23 Fla. L. Weekly Supp. 629a
Online Reference: FLWSUPP 2306LIBEInsurance — Personal injury protection — Discovery — Failure to comply — Sanctions — Where insurer has deliberately failed to comply with multiple orders requiring production of geozip information, and failure has prejudiced medical provider in its attempts to obtain discoverable evidence and prosecute action, insurer’s pleadings are stricken and default judgment is entered — Insurer’s claim that third-party is entitled to trade-secret privilege or confidentiality over insurer’s own information is frivolous
HEALTH DIAGNOSTICS OF FORT LAUDERDALE, LLC, d/b/a STAND-UP MRI OF FORT LAUDERDALE, a/a/o Amichelot Liberal, Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. CONO13-009975(70). November 5, 2015. Honorable John D. Fry, Judge. Counsel: Andrew J. Weinstein, Weinstein Law Firm, Coral Springs, for Plaintiff. Kathryn Winkler, Kirwan, Spellacy & Danner, Fort Lauderdale, for Defendant.
ORDER ON PLAINTIFF’S MOTION FOR CONTEMPTOR TO STRIKE DEFENDANT’S PLEADINGS
THIS CAUSE having come to be considered on October 13, 2015 on Plaintiff’s Motion for Contempt or to Strike Defendant’s Pleadings, and the Court having heard argument from counsel, having reviewed the Court file, and being otherwise advised in the Premises, it is hereupon ORDERED AND ADJUDGED as follows:FINDINGS OF FACT
1. The above-captioned matter arises out of a claim for unpaid personal injury protection benefits filed by the Plaintiff.
2. On or about June 9, 2015, Plaintiff propounded its second request to produce to Defendant seeking “geozip” information.
3. Pursuant to paragraph 3 of the Court’s Order on Case Management and Imposing Time Limitations, entered on April 24, 2015, the Defendant had 20 days (i.e., until June 29, 2015) to file and serve objections to the Plaintiff’s second request to produce (and notice the objections for hearing). Defendant failed to comply.
4. On July 08, 2015, this Court entered the first order requiring the Defendant to “produce GeoZips for CPT code(s) at issue in this case for the county where the service was rendered for 60 days before and 60 days after the date(s) of service at issue in this case on or before July 20, 2015.” Defendant failed to comply.
5. Additionally, the Court required the Defendant to “produce all recommended reimbursements equal to or higher than 80% of the Plaintiff’s total charge that Defendant has previously paid the Plaintiff and other MRI providers (including hospitals) for the county where the services were rendered and for the same CPT code(s) at issue in this case for 60 days before and 60 days after the date(s) of service at issue in this case on or before July 20, 2015.” Defendant failed to comply.
6. On July 10, 2015, Plaintiff made an additional request, in its notice of taking deposition duces tecum, that the “geozip” information be provided at deposition, which was scheduled to occur on July 21, 2015. Defendant failed to comply.
7. Despite this Court already ordering the Defendant to produce the “geozip” information, Defendant, on July 14, 2015, attempted to avoid compliance with the Court’s order by filing objections to Plaintiff’s second request to produce.
8. On July 14, 2015, this Court entered an order overruling Defendant’s objections to produce the “geozip” information for the deposition. Defendant failed to comply.
9. Defendant then filed an “emergency” motion for protective order regarding the Court’s previous order requiring the Defendant to produce the “geozip” information.
10. On July 17, 2015, the Court heard argument on Defendant’s “emergency” motion and, treating the motion as a motion for reconsideration, overruled Defendant’s objections again.
11. Defendant ultimately produced the court-ordered information to its counsel, but instructed that it not be produced to Plaintiff.
12. On July 20, 2015 — the deadline for Defendant to produce the information — the parties contacted the Court during the deposition of the Defendant’s corporate representative and the Court held an impromptu telephonic hearing where the following conversation took place1:
THE COURT: Ms. Winkler, you’re literally on a ledge. You’ve got a decision to make. [Are] [y]ou going to produce it or are you not going to produce it?
MS. WINKLER: I have been directed by my client that if there is not a confidentiality agreement, we cannot produce it, and I would like to lay just a little bit of a record to support that, as I anticipate that this will likely be appealed in some way, shape, or form.
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THE COURT: . . . Ms. Winkler, you would confirm your client has instructed you not to comply with my court order as written, correct?
MS. WINKLER: Correct.
13. As of the date of the hearing, 126 days have passed since the initial request and Defendant has neither sought appellate review nor has it produced the geozip information per this Court’s multiple orders requiring its production.
14. The production of geozips and there use in PIP litigation is not a novel concept for this Court or the litigants. In fact, this Court has ordered State Farm to produce geozips in other cases at least 250 times and has never had an appellate court find that this Court’s ruling was improper.ANALYSIS AND CONCLUSIONS OF LAW
1. At the hearing, the Court asked Defendant, through its counsel, if it wanted an opportunity to have someone present for purposes of conducting an evidentiary hearing, but Defendant chose not to.
2. As such, the Court begins its analysis by pointing out that Defendant, through its counsel, concedes to the fact that multiple orders were issued requiring the production of geozip information, that the Defendant received those orders, and that Defendant failed to comply with each and every one of them.
3. If the Defendant disagreed with any of the Court’s numerous orders, it had two viable options: (1) comply with the orders; or (2) file an appeal. Choosing to do nothing was not an option.
4. As a result of State Farm’s repeated noncompliance, Plaintiff seeks two forms of relief in its motion: (1) that State Farm be held in criminal contempt; or (2) that State Farm’s pleadings be stricken and a default judgment be entered.
5. The Court is not willing to go proceed with a Criminal Contempt at this time and instead looks to the Florida Rules of Civil Procedure for a lesser remedy.
6. Specifically, Rule 1.380(d) of the Florida Rules of Civil Procedure provides, in pertinent part, as follows:
If a party or an officer, director, or managing agent of a party or a person designated under rule 1.310(b)(6) . . . fails (3) to serve a written response to a request for inspection submitted under rule 1.350 after proper service of the request, the court in which the action is pending may take any action authorized under paragraphs (A), (B), and (C) of subdivision (b)(2) of this rule.
7. Additionally, Rule 1.380(b)(2) of the Florida Rules of Civil Procedure provides as follows:
If a party or an officer, director, or managing agent of a party or a person designated under rule 1.310(b)(6) or 1.320(a) to testify on behalf of a party fails to obey an order to provide or permit discovery, including an order made under subdivision (a) of this rule or rule 1.360, the court in which the action is pending may make any of the following orders:
(A) An order that the matters regarding which the questions were asked or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order.
(B) An order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting that party from introducing designated matters in evidence.
(C) An order striking out pleadings or parts of them or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part of it, or rendering a judgment by default against the disobedient party.
(D) Instead of any of the foregoing orders or in addition to them, an order treating as a contempt of court the failure to obey any orders except an order to submit to an examination made pursuant to rule 1.360(a)(1)(B) or subdivision (a)(2) of this rule.
(E) When a party has failed to comply with an order under rule 1.360(a)(1)(B) requiring that party to produce another for examination, the orders listed in paragraphs (A), (B), and (C) of this subdivision, unless the party failing to comply shows the inability to produce the person for examination.
Instead of any of the foregoing orders or in addition to them, the court shall require the party failing to obey the order to pay the reasonable expenses caused by the failure, which may include attorneys’ fees, unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust.
8. When this Court enters an order, it expects that the order will resolve the issue and that the parties will comply, but that was not the case here. The fact that State Farm not only failed to comply with multiple court orders, but also instructed its attorneys not to comply, without good cause certainly warrants the imposition of appropriate sanctions.
9. After giving State Farm multiple opportunities to comply, the Court specifically finds that State Farm’s violation of the Court’s orders was willful, deliberate, and contumacious.
10. The Court further finds that State Farm’s bad-faith conduct is so egregious that the remedy of having its pleadings stricken and default judgment entered is appropriate under these facts.
11. In determining whether the sanction of the entry of a default against Defendant is warranted, the Court is mindful of the six-prong test delineated in Kozel v. Ostendorf, 629 So. 2d 817 (Fla. 1994); see also, Ham v. Dunmire, 891 So. 2d 492 (Fla. 2004) [30 Fla. L. Weekly S6a] and Mercer v. Raine, 443 So. 2d 944 (Fla. 1983):
a. Whether the attorney’s conduct was willful, deliberate, or contumacious, rather than an act of neglect or inexperience;
b. Whether the attorney has been previously sanctioned;
c. Whether the client was personally involved in the act of disobedience;
d. Whether the delay prejudiced the opposing party through undo expense, loss of evidence or some other fashion;
e. Whether the attorney offered reasonable justification for noncompliance; and
f. Whether the delay created significant problems of judicial administration.
12. Although the Court specifically finds that defense counsel has not deliberately disobeyed this Court’s orders, the same cannot be said for the Defendant.
13. This Court is aware of at least 77 cases in its division involving the same Plaintiff and Defendant. Out of those 77 cases, this Court has ordered the production of geozip information in approximately 46 of those cases and State Farm has failed to comply with 42 of those orders.
14. The Court points this out to demonstrate that State Farm’s repeated violations of orders in the case at bar are not just mere isolated incidents, but instead are becoming the norm in this division, which clearly demonstrates State Farm’s willful, deliberate, or contumacious disregard for the Court’s authority and the Rules of Civil Procedure.
15. The Court finds that State Farm was personally involved in the act of disobedience in this case since it was in possession of the Court-ordered information, but specifically instructed its counsel not to comply with the Court’s order.
16. The Court finds that State Farm’s willful failure to abide by this Court’s orders and the Rules of Civil Procedure has prejudiced the Plaintiff in its attempt to obtain discoverable evidence and to prosecute this matter and bring it to a conclusion.
17. The Court finds that Defendant failed to offer a reasonable justification for its repeated noncompliance with Court orders, and acknowledged that they had in their possession the “GeoZip”, and refused to turn over the document fully understanding they were ordered to do so.
18. In fact, as recent as the eve of the hearing on Plaintiff’s motion, Defendant took the position that the information was not State Farm’s, but was instead owned by Mitchell Medical who was instructing State Farm not to disclose its confidential and proprietary information.
19. The Court finds that Defendant’s position with regard to Mitchell Medical is frivolous.
20. The Court is aware of the deposition transcript of Miriam Encarnacion, a corporate representative of Mitchell Medical. Ms. Encarnacion testified explicitly that she had the knowledge to respond on behalf of Mitchell Medical regarding these important issues (Deposition of Miriam Encarnacion, 7/17/13, p. 8). When asked about a specific Geozip document that had been attached to the subpoena duces tecum, the provider’s counsel asked:
Q. [By the provider’s counsel]: Ok. And can you tell me what was required from a technical standpoint? How difficult was it for Mitchell to prepare a report that provided this information in this format?
A. [By Ms. Encarnacion]: Well, the request came in from State Farm, and they provide the criteria as to the date that needs to be extracted in the content of the report that needs to be sent back with that request. So as far as difficulty in extracting this data, I would say they probably took probably no more than two hours (Deposition of Miriam Encarnacion, 7/17/13, pp. 10-11).
21. The transcript itself is replete with questions and answers showing that Ms. Encarnacion agrees that every relevant piece of data on the Mitchell Medical report was supplied to it by State Farm (Deposition of Miriam Encarnacion, 7/17/13, pp. 14; 16-17; 19).
Q. Ma’am, in the charged amount column, those pieces of information, those dollar amounts, under what circumstances were the dollar amounts contained under the charged amount, be different from the amounts that were on the CMS-1500 form that was provided by the medical provider to State Farm?
A. I — I wouldn’t know that answer. I don’t know that answer.
Q. It should not be; right? Because all Mitchell was doing was taking the electronic information from State Farm and putting it into that report.
A. Yes.
Q. I mean, is that right?
A. That’s correct.
Q. Ok. So for whatever reason there was some type of difference, that was nothing more than an error; is that right?
A. I would believe so, yes.
Q. And that would be true of the information contained in the provider group column; is that right?
A. Correct.
Q. And the procedure code column?
A. Correct.
Q. And the date of service column?
A. Correct.
Q. Ok. The information that’s contained on this particular report, is there any limitation to what type of parameters that Mitchell can have a report created for? And what I’m asking you is, do you have the — do you have the ability to pull a report solely by CPT code and geographic area?
A. Yes.
Q. And you would have the ability to limit a report to certain time frames, like a six-month time frame?
A. Again, that would be up to what the customer is requesting.
(Deposition of Miriam Encarnacion, 7/17/13, pp. 22-23).
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Q. And is Mitchell providing State Farm with any type of recommendations regarding what a reasonable reimbursement rate would be for a particular CPT code in Florida?
A. No, we do not.
Q. So that is not a service that Mitchell provides to State Farm; is that correct?
A. That’s correct.
Q. And does Mitchell simply follow the instructions or, I guess, the — or comply with the contractual obligation between it and State Farm and providing State Farm with this automated service?
A. That’s correct.
Q. And it’s State Farm who has decided what the reimbursement calculation will be for Florida no-fault claims.
A. That’s correct.
(Deposition of Miriam Encarnacion, 7/17/13, p. 28).
22. State Farm’s claim that Mitchell Medical is entitled to some type of trade-secret privilege or confidentiality over what is clearly and unequivocally State Farm’s own information is incorrect and frivilous.
23. Moving on to the next Kozel factor, State Farm’s conduct created a significant problem of judicial administration.
24. Among other things, State Farm’s conduct has resulted in significant delay, the unnecessary use of judicial resources, and has caused the Court to cancel the previously scheduled hearing on Plaintiff’s Motion for Summary Disposition.2
25. As such, the Court finds that Defendant has clearly engaged in a pattern designed to thwart discovery evincing a continuous pattern of willful, deliberate, and contumacious disregard of the Florida Rules of Civil Procedure and the Court’s several orders concerning its obligation to produce this information. As such, Plaintiff’s motion is granted and State Farm’s pleadings are stricken and default judgment is entered. Plaintiff is directed to submit a final judgment in its favor.
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1See Hearing Transcript Page 6, lines 8-13 and Page 9, lines 16-19.
2The Court has had to cancel a total of 19 previously scheduled hearings on Plaintiff’s Motion for Summary Disposition on various cases because of State Farm’s noncompliance with orders.
