24 Fla. L. Weekly Supp. 725a

Online Reference: FLWSUPP 2409SAINInsurance — Personal injury protection — Attorney’s fees — Medical provider that obtained confession of judgment as to statutory penalty and postage after pre-suit payment of full PIP benefits and interest was not entitled to award of attorney’s fees and costs under section 627.428

MED-MANAGE GROUP, INC., a/a/o Annie Sainte-Croix, Plaintiff, vs. INFINITY INSURANCE COMPANY, Defendant. County Court, 15th Judicial Circuit in and for Palm Beach County. Case No. 502013SC012711XXXXMB, Division RE. September 14, 2016. Nancy Perez, Judge. Counsel: Lindsay Porack, Deistch & Wright, P.A., Lake Worth, for Plaintiff. Jaclyn Gil, Law Offices of Deborah N. Perez & Associates, Doral, for Defendant.

ORDER ON PLAINTIFF’S MOTIONFOR ATTORNEY’S FEES AND COSTS

THIS CAUSE having come before the Court on Plaintiff’s Motion for Attorney’s Fees and Costs, and being otherwise fully advised in the premises, here by states the following:

BACKGROUND

Plaintiff submitted a claim for personal injury protection benefits. On or about August 30, 2013, Defendant received a Health Insurance Claim Form from Plaintiff for the service rendered to claimant Annie Sainte-Croix on July 26, 2013. On October 7, 2013, Defendant issued payment to Plaintiff inclusive for benefits and interest which was mailed out on October 8, 2013. That same day, Defendant received a demand letter from the Plaintiff. Defendant paid all of the benefits along with interest to Plaintiff but failed to pay the penalty and postage in response to the demand. Plaintiff filed suit to recover the demand penalty, along with attorney’s fees and costs in November, 2013.

After years of litigation, the motion was denied. Defendant paid the penalty and postage to the Plaintiff. Plaintiff then moved for attorney’s fees and costs under Florida Statute § 627.428 due to their recovery of penalty and postage under § 627.736(10)(d). Defendant filed its objections to Plaintiff’s Motion for Attorney’s Fees and Costs.¹

The purpose of Florida Statute § 627.428 is to discourage companies from contesting valid claims for having to utilize the courts to enforce the contract with the insurance company and to reimburse the insured’s their attorney’s fees.

In Florida, attorney’s fees are generally not awarded unless provided by contract or statute. See State Farm Fire & Cas. Co. v. Palma, 629 So. 2d 830, 832 (Fla. 1993). Florida Statute § 627.428 provides that an insured is entitled to an attorney’s fee award when coverage is wrongfully disputed and the insured prevails in obtaining an award for wrongfully withheld benefits. See § 627.428, Fla. Stat. (2016); See United Auto Ins. Co. vs. ISO, 23 Fla. L. Weekly Supp. 1000c (17th Judicial Cir. Ct., FL, 2016) citing Petty vs. Fla. Ins. Guar. Ass’n, 80 So. 3d 313, 316 (Fla. 2012.) [37 Fla. L. Weekly S34a]; also citing Pepper’s Steel & Alloys, Inc. vs. United States, 850 So. 2d 462, 465 (Fla. 2003) [28 Fla. L. Weekly S455a].

Florida courts have held that entitlement to attorney’s fees under § 627.428 is limited to prosecution of suits that result in the recovery of insurance proceeds. See, e.g., Gov’t Emps. Ins. Co. v. Gonzalez, 512 So. 2d 269, 270 (Fla. 3d DCA 1987). As such recovery of this statutory penalty and postage.

The demand letter penalty set forth in Florida Statute § 627.736(10)(d) is not a policy benefit between the contracting parties.

Penalty and postage imposed by statute is not a benefit that triggers attorney’s fees and costs under § 627.428 as it is not a covered claim under the policy. A covered claim is one that is defined by Florida Statute § 631.54(3), as the following: (1) it must arise, or originate, from an insurance policy and (2) it must be within the coverage of, or be included within the risks taken on and losses protected against in, an insurance policy. See United Auto citing Petty vs. Fla. Ins. Guar. Ass’n, Inc., 80 So. 3d 313 (Fla. 2012.) [37 Fla. L. Weekly S34a] Here, there are no benefits or interest at issue as the Defendant paid all of the claimant’s medical bills for all dates of service at issue at eighty percent (80%) of two hundred percent (200%) of Medicare Part B fee schedule plus interest, in accordance with the insurance policy and its endorsement. The remaining issue of penalty and postage is one that is imposed by the statute outside the four corners of the insurance policy. It is undisputed that Plaintiff filed this lawsuit seeking only penalty and postage.

In Petty and United Auto drew a distinction between a party’s obligation to pay the statutory penalty and postage costs and a withheld insurance benefit within the coverage of the policy. See United Auto Ins. Co. vs. ISO, 23 Fla. L. Weekly Supp. 1000c (17th Judicial Cir. Ct., FL, 2016) citing Petty, 80 So. 3d at 317. The fact that § 627.428 is an implicit part of an insurance policy does not mean that the insured’s claim against the insurer for fees and costs is part of the policy’s ‘coverage.’ ” Petty, 80 So. 3d at 316. The issue of penalty and postage does not alter the coverage provisions of the insurance contract itself. Petty, 80 So. 3d at 317. Therefore, it is not a benefit under the policy.

Additionally, In United Auto Ins. Co. vs. ISO and Icon Med. Ctrs vs. United Auto Ins. Co. 20 Fla. L. Weekly Supp. 1086b (11th Judicial Circuit, FL 2013), the Court found 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 United Auto Ins. Co. vs. ISO, 23 Fla. L. Weekly Supp. 1000c (17th Judicial Cir. Ct., FL, 2016); 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].

Thus, recovery of this statutory penalty and postage cannot trigger entitlement to attorney’s fees under § 627.428.

None of the cases cited by the Plaintiff support an award of fees. Plaintiff argues that attorney fees shall be awarded to an insured in “any dispute” arising under the “no fault” statute which proceeds to judgment against insurer. Dunmore v. Interstate Fire Ins. Co., 301 So. 2d 502 (Fla. 1st 1974). However, in Dunmore there was a dispute over benefits. Additionally, USAA Gen. Indemnity Co. vs. Cohen Chiro. Group, P.A., 23 Fla. L. Weekly Supp. 522e (17th Judicial Cir. Ct., FL, 2015) and MR Services I, Inc. vs. State Farm Mutual Auto. Ins. Co., 21 Fla. L. Weekly Supp. 1069b (17th Jud. Cir. Ct., FL 2014) do not apply since they involve outstanding benefits. In contrast, the issue of fees over any dispute was addressed by the Fifteenth Judicial Circuit Court in State Farm Mut. Auto. Ins. Co. vs. Benjamin Mark Morrow, 18 Fla. L. Weekly Supp. 267a (15th Judicial Cir. Ct., FL, 2011). The Court in State Farm found that fee award under § 627.428 was inappropriate because the suit did not involve wrongfully withheld benefits. Id.

CONCLUSION

Absent a judgment for the benefits and/or interest, neither the insured nor the assignee, is entitled to an award of attorney’s fees. See United Auto Ins. Co. vs. ISO, 23 Fla. L. Weekly Supp. 1000c (17th Judicial Cir. Ct., FL, 2016) citing Rodriguez v. Gov’t Employees Ins. Co., 80 So. 3d 1042, 1044 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D2788a]. Benefits are not at issue in this case and the Plaintiff did not recover any wrongfully withheld payment of the proceeds of the policy. See Icon Med. Ctrs. Vs. United Auto Ins. Co., 20 Fla. L. Weekly Supp. 1086b, (11th Jud. Cir., FL, 2013) quoting Ray vs. Travelers Ins. Co., 477 So. 2d 634, 636 (Fla. 5th DCA 1985)). Because the Defendant tendered a confession in this matter only as to the penalty and postage, the Plaintiff does not have a judgment on the claim for PIP benefits in its favor and as such is not entitled to an award of attorney’s fees.

Based on the foregoing, this Court finds that because Plaintiff did not recover any benefits under the policy, the Plaintiff is not entitled to attorney’s fees. Therefore, it is

ORDERED AND ADJUDGED that Plaintiff’s Motion for Attorney’s Fees is DENIED for the reasons set forth herein. The Plaintiff is entitled to reasonable costs to be determined by hearing or agreement.

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¹Defendant initially objected to the entitlement of fees then via mail stated there was no dispute on the entitlement. Thereafter, this objection was filed.