21 Fla. L. Weekly Supp. 1069b
Online Reference: FLWSUPP 2110LCOHInsurance — Personal injury protection — Penalty and postage — Insurer that paid medical expenses and interest after receipt of demand letter cannot defend against action for penalty and postage by claiming that services for which it paid were not related or medically necessary — No merit to argument that insurer is obligated to pay penalty only if full amount is paid after receipt of demand letter
MR SERVICES I, INC. D/B/A C & R IMAGING OF HOLLYWOOD, (Lawrence Cohen), Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 12-23619 COCE (50). June 4, 2014. Honorable Peter B. Skolnik, Judge. Counsel: Steven Lander, Lander, Dalal and Associates, P.L., Fort Lauderdale, for Plaintiff. Jose Font, Hollywood, for Defendant.
ORDER
THIS CAUSE came to be considered before this Court on: PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT AS TO COUNT TWO OF PLAINTIFF’S COMPLAINT-DEFENDANT’S FAILURE TO PAY PENALTY AND POSTAGE. IT IS HEREBY ORDERED AND ADJUDGED:
1. Plaintiff’s Motion is hereby GRANTED. The Court finds that the Defendant was served with a proper pre-suit demand letter on October 10, 2012. On October 16, 2012, post receipt of the Plaintiff’s pre-suit demand letter, the Defendant issued a check to Plaintiff in the amount of $1,150.08 as payment for the medical benefits and interest rendered by the Plaintiff to Lawrence Cohen. The Defendant failed to pay the statutorily required penalty and postage pursuant to section 627.736(10) of the Florida Statutes.
2. The Court finds that necessity and relatedness are not proper to defenses. Penalty and postage is due at the time of payment if a demand letter has been properly served. The purpose of Florida Statute 627.736(10) is to deter litigation. Permitting an insurance company to issue payment post demand and then deny its obligation to pay penalty and postage, alleging the services for which it paid are not necessary and/or related, is in direct contradiction to the purpose of the pre-suit demand letter which reads:
(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 penally of $250, no action may he brought against the insurer . . . Fla. Stat. 627.736(10).
While necessity and relatedness may be disputed at any time, it does not follow that payment of penalty and postage is likewise contestable. The payment itself triggers the obligation to pay penalty and postage.
3. Further, the Court finds that Defendant’s argument that only payment of the full amount post demand obligates the carrier to penalty is likewise without merit. The statute contemplates a scenario where the carrier partially pays a demand, as is the case before this Court. In that event, the amount paid obligates the carrier for 10% penalty of the amount paid. The unpaid amount, if sued on, exposes the carrier to attorney’s fees but not penalty. “To the extent the insurer determines not to pay any amount demanded, the penalty is not payable in any subsequent action.” See Fla. Stat. 627.736(10).
4. Plaintiff shall submit a Final Judgment as to Count II of Plaintiff’s Complaint.
5. Plaintiff is entitled to reasonable attorney’s fees and costs, upon proper Motion, pursuant to Florida Statute 627.428, which reads:
1) 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.
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