23 Fla. L. Weekly Supp. 1000c

Online Reference: FLWSUPP 2310QUEVInsurance — Personal injury protection — Attorney’s fees — Medical provider that obtained confession of judgment as to statutory penalty and postage but voluntarily dismissed its claim for PIP benefits was not entitled to award of attorney’s fees and costs

UNITED AUTOMOBILE INSURANCE COMPANY, Appellant, v. ISO DIAGNOSTIC TESTING, INC., A/A/O YOANNE QUEVEDO, Appellee. Circuit Court, 17th Judicial Circuit (Appellate) in and for Broward County. Case No. CACE14-003402 (AP). L.T. Case No. COCE12-024010. March 21, 2016. Appeal from the County Court for the Seventeenth Judicial Circuit, Broward County, Martin R. Dishowitz, Judge. Counsel: Michael J. Neimand, Office of the General Counsel, United Automobile Insurance Company, Miami, for Appellant. Marlene S. Reiss, Law Offices of Marlene S. Reiss, P.A., Miami, for Appellee.

OPINION

(PER CURIAM.) United Automobile Insurance Company (“UAIC”) appeals a final judgment for award of attorney’s fees and costs in favor of ISO Diagnostic Testing, Inc. (“ISO”). Having carefully reviewed the briefs, the record and the applicable law, this Court dispenses with oral argument, and finds that the final judgment should be reversed as set forth below.

ISO submitted a claim for personal injury protection (“PIP”) benefits to UAIC, but UAIC denied the claim. ISO then served a pre-suit demand letter upon UAIC pursuant to section 627.736(10)(d), Florida Statutes. In the demand letter, ISO requested payment of postage costs pursuant to section 627.736(10)(c), Florida Statutes. Upon receipt of the demand letter, UAIC paid some benefits but not the entire amount demanded by ISO. UAIC did not include the statutory penalty and postage in its tender of payment.

ISO sued UAIC in county court for the remaining PIP benefits, and the statutory penalty and postage related to UAIC’s pre-suit partial payment of benefits. During the course of litigation, UAIC paid the statutory penalty and postage to ISO. The parties subsequently entered into a final judgment stipulating to (1) UAIC’s confession of judgment as to the statutory penalty and postage, and (2) ISO’s voluntary dismissal of the claim for the remaining PIP benefits.

After the entry of the stipulated final judgment, ISO filed a motion for entitlement to attorney’s fees. ISO asserted that it is entitled to an award of attorney’s fees based on UAIC’s confession of judgment as to the statutory penalty and postage. UAIC disputed ISO’s entitlement to an award of attorney’s fees. UAIC argued that under the applicable statutes (1) the statutory penalty and postage, which are imposed by operation of law, are not benefits under the policy, and (2) entitlement to an award of attorney’s fees depends on a recovery of benefits under the policy. The county court ultimately awarded attorney’s fees to ISO. This appeal followed. This Court has de novo review over the issue of whether a party is entitled to attorney fees as prevailing party in an action against an insurer. Barreto v. United Services Auto. Ass’n, 82 So. 3d 159 (Fla. 4th DCA 2012) [37 Fla. L. Weekly D571a].

Applying Petty v. Florida Insurance Guaranty Association, Inc., this Court agrees with UAIC that the statutory penalty and postage are not benefits covered by a PIP policy. See Petty v. Fla. Ins. Guar. Ass’n, Inc., 80 So. 3d 313, 316 (Fla. 2012) [37 Fla. L. Weekly S34a]. Similar to the argument raised in Petty, ISO argues that every PIP policy automatically includes (1) the statutory penalty and postage by operation of section 627.7407(2), Florida Statutes, and (2) a prevailing insured attorney’s fee provision by operation of sections 627.736(8) and 627.7407(2), Florida Statutes. See § 627.736(8), Fla. Stat. (2012) (discussing the applicability of provision regulating attorney fees); § 627.7407(2), Fla. Stat. (2012) (stating that PIP policies shall be deemed to incorporate the provisions of the PIP law); Petty, 80 So. 3d at 316. Petty directly addresses and discredits ISO’s argument that the claim for attorney’s fees is part of the policy’s coverage. See Petty, 80 So. 3d at 316 (“The fact that section 627.428, Florida Statutes, is an implicit part of an insurance claim did not mean that the insured’s claim for fees and costs is part of the policy’s coverage.”). With regard to the statutory penalty and postage, this Court, like the court in Petty, must differentiate between an obligation to pay a statutory penalty and postage costs imposed by operation of law upon a party due to that party’s behavior under the insurance contract and an obligation imposed upon a party by an express provision for which the party contracted. See Petty, 80 So. 3d at 317.¹ With regard to sections 627.736(10)(d) and 627.736(10)(c), Florida Statutes, the insurer is penalized for payment after receipt of a demand letter by having to pay the statutory penalty and postage, if properly requested. See § 627.736(10)(d), Fla. Stat. (2012); § 627.736(10)(c), Fla. Stat. (2012). Under Petty, this obligation to pay the statutory penalty and postage has been imposed by operation of law and does not alter the coverage provisions of the insurance contract itself. See Petty, 80 So. 3d at 317. Thus, this Court finds that the statutory penalty and postage do not constitute benefits under the PIP policy.

After a careful review of the Petty decision and the purpose of the no-fault statutory scheme, this Court concludes that for the purpose of entitlement to an award of attorney’s fees, a prevailing insured is one who obtains a judgment on a claim for PIP benefits in his favor. See § 627.428, Fla. Stat. (2012); § 627.736(4)(b), Fla. Stat. (2012); § 627.736(10)(d), Fla. Stat. (2012); Petty, 80 So. 3d at 316-17; Travelers Indem. Ins. Co. of Ill. v. Meadows MRI, LLP, 900 So. 2d 676, 679 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D962c]; Ivey v. Allstate Ins. Co., 774 So. 2d 679, 683-84 (Fla. 2000) [25 Fla. L. Weekly S1103a]. Absent that, the insured, or the assignee, is not entitled to a fee award. See Rodriguez v. Gov’t Employees Ins. Co., 80 So. 3d 1042, 1044 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D2788a]. Here, while ISO did recover the statutory penalty and postage, ISO voluntarily dismissed its claim for PIP benefits. Without a recovery on ISO’s claim for PIP benefits, ISO is not entitled to an award of attorney’s fees and costs. See Sheldon v. United Servs. Auto. Ass’n, 55 So. 3d 593, 596 (Fla. 1st DCA 2010) [36 Fla. L. Weekly D23a] (“Because no such judgment has been or will be rendered, there is nothing on which to base an award of attorney fees under the statute.”).

Accordingly, the final judgment for award of attorney’s fees and costs in favor of ISO is hereby REVERSED. ISO’s Motion for Attorney’s Fees is hereby DENIED. (PHILLIPS, GATES and MCCARTHY, JJ., concur.)

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¹The Florida Supreme Court stated as follows:

There is a clear difference between an obligation to pay fees that is imposed by operation of law upon a party due to its behavior under the insurance contract and an obligation imposed upon a party by an express provision for which the party contracted. Section 627.428(1) imposes the obligation to pay a fee award upon an insurer that has wrongfully contested an insured’s valid claim. It does not alter the coverage provisions of the insurance contract itself.

Petty, 80 So. 3d at 317.