24 Fla. L. Weekly Supp. 697b

Online Reference: FLWSUPP 2409HAMEInsurance — Personal injury protection — Coverage — Exhaustion of policy limits — Motion to sanction insurer for providing medical provider with PIP log indicating incorrect total loss paid and failing to provide presuit notice that benefits had been exhausted is denied — PIP statute does not require insurer to maintain or provide PIP log or to provide presuit notice of exhaustion of benefits — Insurer’s motion to sanction provider for filing motion for sanctions that it knew or should have known was not supported by necessary material facts or application of existing law is denied — Provider had good faith belief that it was entitled to notice of exhaustion of benefits in response to demand letter and to accurate PIP log

ORLANDO ORTHOPAEDIC CENTER a/a/o Leslie Hamer, Plaintiff, vs. ALLSTATE INSURANCE COMPANY, Defendant. County Court, 9th Judicial Circuit in and for Orange County, Civil Division. Case No. 2015-SC-009892-O, Division 72. September 27, 2016. Steve Jewett, Judge. Counsel: Jason Fezza, Rodier & Rodier, Hallandale, for Plaintiff. Anthony J. Parrino, Reynolds Parrino Spano & Shadwick, P.A., St. Petersburg, for Defendant.

ORDER DENYING PLAINTIFF’S MOTION FORSANCTIONS AND DENYING DEFENDANT’SMOTION FOR SANCTIONS

THIS CAUSE having come on for hearing on Plaintiff’s Motion for Sanctions, on August 26, 2016, and the Court being fully advised in the premises, it is hereby, ORDERED and ADJUDGED as follows:

As the result of a motor vehicle accident that occurred on March, 3, 2010, Leslie Hamer received treatment from Plaintiff on January 28, 2011. On February 15, 2011, Defendant paid Plaintiff’s bill pursuant to the fee schedules set forth in §627.736, Florida Statutes (the PIP Statute). Benefits available for the subject claim were exhausted as of February 14, 2013. However, even if there were benefits remaining, Defendant maintains that it paid all benefits due Plaintiff pursuant to the statutory fee schedules.

Plaintiff sent a pre-suit demand letter pursuant to §627.736(10), Florida Statutes, which was received by Defendant on January 5, 2015, claiming that Defendant’s policy language does not allow it to utilize the statutory fee schedule to pay the subject bill.¹ On January 12, 2015, although not required to do so, Defendant responded to said demand letter by sending a letter to Plaintiff indicating that it was denying Plaintiff’s demand because Plaintiff’s bill was previously paid pursuant to the statutory fee schedule.² Enclosed in Defendant’s response letter was a copy of a log of payments. The log indicated a “total loss paid” of $8,742.76 on the first page of the log which listed payments to medical providers and a “total loss paid” of $8,742.76 on the second page of the log which listed a $1,350.00 payment to Leslie Hamer. However, the sum of all payments indicated on the log was $10,092.76, which included interest.

Plaintiff filed the instant lawsuit in small claims court which was set for a small claims pretrial conference on November 16, 2015. On December 16, 2015, Defendant served its answer to Plaintiff’s Complaint which alleged as an affirmative defense that benefits were exhausted and attached a log of payments which indicated a “total loss paid,” not including interest, of $8,720.64 for “medical bill” benefits and $1,350.00 for “wage loss” benefits.

Plaintiff filed and served its Motion for Sanctions on January 22, 2016, claiming that Defendant should be sanctioned “as a result of Defendant’s failure to advise that the benefits were exhausted prior to [this] lawsuit being filed.” However, at the hearing on said motion, Plaintiff’s counsel indicated that he was not arguing that Defendant was required to notify Plaintiff that benefits were exhausted prior to suit being filed but, rather, that Defendant should be sanctioned because the log of payments provided on January 12, 2015, indicated a “total loss paid” of $8,742.76 on the first page listing payments to medical providers but erroneously indicated a “total loss paid” of $8,742.76 on the second page listing a payment Leslie Hamer and because Defendant should have provided a log that did not include interest payments. Plaintiff has made no allegations that Defendant’s conduct after suit was filed warrants sanctions. However, Plaintiff’s Motion for Sanctions must fail.

There is no authority requiring Defendant to notify Plaintiff when benefits exhaust. The subject policy in this matter was issued in 2010. Thus, the PIP Statute in effect at the time said policy was issued did not require an insurer to notify an insured or provider/assignee when benefits exhaust.³ Indeed, the PIP Statute in effect did not even require an insurer to maintain a log of payments or provide a log of payments when requested, let alone notify an insured or provider/assignee when benefits exhaust. Progressive Amer. Ins. Co. v. Rural/Metro Corp. of Fla., 994 So. 2d 1202 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D2649a]; GEICO Gen. Ins. Co. v. Fla. Emergency Physicians, 972 So. 2d 966 (Fla. 5th DCA 2007) [33 Fla. L. Weekly D35b]; Southern Group Indemn., Inc. v. Humanitary Health Care, Inc., 975 So. 2d 1247 (Fla. 3d DCA 2008) [32 Fla. L. Weekly D1396a]. Plaintiff cites to two county court orders from Broward and Miami-Dade Counties where insurers were sanctioned for failing to advise plaintiff/providers that benefits were exhausted for an unreasonable amount of time after litigation had progressed. Those cases are not binding on this Court nor do they provide persuasive authority as each case dealt with conduct of defense counsel after suit was filed which resulted in plaintiffs expending time during the suit which it would not have otherwise spent had it been notified that benefits were exhausted. In the instant matter, Defendant advised Plaintiff that benefits were exhausted in its answer to Plaintiff’s Complaint and Plaintiff has made no allegations regarding Defendant’s or Defendant’s counsel’s conduct after suit was filed. In addition, a review of the Court file shows little work or “litigation” done in this case prior to the filing of the Motion for Sanctions. The Plaintiff only filed boiler plate discovery requests: a Request to Produce, a Request for Admissions and Interrogatories. The Defense only filed a Motion for Summary Judgment based on the exhaustion of benefits.

Defendant was not required to notify Plaintiff that benefits were exhausted prior to Plaintiff filing the instant suit. Plaintiff has not alleged that Defendant should be sanctioned as a result of any post-filing conduct. Notwithstanding that Plaintiff has not stated any legal basis for sanctioning Defendant for pre-suit conduct, Defendant’s provision of a PIP log prior to suit which may have included an erroneous heading on the second page was not done in bad faith in order to cause Plaintiff to unnecessarily incur attorney’s fees in this action.

For the foregoing reasons, Plaintiff’s Motion for Sanctions is DENIED.

DEFENDANT’S MOTION FOR SANCTIONS

Defendant filed their Motion for Sanctions arguing that Plaintiff’s counsel knew or should have known that their Motion for Sanctions was not supported by the necessary material facts nor was supported by the application of existing law. Therefore, Defendant argued they were entitled to reasonable attorney’s fees incurred in regard to the Motion.

This Court has inherent authority to sanction either party for alleged conduct during litigation, pursuant to Moakley v. Smallwood, 826 So. 2d 221 (Fla. 2002) [27 Fla. L. Weekly S175b]. In Moakley, the Florida Supreme Court reversed a Third DCA opinion affirming an award of sanctions for an attorney’s conduct during the course of litigation. The Florida Supreme Court, noting that trial judges have the inherent authority “to enforce its orders, to conduct its business in a proper manner, and to protect the court from acts obstructing the administration of justice,” held that a trial court has inherent authority to impose attorney’s fees against an attorney for bad faith conduct during litigation. Moakley, 826 So. 2d at 224 and 226 (emphasis added). The Florida Supreme Court further held that a trial court’s “inherent authority to assess attorney’s fees against an attorney must be based upon an express finding of bad faith conduct and must be supported by detailed factual findings describing the acts of bad faith conduct that resulted in the unnecessary incurrence of attorney’s fees.” Moakley, 826 So. 2d at 227 (emphasis added). In the Plaintiff’s Motion for Sanctions, they complained that Defendant provided an erroneous PIP log prior to suit and as a result they unnecessarily incurred costs in filing suit where benefits were already exhausted. It is clear the PIP log was in some ways misleading. However, if completely reviewed, the PIP log did indicate the insured’s benefits had been exhausted. No allegations were made that Defendant provided an erroneous PIP log in bad faith or otherwise conducted itself in a manner so as to induce Plaintiff to file suit. The documents produced by Plaintiff showing that, in other claims, Defendant’s demand letter responses routinely indicate if benefits are exhausted, show that any omission in the instant case was inadvertent, not sanction worthy. Although the Defendant was not required to provide a PIP log under the controlling statute, when one is provided it should be correct. The Plaintiff believed they deserved better and/or clearer information from the Defendant. The Court would agree. Therefore, the Plaintiff’s Motion for Sanctions was filed in good faith. There is blame to be apportioned to both parties in this situation. However, not sufficient blame to sanction either party.

For the foregoing reasons, Defendant’s Motion for Sanctions is DENIED.

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¹The issue pertaining to Defendant’s policy language has been addressed by three different District Courts of Appeal and is currently pending before the Florida Supreme Court in the case of Allstate Ins. Co. v. Orthopedic Specialists, Case No.: SC15-2298 [42 Fla. L. Weekly S38a]. Thus, regardless of whether any benefits remain, there is a dispute as to whether any further amounts would be owed to Plaintiff.

²There is no requirement under §627.736(10), Florida Statutes, for an insurer to respond to a demand letter. Rather, under §627.736(10), Florida Statutes, an insurer can avoid being sued only by paying the amounts demanded.

³In the 2013 version of the PIP Statute, for the first time, insurers were required to maintain a log of benefits and, in certain circumstances, provide a copy of the log to an insured and assignees, if requested, and notify an insured and assignees of exhaustion, if requested. However, the statute applicable to the instant policy had no such requirements.