23 Fla. L. Weekly Supp. 117a
Online Reference: FLWSUPP 2302ARNOInsurance — Personal injury protection — Insurer has waived defense asserting that insured’s claim is governed by Texas law rather than Florida law by insisting on satisfaction of demand letter requirement of Florida PIP statute — Demand letter — Sufficiency — Demand letter is not deficient for failing to delineate CPT codes — Insured was not required to attach re-assignment of benefits to demand letter — Standing — Where insured made unqualified assignments of PIP benefits to medical providers, she is without standing to initiate action against insurer for those benefits — Demand letter from insured that lists charges that add up to more than amount demanded, includes charges for which insured has assigned benefits to medical providers, and does not indicate which assigned charges remain unpaid is invalid
KAREN H. ARNOLD, Plaintiff, vs. USAA CASUALTY INSURANCE COMPANY, Defendant. Circuit Court, 1st Judicial Circuit in and for Escambia County. Case No. 2013 CA 002379, Division “E”. June 8, 2015. T. Michael Jones, Judge.ORDER
THIS CAUSE came on for consideration of the Defendant’s Amended Motion for Summary Judgment and USAA’s Motion for Summary Judgment Based on Invalid Pre-suit Demand Letter filed by the defendant, USAA CASUALTY INSURANCE COMPANY (“USAA”). The Plaintiff, Karen H. Arnold, (“Arnold”), and USAA appeared through counsel. Upon consideration of the record and the pleadings in this cause and the memorandum and arguments of counsel, this Court makes the following findings of fact and conclusions of law:
1. In Arnold’s Amended Complaint filed March 24, 2014, she asserted that on or about July 8, 2012, she was injured in an automobile collision in Escambia County, Florida which caused her to sustain serious personal injuries, various medical expenses, as well as lost earnings and earning capacity; that at the time she was insured by USAA for personal injury protection and medical payment benefits under a policy of insurance that had been in force and effect since before July 8, 2012; that she applied for personal injury protection benefits and medical payment benefits for payment of medical bills pursuant to the policy provisions; that USAA wrongfully refused to pay benefits or has failed to timely provide said benefits; and that, alternatively, she furnished USAA with timely notice of the accident and proof of her claim and otherwise performed all conditions precedent to entitle her to recovery under the policy or USAA waived the conditions precedent but has refused to pay her the policy benefits due her.
2. USAA filed Defendant’s Answer and Affirmative Defenses in which it “[a]dmitted that [USAA] received medical billing that indicated [Arnold] was injured in an automobile accident on or about July 8, 2012,” and “[a]dmitted that policy was in force at all relevant times,” but additionally stated, “[USAA] refused to pay for medical services that were not related to the alleged accident, were not necessitated by the alleged accident, nor reasonable to treat injuries allegedly suffered in the alleged accident.” USAA asserted, in its firstof thirteen affirmative defenses, that the policy of insurance at issue was written for the State of Texas, the parties bargained for a Texas policy, and therefore must be construed in compliance with the laws of the State of Texas. In its second affirmative defense USAA averred that Arnold lacks a cause of action because she is not damaged, since she had assigned the rights to the benefits to the service providers in exchange for the services, and, therefore, she has no right to the benefits. In its seventhaffirmative defense USAA stated that Arnold failed to satisfy the conditions precedent to bringing suit on the policy in that she failed to comply with the pre-suit notice provisions of Florida Statute §627.736 which require that the insured specifically identify the amounts claimed to be overdue by date of service. In the eighth affirmative defense, USAA asserted that Arnold had assigned her right to receive insurance benefits but failed to attach any revocation of benefits or assignment of benefits executed by the service providers in favor of Arnold to demonstrate that Arnold is entitled to maintain the action as required by Florida Statute §627.736(10). In the tenthaffirmative defense, USAA asserted that it timely paid all properly submitted claims that it determined were required to identify or treat injuries caused by the alleged accident of July 8, 2012. In its eleventh affirmative defense, USAA asserted Arnold lacked standing to pursue this action, because she assigned the right to pursue any actions for recovery to the medical service providers in return for the medical services rendered to her.
3. In USAA’s Amended Motion for Summary Judgment Based on Invalid Pre-suit Demand Letter, USAA asserted Arnold failed to satisfy the pre-suit notice requirements of Florida Statutes §627.736(10). The statute requires the insured to provide notice to the insurer of the amount alleged to be due and owing to the insured prior to filing suit. As a result of Arnold’s alleged noncompliance with the statute, USAA claims it was denied its statutory right to reconsider Arnold’s claim before suit was filed. Specifically, USAA claims Arnold’s pre-suit demand letter is invalid because Arnold claims that benefits of $19,408.26 are overdue but fails to delineate the specific breakdown of the amounts alleged due and owing. Further, USAA claims that payments for benefits are not due Arnold because Arnold assigned those benefits to the medical service providers. USAA concludes that including such assigned benefits in the demanded amount results in an invalid pre-suit demand letter, one not in accordance with the requirements of Florida Statute §627.736(10).
4. In Defendant’s Amended Motion for Summary Judgment, USAA asserts that Arnold assigned her right to the subject policy of insurance and that she claims standing based on an alleged re-assignment of benefits, yet Arnold has not provided any such re-assignment. Therefore, USAA concludes Arnold does not have any standing to bring this claim. Additionally, USAA contends Arnold’s claim fails to satisfy the pre-suit notice requirement imposed by Florida Statute section 627.736(10) as a prerequisite to filing suit, in that Arnold’s pre-suit demand letter was served upon USAA without attaching or providing proof of the valid re-assignment of benefits which USAA claims are required by the statute.
5. USAA served upon Arnold Defendant’s First Request for Admissions to Plaintiff on August 12, 2014. In Arnold’s response to this request for admission, she made the following admissions relevant to the motions for summary judgment: (a) that Arnold is seeking benefits under a policy of insurance issued in Texas and (b) that Arnold’s policy was not issued in the State of Florida.
6. USAA served upon Arnold Defendant’s Second Request for Admissions to Plaintiff on September 26, 2012. Arnold failed to file or serve any response to the Defendant’s Second Request for Admissions prior to the hearing on USAA’s motions for summary judgment. Thus, pursuant to Rule 1.370(a), Fla. R. Civ. P., the Second Request for Admissions were deemed admitted at the time of the summary judgment hearing. The matters deemed admitted by this failure to respond to the Second Request for Admissions and which are relevant to the motions for summary judgment are:
a. “That attached assignments in favor of Escambia County, Sacred Heart Hospital, and Pensacola MRI, are true and accurate copies of the assignments executed by Plaintiff in this matter. Please see said assignments attached as Exhibit A.1”
b. “That the attached Demand Letter is a true and accurate copy of the Demand Letter sent by Plaintiff to Defendant to satisfy the requirements of Fla. Stat. 627.736(10). Please see Plaintiff’s letter of January 9, 2014 attached as Exhibit B.”
c. “That Plaintiff’s claim in this matter is that the Defendant breached the requirements of Fla. Stat. 627.736 when Defendant refused to pay the benefits Plaintiff alleges are overdue in this matter.”
d. “That Plaintiff is only demanding payment for the dates of service alleged overdue in the Demand Letter.”
Any matter so admitted is conclusively established unless the court on motion permits withdrawal or amendment to the admission. See Rule 1.370(b), Fla. R. Civ. P. Four days after the summary judgment hearing, Arnold filed Plaintiff’s Motion for Leave to file a Late Response to Defendant’s Second Request for Admissions. No hearing has been scheduled for this motion.
7. USAA relied upon these admissions in support of USAA’s Amended Motion for Summary Judgment Based on Invalid Pre-Suit Demand Letter, in that it referenced, in the motion’s “Statement of Undisputed Facts,” Arnold’s January 9, 2014 Demand Letter and the purported assignment in favor of Sacred Heart Hospital. The Sacred Heart Hospital document is entitled “Consent for Service and Treatment,” bears Arnold’s signature, is dated 07/26/2012, and states, in paragraph B, the following:
ASSIGNMENT OF INSURANCE BENEFITS: I assign payment of all insurance benefits, basic and major medical for this period of hospitalization, Emergency Room treatment or outpatient services to be made directly to Sacred Heart Health System, my admitting physician, consulting physician(s), and to hospital-based physicians, such as Radiologists, Pathologists, Cardiologists, Anesthesiologists, and Emergency Department Physicians. I hereby irrevocably and fully assign my insurance benefits to Hospital to submit any and all appeals, requests for benefit information/determination, and initiate formal complaints on my behalf.
8. The document from Pensacola Open MRI is entitled “MVA Assignment of Benefits,” bears Arnold’s signature, is dated 08/23/2012, and states the following:
The undersigned patient does hereby assign to Pensacola Open MRI (“Provider”) the right, title, and interest in receiving personal injury protection benefits from my automobile insurance policy in payment for medical treatment rendered to me as a result of my accident on 7-8-12. Provider has my permission and consent to bill my insurance company directly for all such services and to receive payment directly from my insurance company.
I understand that I remain fully responsible for payment to Provider for all expenses incurred for medical and diagnostic treatment, regardless of payment, partial payment or denial of payment by my insurance company. Should my insurance company deny payment, I agree to make such payment arrangements as Provider and I may agree upon.
9. USAA additionally relied upon the Affidavit of Valerie Torosian in Support of Defendant’s Motion for Summary Judgment which provided, in pertinent part:
a. Torosian is “corporate representative and adjuster on behalf of USAA Casualty Insurance Company assigned to Arnold’s claim.”
b. Torosian has “personal knowledge of the matters contained in the affidavit.”
c. “USAA insured Karen Arnold (‘Insured’) under the subject insurance policy.”
d. “The dates of service at issue are 07/26/2012 to 04/12/2013.”
e. “USAA received billing indicating that West Florida Medical Center was the provider and biller for Dr. Slobodian’s services.”**
f. “USAA received billing indicating that Sacred Heart Medical Group was the provider and biller for Dr. Martin’s services. Please see a true and accurate copy of a bill received from Dr. Martin and the Explanation of Reimbursements attached as Composite Exhibit B.”**
g. “USAA paid the bill for the MRI billed on 02/11/2013 by Florida Diagnostic Imaging, provided by Dr. Kraut. Please see a true and accurate copy of adjustment attached as Exhibit C.”**
h. “USAA received billing indicating that Sacred Heart Medical Group was the billing provider for Dr. Turnage. Please see a true and accurate copy of Adjustment attached as Exhibit D.”* *
i. “USAA received billing indicating that Sacred Heart Medical Group was the billing provider for James Adair. Please see a true and accurate copy of Document request attached as Exhibit E.”**
j. “USAA received an assignment of benefits for services provided by Sacred Heart Medical Group to Plaintiff in this matter. Please see a true and accurate copy of the assignment received from Sacred Heart Health System attached as Exhibit F.” [This is the same document admitted as a true and correct document in Defendant’s Second Request for Admissions to Plaintiff, and, thus, may be considered by the court for purposes of ruling on the motions for summary judgment.]
**These averments rely upon hearsay or unauthenticated documents and, therefore, cannot be considered by the court for purposes of ruling on the motions for summary judgment. See Humphrys v. Jarrel, 104 So. 2d 404 (Fla. 2d DCA1959); Ham v. Heintzelman’s Ford, Inc., 256 So. 2d 264 (Fla. 4th DCA1971); Jackson v. Stelco Employees’ Credit Union, Limited, 178 So. 2d 58 (2d DCA 1965).
10. In opposition to the motions for summary judgment, Arnold submitted the Affidavit of Karen Arnold, the insured/plaintiff. In it she averred:
a. “At the time of filing the presuit demand (Exhibit A) on January 9, 2014, and filing the complaint (Exhibit B) on March 24, 2014, the following medical bills stemming from my July 8, 2012 accident were unpaid:2
| Provider | Date of Service | Charges | Treatment |
| Dr. David Martin | 7/26/2012 | $243.00 | Continued pain status post MVA |
| Dr. Slobodian | 8/24/2012 | $1,289.00 | Follow up re: injuries from MVA |
| Baptist Hospital | 8/29/2012 | $291.00 | Pre-op labs for surgery clearance—rotator cuff |
| Dr. Pesce | 10/5/2012 | $1,132.19 | Lab work |
| Dr. Kirby Turnage | 10/17/2012 | $8,494.00 | Surgery—R rotator cuff |
| Dr. Kirby Turnage | 10/17/2012 | $238.00 | Pre-op re: rotator cuff surgery |
| James Adair, PA | 10/17/2012 | $1,359.04 | PA fee re: assist w/shoulder surgery |
| Sacred Heart Hospital | 10/26/2012 | $131.00 | Post-op PT |
| Sacred Heart Hospital | 11/8/2012 | $261.00 | Post-op PT |
| Sacred Heart Hospital | 11/15/2012 | $196.00 | Post-op PT |
| Sacred Heart Hospital | 11/21/2012 | $196.00 | Post-op PT |
| Sacred Heart Hospital | 11/27/2012 | $196.00 | Post-op PT |
| Sacred Heart Hospital | 12/20/2012 | $196.00 | Post-op PT |
| Sacred Heart Hospital | 12/27/2012 | $196.00 | Post-op PT |
| Sacred Heart Hospital | 1/9/2013 | $261.00 | Post-op PT & PT re-eval |
| Sacred Heart Hospital | 1/22/2013 | $261.00 | Post-op PT |
| Sacred Heart Hospital | 1/24/2013 | $261.00 | Post-op PT |
| Sacred Heart Hospital | 2/1/2013 | $196.00 | Post-op PT |
| Sacred Heart Hospital | 2/5/2013 | $196.00 | Post-op PT |
| Kraut | 2/11/2013 | $1,840.00 | MRI—lumbar spine |
| Sacred Heart Hospital | 2/12/2013 | $196.00 | Post-op PT |
| Dr. Kirby Turnage | 2/18/2013 | $220.03 | Follow up re: rotator cuff & CTS |
| Dr. Slobodian | 4/12/2013 | $109.00 | Follow up: ongoing lumbar & upper extremity pain |
| Sacred Heart Hospital | 10/17-18/12 | $15,019.10 | Shoulder Surgery |
| TOTAL | $19,408.26 |
b. “I have received demands for payments of all or some of the Unpaid Bills by the above identified Health Providers.”**
c. “The Health Providers of the Unpaid Bills have never informed me or sent me credit [sic] that the Unpaid Bills have been partially or fully satisfied and credited to my account.”
d. “My understanding of the assignment attached to the Affidavit of Valerie Torosian is any collection by my Health Providers of the Unpaid Bills will be a credit on my behalf and to my account, but I still remain responsible to pay such bills and may pursue litigation against any applicable insurer if I choose.”**
e. “I have lost wages and will continue to do so due to the injuries I sustained in the MVA which is the subject of this Complaint.”
f. “I am unaware of any notice by Sacred Heart [sic] or any others that they were assigned the rights to payment of any Unpaid Bills by any of the Health Providers.”
g. “Within about two weeks of moving from Texas into an apartment in Florida, I got into the motor vehicle accident.”
**These averments rely upon hearsay or unauthenticated documents, or contain conclusions of law, and, therefore, cannot be considered by the court for purposes of ruling on the motions for summary judgment. See Humphrys v. Jarrel, 104 So. 2d 404 (Fla. 2d DCA1959); Ham v. Heintzelman’s Ford, Inc., 256 So. 2d 264 (Fla. 4th DCA1971); Jackson v. Stelco Employees’ Credit Union, Limited, 178 So. 2d 58 (2d DCA 1965); Halavin v. Tamiami Trail Tours, Inc., 124 So. 2d 746 (Fla. lst DCA 1960).
11. The parties agree that Arnold’s attorneys sent USAA a Demand Letter on January 9, 2014, which letter was the subject of request #2 in Defendant’s Second Request for Admissions to Plaintiff. The parties dispute whether the letter satisfied the pre-suit Demand Letter requirements of Fla. Stat. §627.736(10), which states, in pertinent part:
(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 he 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).
(b) The notice must state that it is a “demand letter under s. 627.736” and state with specificity:
1. The name of the insured upon which such benefits are being sought, including a copy of the assignment giving rights to the claimant if the claimant is not the insured.
2. The claim number or policy number upon which such claim was originally submitted to the insurer.
3. To the extent applicable, the name of any medical provider who rendered to an insured the treatment, services, accommodations, or supplies that form the basis of such claim; and an itemized statement specifying each exact amount, the date of treatment, service, or accommodation, and the type of benefit claimed to be due. A completed form satisfying the requirements of paragraph (5)(d) or the lost-wage statement previously submitted may be used as the itemized statement. (emphasis supplied.)
12. Arnold’s January 9, 2014, Demand Letter stated:
This is a demand letter under §627.736, Florida Statutes. By reference to §627.736(10), please note:
(b) 1. Name of insured: Karen Arnold
2. Claim No.: 007406802-13: Policy No.: 007406802-7102
3. Itemized statement of medical providers who provided treatment, and amounts due:
[Here was listed the information reproduced in paragraph 10, above.]
(c) Postal costs to be reimbursed: $8.00 (estimated)
(d) Interest is claimed at the rate of 4.75% per annum, plus a penalty of 10% of the overdue amount.
Ms. Arnold demands USAA pay the charges listed above within 30 days. If you have any questions about the bills at issue, please compare the attached ledger3 to your explanation of benefits and please note we dispute each and every reduction and nonpayment. We also dispute your finding that no further medical treatment, diagnostic testing or rehabilitation therapy would be reasonable, medically necessary or causally related to Ms. Arnold’s July 8, 2012 automobile accident.
If you still have questions or need additional documentation, please let us know. If you respond to this demand letter, we will assume this demand letter is acceptable. We are relying on you to tell us if this demand letter or this pre-suit notice is defective in any way before suit is filed.
13. USAA’s representative responded to the Demand Letter by correspondence dated January 30, 2014, which stated, in pertinent part:
Please note that this file is not governed by Florida Law but instead by Texas Personal Injury Protection. Therefore, you have no basis for a demand pursuant to the Florida Statute 627.736(10).
At this time, we are unable to process your correspondence as it fails to comply with Florida Statute 627.736(10).
We are unable to determine who you are representing. If you are representing the medical providers, there are no Assignments of Benefits included in your correspondence. If you are representing the patient, please advise us if you have a revocation of benefits from each provider. Also, if so, please forward same to us so that we may process your correspondence.
Your correspondence also does not comply with the Florida Statute 627.736(10) as it fails to specifically delineate CPT codes, dates and amounts that make up the amount of $19,408.26. Additionally, the documentation does not support this amount claimed.
This may or may not be the only issue specifically identified. (Emphasis supplied.)
14. While USAA’s initial response to Arnold’s Demand Letter first asserted she had “no basis for a demand pursuant to the Florida Statute 627.736(10) because her claim is not governed by Florida Law but instead by Texas Personal Injury Protection,” this issue appears to have been abandoned by the parties because it was not briefed, argued or promoted for the court’s determination at the summary judgment hearing. Additionally, USAA has waived this defense by virtue of its insistence upon the application of Fla. Stat. 627.736(10). Thus, this court will determine the remaining issues raised by the motions for summary judgment.
15. Another argument made by USAA in its response to Arnold’s Demand Letter was that the Demand Letter failed to “comply with the Florida Statute 627.736(10) as it fails to specifically delineate CPT codes, dates and amounts that make up the amount of $19,408.26.” The statute contains no such requirement that the insured/claimant “specifically delineate CPT codes.” While the statute requires the insured/claimant’s Demand Letter to state with specificity “. . .the name of any medical provider who rendered to an insured the treatment, services, accommodations, or supplies that form the basis of such claim; and an itemized statement specifying each exact amount, the date of treatment, service, or accommodation, and the type of benefit claimed to be due,” it contains no obligation that the insured/claimant know, use, or provide “CPT codes.”
16. In Defendant’s Amended Motion for Summary Judgment USAA asserts (a) Arnold assigned her right to the insurance benefits, (b) she claims standing based on an alleged reassignment of benefits, but (c) she has not provided any such re-assignment(s), and, therefore, (d) she does not have standing to bring this claim. USAA misreads the statute when it concludes that Arnold’s claim fails to satisfy the pre-suit notice requirement imposed by Florida Statute § 627.736(10) in that her pre-suit demand letter was served upon USAA without attaching copies of a valid re-assignment of benefits. The statute makes no demand upon the insured to furnish a re-assignment of benefits with the Demand Letter in order for the Demand Letter to be valid. Section 627.736(10)(b)(1) states, “The notice must state that it is a ‘demand letter under s.627.736‘ and state with specificity: 1. The name of the insured upon which such benefits are being sought, including a copy of the assignment giving rights to the claimant if the claimant is not the insured. (Emphasis supplied.)” Even though the failure to include any required re-assignment of benefits does not invalidate the Demand Letter, the issue of Arnold’s standing to bring this suit remains, if the record evidence reveals that she executed valid assignments of her rights to make a claim for benefits from USAA.
17. As noted previously, USAA’s Amended Motion for Summary Judgment Based on Invalid Demand Letter asserts two bases to support its entitlement to summary judgment:
1. Arnold’s “Demand Letter is invalid, because [Arnold] claims that benefits of $19408.26 [sic] are overdue, but fails to delineate the specific breakdown of the amounts alleged due, and owing.
2. Arnold demands payment for benefits that cannot be due to her because she assigned those benefits to the provider, and therefore the benefits are not due and owing to Arnold.
STANDING
18. The Fifth District Court of Appeal held that an assignment of benefits by an insured to a provider of medical services under a personal injury protection insurance policy under which the insured remains liable for any medical bills not paid by the insurer causes the insured to lose standing to maintain a direct action against the insurer. Oglesby v. State Farm Mutual Automobile Insurance Company, 781 So. 2d 469 (Fla. 5th DCA 2001) [26 Fla. L. Weekly D702a]. The appellate court in Oglesby stated:
“We do not find this to be a conditional or qualifying assignment. It is an unqualified assignment of medical benefits accepted on condition. This is a case, as is most often the case, in which the medical provider agrees to perform services based only on an unqualified assignment of medical benefits on the condition that the patient will be ultimately responsible for any medical bills either not covered by the policy or simply not paid by the insurer. If at some point the medical provider decides to forego a claim against the insurer and instead look to the insured, a condition precedent to such action should be the reassignment of the medical benefits under the insurance policy to the insured.”
Oglesby at 470 (medical provider showed no interest in pursuing the insured or insurer after almost four years).
19. As noted in Oglesby, “Only the insured or the medical provider ‘owns’ the cause of action against the insurer at any one time. And the one that owns the claim must bring the action if an action is to be brought.” Oglesby, at 470. See also Livingston v. State Farm Mutual Insurance Company, 774 So. 2d 716 (Fla. 2d DCA 2000) [25 Fla. L. Weekly D533c] (If an insured has assigned his right to receive PIP benefits to a health care provider, the insured has no standing to file a lawsuit to collect the assigned benefits.) United Automobile Insurance Company v. Otero, 39 So. 3d 563 (Fla. 3d DCA 2010) [35 Fla. L. Weekly D1091a](PIP insured did not have standing to sue insurer where insured made an unqualified assignment of his PIP insurance benefits to a medical provider and never obtained a reassignment of benefits or revocation of assignment from the provider.) The Third District Court of Appeal in Otero, supra, determined that the following language contained in the insured’s “assignment of benefits” constituted an unqualified assignment of his PIP insurance benefits to a medical provider:
“I hereby assign to Neurology Associates Group any and all rights and causes of action I may have under any insurance policy or collateral source agreement including but not limited to the above-referenced collateral source provider.
* * *
I as patient have agreed to remain personally liable for the amounts billed by the health care provider regardless of the amount paid by the insurance company unless ordered otherwise by a court of law.”
United Automobile Insurance Company v. Otero, at page 564.
Comparing the language in Oglesby and Otero above to that in Arnold’s “Consent for Service and Treatment” with Sacred Heart Health Systems and with the “MVA assignment of benefits” given to Pensacola Open MRI, it is clear that Arnold made unqualified assignments of her PIP insurance benefits to these medical providers. Thus, Arnold is without standing to initiate the current action against USAA regarding these benefits.
DEMAND LETTER
20. The PIP statute currently “requires an insured to provide a pre-suit notice of intent to initiate litigation and provides an insurer additional time to pay an overdue claim.” Menendez v. Progressive Express Insurance Company, Inc., 35 So. 3d 873, 878 (Fla. 2010) [35 Fla. L. Weekly S81a]. The statute was substantially amended in 2001 to provide “[a]n insured must now take additional steps beyond filing an application for PIP benefits and beyond complying with Section 627.727(4). This includes the preparation and provision of a written notice of intent to litigate which requires the inclusion of additional information that the insured may not have access to and which may not be sent until the claim is considered overdue under Section 627.727(4)(b). An insurer has additional time to meet its obligation under the statute, and an action for a claim of benefits and attorneys, fees cannot be initiated until the additional time for payment has expired. Thus, the Statute allows the insurer additional time to pay the claim and affects the insured’s right to sue and recover attorneys fees.” Menendez, at 880. “The statutory requirements surrounding a demand letter are significant, substantive preconditions to bringing a cause of action for PIP benefits.” MRI Associates of America v. State Farm Fire and Casualty Company, 61 So. 3d 462, 465 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D960b].
21. The language of subsection 627.736(10)(b)(3) requires precision in a demand letter by its requirement of an “itemized statement specifying each exact amount”; it also allows a subsection 627.736(5)(d) health insurance claim form to be “used as the itemized statement.” Thus, the statute requires the same precision in a subsection 627.736(5)(d) health insurance claim form as it does in a subsection 627.736(10)(b)(3) demand letter, although the reverse is not necessarily true.
22. The PIP demand letter statute directs that suit may not be initiated until a demand letter is sent. The letter may not be sent until the payment is overdue. The insured/claimant must include in the demand letter only those amounts for overdue benefits. MRI Associates of American LLC, supra, citing Fountain Imaging of West Palm Beach, LLC v. Progressive Express Insurance Company, 14 Fla. L. Weekly Supp. 614a (Palm Bch Cir. Ct. 2007). In the Fountain Imaging case the medical service provider had obtained an assignment of benefits and sent a demand letter for amounts in excess of the allowable amounts it could charge for its services. The provider then brought suit for the amount claimed in its demand letter, which was not an allowable amount, and, therefore, was not the amount “overdue”. As the appellate court noted, “Fountain Imaging should not be entitled to fees for litigating to compel payment of a claim 46% greater than the maximum amount it was entitled to. Instead, it should have claimed what it was owed, or, at a bare minimum, provided Progressive with the information it needed to compute the amount owed, and sued on only if that amount was not paid.” Id.
23. Arnold’s demand letter included a table (see Paragraph 10, above) listing medical service providers, dates of service, charges, and treatment and indicated the “total” of these charges was $19,408.26. In fact, the listed charges add up to $32,977.36. Additionally, a substantial portion of these charges include charges for medical treatment and services provided by Sacred Heart Hospital, for which the insured Arnold had assigned her benefits. It is also unclear from the information contained in the demand letter which of the benefits assigned to Sacred Heart Hospital remain unpaid or if any payments have been received. Likewise it is not discernible from the information contained in the demand letter whether the amounts owed to Pensacola Open MRI, which had been assigned to Pensacola Open MRI by the “MVA assignment of benefits” discussed above, have been paid or remain unpaid, since the only reference to these MRI services in the demand letter was the entry regarding “provider” Kraut on February 11, 2013, with a charge of $1,840 for “MRI-lumbar spine.” See Dr. David S. Muransky, PA v. State Farm Mutual Insurance Company, 15 Fla. L. Weekly Supp. 99a (17th Jud. Cir. Fla. Oct. 26, 2007)(trial court’s order striking insurer’s affirmative defense that the insured’s demand letter failed to satisfy the itemized statement requirement of Section 627.736 reversed).
24. The appellate court in Dr. David S. Muranski, PA, supra, concluded the demand letter was deficient where the medical service provider “chose to send its ‘demand letter’ to [the insurer] specifying a meaningless amount due from which [the insurer] could not determine the actual amount that [the medical provider] sought. [The medical provider’s] action in sending the letter that it sent made it impossible for [the insurer] to comply with the ‘demand’ in the letter. . . . Allowing [the medical provider] to benefit from [the insurer’s] inability to comply with its ‘demand’ by obtaining an attorney’s fee award punishes [the insurer] for failing to do something that was impossible to do. [The insurer] did not engage in wrongful conduct justifying the imposition of an award of attorneys fees against it.” Government Employees Insurance Company v. Open MRI of Miami-Dade, Ltd., 18 Fla. L. Weekly Supp. 337a (11th Cir. Feb 16, 2011).
It is therefore, ORDERED and ADJUDGED that the Defendant’s Amended Motion for Summary Judgment and USAA’s Amended Motion for Summary Judgment Based on Invalid Pre-suit Demand Letter shall hereby be granted for the reasons stated above.
__________________
1A copy of a Sacred Heart Health System “Consent for Service and Treatment” was attached. Two copies of a Pensacola Open MRI “MVA Assignment of Benefits” were attached, but no assignment from Escambia County was attached.
2The information regarding medical bills, providers and treatments appeared in the January 9, 2014 Demand Letter in exactly the same form and content as that reproduced here from Arnold’s affidavit.
3No ledger was attached to the copy of the Demand Letter referenced in USAA’s Requests for Admission.
