22 Fla. L. Weekly Supp. 724a
Online Reference: FLWSUPP 2206CUNNInsurance — Personal injury protection — Coverage — Medical expenses — PIP policy providing that insurer will pay 80% of reasonable expenses but also providing that amount payable “shall be subject to any and all limitations” authorized by PIP statute does not provide clear and unambiguous notice of intent to limit reimbursement to Medicare Part B fee schedule
NEW SMYRNA IMAGING, LLC, as assignee of Thomas Cunniff, Plaintiff, v. ALLSTATE INSURANCE COMPANY, Defendant. County Court, 7th Judicial Circuit in and for Volusia County. Case No. 2012 23119 CONS, Division 71. December 2, 2014. Robert A. Sanders, Jr., Judge. Counsel: Mark A. Cederberg and Rutledge Bradford, Bradford Cederberg, P.A., Orlando, for Plaintiff. Anthony Parrino, St. Petersburg, for Defendant.
ORDER GRANTING PLAINTIFF’SMOTION FOR FINAL SUMMARY JUDGMENTAND DENYING DEFENDANT’S MOTIONFOR FINAL SUMMARY JUDGMENT
THIS CAUSE, having come before the court on November 3, 2014, after due notice to the parties on competing motions of the parties for Final Summary Judgment and the court having reviewed the summary judgment evidence, having heard argument of both counsel and in reliance on the parties’ stipulations of the facts, and being otherwise fully advised in the premises finds and rules as follows:
Factual Background
This is a claim for PIP benefits arising out of a motor vehicle collision that occurred on or about April 5, 2011. Because the policy in effect on the date of the accident was issued prior to July 1, 2012, the 2008 version of §627.736 and Geico v. Virtual Imaging, 141 So.3d 147(Fla. 2013) [38 Fla. L. Weekly S517a] apply.
Allstate Insurance Company (“Allstate”), issued a policy of automobile insurance numbered 088775427, that provided Personal Injury Protection (“PIP”) benefits to Thomas Cunniff (“Cunniff”). On or about April 5, 2011, Cunniff was involved in a motor vehicle accident in which he sustained injuries and for which he sought medical treatment. The policy referenced herein was in full force and effect on April 5, 2011 and provided $10,000 in PIP coverage with no applicable deductible and no Med Pay coverage. Cunniff provided timely notice of the fact of a covered loss to Allstate and has otherwise fully complied with all conditions precedent to receive PIP benefits under the policy.
On May 16, 2011, Plaintiff, New Smyrna Imaging, LLC (“New Smyrna Imaging”), rendered medical treatment to Cunniff. It is undisputed that the medical services provided by New Smyrna Imaging to Cunniff on May 16, 2011 that are at issue in this lawsuit were reasonable, medically necessary and related to the subject accident and were covered by Allstate. New Smyrna Imaging brings this action to recover reimbursement for the medical services provided on May 16, 2011 to Cunniff pursuant to a valid assignment of benefits under the subject policy to New Smyrna Imaging. New Smyrna Imaging timely submitted its bill for services rendered to Cunniff on May 16, 2011 in the amount of $1,695.00 to Allstate. Said bill was properly completed in compliance with §627.736.
Upon receipt of New Smyrna Imaging’s bill, Allstate limited New Smyrna Imaging’s charge to 200% of the Participating Physicians Fee Schedule of Medicare Part B. Allstate’s Explanation of Benefits stated: “[t]he allowed amount for this procedure is based upon 200% of the Participating Level of Medicare Part B fee schedule . . .”) and paid 80% of this fee schedule amount.
For the purposes of this litigation, Allstate is not contesting, and stipulates not to contest, the reasonableness of New Smyrna Imaging’s charge for the services rendered to Mr. Cunniff on May 16, 2011. New Smyrna Imaging submitted a timely and compliant pre-suit demand letter to Allstate requesting the difference between 80% of the charged amount and the amount previously paid. In response to the pre-suit demand letter, Allstate elected not make any additional payment. New Smyrna Imaging filed suit on or about September 18, 2012. The full $10,000 in PIP benefits have not been exhausted.
Contentions of the Parties
Allstate contends that, pursuant to the provisions of §627.736(5)(a)2., Florida Statutes, and the language of its policy, it properly limited reimbursement of New Smyrna Imaging’s bill for the services at issue pursuant to the schedule of maximum charges described in §627.736(5)(a)2., Florida Statutes. New Smyrna Imaging contends that Allstate’s policy fails to clearly and unambiguously elect the fee schedule payment methodology and, therefore, Allstate cannot avail itself of the (5)(a)(2) payment methodology and must therefore pay New Smyrna Imaging 80% of the amount charged for the date of service at issue.
Analysis
The sole legal issue to be resolved by way of final summary judgment in this case is whether Allstate’s policy has clearly and unambiguously elected and provided notice to its insureds such that it may limit reimbursement of New Smyrna Imaging’s bill for services at issue pursuant to the schedule of maximum charges described in §627.736(5)(a)2., Florida Statutes. The Florida Supreme Court has affirmed a series of appellate court rulings, finding that §627.736 (2008) offers two distinct payment methodologies for payment of benefits. The first method of reimbursement (“the mandatory reasonableness methodology”) is fact dependent and requires the insurer to pay medical benefits at 80% of a “reasonable” charge so long as it does not exceed the provider’s usual and customary charge. §627.736(5)(a)(1) (2008) sets forth various factors to be used to determine reasonableness, including “state and federal fee schedules. . .”.The second method of reimbursement, (“permissive”) is contained in §627.736(5)(a)(2) (2008) of the PIP statute. Pursuant to §5(a)(2), an auto insurer may use the schedule of maximum charges (“the Medicare fee schedule”) to limit reimbursement only if it has “clearly and unambiguously” given notice to its insured and to medical providers in the policy of its election of the “permissive” methodology.
Courts have consistently held that PIP insurers cannot limit reimbursements by using the schedule of maximum charges, without providing notice by “clear and unambiguous” election in its policy. See Geico Gen. Inc. v. Virtual Imaging Servs., Inc., 141 So.3d 147,157-158 (Fla. 2013) [38 Fla. L. Weekly S517a]. See also, Geico General Ins. Co. v. Virtual Imaging Services, Inc., (“Virtual II”), 90 So.3d 321, 322-23 (Fla. 3d DCA 2012) [37 Fla. L. Weekly D985b]; DCI MRI, Inc. v. Geico Indem. Co., 79 So. 3d 840, 842 (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]. Importantly, the Florida Supreme Court reiterated what the 4th DCA stated in the first appellate court ruling on this issue: “[W]hen the plain language of the PIP statute affords insurers two different mechanisms for calculating reimbursements, the insurer must clearly and unambiguously elect the permissive payment methodology in order to rely on it.” 141 So.3d 147 at 157-158.
The applicable policy provision states, in relevant part, under Part III, Personal Injury Protection coverage that Allstate will pay,
1. Medical Expenses
Eighty percent of all reasonable expenses for medically necessary medical, surgical, X-ray, dental, and rehabilitative services, including prosthetic devices, and medically necessary ambulance, hospital, and nursing services (Emphasis added).
The subject policy further provides in the Limitation of Liability section that:
Any amounts payable under this coverage shall be subject to any and all limitations authorized by section 627.736, or any other provisions of the Florida Motor Vehicle No-Fault Law, as enacted, amended or otherwise continued in the law, including, but not limited to all fee schedules (Emphasis added).
The Florida Supreme Court’s ruling in Virtual III, when applied to Allstate’s policy language, makes it clear that the language fails to clearly and unambiguously elect the permissive methodology of reimbursement. In its policy, Allstate attempts to include both of the two distinct options for PIP reimbursements by referencing: (a) the reasonableness standard under (a)(1) (“we will pay 80% of reasonable medical expenses”) and, (b) an ambiguous catch-all paragraph (“Any amounts payable under this coverage shall be subject to any and all limitations authorized by section 627.736, or any other provisions of the Florida Motor Vehicle No-Fault Law, as enacted, amended or otherwise continued in the law, including, but not limited to all fee schedules”). Reviewing these two clauses together creates an ambiguity. “Ambiguities in insurance contracts are resolved in favor of the insured.” State Farm Mutual Auto Ins. Co. v. Menendez, 70 So.3d 566, 570 (Fla. 2011) [36 Fla. L. Weekly S469a]. When an insurer in one part of its policy adopts a reasonableness standard, and in another part vaguely attempts to adopt limitations on that reasonableness standard, the ambiguity created by having both provisions in the insurance policy must be construed against the insurer. Virtual Imaging II, 79 So. 3d at 58.
Allstate argues that it has elected only one reimbursement method in its policy and the “80% of all reasonable expenses” language is simply an indication of the amount it will pay pursuant to the schedule of maximum charges. “When two distinct payment amounts are possible under the statute, it is misleading to insist that there is only one calculation methodology being used.” Virtual Imaging II, 79 So. 3d at 57-58; see also American Independent Ins. Co. v. Gables Ins. Recovery, Inc. a/a/o Orlay Lima, 19 Fla. L. Weekly Supp. 14b (Fla. 11th Cir. App. Oct. 12, 2011) (holding that the fact that an insurance policy simultaneously included language it will pay 80% of all reasonable expense and language purporting to give the insurer an option to pay under Section §627.736(5)(a)(2)(f) at best makes the policy ambiguous).
This court has previously heard argument on the policy at issue and rendered its ruling in Jeremy Gordon, D.C. a/a/o Philomena Schwartz, 20 Fla. L. Weekly Supp. 673a, (Fla. 7th Judicial Circuit, County Court, March 25, 2013) finding,
“Allstate’s general language contained within the limitation of liability paragraphs does not clearly and unambiguously notify the insured patient and the medical provider of Allstate’s intent to limit reimbursement pursuant to Fla. Sta. §627.736(5)(a)2.f. Furthermore, Allstate’s policy fails to adopt the language contained in (5)(a)2.f. and fails to specify that Allstate will pay 80% of 200% of the Medicare Part B fee schedule.
Additionally, an ambiguity is created by Allstate’s inclusion of language which provides that it will pay 80% of all reasonable expenses and conflicting language that attempts to limit reimbursement to “all fee schedules.” Moreover, the policy language leaves the unanswered question as to whether Allstate is adopting the additional coverage limitations contained in 5(a)2.f. which provides that “services, supplies, or care that is not reimbursable under Medicare or workers’ compensation is not required to be reimbursed by the insurer.” Fla. Stat. §627.736(5)(a)1. does not contain any such limitation on the type of services that would be covered by No Fault, thereby creating further uncertainty regarding limitations, payment methodology and scope of coverage provided to the insured.”
The court is also persuaded by the very recent and well-reasoned opinion in Nightlight Chiropractic LLC., (Ruth Rodriguez) vs. Allstate Property and Casualty Insurance Company, Case No. COCE 13015164 (Broward County Court, September 13, 2014, The Hon. Robert W. Lee). Judge Lee’s Order addresses each of the arguments Allstate has put forth and articulates why these arguments fail. He points out Allstate uses the term “fee schedules”, found only in 5(a)(1) as its basis that it clearly and unambiguously relied upon 5(a)(2) (also noting that 5(a)(2) does not refer to the payment limitations as fee schedules, but rather as the schedule of maximum charges); references two Supreme court of Florida cases which stand for the premise that ambiguities in contracts are construed against the insurer and in favor of coverage in response to Allstate’s flawed argument that ambiguities are to be construed in favor of the insured, not the provider and what would be beneficial to the insured is to have the fee schedules utilized; notes the missing definitions in Allstate’s policy and endorsement of basic terms “reasonable’ and “medically necessary” and notes that “Allstate should not be heard to complain about the ambiguities in its policy when it alone chose not to define those terms”; addresses as length the use of the words “subject to”, noting that the “subject to provision is intrinsically ambiguous with many possible meanings. In context, all of them create ambiguity.” He finds that Allstate’s policy provisions at issue incorporate both methodologies of reimbursement and that it has done nothing other than give itself the option to reimburse benefits under either 5a1 or 5a2. Further he notes that the policy retains a provision giving Allstate the right to contest whether the charges are reasonable. He states, “If it was Allstate’s intent to elect to limit reimbursements in accordance with 5a2, there would be no reason to ever have to contest the reasonableness of the charge.”
Finally, Judge Lee rejects Allstate’s position that the Florida Supreme Court’s ruling in Virtual approved the text in GEICO’s amendment to its standard policy made while the case was being presented in the Supreme Court. The case on review in the Supreme Court involved only GEICO’s 2008 version of its PIP policy. He noted, “In short, contrary to approving the new text put forth by GEICO, the Court made clear that its holding applied only to the policies in effect from 2008-2012. It is absolutely clear that the Supreme Court did not review any insurance policy other than the one in Virtual III. Allstate’s claim otherwise is an attempt at subterfuge to lead this Court away from Allstate’s weakness — the actual language of its policy.
In conclusion, Judge Lee noted that both of the Circuit Appellate opinions in favor of Allstate in Miami-Dade county rely on the faulty premise that the holding in Virtual approved a GEICO policy that was not at issue. Regarding Allstate’s language, he concludes, “if trained legal minds are unable to agree as to whether the provision is clean and unambiguous, the average insured could never clearly understand what his or her benefits are.”
This court also believes that Allstate’s endorsement opts for two methodologies and reiterates its holding in Jeremy Gordon, D.C. a/a/o Philomena Schwartz 20 Fla. L Weekly Supp. 673a (Fla. 7th Judicial Circuit, County Court, March 25, 2013). There is no question that Allstate’s endorsement at issue in this case is ambiguous. A policy is ambiguous when the relevant policy language is susceptible to more than one reasonable interpretation, one providing coverage and the other limiting coverage. Kiln, PLC v. Advantage Gen. Ins. Co., 80 So. 3d 429, 431 (Fla. 4th DCA 2012) [37 Fla. L. Weekly D475a]. Accordingly, it is
ORDERED AND ADJUDGED:
1. Plaintiff’s Motion for Final Summary Judgment is GRANTED. Defendant’s Motion for Final Summary Judgment is DENIED.
2. Final Judgment is hereby granted in favor of the Plaintiff, NEW SMYRNA IMAGING, LLC, as assignee of Thomas Cunniff. Plaintiff shall recover from Defendant, Allstate Insurance Company, the sum of $564.59 plus 6.0% interest (5/2011 DOS) in the amount of $127.50 for a total sum of $692.09 for which sum let execution issue.*
3. The Court finds Plaintiff is entitled to its reasonable attorneys’ fees and costs. The Court reserves jurisdiction to determine the amount of attorneys’ fees and costs to Plaintiff pursuant to Fla. Stat. §§627.736, 627.428 and 57.041.
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*Post judgment interest of 4.75% per annum shall accrue on this judgment pursuant to Fla. Stat. § 55.03.
