24 Fla. L. Weekly Supp. 153a
Online Reference: FLWSUPP 2402PEREInsurance — Personal injury protection — Conditions precedent — Demand letter — Where insurer sent response to demand letter stating that it will not consider providing any payment on bill, insurer waived 30-day period for payment after receipt of demand letter afforded by section 627.736(10(d), and medical provider was not required to wait out 30-day period before filing lawsuit
CENTRAL FLORIDA MEDICAL & CHIROPRACTIC CENTER, INC., d/b/a FLORIDA MRI CENTER, a/a/o TEDDY PEREZ, Plaintiff, vs. AUTO-OWNERS INSURANCE COMPANY, Defendant. County Court, 9th Judicial Circuit in and for Orange County. Case No. 2014-CC-12176-O. November 6, 2015. Honorable Steven Jewett, Judge. Counsel: Hans Kennon, Morgan & Morgan, P.A., Orlando for Plaintiff. Quinn P. LaHiff, Smith Rolfes & Skavdahl Company, L.P.A., Orlando, for Defendant.
ORDER ON PLAINTIFF AND DEFENDANT’S CROSSMOTIONS FOR SUMMARY JUDGMENT — PLAINTIFF’SMOTION FOR SUMMARY JUDGEMENT ASTO DEFENDANT’S 1st AFFIRMATIVE DEFENSEAND DEFENDANT’S MOTION FORFINAL SUMMARY JUDGMENT
THIS CAUSE having come before the Court on Plaintiff and Defendant’s Motions for Summary Judgment on October 21, 2015, and the Court having heard argument of counsel, the following findings of fact and conclusions of law are set out below:FINDINGS OF FACT
The following material facts not in dispute are:
October 14, 2013 — Date of Motor Vehicle Accident (Insurer’s EOB)
February 5, 2014 — Date of MRI at issue in litigation (Insurer’s EOB)
February 6, 2014 — Plaintiff timely submits bill at issue to insurer (Insurer’s EOB)
February 17, 2014 — Insurer receives bill from Plaintiff (Insurer’s EOB)
September 3, 2014 — Statutory Demand letter sent to insurer (Insurer’s demand response dated September l8, 2014 confirms date of mailing)
September 12, 2014 — Demand letter received by Defendant (Insurer’s demand response dated September 18, 2014 confirms date of receipt by insurer)
September 18, 2014 — Insurer responds and denies any further payment after compulsory medical exam of insured (insurer’s demand letter response)
September 29, 2014 — Plaintiff files suit
It is of particular importance to the factual findings that on September 18, 2014, Jillian Nickle of Auto-Owners Insurance Company, the Defendant in this case, served a response to the Plaintiff’s demand letter stating that Auto-Owners did receive the Plaintiff’s statutory demand letter on September 12, 2014 and denied any further payment. Defendant has admitted that the letter is true and correct in its responses to Plaintiff’s Supplemental Request for Admissions (Certificate Date December 12, 2014). In the letter attached as Exhibit “A” to the motion, Ms. Nickle’s letter states:
The bill for the above date of service was denied as a result of an Independent Medical Examination in which it was determined that any further treatment or diagnostic treatment would not be medically necessary, related or reasonable to the above dated motor vehicle accident. Furthermore, no treatment or testing of any kind was related after the date of the IME.
Therefore, we will not consider providing any payment on this bill. Since we are not considering any additional payment on the medical bill, we are not considering payment of interest, penalty, and postage as requested in your demand.
(Emphasis supplied).ISSUE OF LAW PRESENTED
WHETHER THE 30 DAYS ALLOWED UNDER 627.736(10)(d) FOR AN INSURER TO PAY AN OVERDUE CLAIM AFTER RECEIPT OF THE STATUTORY NOTICE OF INTENT TO INITIATE LITIGATION (DEMAND LETTER) IS WAIVED WHEN THE INSURER SENDS A WRITTEN RESPONSE TO THE DEMAND LETTER PRIOR TO THE EXPIRATION OF THE 30 DAYS STATING THAT IT WILL UNEQUIVOCALLY NOT MAKE FURTHER PAYMENT UNDER THE POLICY ALLOWS FOR A LAWSUIT BE BROUGHT IMMEDIATELY UNDER THE ANTICIPATORY BREACH THEORY IN PEACHTREE CASUALTY INSURANCE COMPANY V. WALDEN, 759 So.2d 7 (Fla. 5th DCA 2000) [25 Fla. L. Weekly D555d].FINDINGS OF LAW
The statutory provisions that govern the notice of intent to initiate litigation are contained within Section 627.736(10) and Section 627.736(4)(b). The case law on the issue relied upon by the Plaintiff is primarily found in Peachtree Casualty Insurance Company v. Walden, 759 So.2d 7 (Fla. 5th DCA 2000) [25 Fla. L. Weekly D555d], State Farm Mutual Automobile Insurance Co. v. Gueimunde, 823 So.2d 141 (Fla. 3d DCA 2002) [27 Fla. L. Weekly D1188a], and as referenced in Blumberg v. USAA Casualty Insurance Company, 790 So.2d 1061 (Fla. 2001)[26 Fla. L. Weekly S473a]. The Defendant relies upon Bond v. State Farm Automobile Insurance Company, 15 Fla. L. Weekly Supp. 820a (Duval Cty. Ct. 2008), EBM Internal Medicine a/a/o Bernadette Dorelian v. State Farm Mutual Automobile Insurance Company, 19 Fla. L. Weekly Supp. 410a (Duval Cty. Ct. 2012), and Menendez v. Progressive Express Insurance Company, 35 So. 3d 873, n.6 (Fla. 2010) [35 Fla. L. Weekly S81a] in its motion.
Initially, Section 627.736(10)(a) states in pertinent part:
Section (10) states:
(10) DEMAND LETTER. —
(a) As a condition precedent to filing any action for benefits under this section, written notice of an intent to initiate litigation must be provided to the insurer. Such notice may not be sent until the claim is overdue, including any additional time the insurer has to pay the claim pursuant to paragraph (4)(b).
As Section (10) references (4)(b), that section states:
(4) PAYMENT OF BENEFITS
(b) Personal injury protection insurance benefits paid pursuant to this section are overdue if not paid within 30 days after the insurer is furnished written notice of the fact of a covered loss and of the amount of same. However:
1. If written notice of the entire claim is not furnished to the insurer, any partial amount supported by written notice is overdue if not paid within 30 days after written notice is furnished to the insurer. Any part or all of the remainder of the claim that is subsequently supported by written notice is overdue if not paid within 30 days after written notice is furnished to the insurer.
Section (10)(d) states in pertinent part:
(d) If, within 30 days after reciept 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 penalty of $250, no action may be brought against the insurer.
It should initially be noted that the provisions of Section 627.736 (10)(d) allow an insurer 30 days to pay the claim not just 30 days to consider or review the claim. It is undisputed that no payment was made within 30 days after receipt of the demand letter. The insurer could have paid the claim at any time before the 30 days elapsed with no obligation for attorney fees or costs. In this case the insurer clearly stated that no further payment was forthcoming and has not wavered from that decision.
Based on the insurer denying any further payment before the expiration of the 30 days allowed under Section 672.736(10)(d), this Court must next look at the controlling case law in Peachtree Casualty Insurance Company v. Walden, 759 So.2d 7 (Fla. 5th DCA 2000) [25 Fla. L. Weekly D555d] where the 5th DCA held:
Peachtree’s notice gave rise to a cause of action for breach of contract with respect to the claims accrued by the time of the litigation, see id,; Cruz v. Union General Ins., 586 So.2d 91 (Fla. 3d DCA 1991); State Farm Mut. Auto. Ins. Co. v. Gil, 573 So.2d 90 (Fla. 3d DCA 1991). We do not agree with Peachtree that this result renders the 30 day provision of the statute meaningless. Insurers have 30 days to provide the benefits unless they themselves announce that they will pay no benefits in any event. We do not think the insured is required to wait 30 days to see the insurer was only kidding when it sent the notice.
Id. at 8.
In the Walden case, Ms. Walden was injured in an automobile accident and made a claim for PIP benefits under a policy issued by Peachtree. Peachtree later scheduled Ms. Walden for an Independent Medical Examination as allowed under Section 627.736(7)(a). Based on the examination, Peachtree determined that any further treatment would not be reasonable, necessary, or related to the accident. Peachtree informed Ms. Walden through her attorney that they would not pay for medical treatment after June 12, 1997. Ms. Walden continued to have medical treatment.
This Court notes that the Defendant in this case scheduled Mr. Perez for a medical examination and denied further payment based on the results of the examination as in Peachtree and announced it would make no further payment in its Explanation of Review attached to Plaintiff’s Motion for Summary Judgment as Exhibit “B” and then again in its September 18, 2014, demand letter response attached as Exhibit “A” attached to Plaintiff’s Motion for Summary Judgment.
On July 2, 1997, Ms. Walden sued Peachtree alleging breach of contract and nonpayment of the PIP benefits. After filing suit Walden submitted the bills and Peachtree paid them within 30 days. Peachtree then moved for summary judgment, claiming they were not in breach because it had paid all the bills submitted within 30 days of submission. Ms. Walden’s opposition was that she was not required to give Peachtree 30 days to pay the bills because they had already notified her and they would not pay any further bills.
Ms. Walden won at the County Court trial level and the Circuit Court in its appellate capacity stated according the 5th DCA in its later opinion:
The court ruled that Peachtree’s notice that it would no longer pay benefits was a repudiation of the contract giving rise to a cause of action for breach of contract. The court further pointed out an important policy reason for its decision: “If actual breach is prerequisite to a cause of action then the unintended result may be that some insurance companies will cancel benefit payments to their PIP insured and only resume making payments to those who question the denial.”
Id. at 8.
The 5th DCA pursuant to a timely petition for certiorari by Peachtree affirmed the decision of the Circuit Court and additionally stated:
As stated in Arthur Corbin’s, Corbin on Contract Section 959 (1951), “It is now the generally prevailing rule in both England and United States that a definite unconditional repudiation of the contract by a party thereto communicated to the other, is a breach of contract creating an immediate right of action and other legal effects, even though it takes place long before the time prescribed for the promised performance and before conditions specified in the promise of ever occurred.”
Id. at 8.
Many other cases have followed the holding of the 5th DCA in Peachtree, including Blumberg v. USAA Casualty Insurance Company, 790 So.2d 1061 (Fla. 2001)[26 Fla. L. Weekly S473a], where Supreme Court Justice Pariente stated:
Moreover, if the insurer puts the insured on notice that it will no longer pay benefits, this constitutes an anticipatory repudiation, giving rise to a cause of action for breach of contract and commencing the running of the statute of limitations. See Peachtree Cas. Ins. Co. v. Walden, 759 So.2d 7, 8 (Fla. 5th DCA 2000) [25 Fla. L. Weekly D555d].
Id. at 1069.
In State Farm Mutual Automobile Insurance Co. v. Gueimunde, 823 So.2d 141 (Fla. 3d DCA 2002) [27 Fla. L. Weekly D1188a], the 3d DCA held:
In this letter State Farm says in substance that the Plaintiff did not have a tear to the meniscus and did not need any surgery. We would have a different case if the State Farm letter indicated that the Plaintiff should have surgery and then submit the surgeon’s report and bills. In that case, there might be an argument that the Plaintiff had acted prematurely in bringing the lawsuit. But instead, the December 1998 letter indicated that State Farm simply was not going to make any additional payment for further orthopedic work on the knee. Under the circumstances present here, the Plaintiff was entitled to bring suit when he did. See Peachtree Cas. Ins. Co. v. Walden, 759 So.2d 7, 8 (Fla. 5th DCA 2000)[25 Fla. L. Weekly D555d]. (When an insurer, which had 30 days to pay the bills submitted by the insured, informed the insured it would not pay for further treatment, the insurer was not required to “see if insurer was only kidding” by waiting until the expiration of the 30 days before bringing action).
Id. at 144.
Defendant attempts to rely on the case of Bond v. State Farm Automobile Insurance Company, 15 Fla. L. Weekly Supp. 820a (Duval Cty. Ct. 2008), to support its argument. Defendant’s reliance is in error and a review of the facts and law of Bond in its motion reveals that Bond claimed that it had no obligation to provide a statutory demand letter at all which is not what occurred in this case as the demand letter was timely sent after the claim was overdue.
The Defendant also attempts to rely upon the case of EBM Internal Medicine a/a/o Bernadette Dorelian v. State Farm Mutual Automobile Insurance Company, 19 Fla. L. Weekly Supp. 410a (Duval Cty. Ct. 2012), for the proposition that the full 30 days has to transpire before a lawsuit may be filed. The Court in that case stated “or if it chooses to stay on its original decision as listed in its Explanation of Benefits.” In this case, the adjuster wrote “we will not consider providing any payment on this bill. Since we are not considering any additional payment on the medical bill. .. .” The adjuster could have chosen to wait until the 30th day to send the letter but the message was still the same. No further payment was forthcoming and none was made before or after the filing of the lawsuit.
The Defendant further attempts to support its case with Menendez v. Progressive Express Insurance Company, 35 So. 3d 873, n.6 (Fla. 2010) [35 Fla. L. Weekly S81a]. This case went to the Florida Supreme Court but was decided on whether the 2001 statutory changes were procedural or substantive. Footnote 6 upon which the Defendant relies states in pertinent part:
The 2001 amendment to the statute allowed an additional seven days after receipt of the notice of intent to litigate for the insurer to pay the claim. Under the current version of the statute, an insurer has an additional thirty days to pay a claim after receiving the notice of intent to litigate. § 627.736(10)(d), Fla. Stat. (2009). Both the 2001 and the current version of the statute state that the notice of intent to litigate may not be sent until the claim for benefits is overdue. § 627.736(11)(a), Fla. Stat. (2001); § 627.736(10)(a), Fla. Stat. (2009).
The footnote states that the insurer has 30 days to pay the overdue claim but the opinion does not overturn or call into question the Peachtree case or its progeny despite being decided in 2010. Again, the statute states that the insurer has 30 days to pay the overdue claim and it is undisputed that no payment was made within the 30 day period.
ANALYSIS AND CONCLUSION
This Court does not question that Peachtree is controlling on this Court but the issue is whether it still applies in the face of the current language of Section 627.736(10)(d). This Court is of the opinion that Peachtree is still controlling in this factual situation even with the language under Section 627.736(10)(d). Based on the binding precedent of the 5th DCA in Peachtree, once the defendant made a definitive repudiation of any further payment under the contract, the insurer has waived its right to claim that it continued to have time to reconsider its own decision and as stated by the 5th DCA to see “if the insurer was only kidding.” This Court holds that that the 30 days allowed for an insurer to pay an overdue claim is a ceiling but not a floor. The insurer can choose to use all 30 days allotted to it as it sees fit but once it decides not to pay the overdue claim it waives any right to claim that the additional time is still available to it especially in this case where the insurer did not make payment within the 30 days.
This Court also takes note of the 5th DCA’s concern in that Peachtree that: “If actual breach is a prerequisite to a cause of action then the unintended result may be that some insurance companies will cancel benefit payments to their PIP insured and only resume making payments to those who question the denial.” The demand letter is meant to afford the insurer a second opportunity to reconsider its denial of an overdue claim. The insurer already said no to payment once in its Explanation of Review and after being given a second chance after receiving the demand letter it waives its right to assert that it is entitled to the full 30 days after stating in writing that no further payment will be made especially when it made no attempt to pay during the 30 days and stood on its denial.
As a result, as of September 18, 2014, the Defendant had already breached its agreement to provide any further PIP benefits to the Plaintiff in this case and waived its right to assert that the insured could not rely on the written response to the demand letter that no further payment would be forthcoming.
The Defendant has made no showing that the Defendant has in any way retreated from the position of refusing payment for the bill at issue in this litigation and made no payment within the 30 days following receipt of the statutory demand letter.
IT IS HEREBY ORDERED and ADJUDGED that
1. Plaintiff’s Motion For Summary Judgment As To Defendant’s 1st Affirmative Defense (certificate date July 29, 2015) is hereby GRANTED.
2. Defendant’s Motion For Final Summary Judgment (certificate date April 15, 2015) is hereby DENIED.
