23 Fla. L. Weekly Supp. 854b
Online Reference: FLWSUPP 2308GALLInsurance — Personal injury protection — Attorney’s fees — Insurer’s post-suit payment of interest due on partial payment of reduced bills is not confession of judgment in action seeking balance of reduced bills and does not entitle medical provider to award of attorney’s fees and costs under section 627.428(1)
MIAMI DADE COUNTY MRI CORP a/a/o LUIS GALLESI, Plaintiff, vs. UNITED AUTOMOBILE INSURANCE COMPANY, a Florida corporation, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County, Civil Division. Case No. 12-19979 SP 23 (06). December 10, 2015. Spencer Multack, Judge. Counsel: Kenneth J. Dorchak, Buchalter, Hoffman & Dorchak, P.A., North Miami, for Plaintiff. Orlando Ortiz, House Counsel for United Automobile Insurance Company, Miami, for Defendant.
ORDER DENYING PLAINTIFF’S MOTIONFOR ENTITLEMENT FOR ATTORNEY FEESAND COSTS WITHOUT PREJUDICE
This matter having come before the Court on this 5th day of November 2015, on the Plaintiff’s Motion for Entitlement for Attorney Fees and Costs, and after having considered the argument of counsel present, having reviewed all the applicable documents in the Court file, and those which were presented to the Court at the hearing by the attorneys, after having reviewed all the case law provided by the attorneys and being fully advised of the premises thereof, the Court finds as follows:
STATEMENT OF FACTS
This is an action for the recovery of PIP benefits pursuant to Fla. Stat. §627.736. The Assignee, pursuant to Fla. Stat. § 627.736(10), Fla. Stat. (2011) sent a demand letter to United Auto demanding payment of overdue bills, the failure of which would allow the Assignee to initiate a lawsuit for unpaid PIP benefits. According to Fla. Stat. § 627.736(10)(d), if United Auto chose to pay the overdue bills, specified in the demand letter, United Auto was also required to pay “the 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.” Thereafter, United Auto paid a reduced amount but failed to remit the statutory interest.
Thereafter, on or about October 12, 2012, the Assignee filed a lawsuit seeking the remainder of the benefits only in the amount of $1942.31. The Plaintiff’s complaint did not demand the interest outstanding on the medical bills nor did it allege the payment was late.
On April 30, 2015, United Auto sent an “Amended Demand Response interest payment” attaching a check for the underpayment of interest only to the Assignee in the amount of $4.58.
On May 20, 2015, the Assignee filed its Motion for Entitlement to Attorneys’ Fees and Costs alleging entitlement alleging the post suit payment on interest was a confession of judgment which entitled Assignee to attorney fees pursuant to Section 627.428
.CONCLUSIONS OF LAW
Under Florida law, each party generally bears its own attorneys’ fees unless a contract or statute provides otherwise. Florida Patient’s Comp. Fund v. Rowe, 472 So.2d 1145, 1148 (Fla. 1985). This case involves one such statute, § 627.428(1), Fla. Stat. (2010). Since a statute that awards attorneys’ fees is in derogation of the common law, it must be strictly construed. Roberts v. Carter, 350 So.2d 78, 78-79 (Fla. 1977). Any party seeking to receive the benefits of a statute in derogation of the common law must demonstrate strict compliance with the statute’s provisions. Ady v. America Honda Financing Corp., 675 So.2d 577, 581 (Fla. 1996) [21 Fla. L. Weekly S130a]. The jurisdiction of the trial court to award attorneys’ fees to an insured pursuant to § 627.428(1) is dependent upon conditions imposed by the statute. AIU Ins. Co. v. Coker, 515 So.2d 317, 318 (Fla. 2d DCA 1987). There is no legal basis for an award of attorneys’ fees that is outside the conditions imposed by Fla. Stat. § 627.428(1). Travelers Indemnity Co. v. Chisholm, 384 So.2d 1360, 1361 (Fla. 2d DCA 1980).
Section 627.428(1) provides:
(1) Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of any named or omnibus insured or the named beneficiary under a policy or contract executed by the insurer, the trial court or, in the event of an appeal in which the insured or beneficiary prevails, the appellate court shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured’s or beneficiary’s attorney prosecuting the suit in which the recovery is had.
Section 627.428(1) directs the courts to assess attorney fees against only one side of the litigation in certain types of actions. Pepper’s Steel & Alloys, Inc. v. United States, 850 So.2d 462 (Fla. 2003) [28 Fla. L. Weekly S455a]. The statute’s purpose “is to discourage insurance companies from contesting valid claims, and to reimburse insureds for their attorney’s fees incurred when they must enforce in court their contract with the insurance company.” Bell v. U.S.B. Acquisition Co., 734 So.2d 403 (Fla. 1999) [24 Fla. L. Weekly S220a]. Section 627.428(1) allows an award of attorneys’ fees as a penalty to discourage wrongful refusals to pay policy benefits. Liberty National Life Ins. Co. v. Bailey ex rel. Bailey, 944 So.2d 1028 (Fla. 2d DCA 2006) [31 Fla. L. Weekly D1643a]. An obligation to pay a penalty that is imposed by operation of law upon a party due to its behavior under the insurance contract is not part of the policy’s coverage. Petty v. Florida Ins. Gaur. Ass’n, 80 So.3d 313 (Fla. 2012) [37 Fla. L. Weekly S34a].
Just as § 627.428(1) attorney’s fees is a penalty imposed on an insurer for wrongfully contesting a valid claim, “interest” is a penalty imposed on an insurer for wrongfully failing to pay a valid overdue claim within 30 days after receipt of notice. See Fla. Stat. § 627.736(10)(d) (2011). Although prejudgment interest does not have to be pled, an award of prejudgment interest is non-discretionary once the amount of loss is ascertained. (emphasis added) Merecedes Benz of North America v. Florescue & Andrews Investments v. Gulfstream Motors, Inc. 653 So.2d 1067 (Fla. 4th DCA 1995) [20 Fla. L. Weekly D896b]. In the instant case “interest” is not an obligation imposed upon United Auto by an express provision of its insurance contract with the Assignee but rather, it is imposed by operation of law which does not entitle the Assignee to attorneys’ fees and costs under § 627.428(1) as the interest is not a “proceed” under the policy.
The Plaintiff relies on Magnetic Imaging Systems v. Prudential Property & Casualty Ins. Co. 847 So.2d 987 (Fla. 3d DCA 2003) [28 Fla. L. Weekly D679a] as authority for the position that interest payments alone trigger an award of attorneys’ fees. This Court distinguishes Magnetic from the case sub judice due to the fact that the Appellant in Magnetic sued specifically for Prudential’s habit of regularly failing to pay interest on late paid PIP benefits. The lawsuit filed against Prudential triggered Prudential to tender the due interest, effectively ending the litigation and awarding judgment for Magnetic. In the matter sub judice, the interest is not the subject matter of the complaint and further, the amount of the unpaid portion of the insurance proceeds has yet to be determined.
In conclusion, the Court does not find that the interest payment of $4.58 constitutes a confession of judgment and further finds that a fee award under this premise is premature.
IT IS ORDERED AND ADJUDGED, the Plaintiff’s Motion for Entitlement for Attorney Fees and Costs is hereby DENIED WITHOUT PREJUDICE for the reasons set forth above.
