees Ins. Co. v. Robinson, 581 So. 2d 230 (Fla. 3d DCA 1991); Dixie Ins. Co. v. Lewis, 484 So. 2d 89 (Fla. 2d DCA 1986). Furthermore, the law in Florida is fairly well-settled regarding a PIP insurer’s liability once its insured’s PIP benefits have been exhausted. To illustrate, in Progressive American Insurance Company v. Stand-Up MRI of Orlando, 990 So. 2d 3, 4 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a], the Fifth District Court of Appeal announced the seminal proposition that “in the absence of a showing of bad faith, a PIP insurer is not liable for benefits once benefits have been exhausted.”
4. The facts underlying the instant action are substantially analogous to those in Stand-Up MRI. After the Defendant, MGA, reduced All X-Ray’s charges pursuant to the Medicare Part B fee schedule pursuant to Fla. Stat. § 627.736(5)(a)21. (2008) and the subject policy of insurance, the Defendant continued paying other claims in order of receipt. Subsequently, the Plaintiff served the Defendant with its Complaint on February 3, 2011. However, the policy limits for Mr. Castro’s PIP benefits were exhausted on or about August 7, 2010, when the Defendant paid the outstanding claims of Atlantic Medical Specialty, which had rendered the vast majority of treatment to Mr. Castro for the personal injuries that he allegedly sustained in the automobile accident on March 26, 2008. As with Progressive American in Stand-Up MRI, MGA’s exhaustion of Mr. Castro’s PIP benefits cannot be reasonably argued to have been undertaken in bad faith.
5. Being fully aware of the case law, Plaintiff served a Motion to Amend Statement of Claim on May 16, 2012 and this Court entertained the foregoing motion on June 28, 2012. The very next day, June 29, 2012, this Court, relying on, and citing to QBE Insurance Corporation v. Chalfonte Condominium Apartment Association, 2012 WL 1947863 (Fla.), issued an Order Denying Plaintiff’s Motion to Amend [Statement of Claim] on the basis that it sought to introduce a bad faith claim not permitted by case law.
6. Despite the Plaintiff’s contention that MGA misapplied the 2008 fee schedule in a policy that made no express reference to it and that there was no other basis to reduce the allowed amount, this Court finds that “[w]hen the Plaintiff accepted the Assignment of Benefits from the patient, [it] did so knowing that there was a finite limit in benefits and that there were possible other providers that would be getting paid from those benefits even after suit was filed.” Northwood Sports Medicine and Physical Rehabilitation, Inc. vs. State Farm Mutual Automobile Insurance Company, 18 Fla. L. Weekly Supp. 1201a (Fla. Palm Beach Cty. Ct. Aug 25, 2011). Moreover, just as in Northwood, Jose Castro’s PIP benefits were exhausted on or about August 7, 2010, which was well before the existence of any binding law on the issue of the applicability of the Medicare Part B fee schedule.
7. This Court also finds that the Defendant is entitled to judgment as a matter of law as a PIP insurer is not required to set aside a “reserve” fund for claims that are reduced or denied.
8. Florida appellate courts have “decline[d] to create a requirement that an insurance company set aside a ‘reserve’ fund for claims that are reduced or denied.” Simon v. Progressive Express Ins. Co., 904 So. 2d 449, 450 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D1156b]; accord Stand-Up MRI, 990 So. 2d at 5. According to the Fourth District Court of Appeal, imposing a “reserve” or “hold” requirement on a PIP insurer who reduced or denied a claim “would result in unreasonable exposure of the insurance company and would be to the detriment of the insured and other providers with properly submitted claims.” Id. Furthermore, requiring insurers to allocate “reserve” funds for prospectively disputed claims would be contrary to the legislative intent of the PIP statute, which mandates prompt payment of medical bills. See Stand-Up MRI, 990 So. 2d at 6; Simon, 904 So. 2d at 450.
9. Since MGA had no obligation to set aside available PIP benefits to settle a potential dispute with All X-Ray, a provider, the exhaustion of the claimant’s PIP benefits prior to suit serves as a complete defense to the Plaintiff’s instant claim for additional PIP benefits.
10. Finally, the Defendant is also entitled to judgment as a matter of law because a medical provider is barred from seeking interest, penalties or attorney fees on disputed PIP benefits that will never be paid due to exhaustion of benefits.
11. In the Complaint, the Plaintiff demanded interest on overdue No-Fault benefits and interest on late payment of No-Fault benefits along with damages for overdue No-Fault benefits. The Plaintiff also alleged entitlement to attorney fees pursuant to Fla. Stat. §§ 627.428 and 627.736(8). Just as a PIP insurer is not liable for benefits once they have been exhausted in the absence of bad faith, a PIP insurer is not responsible for paying interest, penalties or attorney fees in an action in which benefits will never have to be paid due to an exhaustion of insurance benefits. See Sheldon v. United Servs. Auto. Ass’n, 2010 WL 5306461 (Fla. 1st DCA 2010) [36 Fla. L. Weekly D23a].
12. Last, but not least, this Court finds that the Plaintiff’s reliance on Coral Imaging Service v. Geico Indemnity Insurance Company, 955 So. 2d 11 (Fla. 3d DCA 2006) [31 Fla. L. Weekly D2478a], is misplaced. The insurer in Coral Imaging improperly paid untimely, non-compensable claims and subsequently denied timely and compensable claims alleging that benefits had been exhausted. Unlike in Coral Imaging, the insurer in this case, MGA, did not pay any claims that were non-compensable as a matter of law.
THIS CAUSE coming to be heard on the Defendant’s Motion for a Summary Judgment on the Issue of Exhaustion of Benefits on October 23, 2012, and the matter having been duly advised to the court,
IT IS ORDERED AND ADJUDGED that the Defendant’s Motion for Summary Judgment on the Issue of Exhaustion of Benefits is hereby granted.
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*Within 30 days, Plaintiff had the right to file its lawsuit. Certainly, at that time there were benefits available. Plaintiff chose to not file and Defendant continued to make payments.
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