24 Fla. L. Weekly Supp. 446a
Online Reference: FLWSUPP 2406MAESInsurance — Personal injury protection — Coverage — Medical expenses — Accord and satisfaction — Insurer’s tender of check containing the language “For Full & Final Payment of PIP Benefits” and provider’s depositing same did not constitute an accord and satisfaction which discharged insurer’s obligation to pay additional no-fault benefits and the remaining balance owed on the medical bill submitted by provider where check did not contain conspicuous statement that it was in full satisfaction of claim — Further, insurer did not provide any summary judgment evidence that provider’s claim was “unliquidated” as required for statutory accord and satisfaction or any evidence establishing bona fide dispute between insurer and provider with respect to claim
RIVERO DIAGNOSTIC CENTER, INC. a/a/o REINALDO MAESTRE, Plaintiff, v. UNITED AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 12-25994 SP 25 04. May 9, 2016. Carlos Guzman, Judge.
ORDER CROSS-MOTIONS FOR SUMMARY JUDGMENTON DEFENDANT’S ACCORD ANDSATISFACTION AFFIRMATIVE DEFENSE
On March 30, 2016, this Court heard Cross Motions for Summary Judgment on Defendant, United Automobile Insurance Company’s (“United’s) Accord and Satisfaction Affirmative Defense. Ari Neimand, Esq. appeared on behalf of the Defendant and Rita M. Baez, Esq. appeared on behalf of the Plaintiff. The Court reviewed both Defendant’s Motion and Plaintiff’s Motion for Summary Judgment along with the exhibits and affidavits filed in support of same. After review of the above motions, the applicable summary judgment evidence, legal authority provided by the parties and having heard argument of counsel, this Court GRANTS Plaintiff’s Motion and DENIES Defendant’s Motion for Summary Judgment for the reasons set for herein.
ISSUES FOR DETERMINATION
The issue presented to this Court for determination is whether United’s tender of a negotiable instrument containing the language “For Full & Final Payment of PIP Benefits” and Rivero’s depositing same constitutes an accord and satisfaction which would discharge United’s obligation to pay additional no-fault benefits and the remaining balance owed on the medical bill submitted to them by the Plaintiff.FACTUAL HISTORY
Reinaldo Maestre was involved in an automobile accident which occurred on April 17, 2011. He received diagnostic testing in the form of a lumbar MRI from the Plaintiff on June 1, 2011 who submitted bills to United Automobile for payment. On or about July 22, 2011, the Defendant sent the Plaintiff a check in the amount of $918.28. The “Pay to the Order Of” line on the check contained the following language:
RIVERO DIAGNOSTIC CENTER, INC.
F/A/O REINALDO MAESTRE
for Full and Final PIP Benefits for Bill ID 7777-H-152437
Along with the check, the Defendant submitted a letter and an Explanation of Review (“EOR”). The letter stated the Defendant’s claims investigation was ongoing and the payment was being sent as advanced consideration for unverified treatments. Additionally, the letter stated the Defendant was reserving its rights, specifically reserving its right to reimbursement. In her deposition, Denorah Lang, as the corporate representative for the Defendant, confirmed the payment amount was based solely on the 200% of the Medicare Part B fee schedule.
The Court also reviewed the affidavit of Osnay Rivero. Mr. Rivero is the owner and officer manager at Rivero Diagnostic Center, Inc. (“Rivero”). Mr. Rivero has knowledge of the practices and procedures at Rivero. He acknowledged Plaintiff received the check from United and the check was processed and deposited in the ordinary course of business at the facility. He acknowledged the full and final language in the “Pay to the Order Line” of the check was not noticed and he confirmed the check from United was not accepted as the complete payment for the services rendered to the insured. He confirmed no one from United ever called his office to dispute, discuss, negotiate or to request he accept an amount less than the full amount owed for the services rendered. His personal experience as a manager and owner of a diagnostic center for the past 15 years and industry standards regarding the acceptance of payments from insurance companies made the Defendant’s practice of sending payment with an explanation of review indistinguishable from any of the hundreds if not thousands of prior payments but for the “full and final” language hidden in the payee section of the check. Mr. Rivero confirmed when the checks were deposited the Plaintiff did not intend to settle the entire amount owed by the Defendant and intended on collecting the remaining benefits owed based on the services rendered and the policy applicable to the claim. Mr. Rivero acknowledged that by failing to first obtain an agreement to settle the claim for less than the full amount owed and before sending the check, the insurer failed to comply with the industry standards of fair dealing and good faith within the medical and insurance industries. Simply sending a check for a lesser amount than owed with full and final language is unreasonable and does not fall in line with how the vast majority of insurance companies negotiate settlements with providers.
This Court has reviewed a copy of the check attached to Defendant’s motion and notes the “Full and Final” language is not larger in size than the surrounding text and is not in contrasting type, font or color. Further, there is nothing in the surrounding text, symbols, or other marks that would call attention to the aforesaid language.ANALYSIS
A Defendant seeking to assert an affirmative defense in a civil action bears the burden of proving each and every element of the defense. Custer Medical Center v. United Automobile Insurance Company, 62 So. 3d 1086 (Fla. 2010) [35 Fla. L. Weekly S640a]; State Farm Mutual Automobile Insurance Company v. Curran, 135 So. 3d 1071 (Fla. 2014) [39 Fla. L. Weekly S122a].
Defendant’s motion improperly attempts to simultaneously assert claims for an accord and satisfaction under both the common law and Florida Statute § 673.3111. Sec. 2.01 Florida Statutes (2008) precludes the application of common law causes of action and defenses that conflict with laws enacted by the Legislature.
2.01 Common law and certain statutes declared in force. — The common and statute laws of England which are of a general and not a local nature, with the exception hereinafter mentioned, down to the 4th day of July, 1776, are declared to be of force in this state; provided, the said statutes and common law be not inconsistent with the Constitution and laws of the United States and the acts of the Legislature of this state.
History. — s. 1, Nov. 6, 1829; RS 59; GS 59; RGS 71; CGL 87.
Berman v. U.S. Financial Acceptance Corporation, 669 So.2d 1116 (Fla. 4th DCA 1996) [21 Fla. L. Weekly D719b], ratified the above statutory principle that “when a conflict exists between the common law and the legislature, the statute prevails.” Berman also acknowledges the Florida Legislature expressly enacted Section 673.3111 Florida Statutes as the mechanism for establishing an “accord and satisfaction by use of [a negotiable] instrument” concerning a disputed debt. 669 So.2d 1116 at 1117.
In reviewing both Defendant’s Motion for Summary Judgment and Plaintiff’s Cross Motion, it is clear the statutory and common law affirmative defenses of accord and satisfaction contain different elements. Common law accord and satisfaction has the following elements:
(1) a preexisting dispute as to the nature and extent of an obligation between the parties, and; (2) the mutual intent to effect settlement of that dispute by a superseding agreement, and; (3) the obligor’s subsequent tender and the obligee’s acceptance of performance of the new agreement in full satisfaction and discharge of their prior disputed obligation.
Republic Funding Corporation of Florida v. Juarez, 563 So. 2d 145 (5th DCA 1990).
(Emphasis added).
In contrast, Section 673.3111 Florida Statutes (2008) sets forth the elements necessary for a statutory defense of accord and satisfaction by use of instrument:
(1) If a person against whom a claim is asserted proves that that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, that the amount of the claim was unliquidated or subject to a bona fide dispute, and that the claimant obtained payment of the instrument, the following subsections apply.
(2) Unless subsection (3) applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.
(Emphasis added).
A plain reading of the above statute reveals its inconsistencies with the common law elements in that each imposes completely different requirements for an accord and satisfaction. Thus, the common law defense must yield to the expression of the Legislature as set forth in Ch. 673.3111 Fla. Stat. See Atlas Travel Service Inc. v. Morelly, 98 So.2d 816 (Fla. 1st DCA 1957) (Statute that expressly or by implication supersedes common law and does no violence to organic provisions or principles becomes controlling law within its proper sphere of operation).
The Defendant, as the movant on its motion for summary judgment, has the initial burden of demonstrating the non-existence of material issues of fact by offering “sufficient, admissible evidence” to support its motion. Dorff v. Foodfair Stores, Miami Beach, Inc., 177 So.2d 749, 750 (Fla. 3d DCA 1965). (“[S]imply moving for a summary judgment, does not create an ‘I move-you prove’ situation. There is no duty on the party moved against to demonstrate the existence of a genuine issue until after the movant has satisfied his initial burden”). The summary judgment evidence before this Court demonstrates that Defendant has not provided admissible record evidence to establish an accord and satisfaction under Section 673.3111(1) Florida Statutes.
United has provided no evidence it made a “good faith” tender as required by the statute when it sent Rivero its check along with the Explanation of Review. “Good faith” is defined in the annotative notes following Florida Statute 673.3111(1) as “not only honesty in fact, but the observance of reasonable commercial standards of fair dealing.” The only evidence before the Court on this issue is contained in the affidavit of Osnay Rivero filed by the Plaintiff in opposition to Defendant’s Motion for Summary Judgment and in support for its motion. Mr. Rivero has personal experience with the industry and commercial standards regarding the acceptance of payments from insurance companies, including settling insurance claims for less than the full amount owed. In his affidavit, he testified tendering a check containing the phrase “for Full and Final PIP Benefits” is not the usual practice for settling insurance claims, and does not comply with the industry standards of fair dealing and good faith in the settlement of insurance claims. Defendant has not provided any testimony as to this issue.
Defendant’s affidavit of Denorah Lang, her deposition testimony, and the insurance contract provide additional evidence supporting the finding of a lack of good faith in tendering the payment at issue. United Auto’s insurance policy states it has contracted with its insured to pay “[E]ighty percent of all medically necessary expenses defined as medical service or supply that a prudent physician would provide for the purpose of preventing, diagnosing, or treating an illness, injury, disease or symptom.” Ms. Lang’s deposition confirms the policy does not reference the Medicare Part B fee schedule however United issued the reduced payment using the Medicare Part B fee schedule contained in Section 627.736(5)(a)(2)(f) Florida Statutes. Binding decisional precedent holds an insurance company cannot limit reimbursement of bills to the fee schedule methodology contained in Ch. 627.736(5)(a)(2) Fla. Stat. (2008) unless expressly indicated in its policy. See Geico General Insurance Company v. Virtual Imaging Services, Inc., 38 Fla. L. Weekly S517a (Fla. 2013) (a policy “election” providing notice to an insured of its intent to limit reimbursement of no-fault benefits under the fee schedules referenced in §627.736(5)(a) Florida Statutes (2008) is required “before” an insurer could utilize the fee schedule methodology as its basis for payment). See also, Hialeah Medical Associates, Inc. a/a/o Ana Lexcano v. United Automobile Insurance Company, 21 Fla. L. Weekly Supp. 487b, (Fla. 11th Judicial Circuit Appellate 2014).
“Medicare Fee Schedules are not relevant in PIP cases, and should not be used. In 2008, the legislature allowed such schedules to be used as an alternative reimbursement method that insurers may use if they elect such a fee schedule in their policies as their chosen method of calculating reimbursement.”
“As such, United Auto was prohibited from relying on the 2008 Medicare Fee Schedule.”
United Auto has not provided any summary judgment evidence that Plaintiff’s claim is “unliquidated” as required for a statutory accord and satisfaction pursuant to Section 673.3111(1) Florida Statutes (2008). Nothing in the affidavit of Denorah Lang even discusses this issue. In Bowman v. Kingsland Development, 432 So.2d 660, 662 (Fla. 4th DCA 1983) the court held damages are liquidated when the proper amount to be awarded can be determined with exactness from the cause of action as pleaded.” Bowman cites to numerous examples of “unliquidated” damage claims, such as damages for wrongful conversion, punitive damages, and tort damages for pain and suffering. Plaintiff’s Complaint seeks damages in the amount of $618.72. The amount is calculated with an exact formula which is: $2,000 (amount billed) at 80% equals $1,600 minus $918.28 leaving $618.72 as the amount owed. Plaintiff’s damages are “liquidated” as the amount at issue in this case is a liquidated sum that can be determined with exactness from the pleadings, arithmetic calculation and application of the law. Bowman, 432 So.2d 660, 662 (Fla. 4th DCA 1983). Accordingly, Defendant cannot satisfy the prima facie element of its accord and satisfaction defense pursuant to Fla. Stat. 673.3111 which requires the damages to unliquidated.
Defendant has not offered evidence establishing a bona fide dispute existed between United and Rivero with respect to this claim. The affidavit of Denorah Lang filed by the Defendant in support of its motion does not address this issue. Prior to the issuance of the check there was no communication between the parties regarding the bill at issue. The evidence shows the Defendant intended to fulfill its entire obligation with the payment it made to Rivero by paying the fee schedule amount. There must be unequivocal evidence a dispute existed prior to the issuance of the payment. San Hueza v. National Foundation Life Ins. Co., 545 So. 2d 321 (Fla. 3rd DCA 1989). This Court finds there is no evidence of a bona fide dispute between the parties.
Defendant has provided no evidence that the payment tendered to the Plaintiff contained a “conspicuous statement” as required for a statutory accord and satisfaction under section 673.3111(2) Florida Statutes (2008). The definition of “conspicuous” can be found in the Uniform Commercial Code § 1-201(10) and is referenced in the annotations of Florida Statute 673.3111. A statement is conspicuous if “it is so written that a reasonable person against whom it is to operate ought to have noticed it.”
In Florida’s version of the Uniform Commercial Code, there is also a definition of the term “conspicuous” for use in the statutory accord and satisfaction defense. Florida Statute 671.201(10) defines “conspicuous” as follows:
“Conspicuous,” with reference to a term, means so written, displayed or presented that a reasonable person against which it is to operate ought to have noticed it. Whether a term is “conspicuous” is a decision for the court. Conspicuous terms include the following:
(a) A heading in capitals equal to or greater in size than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same or lesser size and
(b) Language in the body of a record or display in larger type than the surrounding text or set off from surrounding text of the same size by symbols or other marks that call attention to the language.
(Emphasis added).
U.C.C. § 1-201(10) specifically states that the determination of whether or not a term or clause is “conspicuous” is a determination to be made by the Court. The Third District Court of Appeal in the case of Gonzalez v. Associates Life Ins. Co., 641 So.2d 895 (Fla. 3d DCA 1994) has used the definition of U.C.C. § 1-201(l0) to determine that a clause in a contract was not “conspicuous” and therefore unenforceable.
The term “conspicuous” has been defined as “1: obvious to the eye or mind: plainly visible . . . 2: attracting or tending to attract attention by reason of size, brilliance, contrast, station.” Webster’s Third New International Dictionary 485 (1986). In defining “conspicuous term or clause”, Black’s Law Dictionary, tracking U.C.C. § 1-201(10), states that “[language in the body of a form is ‘conspicuous’ if it is in larger or other contrasting type or color.” Black’s Law Dictionary 309 (6th ed. 1990).
Applying these definitions, we conclude that the language at issue here is not “conspicuous”. . . . Here, the language in question is in no way distinguished from the remainder of the data page provisions. The fact that this language is not highlighted, set apart, or emphasized in any way, renders it not conspicuous. Consequently, because the language is not conspicuous as required by Section 627.429(5)(d)2.c., the AIDS/ARC limitation is unenforceable.
Applying the standard set forth in U.C.C. § 1-201(10) to the language printed on the “Pay to the Order” line of its check attached to Defendant’s Motion for Summary Judgment, Defendant’s check does not contain a “conspicuous” statement that would evidence that it was in full satisfaction of the claim.
Based on this Court’s determination a statutory accord and satisfaction through use of a negotiable instrument is governed under section 673.3111 Florida Statutes, Defendant’s claims pertaining to a common law of accord and satisfaction are moot. Notwithstanding, in order to prove common law accord and satisfaction it would have required an evidentiary showing by the Defendant of: (1) a preexisting dispute as to the nature and extent of an obligation between the parties, (2) the mutual intent of both parties to effect settlement of said dispute by a superseding agreement, and (3) the obligor’s subsequent tender and the obligee’s acceptance of performance of the new agreement in full satisfaction and discharge of the prior disputed obligation. Republic Funding v. Juarez, 563 So.2d 145 (Fla. 5th DCA 1990).
As discussed previously, Defendant has offered no evidence of any pre-existing dispute. Defendant reimbursed all of Plaintiff’s bills, albeit limited to the fee schedule provisions of Ch. 627.736(5)(a)(2)(f) Fla. Stat. (2008). Since this amount was the undisputed amount the Defendant believed to be owed in accordance with Fla. Stat. 627.736(4)(b), an inference can be drawn that the Explanation of Benefits sent by the Defendant only serves to provide notice of an obligation the Defendant was required to make under the law. St. Mary’s Hospital v. Schocoff, 725 So.2d 454 (Fla. 4th DCA 1999) [24 Fla. L. Weekly D405a] (“The insurer’s payment to, and acceptance by, the insured of an amount the insurer was obligated to pay in any event was not an accord and satisfaction”).
Likewise, there is no evidence of any mutual intent by the parties to enter into a settlement for a reduced amount. The affidavit of Osnay Rivero states the Plaintiff never intended to enter into any such agreement and also states the Defendant never contacted the Plaintiff in order to discuss any agreement on this claim. This fact combined with the lack of any testimony from the Defendant, and the lack of any writing advising specifically of a pre-existing dispute and an invitation to enter into a new agreement, fail to establish a requisite element of a common law defense of accord and satisfaction.CONCLUSION
Based upon the foregoing, this Court finds that Defendant is precluded from asserting its common law accord and satisfaction affirmative defense as a matter of law. Further, the summary judgment evidence before this Court demonstrates that Defendant has not provided admissible record evidence that would establish the requisite elements of an accord and satisfaction under Fla. Stat. 673.3111(1). Accordingly, this Court DENIES Defendant’s Motion for Summary Judgment and GRANTS Plaintiff’s Cross Motion for Summary Judgment as to Defendant’s statutory accord and satisfaction affirmative defense under Fla. Stat. 673.3111(1).
