21 Fla. L. Weekly Supp. 270c

Online Reference: FLWSUPP 2103ROMAInsurance — Personal injury protection — Affirmative defenses — Accord and satisfaction — Insurer’s explanation of review indicating that reductions in claim were made in accordance with statutory fee schedule and check containing statement that it was full and final payment of PIP benefits did not constitute accord and satisfaction under statutory law — Payment based on application of statutory fee formula is liquidated amount that cannot give rise to accord and satisfaction — Further, elements of statutory accord and satisfaction were not met where there was no communication of bona fide dispute between parties prior to issuance of insurer’s check, and “full and final” language on check in same size and color font as surrounding text was not conspicuous — No common law accord and satisfaction occurred where there is no evidence dispute existed prior to insurer’s issuance of payment

BEST AMERICAN DIAGNOSTIC CENTER, INC., (Obdulia Romaguera), Plaintiff(s), vs. UNITED AUTOMOBILE INSURANCE COMPANY, Defendant(s). County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 11-27641 SP 23 (02). October 17, 2013. Caryn Schwartz, Judge.

ORDER GRANTING PLAINTIFF’S PLAINTIFF’SMOTION FOR SUMMARY JUDGMENT REGARDINGDEFENDANT’S AFFIRMATIVE DEFENSE OF ACCORDAND DENYING DEFENDANT’S MOTION FOR FINALSUMMARY JUDGMENT RE: ACCORD ANDSATISFACTION AND REQUEST FOR 57.105 SANCTIONS

THIS CAUSE having come on to be heard before me on Plaintiff’s Motion for Summary Judgment Regarding Defendant’s Affirmative Defense of Accord and Satisfaction and Defendant’s Motion for Summary Judgment Re: Accord and Satisfaction and Request for 57.105 Sanctions for and the Court having heard and considered the argument of counsel, reviewing the file, including the above-referenced Motions and Memorandum of Law, deposition transcripts, record evidence, applicable case law, and Florida Statutes provided to the Court, being otherwise fully advised in the premises, it is hereby

ORDERED AND ADJUDGED as follows:FACTUAL BACKGROUND

On September 13, 2010, Plaintiff provided lumbar and right hip MRIs to Obdulia Romaguera. Pursuant to an assignment of benefits, Plaintiff billed Defendant $1,750.00 for each MRI provided to its insured, Obdulia Romaguera. In response, Defendant paid $900.03 for the hip MRI and $981.28 for the lumbar MRI. These amounts are equal to the fee schedule amount set forth in Fla. Stat. §627.736(5)(a)(2). In its explanation of review Defendant stated “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. The “Pay to the Order” line of the check contained the following language, in the same type, font size and color:

BEST AMERICAN REHAB CENTER, INC.

AAO OBDULINA ROMAGUERA FOR FULL FINAL PAYMENT OF PIP BENEFITS FOR DOL 7/24/2010

There was no other correspondence sent from Defendant to Plaintiff. It is further undisputed there was no other communication between Defendant and Plaintiff with regard to the bill at issue.

CONCLUSIONS OF LAW

Defendant alleges accord and satisfaction both under statutory and common law. The main issue to be decided by this Court is whether Defendant’s Explanation of Review combined with a check containing 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.

Fla. Stat. §673.3111 codifies Defendant’s defense. Fla. Stat. §673.3111(1) provides:

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.

Thus, in order to invoke this defense under the Uniform Commercial Code, Defendant must prove (1) it made a good faith tender; (2) the amount of the claim was unliquidated or subject to a dispute; and (3) that Plaintiff obtained payment of the instrument. Plaintiff contends the Defendant did not meet the elements required to invoke the statute, and, as such, Defendant’s affirmative defense is insufficient. This Court agrees with the Plaintiff.

I. The amount of the claim was “liquidated”

First, the Court finds no merit in Defendant’s contention that its payment was “unliquidated.” On January 1, 2008, the new No Fault statute became effective, which included permissive language allowing insurers to limit reimbursement of services pursuant to a “fee schedule” under Fla. Stat. §627.736(5)(a)(2). It has since been established that insurers are not permitted to reimburse medical services by applying Fla. Stat. §627.736(5)(a)(2) unless their policies provide language selecting this payment methodology. Geico General Insurance Co. v. Virtual Imaging Services, Inc. (“Virtual II”), 90 So.3d 321 (Fla. 3d DCA 2012) [37 Fla. L. Weekly D985b] aff’d __ So. 3d __, 2013 WL 3332385 (Fla. 2013) [38 Fla. L. Weekly S517a]; DCI MRI, Inc. v. Geico Indem. Co., 79 So.3d 840 (Fla. 4th DCA 2012) [37 Fla. L. Weekly D170e]; Geico Indem. Co. v. Virtual Imaging Servs., Inc. (“Virtual I”), 79 So.3d 55, 58 (Fla. 3d DCA 2011) [36 Fla. L. Weekly D2597a]; Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So.3d 63, 67 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a]. The evidence in this case shows that despite Defendant’s failure to include any such language permitting reimbursement pursuant to Fla. Stat. §627.736(5)(a)(2), Defendant intended to pay an amount equivalent to the “fee schedule” amount. An amount of an obligation that is ascertained by mere mathematical calculation or fixed by specific rule of law is, by definition, a liquidated claim. Watson v. Internet Billing Co., 888 So.2d 533 (Fla 4th DCA, 2004) [29 Fla. L. Weekly D2141a]; Hill v. Murphy, 872 So.2d 919 (Fla. 2nd DCA, 2003) [28 Fla. L. Weekly D2145a]; Bowman v. Kingsland Dev. Inc., 432 So.2d 660 (Fla. 5th DCA, 1983)(Damages are liquidated when the proper amount to be awarded can be determined with exactness from the cause of action as pleaded). The amount tendered by Defendant is a liquidated sum because the amount can be determined by an arithmetical calculation or by application of definite rules of law, specifically Fla. Stat. §627.736(5)(a)(2). See DYC Fishing, Ltd. v. Martinez, 994 So.2d 461 (Fla. 3d DCA 2008) [33 Fla. L. Weekly D2604a].

Because the amount of payment reflected on Defendant’s cheek is calculated based upon the application of a statutory fee formula, then by definition the claim is “liquidated” and unless there was a previous dispute then the payment of the liquidated amount can not give rise to an accord and satisfaction. See St. Mary’s Hospital v. Schocoff, 725 So.2d 454 (Fla. 4th DCA, 1999) [24 Fla. L. Weekly D405a](Insurer’s payment and acceptance by the insured of an amount the insurer was obligated to pay in any event was not an accord and satisfaction where the letter accompanying payment indicated that it was the maximum amount it was obligated to pay). Therefore, Fla. Stat. §673.3111(1) was not invoked and Defendant’s failure to meet its burden of establishing that Plaintiff’s bills are “unliquidated” precludes the establishment of a statutory accord and satisfaction affirmative defense.

II. There was no dispute was communicated in order to invoke Fla. Stat. §673.3111(1)

Further, in determining that the elements of Fla. Stat. §673.3111(1) were not met, this Court finds there is no evidence of a bona fide dispute between the parties.

Prior to Defendant’s issuance of the check, there was no communication between the parties with regard to the bill. The evidence considered by the Court demonstrated Defendant intended to satisfy its full obligation under the policy by paying the fee schedule amount, and Defendant did not communicate any defenses to paying the claim. The Explanation of Review did not communicate the existence of a dispute, or that the payment was made as an offer to compromise.

There must be unequivocal evidence that a dispute existed prior to the issuance of the payment by the Defendant. San Hueza v. National Foundation Life Ins. Co., 545 So.2d 321 (Fla. 3d DCA, 1989)(where insurer issued checks for payment of medical services in an amount for which there was no real dispute so that there was nothing to be compromised, the defense of accord and satisfaction fails). If neither side believes that the other is compromising or accepting less than what was legally enforceable, then there is no dispute.

Here, the Explanation of Review was completely silent as to the nature and extent of any dispute between the parties. There was no negotiation or contact between the parties prior to the issuance of the check. The Explanation of Review merely contained the unilateral pronouncement that “all reductions are due to guidelines indicated in Senate Bill SB 1092.” Defendant’s adjuster testified that the amount tendered was the full amount Defendant was obligated to pay based on the fee schedule. Plaintiff was not given any information as to whether Defendant’s policy allowed for the “fee schedule”.

Defendant intended to pay the fee schedule amount as the maximum reimbursement owed, despite having no provision in its policy which allows the application of the fee schedule. Pino v. Union Bankers Ins. Co., 627 So. 2d 535 (Fla. 3d DCA, 1993)(Insurer’s unilateral pronouncement accompanied by tender does not evolve into accord and satisfaction). Where the amount on the check is believed to satisfy the entire amount that is owed Fla. Stat. 673.3111 is unavailable to effect accord and satisfaction. Berman v. US Financial Acceptance Corporation, 669 So.2d 1116 (Fla. 4th DCA, 1996) [21 Fla. L. Weekly D719b](Fla. Stat. 673.3111 does not apply to undisputed debt). Although the amount on the HCFA was greater than the “fee schedule,” there was no way of Plaintiff to know whether Defendant’s policy contained language which permitted Defendant to apply Fla. Stat. §627.736(5)(a)(2)(2008). Based on the evidence demonstrating the Explanation of Review was silent as to the existence of a dispute, that Defendant did not communicate that the payment was an offer to compromise, and Defendant intended to satisfy its complete obligation by paying the fee schedule amount, the Court concludes there was no dispute. Republic Funding Corp. of Florida v. Juarez, 563 So.2d 145 (Fla. 5th DCA, 1990)(In the absence of a dispute and a finding or admission that the parties intended to, and did, reach an accord and agreed to resolve that dispute by payment of an agreed amount, a partial payment of a legal obligation does not act to satisfy and discharge that obligation).

III. The check and accompanying documentation did not contain a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim

Lastly, although Defendant has not met the threshold requirements of Fla. Stat. §673.3111(1), the payment tendered to Plaintiff did not contain a “conspicuous statement” as required to invoke Fla. Stat. §673.3111(2).

Fla. Stat. §673.3111(2) provides: “Unless (3) applies, claim is discharged if person against whom claim is asserted proves the instrument or accompanying document contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.” Thus, in order to demonstrate an accord and satisfaction pursuant to Fla. Stat. §673.3111(2), Defendant must prove the check and accompanying document contained a conspicuous statement sufficient to provide notice that the instrument delivered was in full satisfaction of the claim.

Florida Statute §671.201(10) defines the term “conspicuous” as follows:

(10) “Conspicuous,” with reference to a term, means so written, displayed, or presented that a reasonable person against whom it is to operate ought to have noticed it. Whether a term is “conspicuous” is a decision for the court. Conspicuous terms include the following:

(a) A heading in capitals in a size equal to or larger than that of the surrounding text or in a type, font, or color in contrast to the surrounding text of the same or lesser size; and

(b) Language in the body of a record or display in a type larger than that of the surrounding text; in a type, font, or color in contrast to the surrounding text of the same size; or set off from the surrounding text of the same size by symbols or other marks that call attention to the language.

Whether the face of a check contains a “conspicuous statement” that the check is presented as full and final satisfaction of Plaintiff’s entire claim is a question of law. See Fla. Stat. 627.201(10); Atlantic Acu Medical Center Corp. a/a/o Guillaume Baptiste v. United Automobile Insurance Company, 16 Fla. L. Weekly Supp. 781a (County Ct Broward Judge Merrigan, May 25, 2009). Further, conspicuousness is judged by the relationship of the “warning” to the color, size, and type of the print surrounding it. O’Connell v. Norwegian Carribean Lines, Inc., 639 F.Supp 846 (ND, Ill., 1986). The purported “conspicuous” language in the check does not comply with the statute and does not operate to effect an accord and satisfaction. The language contained in the “pay to the order” section was the same size as the surrounding text and was not in a type, font, or color in contrast to the surrounding text of the same size. See Orange Motors of Coral Gables, Inc. v. Dade County Dairies, Inc., 258 So.2d 319 (Fla. 3d DCA, 1972)(Statute requiring conspicuous language excluding or modifying implied warranties of merchantability not satisfied where language on disclaimer in the same color, size, and type used for other provisions); Osborne v. Genevie, 289 So.2d 21 (Fla. 2d DCA, 1974)(Statute requiring conspicuous language excluding or modifying implied warranties not satisfied where language on disclaimer in the same color, size, and type used for other provisions and was not otherwise distinguishable); Gonzalez v. Associates Live Insurance Company, 641 So.2d 895 (Fla. 3d DCA, 1994)(Terms of medical insurance policy which were required to be conspicuous were unenforceable as text was printed in same color, style, and size of type as the remainder of the page); See also Hirsch v. Klosters Rederi, 521 So.2d 316 (Fla. 3d DCA, 1988). Atlantic Acu Medical Center Corp. (Guillaume Baptiste) v. United Automobile Insurance Company, 16 Fla. L. Weekly Supp. 781a (Broward County Court Judge Merrigan, May 25, 2009); Complete Rehab and Medical Centers of Plantation, Inc. (M. Martinez) v. United Automobile Insurance Company, 16 Fla. L. Weekly Supp. 1171a (Broward County Court, Judge Lee, October 12, 2009); Michael J. Delesparra DC, PA (Petit-Jean, Michelle) v. United Automobile Insurance Company, 19 Fla. L. Weekly Supp. 214a (Broward County Court, Judge Lee, December 8, 2011); Ann K Medical Office, Inc. (Rosa Delgado) v. United Automobile Insurance Company, 17 Fla. L. Weekly Supp. 684a (Miami-Dade County Court, Judge Lehr, May 21, 2010); Best American Diagnostic Center (Georgina Perez) v. United Automobile Insurance Company, Case No. 11-27626 SP 23 (05) (Miami-Dade County, Judge Charles Johnson, October 5, 2012) [20 Fla. L. Weekly D163b]. Defendant’s failure to tender an instrument with conspicuous language as required by the statute cannot create an accord and satisfaction.

IV. Common Law Accord and Satisfaction

An affirmative defense of accord and satisfaction requires (1) proof of preexisting dispute as to nature and extent of obligation between parties, (2) their mutual intent to effect settlement of that dispute by superseding agreement, and (3) the obligor’s subsequent tender and obligee’s acceptance of performance of new agreement in full satisfaction and discharge of prior disputed obligation. St. Mary’s Hospital, Inc. v. Schocoff, 725 So.2d 454 (Fla. 4th DCA, 1999) [24 Fla. L. Weekly D405a]. There must be unequivocal evidence that a dispute existed prior to the issuance of the payment by the Defendant. See San Hueza v. National Foundation Life Ins. Co., 545 So.2d 321 (Fla. 3d DCA, 1989)(where insurer issued cheeks for payment of medical services in an amount for which there was no real dispute defense of accord and satisfaction fails).

In this case, the evidence presented demonstrates Defendant communicated no dispute prior to tendering the check. Defendant contends its payment of a lesser amount than the billed amount is sufficient to communicate a dispute. An insurer, however, cannot create a dispute by making a payment in an amount it contends will fully satisfy its obligation. Pino v. Union Bankers Ins. Co., 627 So.2d 535 (Fla. 3d DCA 1993). Here, the Defendant intended to pay the full amount of its obligation and it did not believe that the amount paid was a compromise of what Defendant owed. Both parties must intend to enter into a new agreement in which the party, against whom the accord and satisfaction is asserted, is taking less than he believes was legally entitled. See Chassan Professional Wallcovering v. Victor Frankel, 608 So. 2d 91 (Fla. 4th DCA 1992); Republic Funding Corp. of Florida v. Juarez, 563 So.2d 145, 146 (Fla. App. 5 Dist., 1990). If neither side believes that the other is compromising or accepting less than what was legally enforceable, then there is no meeting of the minds that issuing or cashing the check results in an accord and satisfaction. Based on the evidence presented and considered, there is no evidence a dispute existed prior to Defendant’s payment. Defendant intended to satisfy its full obligation under the policy by paying the fee schedule amount and communicated no defenses to payment. Because the Explanation of Review was silent as to the Defendant’s reimbursement obligation and the nature of a dispute, and Plaintiff was not provided any information regarding Defendant’s obligation under the policy, it is this Court’s holding that no dispute was communicated that would result in an accord and satisfaction.

Therefore, based upon the undisputed facts, the Plaintiff is entitled to summary judgment regarding Defendants defense of Accord and Satisfaction as a matter of law. Accordingly, Plaintiff’s Motion for Summary Judgment Regarding Defendant’s Affirmative Defense of Accord and Satisfaction is GRANTED and Defendant’s Motion for Summary Judgment Re: Accord and Satisfaction and Request for 57.105 Sanctions is DENIED.

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