20 Fla. L. Weekly Supp. 1086b
Online Reference: FLWSUPP 2011FGOMInsurance — Personal injury protection — Attorney’s fees — Recovery of statutory penalty for overdue benefits does not entitle medical provider to award of attorney’s fees and costs under section 627.428
ICON MEDICAL CENTERS, a/a/o FRANCISCO GOMEZ, Plaintiff, v. UNITED AUTOMOBILE INSURANCE COMPANY, a Florida Corporation, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 12-00795 SP 24. August 28, 2013. Rodolfo A. Ruiz, Judge. Counsel: Mark Mullen, for Plaintiff. Michael Fogarty, for Defendant.
ORDER DENYING PLAINTIFF’S MOTION FORENTITLEMENT TO ATTORNEY’S FEES AND COSTS
THIS CAUSE came before the Court on Plaintiff’s Motion for Entitlement to Attorney’s Fees and Costs. The Court, having reviewed the record and the parties’ filings, having heard argument of counsel, and being otherwise fully advised in the premises, it is,
ORDERED AND ADJUDGED that Plaintiff’s Motion for Entitlement to Attorney’s Fees and Costs is DENIED for the reasons set forth herein.
BACKGROUND
On June 26, 2011, FRANCISCO GOMEZ (“Gomez”) was injured while operating a motor vehicle. Defendant, UNITED AUTOMOBILE INSURANCE COMPANY (“United”), issued an insurance policy to Gomez, which inured to the benefit of Gomez. The policy included personal injury protection (“PIP”) benefits, medical, and extended medical expense coverage. The policy was in full force and effect on the date of the injury. Plaintiff, ICON MEDICAL CENTERS (“Icon”), gave notice to United of covered losses, and demanded benefits for services rendered from October 14, 2011 to November 7, 2011.
United issued its first payment to Icon for unpaid benefits in October 2011, but United did not issue additional payments. On January 11, 2012, Icon issued a second demand letter to United for the unpaid benefits. On February 10, 2012, United paid the benefits and interest according to the second demand letter, but it did not pay any statutory penalty for overdue medical bills pursuant to section 627.736 of the Florida Statutes. See Fla. Stat. § 627.736(10)(d) (“If, within 30 days after receipt of notice by the insurer, the overdue claim specified in the notice is paid by the insurer together with applicable interest and a penalty of 10 percent of the overdue amount paid by the insurer, subject to a maximum penalty of $250, no action may be brought against the insurer.” (emphasis added)). Consequently, Icon filed suit to recover a second demand penalty, plus any associated costs and attorney’s fees.
The parties filed their respective Motions for Summary Judgment regarding payment of the statutory penalty under section 627.736(10)(d), both of which came before the Court for hearing on April 1, 2013. This Court, applying the rules of statutory construction and analyzing the plain meaning of the statute, held that that the penalty under section 627.736(10)(d) applied each time an insurer was delinquent on benefit payments, and proceeded to grant Plaintiff’s Motion for Final Summary Judgment, See Birth-Related Neurological Injury Comp. Ass’n v. Dep’t of Admin. Hearings, 29 So. 3d 992, 997-98 (Fla. 2010) [35 Fla. L. Weekly S40a] (holding that where a statute’s language is plain and unambiguous, its plain meaning will control and further statutory construction is not necessary). The Court went on to note during the April 1, 2013 hearing that application of the statutory penalty in this fashion would not only comport with the plain meaning of section 627.736(10)(d), but also encourage the swift and virtually automatic payment of PIP benefits, which is the purpose of the no-fault statutory scheme. See Ivey v. Allstate Ins. Co., 774 So. 2d 679, 683-84 (Fla. 2000) [25 Fla. L. Weekly S1103a].
Pursuant to the aforementioned interpretation of section 627.736(10)(d), the Court found that as a result of Icon’s January 11, 2012 demand letter for overdue bills, United owed the statutory 10% penalty for overdue benefits, which resulted in a Final Judgment against United for $115.00. Given this recovery under section 627.736(10)(d), Icon maintains that it is entitled to fees and costs pursuant to section 627.428 of the Florida Statutes.ANALYSIS
The Court finds that the demand letter penalty set forth section 627.736(10)(d) is nothing more than so named — a penalty, not a policy benefit between contracting parties. Thus, recovery of this statutory penalty cannot trigger entitlement to attorney’s fees under section 627.428. Section 627.428 provides, in pertinent part:
Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of any named or omnibus insured or the named beneficiary under a policy or contract executed by the insurer, the trial court or, in the event of an appeal in which the insured or beneficiary prevails, the appellate court shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured’s or beneficiary’s attorney prosecuting the suit in which the recovery is had.
Fla. Stat. § 627.428(1) (emphasis added). Florida courts have consistently held that entitlement to attorney’s fees under section 627.428 is limited to prosecution of suits that result in the recovery of insurance proceeds. See, e.g., Gov’t Emps. Ins. Co. v. Gonzalez, 512 So. 2d 269, 270 (Fla. 3d DCA 1987) (holding insurer liable for attorney’s fees under section 627.428 “when, but only when, it has wrongfully withheld the proceeds of the policy.”); Progressive American Ins. Co. v. Rural/Metro Corp. of Florida, 994 So. 2d 1202, 1209 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D2649a] (holding that section 627.428 “ ‘has consistently been interpreted to authorize recovery of attorney’s fees from an insurer only when the insurer has wrongfully withheld payment of the proceeds of the policy.’ ” (quoting Ray v. Travelers Ins. Co., 477 So. 2d 634, 636 (Fla. 5th DCA 1985)). Here, insurance proceeds are not at issue, and Icon has not recovered any wrongfully withheld payment under the policy between Gomez and United. Therefore, section 627.428 is inapplicable.
The foregoing interpretation of section 627.428 is further supported by the Florida Supreme Court’s analysis in Petty v. Florida Insurance Guaranty Association, 80 So. 3d 313 (Fla. 2012) [37 Fla. L. Weekly S34a]. Pursuant to Petty, section 627.428 provides “that an insured will be entitled to an attorney’s fee award when coverage is disputed and the insured prevails.” Id. at 316 (emphasis added). Moreover, Petty contradicts Plaintiff’s contention that under State Farm Fire & Casualty Co. v. Margarita Palma, 585 So. 2d 329 (Fla. 1993), Icon’s fee award is covered by the underlying policy between Gomez and United because “the terms of section 627.428 are an implicit part of every insurance policy issued in Florida.” Palma, 585 So. 2d at 832. As explained in Petty, Palma does not establish that section 627.428 applies whenever any judgment is rendered in favor of an insured:
There is a clear difference between an obligation to pay fees that is imposed by operation of law upon a party due to its behavior under the insurance contract and an obligation imposed upon a party by an express provision for which the party contracted. Section 627.428(1) imposes an obligation to pay a fee award upon an insurer that has wrongfully contested an insurer’s valid claim. It does not alter the coverage provisions of the insurance contract itself.
Petty, 80 So. 3d at 317 (emphasis added). Here, United’s behavior resulted in the imposition of a statutory penalty by operation of law under section 627.736(10)(d). Under Petty, the implicit incorporation of section 627.428 into all insurance policies does not mean that Icon’s recovery of the statutory penalty automatically qualifies as a recovery of benefits or insurance proceeds pursuant to the underlying policy between Gomez and United. As indicated by the applicable case law interpreting the language of section 627.428, attorney’s fees may only be assessed for the wrongful withholding of insurance proceeds under a policy or contract executed by the insurer. Statutory penalties cannot be considered contractual policy obligations, and therefore an action solely seeking recovery of a penally under section 627.736(10)(d) cannot trigger an entitlement to attorney’s fees and costs under section 672.428.
CONCLUSION
Ultimately, the underlying insurance policy between Gomez and United was never at issue in this case. No suit for benefits was filed, and no insurance policy proceeds were recovered. Icon’s recovery was solely based on the statutory penalties provided by section 627.736(10)(d). Consequently, this Court finds section 627.428 inapplicable to the case at bar, and hereby denies Plaintiff’s Motion for Entitlement to Attorney’s Fees and Costs.
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