20 Fla. L. Weekly Supp. 120a

Online Reference: FLWSUPP 2002PINOInsurance — Personal injury protection — Denial of claim — Valid medical report — No abuse of discretion in declining to consider peer review report that contains mere conclusions as to reasonableness, relatedness and necessity of treatment and does not create factual issue precluding summary judgment — Affirmative defenses — Amendment — No merit to claim that trial court exceeded appellate mandate requiring reconsideration of motion for summary judgment on issues of reasonableness, relatedness and necessity of treatment by allowing insurer to amend its affirmative defenses to assert claim that medical provider submitted false or misleading disclosure and acknowledgment form where court ruled on motion for summary judgment prior to considering motion to amend — No abuse of discretion in allowing insurer to amend affirmative defenses where provider that did not require extensive preparation to prevail on affirmative defense was not prejudiced by amendment — Trial court correctly found that D&A form defense was legally insufficient where insurer failed to bring deficiencies in form to provider’s attention, and insurer chose not to raise defense of fraud under insurance fraud statute

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, v. HYMA MEDICAL CENTER, INC. a/a/o Jorge Pino a/a/o Sadys Lopez, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 10-506 AP. L.C. Case Nos. 06-4921 CC (03) and 06-4918 CC (03). October 18, 2012. On appeal from the County Court for Miami-Dade County, Wendell M. Graham, Judge. Counsel: Douglas H. Stein and Stephanie Martinez, Seipp & Flick LLP, for Appellant. Annabel C. Majewski, Wasson & Associates, Chartered, and Jabari Prempeh, II, Ayala Prempeh, LLP, for Appellee.

[Lower court orders published at 18 Fla. L. Weekly Supp. 493b (Case No. 06-4918) and 18 Fla. L. Weekly Supp. 225a (Case No. 06-4921)

(Before SCHLESINGER, COLODNY, and HIRSCH, JJ.)

(PER CURIAM.) Appellant, State Farm Mutual Automobile Insurance Company (“State Farm”) brings this appeal from a final judgment entered by the trial court in favor of Appellee, Hyma Medical Center, Inc. a/a/o Jorge Pino, a/a/o Sadys Lopez (“Hyma”) in two consolidated cases. State Farm contends that the trial court erroneously entered summary judgment in favor of Hyma on the issues of (1) reasonableness, relatedness, and medical necessity, and (2) State Farm’s affirmative defense that Hyma submitted a false or misleading Standard Disclosure and Acknowledgment Form. Hyma cross-appeals asserting error in the trial court’s granting of State Farm’s motion to amend their affirmative defenses to include a claim that Hyma submitted a false or misleading Standard Disclosure and Acknowledgment Form. We affirm as to all issues raised in this case.

FACTS

Sadys Lopez and Jorge Pino were injured in automobile accidents on June 16, 2005 and July 16, 2005 respectively. Both sought treatment for their injuries from Hyma and assigned their right to recover personal injury protection (“PIP”) benefits to the company. Hyma filed separate actions against State Farm alleging that the insurer refused to render payment for medical care and treatment provided to each insured in relation to their accident.¹

At the trial court, Hyma filed motions for partial summary judgment alleging, among other things, that the services rendered were reasonable, related to the accident, and medically necessary. In opposition to the motion, State Farm filed the affidavit of Dr. John J. Gentile, D.C., which incorporated an attached peer review report. As a result of the trial court granting Hyma’s motion to strike Dr. Gentile’s affidavit on grounds that the peer review report was not a “valid report” pursuant to section 627.736(7)(a), Florida Statutes, the trial court subsequently granted final summary judgment in favor of Hyma. The striking of the peer review report and subsequent entry of the final summary judgment was the basis for the first round of appeals.

In the Lopez appeal, the appellate division of the Eleventh Judicial Circuit affirmed without opinion. The Third District Court of Appeal granted second-tier certiorari and determined that the appellate division erroneously accepted the arguments of Hyma that State Farm’s physician affidavit did not comply with the paragraph 627.736(7)(a), Florida Statutes, which was inapplicable in the instant case as it is a denial case. See State Farm Mutual Auto. Ins. Co. v. Hyma Medical Center, Inc., 22 So. 3d 699 (Fla. 3d DCA 2009) [34 Fla. L. Weekly D2305a]. The court quashed the opinion of the appellate division of the circuit court and returned the case to county court for further proceedings under paragraph 627.736(4)(b), Florida Statutes.

The sole issue on appeal in Pino was whether the trial court erred in striking Dr. Gentile’s peer review report and affidavit as “not timely and/or valid pursuant to Fla. Stat. § 627.736(7)(a)(2003).”² First, the appellate division of the Eleventh Judicial Circuit followed the Third District Court of Appeal decision in United Auto Insurance Co. v. Bermudez, 980 So. 2d 1213 (Fla. 3d DCA 2008) [33 Fla. L. Weekly D1201a], and found that there is no distinction among withdrawal, denial, and reduction of benefits. Citing to Bermudez, the court found that a valid report is required where an insurer attempts to reduce, withdraw, or deny PIP benefits on the grounds of reasonableness, necessity or relationship.³ On this basis, the court reversed the case and remanded to county court with instructions to apply Metro Injury,⁴ which held that in order to constitute a “valid report” under section 627.736(7)(a), the physician who issues the report must be a physician who examines the insured or, excluding the treating physician, a physician who reviews the examination and treatment records of the insured. Metro Injury, 16 So. 3d at 900.

On remand, the trial court again found in favor of Hyma on their motion for summary judgment as to reasonableness, relatedness, and medical necessity.⁵ After the entry of summary judgment, State Farm filed a motion to amend its affirmative defenses to include a claim that Hyma filed a false or misleading Standard Disclosure and Acknowledgment Form (“D & A Form”) and as a result, State Farm is not required to pay the claim pursuant to section 627.736(5)(b)(1)(c), Florida Statutes.⁶ State Farm’s motion was granted. Thereafter, Hyma filed a second motion for summary judgment on State Farm’s affirmative defense, which was granted in their favor.⁷ This appeal followed. We have jurisdiction. See § 26.012(1), Fla. Stat. (2012); Fla. R. App. P. 9.030(c)(1).

STANDARD OF REVIEW

The standard of review applicable to the grant of a summary judgment is de novo and requires the appellate court to view the evidence, including any supporting affidavits, in the light most favorable to the non-moving party. Daneri v. BCRE Brickell, LLC, 79 So. 3d 91 (Fla. 3d DCA 2012) [37 Fla. L. Weekly D76a]; Sierra v. Shevin, 767 So. 2d 524, 525 (Fla. 3d DCA 2000) [25 Fla. L. Weekly D1605a].

To analyze summary judgment, the appellate court must determine: (1) whether there is a genuine issue of material fact, and (2) whether the trial court applied the correct rule of law. Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000). The initial burden is on the moving party to show conclusively the absence of genuine issues of material fact and every possible inference must be drawn in favor of the party against whom summary judgment is sought. Holl v. Talcott, 191 So. 2d 40 (Fla. 1996); Moore v. Morris, 475 So. 2d 666 (Fla. 1985). The opposing party has no obligation to show that genuine issues of material fact exist until the moving party meets his burden. Holl, 191 So. 2d at 40.

DISCUSSION

In the first round of appeals, the singular review of the trial court’s error in striking Dr. Gentile’s peer review report suggests that the burden to demonstrate a genuine issue of material fact shifted to State Farm as a result of either Hyma meeting its initial burden to show the absence of genuine issues of material fact, or in the alternative that State Farm did not assert on appeal that Hyma’s affidavits were insufficient. See Holl, 191 So.2d at 43-44 (“The rule simply is that the burden to prove the non-existence of genuine triable issues is on the moving party, and the burden of proving the existence of such issues is not shifted to the opposing party until the movant has successfully met his burden.”). As a result, there was an implicit finding that Hyma’s affidavits sufficiently showed the absence of genuine issues of material fact; and thus, that issue will not be considered here. See Fla. Dep’t of Transp. v. Juliano, 801 So. 2d 101, 107 (Fla. 2001) [26 Fla. L. Weekly S784a] (citations omitted) (stating that the law of the case doctrine may foreclose subsequent consideration of issues implicitly addressed or necessarily considered by the appellate court’s decision).

State Farm asserts that the Third District and the appellate division of this circuit considered and evaluated the validity and sufficiency of Dr. Gentile’s affidavit and peer review report; and their determination that both were valid became the law of the case. We disagree. Because this is a denial case, section 627.736(7)(a), Florida Statutes, is not implicated. As a result, State Farm was not required to obtain a “valid report” to deny payment of Hyma’s claim, and the trial court erred in granting Hyma’s motion for summary judgment based upon State Farm’s failure to comply with section 627.736(7)(a). Section 627.736(4)(b) is the controlling statutory section, and requires the insurer to obtain and offer reasonable proof at any time to establish that the insurer is not responsible for payment of the claim. See § 627.736(4)(b), Fla. Stat. (emphasis supplied). A review of the mandates reveals that neither appellate court explicitly considered the sufficiency of State Farm’s affidavit and peer review report in opposition to the motion for summary judgment. Therefore, on remand and in accordance with the mandates, the trial court considered State Farm’s amended affidavit and peer review report in opposition to Hyma’s motion for summary judgment as to reasonableness, relatedness, and medical necessity of the treatment.

Once competent evidence to support the motion for summary judgment has been tendered, the opposing party must come forward with admissible counter-evidence sufficient to reveal a genuine issue of material fact. See Fla. R. Civ. P. 1.510; Michel v. Merrill Stevens Dry Dock Co., 554 So. 2d 593, 596 (Fla. 3d DCA 1989). “A trial court has broad discretion concerning the admissibility of evidence and its rulings will not be disturbed absent an abuse of discretion.” Hendry v. Zelaya, 841 So. 2d 572, 575 (Fla. 3d DCA 2003) [28 Fla. L. Weekly D741a]. Accordingly, while this Court reviews summary judgments de novo, findings related to the admissibility of evidence are reviewed for abuse of discretion. See United Auto. Ins. Co. v. ISOT Med. Ctr., 18 Fla. L. Weekly Supp. 762a (Fla. 11th Cir. Ct. May 24, 2011) (citation omitted).⁸

A review of the amended affidavit and peer review report reveals that the trial court did not abuse its discretion in declining to consider Dr. Gentile’s peer review report. The amended affidavit of Dr. Gentile listed his qualifications as an expert, stated that he reviewed the medical records and treatment rendered by Hyma, attached and incorporated his peer review report dated 6/19/06 and addendum dated 2/26/07, and opined that Hyma “has not rendered any treatment that was reasonable, necessary, or related to the alleged injuries sustained in the subject automobile accident.” The peer review report dated 6/19/06 concluded the following:

I do not believe that the injury or condition has been properly diagnosed or documented in the clinical records due to the poor reporting format. I do not believe that the treatment has been documented as to its consistency with the injuries. I do not believe that the type, intensity, frequency, and duration of the provided treatment has been documented as to its consistency with the severity of the injuries. I do not believe that the performance of the diagnostic x-rays have been documented as to their appropriateness. The performance of any diagnostic test must be thoroughly documented in the history and examination section in order to justify its performance. That was not the case here. I do not believe that the provided treatment has been documented as to its necessity for the patient to achieve maximum medical improvement due to the extremely poor documentation supplied.

The addendum to the peer review report dated 2/26/2007 stated, in pertinent part:

Please consider this an addendum to my report of 06/19/06. I do not believe that the treatment in this case is reasonable, medically necessary, and causally related to the automobile accident of 07/16/05.

I call your attention to page three, the last paragraph of my report dated 06/19/06. I indicate in that paragraph that I did not believe the injury or condition had been properly diagnosed or documented due to the poor reporting format. As well I did not believe that any of the treatment had been documented due to the extremely poor reporting format.

First, the amended affidavit submitted by Dr. Gentile contains mere conclusions relating to the reasonableness, relatedness, and medical necessity of the treatment. Absent incorporation of the peer review report and its addendum, the affidavit’s conclusory assertions are insufficient counter-evidence to avoid summary judgment. See Master Tech Satellite, Inc. v. Mastec N. Am., Inc., 49 So. 3d 789, 791 (Fla. 3d DCA 2010) [35 Fla. L. Weekly D2381a] (holding that conclusory affidavits of a party and its expert were insufficient to create a disputed issue of fact). The peer review report filed by Dr. Gentile does not create a factual issue precluding summary judgment. Although he suggests in the peer review report that the services provided were not reasonable, related to the accident, and medically necessary, Dr. Gentile neither indicates what services were unrelated to the accident nor medically necessary in a related situation. Consequently, Dr. Gentile’s peer review and amended affidavit are insufficient counter-evidence to reveal a genuine issue of material fact. The trial court was correct in its finding that the amended affidavit and peer review report were not competent. As such, Hyma was entitled to prevail on summary judgment on the issue of reasonableness, relatedness, and medically necessity.

We next consider the trial court’s ruling on State Farm’s motion to amend its affirmative defenses. In its cross-appeal, Hyma argues that the trial court exceeded its mandate by allowing State Farm to amend its affirmative defenses to include a claim that Hyma knowingly submitted a false or misleading D & A Form. In the alternative, Hyma argues that the trial court abused its discretion in allowing the amendment.

In the instant case, State Farm sought leave to amend its affirmative defenses to assert the false or misleading D & A Form defense after the trial court ruled on Hyma’s motion for summary judgment as to reasonableness, relatedness, and medically necessity. The trial court first entered a ruling on Hyma’s motion for summary judgment in accordance with the appellate mandates before it considered State Farm’s motion to amend its affirmative defenses. See, e.g., Nazzaro v. Moksel, 508 So. 2d 544 (Fla. 3d DCA 1987) (reversing the order under review upon a holding that it was erroneously entered without the lower court’s first complying with the appellate court’s mandate in a prior appeal). Thus, Hyma’s argument that the trial court exceeded the mandate is without merit.

Florida Rule of Civil Procedure 1.190(a) provides that leave to amend pleadings “shall be given freely when justice so requires.” Pleadings may be amended even after the ruling on a motion for summary judgment. Cardona v. Benton Express, Inc., 804 So. 2d 505, 507 (Fla. 3d DCA 2001) [27 Fla. L. Weekly D76a]. “Ordinarily, a ruling on a motion to amend the pleadings rests within the sound discretion of the trial court, . . . which will not be overturned unless abuse is demonstrated.” Holy Temple Church of God in Christ, Inc. v. Maxwell, 578 So. 2d 877, 878 (Fla. 1st DCA 1991). However, “all doubts should be resolved in favor of allowing amendment. It is the public policy of this state to freely allow amendments to pleadings so that cases may be resolved upon their merits.” Adams v. Knabb Turpentine Co., 435 So. 2d 944, 946 (Fla. 1st DCA 1983).

As a general rule, refusal to allow amendment of a pleading constitutes an abuse of discretion unless it clearly appears that allowing the amendment would prejudice the opposing party; the privilege to amend has been abused; or amendment would be futile. See New River Yachting Center, Inc. v. Bacchiocchi, 407 So. 2d 607 (Fla. 4th DCA 1981), review denied, 415 So. 2d 1360 (Fla. 1982). While the privilege to amend may have been abused and the amendment futile in the instant case, Hyma only contends that the amendment was highly prejudicial as it “needlessly subjected it to prolonged litigation and unnecessarily protracted discovery.” The record does not reflect prejudice to Hyma by the grant of the motion to amend. In fact, Hyma needed no extensive preparation to prevail on their motion for summary judgment on the false or misleading D & A Form defense. Therefore, we find that the trial court did not abuse its discretion to allow amendment of State Farm’s affirmative defenses.

Last, we consider the trial court’s entry of summary judgment in favor of Hyma with respect to State Farm’s defense that Hyma knowingly submitted a false or misleading D & A Form.⁹ In granting the summary judgment in favor of Hyma in the instant case, the trial court relied on Florida Medical & Injury Center, Inc. v. Progressive Express Insurance Co., 29 So. 3d 329 (Fla. 5th DCA 2010) [35 Fla. L. Weekly D215b]. In Florida Medical & Injury Center, the court held that proper completion of a D & A Form is not a prerequisite to receive payment under an insurance policy. Id. at 339, 341. The court asserted that “nothing in [§ 627.736(5)(e), Florida Statutes] suggests that the submission of a flawless D & A Form is a condition to the right to enforce a claim to payment.” Id. at 341. The court also clarified that “[a] defect in a submitted claim has to be brought to the provider’s attention by the insurer so it can be rectified” and “[i]f the insurer fails to specify the defect in the form so that it can be rectified as contemplated by subsection (4), it will be deemed to have waived its objection to payment.” Id. at 339, 341.

Where a defendant asserts an affirmative defense, in order to succeed on a motion for summary judgment, a plaintiff must either disprove those defenses or establish their legal insufficiency. Martin County v. Edenfield, 609 So. 2d 27, 29 (Fla. 1992). The trial court found that State Farm neglected its statutory duty to investigate and notify Hyma of any issues or questions it had regarding representations made in the D & A Form. As a result, Hyma was never afforded an opportunity to clarify the issues or questions raised in State Farm’s second amended affirmative defense and State Farm is otherwise estopped from raising a defense based on representations in the D & A Form at this stage of the proceedings. The trial court further found that State Farm chose not to raise the defense of fraud under the specific insurance fraud statute. We agree with the trial court and find that State Farm’s false or misleading D & A Form defense was legally insufficient to avoid summary judgment.

Accordingly, we conclude Hyma was entitled to summary judgment regarding reasonableness, relatedness, and medical necessity, and regarding State Farm’s affirmative defense of a false or misleading D & A Form. We affirm on all issues presented, and remand for entry of a final judgment in favor of Hyma.

We remand for the trial court to award Hyma their appellate attorneys’ fees as to the issues on which they prevailed. See § 627.428(1), Fla. Stat. (2010).

AFFIRMED and REMANDED for proceedings consistent with this opinion. (SCHLESINGER and COLODNY, JJ., concur.)

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¹At the time of suit, State Farm had not rendered any payments to Hyma on behalf of Lopez or Pino.

²See State Farm Mutual Auto. Ins. Co. v. Hyma Med. Ctr., Inc. a/a/o Jorge Pino, 16 Fla. L. Weekly Supp. 1129a (Fla. 11th Cir. Ct. Oct. 29, 2009).

³The Third District has since receded from that portion of Bermudez which suggests that a valid report is required in denial of benefit cases. See United Auto. Ins. Co. v. Santa Fe Med. Ctr., 21 So. 3d 60, 67 (Fla. 3d DCA 2009) [34 Fla. L. Weekly D2051b].

⁴United Auto. Ins. Co. v. Metro Injury & Rehab Ctr., a/a/o Magda Davis, 16 So. 3d 897 (Fla. 3d DCA 2009) [34 Fla. L. Weekly D1516a].

⁵In regard to Dr. Gentile’s report, the trial court held that:

4. Binding law requires this Court to decline to consider Dr. Gentile’s peer review report as it is inadmissible as evidence pursuant to Fla. Stat. 90.803(6). See, McElroy v. Perry, 753 So.2d 121 (Fla. 2nd DCA, 2000) [25 Fla. L. Weekly D111a] ; Eric Friedman D.C. a/a/o Nemours Jean Baptiste v. United Automobile Ins. Co., 16 Fla. L. Weekly Supp 100a (Fla. 11th Cir., 2008). See also, Fla. Stat. 90.801 (relevance); Fla. Stat. 90.804 (more prejudicial that probative).

5. Even if Dr. Gentile’s peer review report was admissible as evidence, his conclusions therein are insufficient to create a factual issue precluding summary judgment. See, United Automobile Ins. Co. v. Professional Medical Group, Inc., a/a/o Yansi Montesino, 17 Fla. L. Weekly Supp. 520a (Fla. 11th Cir. App., 2010).

6. Where this Court has found that Defendant’s peer review is inadmissible, so too is any affidavit of Dr. John J. Gentile which incorporates the inadmissible peer review as its factual basis. See, Fla. R. Civ. P. 1.510(e); Padavano, Florida Civil Practice § 13.2 (2006 Edition), citing to; D. Nour v. All State Pipe Supply Co., 487 So.2d 1204 (Fla. 1st DCA, 1986); Bifulco v. State Farm, 693 So.2d 707 (Fla. 4th DCA, 1997) [22 Fla. L. Weekly D1325a].

7. Dr. Gentile’s amended affidavit is equally inadmissible. See, Bruce J. Berman, Florida Civil Procedure § 501.7 at 630 (2003 ed.) citing, Ellison v. Anderson, 74 So.2d 680, 681 (Fla., 1954) See also, Ellison v. Goodman, 395 So.2d 1201, 1202 (Fla. 3rd DCA, 1981). This Court finds that Dr. Gentile’s changing of the one word, “documented,” in his original affidavit to “rendered,” in his amended affidavit represents an impermissible, unexplained, material change in his sworn testimony, and an unsupportable departure from the expert opinion contained in his attached peer review. Therefore this Court must decline to consider it in opposition to Plaintiff’s Motion for Final Summary Judgment. See, Brooks v. Serrano, 209 So.2d 279 (Fla. 4th DCA, 1968); Holl v. Talcott, 191 So.2d 40 (Fla., 1966). This finding is also in keeping with the prior trial court’s order dated June 13, 2007. For the same reasons, this Court must decline to grant Defendant’s Motion for Leave to file a third affidavit of Dr. Gentile.

⁶Section 627.736(5)(b)(1)(c), Florida Statutes, states that an insurer or insured is not required to pay a claim or charges to any person who knowingly submits a false or misleading statement relating to the claim or charges.

⁷In granting this motion, the trial court held State Farm had waived or was otherwise estopped from raising a defense based on representations in the disclosure and acknowledgment form. The court found that State Farm neglected its statutory duty to investigate and notify Hyma of any issues/questions it had regarding representations made in the disclosure and acknowledgment form when it was initially submitted by Hyma or when it was resubmitted in response to State Farm’s request for additional documentation. The court further found that State Farm was free to raise the claim that Hyma “knowingly submitted false or misleading statements” under a specific insurance fraud statute, section 817.234, Florida Statutes (2010), but State Farm admitted on record that it chose not to.

⁸Although persuasive, this Court addressed the inadmissibility of affidavits which incorporate reports in United Auto v. ISOT Medical Center, 18 Fla. L. Weekly Supp. at 762a, stating that “the records ‘incorporated’ represent out-of-court statements intended to prove the truth of the matter asserted. As inadmissible hearsay, the trial court cannot consider such evidence in deciding a motion for summary judgment.”

⁹State Farm asserted in its affirmative defense that Dr. Sherman’s signature appears on the D & A Form even though genuine issues of material fact remain concerning whether Dr. Sherman was, in fact, the physician who rendered treatment and personally explained said treatment to the insured. As a result, State Farm is not required to pay the claim or charges pursuant to section 627.736(5)(b)(1)(c), Florida Statutes (2005).

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