21 Fla. L. Weekly Supp. 84a
Online Reference: FLWSUPP 2101PORTInsurance — 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 payment of balance of reduced claim after exhaustion of benefits
UNIVERSAL X-RAY CORP a/a/o MARK PORTER, Plaintiff, v. PROGRESSIVE EXPRESS INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 12-23294-SP-23 (5). October 3, 2013. Charles Johnson, Judge. Counsel: Wajih Shirazi, for Plaintiff. Maury L. Udell, Beighley, Myrick & Udell, P.A., Miami, for Defendant.
ORDER GRANTING DEFENDANT’S MOTIONFOR FINAL SUMMARY JUDGMENT
THIS CAUSE came upon to be heard on Defendant’s Motion for Final Summary Judgment and The Plaintiff’s Cross Motion for Final Summary Judgment, Plaintiff’s Motion For Rehearing and the Court having heard argument of counsel on September 17, 2013, and after reviewing the record and all memoranda and submitted case law, and being otherwise fully advised in the premises, it is hereby
ORDERED AND ADJUDGED as follows:FACTUAL BACKGROUND
The following facts are undisputed:
1. This is a Personal Injury Protection (PIP) case arising out of an accident that occurred on November 13, 2009 involving Progressive’s insured, Mark Porter.
2. Plaintiff, UNIVERSAL X-RAY CORP., submitted medical bills to Defendant, PROGRESSIVE EXPRESS INSURANCE COMPANY, based on a policy of insurance that insured, Mark Porter, had with Defendant.
3. Pursuant to the policy of insurance, Defendant paid the insured’s medical bills in the order in which they were received, including some of Plaintiff’s medical bills at a reduced rate, pursuant to the terms of the policy. Progressive also denied two CPT codes pursuant to Fla. Stat. Sec. 627.736(6)(b). Progressive’s policy of insurance did not provide notice to the insured of its election to use the fee schedules.
4. Plaintiff, as assignee of Progressive’s insured, filed the instant case on December 21, 2012.
5. The record reveals that there was no allegation of bad faith in the complaint, nor a reply to Defendant’s affirmative defenses.
6. 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. See Affidavit of Robert Grant.
7. The insured’s $10,000 policy was exhausted on June 9, 2010, two and a half years before this suit was filed. See Affidavit of Robert Grant.
QUESTION PRESENTED
The question presented to the Court is whether an assignee/medical provider can maintain a cause of action for breach of an insurance contract where the policy limit has been exhausted for covered losses for the benefit of the insured, even if Defendant paid the Plaintiff provider at 80% of 200% of the Medicare Part (B) Fee Schedule or denied some dates of service.
CONCLUSIONS OF LAW
It is a well-established principle of law that an assignee is bound where his assignor would be bound. See Cadle Co. II, Inc. v. Stamm, 633 So.2d 45, 46 (Fla. 1st DCA 1994). “As to all defenses, he stands in the shoes of the former.” See Einstein’s Sons v. Shouse, 24 Fla. 490, 500 (Fla. 1888). An assignment does not change the rights and benefits available under the policy, and does not invest in the assignee any right of action or defense which before the assignment, the assignor did not have. In Union Indemnity Co. v. City of New Smyrna 100 Fla. 980, 130 So. 453 (Fla. 1930), the Court held that the assignee of a contract could acquire no greater right through assignment than that which the assignor himself might assert. Thus, the Plaintiff in this case can gain no greater rights than the insured. See also Chysler Credit Corporation v. United Services Automobile Association, 625 So.2d 69 (Fla. 1st DCA 1993) (the assignee took the assignment subject to the specific language in the policy);The insurance policy in this case is a contract between Progressive and the insured which sets forth the benefits to which the insured is entitled. The insured is limited in its recovery by the terms of this contract.
Plaintiff, as assignee of the contract insurance, 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. See 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 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 Geico a/a/o 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. Second in Geico General Ins. Co. v. Virtual Imaging Services, Inc., 2013 WL 3332385 (Fla. 2013), decided eight (8) days after the Geico a/a/o Lauzan case, the Florida Supreme Court stated in a footnote that “although we agree that there are two payment methodologies for satisfying the PIP statute’s coverage mandate, we emphasize that we do not conclude that limiting reimbursement pursuant to section 627.736(5)(a)2 would never satisfy this reasonable medical expenses coverage mandate. See Footnote 8. (Emphasis Added).
Moreover, the Florida Standard Jury Instruction on the issue of reasonableness of charges, states as follows:
In deciding whether the amount of a charge is reasonable, you may consider evidence of:
· usual and customary charges and payments accepted by the provider involved in the dispute;
· reimbursement levels in the community;
· reimbursement levels in various federal and state medical fee schedules applicable to automobile coverages; and
· any other evidence relevant to the reasonableness of the charges.
You may not, however, award an amount that exceeds the amount the provider customarily charges for like services or supplies.
Therefore any statement that an insurer’s use of the medicare fee schedule as a basis to limit a provider’s reimbursement was “wrongful” directly contradicts the Florida Supreme Court approved language of the standard jury instruction and language in Geico General Ins. Co. v. Virtual Imaging Services, Inc., 2013 WL 3332385 (Fla. 2013) which specifically stated such a payment could satisfy the coverage mandate despite the failure of the insurer to notify the policyholder of the fee schedule election.
In the instant case, at the time Progressive received and processed the bills, Progressive had reasonable proof to reimburse Plaintiff’s charges based on its reliance on the plain language of Fla Stat. § 627.736(5)(a)(2)(f)(2008), see infra and Fla. Stat.§ 627.736(6)(b). Bad faith does not exist when an insurer takes a legal position, relying upon the status of the law at that time, when there is no binding authority stating otherwise. See DPI of North Broward, LLC a/a/o John Shutowick v. USAA, Case No. 10-05075 COCE 53, Broward County Court, Judge Robert Lee (February 1, 2011) [18 Fla. L. Weekly Supp. 492a]; see also Pembroke Pines MRI, Inc. a/a/o Jack Paris v. USAA Casualty CASE NO. 09-09458 COCE 51, Broward County Court, Judge Martin Dishowtiz (April 11, 2011) [18 Fla. L. Weekly Supp. 613a]; Pembroke Pines MRI, Inc. (a/a/o Coleen Carcelli) v. United Service Automobile Ass’n, 10-08138 COCE 54, Broward County Court, Judge Lisa Trachman (April 8, 2011).
There are numerous cases where an appellate court has reduced the amount of the judgment rendered by a jury because it exceeds the policy limits. For example, in Stella v. Craine, 281 So.2d 584, 585-86, (Fla. 4th DCA 1973) the 4th DCA held that relief pursuant to rule 1.540(b) was available where a judgment was entered against an insurance company for an amount in excess of the policy limits. Allowing recovery beyond the policy limits would render the terms of the policy meaningless. Florida courts have long held that insurance contract provisions may not be construed as meaningless. See, e.g., Premier Ins. Co. v. Adams, 632 So.2d 1054 (Fla. 5th DCA 1994).
To follow Plaintiff’s argument and require an insurer to maintain a reserve fund for possible or disputed claims would undoubtedly disrupt the flow of prompt payments to medical providers who provided reasonable, related and medically necessary services to the insureds and unfortunately require the Court system to become the claim adjustment mechanism for the insurance carriers. This is the antithesis of why the No-fault scheme was enacted. See Ivey v. Allstate Ins. Co., 774 So. 2d 679, 683-84 (Fla. 2000) [25 Fla. L. Weekly S1103a] (“Without a doubt, the purpose of the no -fault statutory scheme is to ‘provide swift and virtually automatic payment so that the injured insured may get on with his life without undue financial interruption.’ ”) Thus, taking into account the holdings on the issue of benefits exhausted from the Third, Fourth, and Fifth District Courts of Appeal, the payments made on behalf of Mark Porter exhausted all PIP benefits and there is no evidence of bad faith, Plaintiff’s interest is extinguished.
Wherefore, for the foregoing reasons, the Court hereby orders and adjudges that:
1. Defendant’s Motion for Final Summary Judgment is hereby GRANTED;
2. Plaintiff’s Cross Motion for Summary Judgment is DENIED. Plaintiff’s Motion for Rehearing is DENIED.
3. Defendant shall go hence forth without day. The Court reserves jurisdiction to entertain any timely served motions to tax attorney’s fees and costs.
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