20 Fla. L. Weekly Supp. 438a

Online Reference: FLWSUPP 2004BUREInsurance — Personal injury protection — Accord and satisfaction — Explanation of Review combined with check containing, among other language, the phrase “Full and Final Payment of PIP Benefits” in the “Pay to the Order” line did not constitute accord and satisfaction — Insurer cannot simultaneously assert common law and statutory accord and satisfaction defenses — Accordingly, common law defense must yield to statute — Insurer failed to establish requisite elements of statutory accord and satisfaction where presented no evidence that it made a “good faith” tender when it calculated claim by applying fee schedule reductions, although policy required payment of 80% of all medically necessary expenses — Further, evidence did not show that plaintiff’s claim was unliquidated, as required for statutory accord and satisfaction, and insurer offered no evidence of a “bona fide” dispute existing between the parties — Finally, insurer provided no evidence that payment tendered contained a conspicuous statement, as required by statute — Court notes, that while moot, disputed issues of material fact exist that would also preclude finding of common law accord and satisfaction as a matter of law — Defendant’s motion for summary judgment based on accord and satisfaction denied

PROGRESSIVE REHABILITATION AND ORTHOPEDIC SERVICES, LLC. (Victor Bure-Figueroa), Plaintiff, v. UNITED AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County, Civil Division. Case No. 12-01316 SP 26 (03). January 9, 2013. Honorable Michaelle Gonzalez-Paulson, Judge. Counsel: Stuart L. Koenigsberg, Stuart L. Koenigsberg, P.A., Miami, for Plaintiff. Jon Sorensen, Miami Gardens, for Defendant.

ORDER DENYING DEFENDANT’S MOTIONFOR SUMMARY JUDGMENT AS TO ITS ACCORDAND SATISFACTION AFFIRMATIVE DEFENSE

Defendant, United Automobile Insurance Company’s Motion for Summary Judgment on its Accord and Satisfaction Affirmative Defense was heard on Tuesday, October 23, 2012 before the Honorable Michaelle Gonzalez-Paulson, County Court Judge. Jon Sorensen, Esq. appeared on behalf of the Defendant and Stuart L. Koenigsberg, Esq. appeared on behalf of the Plaintiff. The Court reviewed Defendant’s Motion for Summary Judgment filed on June 4, 2012 and the exhibits referenced in said motion, including United Automobile’s insurance application, policy declarations page, affidavit of litigation adjuster Saravenessa Columbie, Plaintiff’s medical records and bills, Defendant’s Explanation of Review for Progressive Rehabilitation’s treatment from May 10, 2010 to May 19, 2010, Defendant’s check in the amount $806.31, Plaintiff’s pre-suit demand letter and Defendant’s response to same. The Court also reviewed Plaintiff’s Memorandum of Law in Opposition to Defendant’s Motion for Summary Judgment filed on October 23, 2012 and the affidavit of Dr. Jason Levine, owner of Progressive Rehabilitation filed on July 13, 2012. After reviewing the above documents, the court file, legal authority provided by the parties and considering the legal argument of counsel, this Court denies Defendant’s Motion for Summary Judgment for the reasons set for herein.

ISSUES INVOLVED IN THIS CASE

The main issue to be decided by this Court is whether Defendant’s Explanation of Review dated September 30, 2010 combined with a check in the amount of $806.31 containing, among other language, the phrase “Full and Final Payment of PIP Benefits” in the “Pay to the Order” line constitutes as an accord and satisfaction as matter of law. Other issues to be decided involve the ability of Defendant to simultaneously assert both common law and statutory accord and satisfaction defenses which involve different elements, and whether disputed issues of material fact exist precluding summary judgment.

UNDISPUTED FACTS

Progressive Rehabilitation & Orthopedic Services, LLC. (“Progressive Rehab”) provided chiropractic treatment to Victor Bure-Figueroa, who was injured in an automobile accident on April 26, 2010. Progressive Rehab obtained an assignment from Bure-Figueroa and thereafter submitted its proof of claim to United Automobile Insurance Company, (“United Auto”) who provided no-fault insurance coverage for injuries sustained in the accident. Progressive Rehab’s proof of claim in the amount of $1,610.00 for services from May 10, 2010 through May 19, 2010 was received by Defendant on July 27, 2010. On August 9, 2010, in response to Plaintiff’s claim, Defendant sent a letter to Plaintiff seeking to clarify whether Bure-Figueroa’s injuries were related to the above accident. Another letter sent the same day requested additional medical documentation pursuant to Section 627.736(6)(b) Florida Statutes (2008). On September 30, 2010, United Auto, pursuant to Section 627.736(4)(b) Florida Statutes (2008), sent Plaintiff an “Explanation of Review” itemizing its decision to make payment of the bills submitted by Plaintiff. The three page Explanation of Review details that Defendant authorized payment for each of Plaintiff’s treatment modalities. However, in doing so, United Auto reduced the amount of the $1,610.00 in billed charges pursuant to the fee schedule provisions set forth in Section 627.736(5)(a)(2)(f) Florida Statutes (2008). The language used in the explanation of benefits indicates that the payment reductions were made under explanation code 663 — “Reimbursement has been calculated according to the State Fee Schedule Guidelines” and “Unless otherwise noted, all reductions are due to guidelines indicated in Senate Bill SB 1092.” The Explanation of Review makes no mention of payment being tendered as a compromise to resolve a dispute or that acceptance of same was expressly conditioned on Plaintiff’s acquiescence to same.

Enclosed with the explanation of benefits was a check in the amount of $806.01. The “Pay to the Order” line of the check contained the following language, in the same type, font size and color:

PROGRESSIVE REHABILITATION AND ORTHOPEDIC SERVICES, LLC

FOR FULL AND FINAL PAYMENT OF PIP BENEFITS F/A/O

VICTOR B. BURE FIGUEROA

The affidavit of Saravanessa Columbie, a litigation adjuster with Defendant, indicated that United Auto on or about October 1, 2010 sent the above referenced Explanation of Benefits and Check to Progressive Rehab and that Defendant “paid a reasonable amount” for Plaintiff’s bill. Columbie’s affidavit also indicates that Defendant’s check was negotiated by Progressive Rehab.

The affidavit of Dr. Levine establishes that no other correspondence was sent to Plaintiff other that the above referenced check and Explanation of Review. Specifically, Plaintiff received no written communication from United Auto advising that it was disputing the amount at issue and was offering a reduced amount as a full and final settlement. Dr. Levine confirmed that no one from United Auto called or otherwise contacted his office requesting that they accept an amount less than the full amount owed for the services rendered as full and final payment. Dr. Levine averred to having personal experience with the commercial standards of billing and accepting payment from insurance companies and that “Merely tendering a check containing the terms ‘for full and final payment of PIP benefits’ is not the usual practice for settling insurance claims, and does not represent honesty in fact or the observance of reasonable commercial standards of fair dealing in the settlement of PIP insurance claims.” He indicated that his office routinely handles numerous checks and that clerical staff typically stamps the endorsement on the back of the check and deposits same without ever reading the “Full and Final” language and in addition, said employees would not have the ability to interpret the meaning of same. Progressive Health applied the payment towards the full eighty percent balance owed and filed suit against Defendant to collect the remaining balance.

ANALYSIS

Section 673.3111 Florida Statutes (2008) Precludes Defendant’s Common Law Accord and Satisfaction Defense

Sec. 2.01 Florida Statutes (2008) precludes the application of common law causes of action and defenses that conflict with laws enacted by the Legislature.

2.01 Common law and certain statutes declared in force. — The common and statute laws of England which are of a general and not a local nature, with the exception hereinafter mentioned, down to the 4th day of July, 1776, are declared to be of force in this state; provided, the said statutes and common law be not inconsistent with the Constitution and laws of the United States and the acts of the Legislature of this state.

History. — s. 1, Nov. 6, 1829; RS 59; GS 59; RGS 71; CGL 87.

Berman v. U.S. Financial Acceptance Corporation, 669 So.2d 1116 (Fla. 4th DCA 1996) [21 Fla. L. Weekly D719b], in addition to ratifying the above statutory principle that when a conflict exists between the common law and the legislature, the statue prevails, also acknowledged that Section 673.3111 Florida Statutes expressly encompassed “accord and satisfaction by use of [a negotiable] instrument.”¹ 669 So.2d 1116 at 1117. In reviewing Defendant’s Motion for Summary Judgment, it is clear that the common law affirmative defense of accord and satisfaction contains different elements than the statutory defense. The common law defense requires proof of the following:

(1) a preexisting dispute as to the nature and extent of an obligation between the parties,

(2) the mutual intent to effect settlement of that dispute by a superseding agreement, and

(3) the obligor’s subsequent tender and the obligee’s acceptance of performance [the check] of the new agreement in full satisfaction and discharge of the prior disputed obligation.

Republic Funding Corp. v. Juarez, 563 So.2d 145 (Fla. 5th DCA 1990).

In contrast, Section 673.3111 Florida Statutes (2008) states as follows:

Florida Statutes §673.3111. Accord and satisfaction by use of instrument.

(1) If a person against whom a claim is asserted proves that that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, that the amount of the claim was unliquidated or subject to a bona fide dispute, and that the claimant obtained payment of the instrument, the following subsections apply.

(2) Unless subsection (3) applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.

This Court finds that Defendant’s common law defense of accord and satisfaction is inconsistent with the statutory accord and satisfaction enacted by the Legislature in that each imposes completely different requirements. Thus, the common law defense must yield to the expression of the Legislature as set forth in Ch. 673.3111 Fla. Stat. See Atlas Travel Service Inc. v. Morelly, 98 So.2d 816 (Fla. 1st DCA 1957) [Statute that expressly or by implication supersedes common law and does no violence to organic provisions or principles becomes controlling law within its proper sphere of operation].

Defendant has not Established the Requisite Elements for a Statutory Accord and Satisfaction under Section 673.3111

Defendant, as the movant on its motion for summary judgment, has the initial burden of demonstrating the non-existence of material issues of fact by offering “sufficient, admissible evidence” to support its motion. Dorff v. Foodfair Stores, Miami Beach, Inc., 177 So.2d 749, 750 (Fla. 3d DCA 1965). [“simply moving for a summary judgment, does not create an ‘I move-you prove’ situation. There is no duty on the party moved against to demonstrate the existence of a genuine issue until after the movant has satisfied his initial burden”]. The summary judgment evidence before this Court demonstrates that Defendant has not provided admissible record evidence that would establish an accord and satisfaction under Section 673.3111(1) Florida Statues.

First, United Auto has provided no evidence that it made a “good faith” tender as required by the statute when it sent Progressive Rehab its check along with the Explanation of Benefits. “Good faith” in the annotative notes following Section 673.3111(1) Florida Statues (2008), is defined as “not only honesty in fact, but the observance of reasonable commercial standards of fair dealing.” The only evidence before the Court on this issue is contained in the affidavit of Jason Levine, D.C., filed by Progressive Rehab in opposition to Defendant’s Motion for Summary Judgment. Based on his personal experience with the commercial standards of billing and accepting payment from insurance companies, as well as all aspects of settling insurance claims for less than the full amount owed, it is Dr. Levine’s testimony that tendering a check containing the phrase “for full and final payment of PIP benefits” is not the usual practice for settling insurance claims, and does not represent honesty in fact or the observance of reasonable commercial standards of fair dealing in the settlement of PIP insurance claims. Another issue regarding whether the tender was made in good faith lies with Defendant’s insurance contract, attached as an exhibit to Plaintiff’s Complaint. United Auto has contracted to pay “eighty per cent of all medically necessary expenses” which policy defines as “Eighty percent of all medically necessary expenses defined as a medical service or supply that a reasonably prudent physician would provide for the purpose of preventing, diagnosing, or treating an illness, injury, disease or symptom.” Despite United Auto’s determination that each and every treatment billed for by Plaintiff was a covered medical expense, Defendant unilaterally applied fee schedule reductions contained in Section 627.736(5)(a)(2)(f) Florida Statutes in violation of not only its policy, but binding decisional precedent precluding fee schedule reimbursement unless expressly indicated in the policy. See GEICO Indemnity Co. v. Virtual Imaging Services, Inc., 79 So.3d 55 (Fla. 3d DCA 2011) [36 Fla. L. Weekly D2597a]; Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So.2d 63, (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a]. Defendant’s aforesaid actions, when viewed in the light most favorable to the non moving party, provide a reasonable inference demonstrating the lack of good faith.

Second, there is no evidence before this Court that Plaintiff’s claim is “unliquidated” as required for a statutory accord and satisfaction pursuant to Section 673.3111(1) Florida Statutes (2008). Nothing in the affidavit of Saravanesa Columbie even discusses this issue. Bowman v. Kingsland Development, 432 So.2d 660, 662 (Fla. 4th DCA 1983) holds that “damages are liquidated when the proper amount to be awarded can be determined with exactness from the cause of action as pleaded.” Bowman cites to numerous examples of “unliquidated” damage claims, such as damages for wrongful conversion, punitive damages, and tort damages for pain and suffering, Plaintiff’s Complaint alleges that $1,610.00 in bills submitted were submitted to Defendant, who wrongfully reduced said bills to $1,007.88 by applying improper fee schedule reductions pursuant to Ch. 627.736 (5)(a)(2)(f) Fla. Stat. (2008). Defendant made a payment of $806.31 equal to eighty per cent of the reduced amount instead of $1,288.00, which would have been eighty per cent of the full amount of Plaintiff’s bills due under Defendant’s policy. Plaintiff’s damage calculation set forth in its Complaint is $481.69 which is the difference between the amount owed and the amount paid. This figure is liquidated as it can be determined with exactness from the pleadings, arithmetic calculation and application of the law. Bowman, 432 So.2d 660, 662 (Fla. 4th DCA 1983). Defendant’s failure to meet its burden of establishing that Plaintiff’s bills are “unliquidated” precudes the establishment of a Statutory Accord and Satisfaction affirmative defense.

Third, Defendant has offered no evidence of a “bona fide” dispute existing between the parties. Typically, this issue involves a question of fact for a jury. Utilities Operating Co. v. Pringle, 177 So. 684 (Fla. 2d DCA 1965). [“Ordinarily the question of whether the dispute was bona fide would be for the jury to determine”]. Neither the affidavit of Saravanesa Columbie or Defendant’s Explanation of Benefits addresses this issue. Moreover, Section 627.736(4)(b) Florida Statues requires that an insurer provide an itemized specification of each item that it has reduced, omitted or declined to pay.

“When an insurer pays only a portion of a claim or rejects a claim, the insurer shall provide at the time of the partial payment or rejection an itemized specification of each item that the insurer had reduced, omitted, or declined to pay and any information that the insurer desires the claimant to consider related to the medical necessity of the denied treatment or to explain the reasonableness of the reduced charge.”

Defendant’s Explanation of Review is simply a statutorily mandated requirement that it was required under the law to furnish Plaintiff when making payment on this claim.

Lastly, Defendant has provided no evidence that the payment tendered Plaintiff contained a “conspicuous statement” as required to perfect a statutory accord and satisfaction within the requirements of section 673.3111(2) Florida Statues (2008). The annotated section of Section 673.3111 Florida Statutes (2008) details what constitutes a “conspicuous” statement sufficient to provide notice that the instrument delivered was in full satisfaction of the claim. The annotated section states that:

Subsection (b) requires a “conspicuous” statement that the instrument was tendered in full satisfaction of the claim. “Conspicuous” is defined in Section 1-201(10). The statement is conspicuous if “it is so written that a reasonable person against whom it is to operate ought to have noticed it.” If the claimant can reasonably be expected to examine the check, almost any statement on the check should be noticed and is therefore conspicuous. In cases in which the claimant is an individual the claimant will receive the check and will normally indorse it. Since the statement concerning tender in full satisfaction normally will appear above the space provided for the claimant’s endorsement of the check, the claimant “ought to have noticed” the statement.

U.C.C. § 1-201(10) defines “Conspicuous” as follows:

A term of clause is conspicuous when it is so written that a reasonable person against whom it is to operate ought to have noticed it. A printed heading in capitals (as: Non-Negotiable Bill of Lading) is conspicuous. Language in the body of a form is “conspicuous” if it is in larger or other contrasting type or color. But in a telegram any stated term is “conspicuous”. Whether a term or clause is “conspicuous” or not is for decision by the court.

U.C.C. § 1-201(10) specifically states that the determination of whether or not a term or clause is “Conspicuous” is not a determination to be made by the Court. In contrast, precedent from the Third District Court of Appeal Gonzalez v. Associates Life Ins. Co., 641 So.2d 895 (Fla. 3d DCA 1994) has used the definition of U.C.C. § 1-201(10) to determine that a clause in a contract was not “Conspicuous” and therefore unenforceable.

The term “conspicuous” has been defined as “1: obvious to the eye or mind: plainly visible . . . 2: attracting or tending to attract attention by reason of size, brilliance, contrast, station.” Webster’s Third New International Dictionary 485 (1986). In defining “conspicuous term or clause”, Black’s Law Dictionary, tracking U.C.C. § 1-201(10), states that “[l]anguage in the body of a form is ‘conspicuous’ if it is in larger or other contrasting type or color.” Black’s Law Dictionary 309 (6th ed. 1990).

Applying these definitions, we conclude that the language at issue here is not “conspicuous”. . . . Here, the language in question is in no way distinguished from the remainder of the data page provisions. The fact that this language is not highlighted, set apart, or emphasized in any way, renders it not conspicuous. Consequently, because the language is not conspicuous as required by Section 627.429(5)(d)2.c., the AIDS/ARC limitation is unenforceable.

Disputed Issues of Material Fact exist with respect toDefendant’s Common Law Accord and Satisfaction Claims

While moot in light of the Court’s determination that a statutory accord and satisfaction through use of a negotiable instrument is governed under section 673.3111 Florida Statutes, disputed issues of material fact exist that would also preclude the finding of a common law of accord and satisfaction as a matter of law. As stated above, this defense requires proof of (1) a preexisting dispute as to the nature and extent of an obligation between the parties, (2) their mutual intent to effect settlement of that dispute by a superseding agreement, and (3) the obligor’s subsequent tender and the obligee’s acceptance of performance of the new agreement in full satisfaction and discharge of the prior disputed obligation. Republic Funding v. Juarez, 563 So.2d 145 (Fla. 5th DCA 1990). When viewed in the light most favorable to the non party Plaintiff, the summary judgment evidence offered by Defendant does not provide any inference of a pre-existing dispute concerning the nature and extent of Defendant’s obligations in connection with Plaintiff’s bills. On the contrary, Defendant’s Explanation of Benefits draws an inference that United Auto never disputed that all of Plaintiff’s bills were covered. Defendant reimbursed all of Plaintiff’s bills, albeit limited to the fee schedule provisions of Ch. 627.736(5)(a)(2)(f) Fla. Stat. (2008). Since this amount was the undisputed amount that Defendant believed to be owed in accordance with Ch. 627.736(4)(b) Fla. Stat., an inference can be drawn that the Explanation of Benefits only serves to provide notice of an obligation that Defendant was required to make under the law. (2008) St. Mary’s Hospital v. Schocoff, 725 So.2d 454 (Fla. 4th DCA 1999) [24 Fla. L. Weekly D405a] [“The insurer’s payment to, and acceptance by, the insured of an amount the insurer was obligated to pay in any event was not an accord and satisfaction”]. Further, the affidavit of Dr. Levine denying any intent on behalf of Plaintiff to enter into a settlement with United Auto for a reduced amount, creates a genuine issue of material fact as to the mutual intent of the parties. Id., 725 So.2d 454 at 455. [“[A]ccord and satisfaction is primarily a question of the parties’ intention[s], . . . which itself is a question of fact.”]. Lastly, the affidavit of Dr. Levine, the lack of any testimony from Defendant, and the lack of any writing advising specifically of a pre-existing dispute, and invitation to enter into a new agreement, create disputed issues of material fact as to whether Plaintiff’s acceptance of Defendant’s check acquiesced to a new agreement in discharge of all prior obligations. See Pino v. Union Bankers Insurance Company, 627 So.2d 535 (Fla. 3d DCA 1995) [Insurer’s unilateral rescission accompanied by premium refund for less than full amount owed did not involve into an accord and satisfaction. Insured was entitled to treat check as partial payment and sue for balance].

CONCLUSION

Based upon the foregoing analysis, this Court finds that Defendant is precluding from asserting its common law accord and satisfaction affirmative defense as a matter of law. Further, the summary judgment evidence before this Court demonstrates that Defendant has not provided admissible record evidence that would establish an accord and satisfaction under Section 673.3111(1) Florida Statues. Accordingly, this Court DENIES Defendant’s Motion for Summary Judgment as to Defendant’s statutory accord and satisfaction affirmative defense under Section 673.3111(1) Florida Statues.

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¹At the summary judgment hearing, Defendant’s counsel conceded that the check tendered to Plaintiff was a negotiable instrument.

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