21 Fla. L. Weekly Supp. 806a
Online Reference: FLWSUPP 2108PAZInsurance — 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 statutory fee schedule and is not liable for balance of reduced claim after exhaustion of benefits
GABLES INSURANCE RECOVERY, INC A/A/O OMAR HERNANDEZ DE LA PAZ, Plaintiff, v. PROGRESSIVE EXPRESS INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County, Civil Division. Case No. 13-2779SP25. April 11, 2014. Patricia Marino Pedraza, Judge. Counsel: Matthew E. Ladd, Coral Gables, for Plaintiff. Robert N. Pelier, General Counsel for Gables Insurance Recovery, Coral Gables, for Plaintiff. Byron T. Jackson and Neil V. Singh, Law Offices of Neil V. Singh, Fort Lauderdale, for Defendant.
ORDER GRANTING DEFENDANT’S MOTION FORFINAL SUMMARY JUDGMENT AND DENYINGPLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
THIS CAUSE having come before the Court on March 17th, 2014, pursuant to Defendant’s Motion for Final Summary Judgment as to Benefits Exhausted, and Plaintiff’s Motion for Summary Judgment Regarding Improper Exhaustion of Benefits and the Court having reviewed the file, affidavits, pleadings, considered the arguments of Counsel and Memorandums of Law submitted by the parties, and being otherwise fully advised in this matter, does hereby make the following findings of fact and conclusions of law:
FINDINGS OF FACTS
1. The above-captioned case involves a suit for personal injury protection (“PIP”) benefits.
2. On May 23rd, 2009 the Plaintiff’s assignor, OMAR HERNANDEZ DE LA PAZ, was allegedly involved in an automobile accident and thereafter sought treatment from and assigned his benefits to Plaintiff’s predecessor in interest, All X Ray Diagnostic Services, Corp. (“All X-Ray”), for the injuries that he allegedly sustained in the accident. The assignment of benefits then inured to Plaintiff by way of subsequent assignment.
3. All X-Ray provided the Plaintiff’s assignor with treatment on date of service May 27th, 2009 and thereafter submitted its bill in the amount of $2,475.00 to Progressive for payment.
4. On July 6th, 2009, the Defendant paid All X-Ray $357.23 in PIP benefits and in accordance with the terms and conditions of its policy and Fla. Stat. § 627.736(5)(a)(2)(2008).
5. More than three years after paying All X-Ray, the Defendant was served with Plaintiff’s initial Statement of Claim (“Complaint”) on February 20th, 2013. The Complaint seeks “damages for overdue No-Fault Benefits in the amount of $1,622.77, interest on overdue No-Fault Benefits, and interest on late payment of No-Fault Benefits.”
6. However, the policy limits for OMAR HERNANDEZ DE LA PAZ’s PIP benefits were exhausted on or about August 25th, 2009, when the Defendant paid $1,159.25 to AAA Rehab Center, another of the claimant’s medical providers, in satisfaction of its claim for PIP benefits under the subject policy of insurance.
7. The record reveals that there was no allegation of bad faith in the Complaint, nor in reply to Defendant’s affirmative defenses.
8. Moreover, there is no allegation or proof of bad faith by the insurer or that benefits were not paid for covered losses of the insured pursuant to the policy of insurance. All bills Defendant deemed payable were paid in the order they were received and payments issued to providers for timely submitted bills.
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.
10. 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.
QUESTION PRESENTED
The question presented to the Court is whether the exhaustion of benefits absolves the insurer from any responsibility to pay an otherwise valid claim where the exhaustion occurred after the insurer paid an amount that the provider claims is less than required by the contract; specifically where Defendant paid the Plaintiff provider at 80% of 200% of the Medicare Part (B) Fee Schedule without a clear election in the policy.DISCUSSION
The Court answers this question in the affirmative extending the reasoning of Northwoods / Wellness, Simon, Standup MRI, and Sheldon. In Northwoods / Wellness, the Fourth District Court of Appeal held that “post-suit exhaustion of benefits should be treated no differently than pre-suit exhaustion of benefits, as long as the benefits’ compensability under PIP has not been established. Once the PIP benefits are exhausted through the payment of valid claims, an insurer has no further liability on unresolved, pending claims, absent bad faith in the handling of the claim by the insurance company.” Northwoods Sports Medicine and Physical Rehab, Inc. a/a/o Suzanne Cabrera v. State Farm Mut. Ins. Co., 2014 WL 837091 at 7 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D491a].
Specifically, the Fourth DCA addressed whether a post-suit exhaustion of benefits absolves the insurer from any responsibility to pay an otherwise valid claim where the exhaustion occurred after the insurer “paid an amount that the provider claims is less than required by the contract.” Id. at 5 (addressing the fourth certified question 4(a) in Wellness). The Fourth DCA answered this question in the affirmative clearly extending the reasoning of Simon, Stand-up MRI, and Sheldon in that it rejected the reserve or hold theory that when an insurer reduces a provider’s claim, it must set up a reserve in case it is later required to pay the full claim. Id. at 5-6 (noting adherence to Simon and its progeny); see Simon v. Progressive Express Ins. Co., 904 So. 2d 449, 450 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D1156b]; Progressive American Ins. Co. v. Stand-Up MRI of Orlando, 990 So. 2d 3 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a]; Sheldon v. United Services Auto. Ass’n, 55 So. 3d 593 (Fla. 1st DCA 2010) [36 Fla. L. Weekly D23a]. See Northwoods / Wellness – Northwoods Sports Medicine and Physical Rehab, Inc. a/a/o Suzanne Cabrera v. State Farm Mut. Ins. Co., 2014 WL 837091 at 7 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D491a].
Plaintiff, GABLES INSURANCE RECOVERY INC. as assignee of the insurance contract is entitled to only those rights and benefits set forth in the policy and cannot gain more from the insurance company than the contractual benefit amount. See Progressive American Ins. Co. v. Stand-Up MRI of Orlando, 990 So. 2d 3 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a]; see also Allstate v Shilling, 374 So. 2d 611 (Fla. 4th DCA 1979); GEICO v. Robinson, 581 So.2d 230 (Fla. 3rd DCA 1991); Atkins v. Bellefonte Ins. Co. 342 So.2d 837 (Fla. 3rd DCA 1977); Dixie Ins. Co. V. Lewis, 484 So. 2d 89 (Fla. 2nd DCA 1986). It appears that in the instant case, Plaintiff, in its breach of contract suit, seeks benefits beyond the contractual amount set forth by the policy. Progressive’s actions of continuing to pay the bills as submitted, and not setting aside monies to satisfy potential disputes, satisfies the purpose and design of the PIP statute, and allowed the insured to continue receiving medical treatment for his injuries. There is no requirement that an insurance company set aside a reserve fund for claims that are reduced or denied. Dr. Robert D. Simon v. Progressive Express Ins. Co., 904 So.2d 449 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D1156b]. As such, Defendant is not responsible for the insured’s over use of the policy and the court has found that the assignees should look to the insured’s for any additional payments. See Progressive American Ins. Co. v. Stand-Up MRI of Orlando, 990 So. 2d at 6-7 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a]. It is undisputed that Defendant, as in Simon, paid the insured’s claims as they were received and attempted to settle as many claims as possible with the limited amount of money and time available.
In Millennium Diagnostic Imaging Center. Inc. v. Progressive Express Ins. Co., 3D07-2628 (Fla. 3d DCA 2008) [33 Fla. L. Weekly D1742b], in denying Millennium’s petition for certiorari of the 11th Judicial Circuit Appellate Court’s ruling in Progressive Express Ins. Co. v. Millennium Diagnostic Imaging Center, Inc. 14 Fla. L. Weekly Supp. 938a (Fla. 11th Cir Appellate July 2007)(insurer not required to hold remaining PIP benefits in reserve funds each time claims are reduced or denied), the 3rd District Court adopted the holding in Simon that an insurance carrier has no obligation to reserve PIP benefits. See Farinas v. Florida Farm Bureau General Ins. Co., 850 So.2d 555, 560 (Fla. 4th DCA 2003) [28 Fla. L. Weekly D1023b].
The right to contest the denial of a PIP claim, absent a showing of bad faith, can be extinguished through an exhaustion of benefits by the insured after the claim has been submitted. See Progressive American Ins. Co. v. Stand-up MRI of Orlando, 990 So. 2d 3 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a]. Additionally, in Sheldon, D.C. v. United Services Automobile Association, 55 So.3d 593 (Fla. 1st DCA 2011) [36 Fla. L. Weekly D23a], the Court found in that case that Florida courts have established that, once an insurer has paid out the policy limits to the insured (or to various providers as assignees), it is not liable to pay any further PIP benefits, even those that are in dispute. (Emphasis added).
Plaintiff relies on the recent 11th Circuit Court’s Appellate Opinion of GEICO Indemnity Co. v. Gables Ins. Recovery, Inc. a/a/o Rita M. Lauzan, 20 Fla. L. Weekly Supp. 862a (June 25, 2013) both in support of their motion and in opposition to Defendant’s Motion. The 11th Circuit Court sitting in its appellate capacity in Lauzan determined that an insurer’s payment was “wrongful” because instead of paying in accordance with the clear and unambiguous language of its policy to pay 80% of reasonable medical expenses it paid pursuant to the Medicare Fee Schedule. First, in Lauzan, the Circuit Court failed to cite any of the binding DCA case law on the issue of exhaustion of benefits such as Simon, Stand-up MRI, or Sheldon. These cases were recently reaffirmed by the Fourth DCA in the consolidated case of Northwoods /Wellness. See Northwoods / Wellness – Northwoods Sports Medicine and Physical Rehab, Inc. a/a/o Suzanne Cabrera v. State Farm Mut. Ins. Co., 2014 WL 837091 at 7 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D491a].
Specifically, in Northwoods / Wellness, the Fourth District Court of Appeal addressed whether a post-suit exhaustion of benefits absolves the insurer from any responsibility to pay an otherwise valid claim where the exhaustion occurred after the insurer “paid an amount that the provider claims is less than required by the contract.” Id. at 5 (addressing the fourth certified question in Wellness). 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. 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); Northwoods / Wellness – Northwoods Sports Medicine and Physical Rehab, Inc. a/a/o Suzanne Cabrera v. State Farm Mut. Ins. Co., 2014 WL 837091 at 7 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D491a].
Further, 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, Progressive, did not pay any claims that were non-compensable as a matter of law. The Court finds that holding of Coral Imaging is not applicable to the instant case and declines to extend that holding further in conflict with the opinion in Northwoods / Wellness – Northwoods Sports Medicine and Physical Rehab, Inc. a/a/o Suzanne Cabrera v. State Farm Mut. Ins. Co., 2014 WL 837091 at 7 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D491a].
In addition, the Court finds that the following language in Northwoods / Wellness citing to Simon and its progeny, entitled the Defendant to entry of a final summary judgment despite the fact that Progressive had notice prior to exhaustion of benefits:
We decline to create a requirement that an insurance company set aside a ‘reserve’ fund for claims that are reduced or denied. Simon does not contend that the denial or reduction of its claim was made in bad faith, or that Progressive had manipulated, or acted improperly in reducing it. if we were to accept Simon’s theory that a ‘reserve’ or ‘hold’ provision be automatically applied to any funds at the time a claim is submitted, it 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. Under such a theory, all potential payments to a service provider that were denied, or were subject to a reduction, would have to be held in reserve until the statute of limitations period expired or a suit was filed and concluded. This would delay and reduce availability of funds for the payment of claims to other providers and would be inconsistent with the PIP statutes prompts pay provisions. See §627.613, and 627.662(7), Fla. Stat. (provision established to expedite payment to service providers). It is the obligation of insurance companies to attempt to settle as many claims as possible. See Farinas v. Florida Farm Bureau General Ins. Co., 850 So.2d 555 (Fla. 2003) [28 Fla. L. Weekly D1611b]. It is also the prerogative of insurance companies to pay, reduce, or deny claims. Simon 904 So.2d 449 Id.
In sum, this Court finds that it is bound by the decisions of the Florida District Court of Appeals. The Fourth DCA opinion in Northwoods / Wellness is controlling over this Court and effectively quashes the holding of GEICO Indemnity Company vs. Gables Insurance Recovery a/a/o Rita M. Lauzan, 12-069 AP, Trial Case No.: 10-000985SP26(03) [20 Fla. L. Weekly Supp. 862a]. See Northwoods / Wellness – Northwoods Sports Medicine and Physical Rehab, Inc. a/a/o Suzanne Cabrera v. State Farm Mut. Ins. Co., 2014 WL 837091 at 7 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D491a]. (The decisions of the district courts of appeal represents the law of Florida unless and until they are overruled by this Supreme Court); See Stanfill vs. State, 384 So.2d 141, 143 (Fla. 1980). [Emphasis supplied].
RULINGS
It is therefore ORDERED AND ADJUDGED as follows:
1. Defendant’s Motion for Final Summary Judgment is hereby GRANTED.
2. Plaintiff’s Motion for Summary Judgment is hereby DENIED.
3. Judgment is entered in favor of the Defendant and the Plaintiff shall take nothing by this action and the Defendant shall go hence without a day. The Court reserves jurisdiction to determine Defendant’s attorney’s fees and taxable costs.
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