25 Fla. L. Weekly Supp. 388a
Online Reference: FLWSUPP 2504FOUNInsurance — Personal injury protection — Demand letter — Where insurer paid overdue claim within 30 days of receipt of demand letter but made check payable to medical provider rather than payee specified in demand letter, insurer is immune from suit pursuant to section 627.736(10)(d) — Attorney’s fees — Confession of judgment — Even if court did not find that insurer was immune from suit based on initial payment, re-issuance of payment to specified payee after 30-day grace period and on same day suit was filed would not be considered confession of judgment where insurer had already demonstrated intent to comply with policy obligations by issuance of original check, and provider was not forced to sue to receive benefits
FOUNTAINS THERAPY CENTER, INC. (a/a/o Joyce Williams), Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. COCE15-019510 (49). May 17, 2017. Nina W. Di Pietro, Judge. Counsel: Tara L. Kopp, Schuler, Halvorson, Weisser, and Zoeller, PA, West Palm Beach, for Plaintiff. Scott E. Danner, Kirwan, Spellacy & Danner, P.A., Fort Lauderadale, for Defendant.
ORDER DENYING PLAINTIFF’S MOTION FORFINAL SUMMARY JUDGMENT BASED UPONCONFESSION OF JUDGMENT
THIS CAUSE having come on to be heard on April 26, 2017 regarding Plaintiff’s Motion for Final Summary Judgment based upon Confession of Judgment (hereinafter “Plaintiff’s Motion” or “the Motion”), and the Court having reviewed the Motion, all responses to the Motion, and all replies to the responses, the entire court file, and the relevant legal authorities; having heard argument; having made a thorough review of the matters filed of record; and having been sufficiently advised in the premises, the Court finds as follows:
In this PIP case, the following facts are undisputed: Plaintiff, Fountains Therapy Center, Inc. (hereinafter “Plaintiff’), provided medical treatment to Joyce Williams from January 8, 2013 to March 8, 2013. Ms. Williams was covered under a policy of insurance issued by Defendant, State Farm Mutual Automobile Insurance Company (hereinafter “Defendant”), assigned her insurance benefits to Plaintiff, and Plaintiff then billed Defendant for payment of the medical treatment. When Defendant did not pay Plaintiff the full amount of its charges, Plaintiff, on July 9, 2015, sent Defendant a demand letter pursuant to Florida Statute §627.736(10). Plaintiff’s demand letter stated on page two of three, in pertinent part, the following:
Please make the first check for BENEFITS payable to: Schuler, Halvorson, Weisser, Zoeller & Overbeck, P.A. Trust Account.
Please make the other check for the PENALTY, INTEREST, and POSTAGE payable to Schuler, Halvorson, Weisser, Zoeller & Overbeck, P.A., using Tax Identification Number: 65-0843304.
After receiving Plaintiff’s demand letter on July 13, 2015, Defendant, on August 4, 2015, issued several checks to Plaintiff’s counsel representing payment of benefits and interest for all outstanding dates of service. Each check listed the payee as “Fountains Therapy Center”. Defendant’s response letter and checks were received by Plaintiff on August 7, 2015. As the checks were not made out to the payees requested in Plaintiff’s July 9, 2015 demand letter, Plaintiff, on August 20, 2015, sent a facsimile correspondence to Defendant requesting that Defendant reissue the checks payable to “Schuler, Halvorson, Weisser, Zoeller & Overbeck, P.A. Trust Account” by August 27, 2015. This correspondence further stated that if Defendant did not comply, Plaintiff would file suit. When Plaintiff did not receive the above requested reissued checks by August 27, 2017, Plaintiff, on August 28, 2017, filed the instant law suit. That same day, Defendant issued a check in compliance with Plaintiff’s August 20, 2015 faxed correspondence, which was received by Plaintiff on September 2, 2015. Finally, Defendant was served with the instant lawsuit on September 18, 2015.
The parties agree there are no issues of material fact in dispute and the matter is ripe for summary judgment. While both parties are in agreement that the pertinent issue that the Court must determine is whether Defendant’s “post suit”, reissued payment is, as a matter of law, a confession of judgment, the Court must first address the threshold issue of whether Defendant is immune from suit in the first place pursuant to Florida Statute §627.736(10)(d).Florida Statute §627.736(10)
Florida Statute §627.736(10) provides pre-suit requirements that an insured, or assignee of an insured, must follow prior to being able to file suit against an insurance company on a claim of overdue PIP benefits. Specifically, it states:
(10) DEMAND LETTER. —
(a) As a condition precedent to filing any action for benefits under this section, written notice of an intent to initiate litigation must be provided to the insurer. Such notice may not be sent until the claim is overdue, including any additional time the insurer has to pay the claim pursuant to paragraph (4)(b).
(b) The notice must state that it is a “demand letter under s. 627.736” and state with specificity:
1. The name of the insured upon which such benefits are being sought, including a copy of the assignment giving rights to the claimant if the claimant is not the insured.
2. The claim number or policy number upon which such claim was originally submitted to the insurer.
3. To the extent applicable, the name of any medical provider who rendered to an insured the treatment, services, accommodations, or supplies that form the basis of such claim; and an itemized statement specifying each exact amount, the date of treatment, service, or accommodation, and the type of benefit claimed to be due. A completed form satisfying the requirements of paragraph (5)(d) or the lost-wage statement previously submitted may be used as the itemized statement. To the extent that the demand involves an insurer’s withdrawal of payment under paragraph (7)(a) for future treatment not yet rendered, the claimant shall attach a copy of the insurer’s notice withdrawing such payment and an itemized statement of the type, frequency, and duration of future treatment claimed to be reasonable and medically necessary.
(c) Each notice required by this subsection must be delivered to the insurer by United States certified or registered mail, return receipt requested. Such postal costs shall be reimbursed by the insurer if requested by the claimant in the notice, when the insurer pays the claim. Such notice must be sent to the person and address specified by the insurer for the purposes of receiving notices under this subsection. Each licensed insurer, whether domestic, foreign, or alien, shall file with the office the name and address of the designated person to whom notices must be sent which the office shall make available on its Internet website. The name and address on file with the office pursuant to s. 624.422 is deemed the authorized representative to accept notice pursuant to this subsection if no other designation has been made.
(d) If, within 30 days after receipt of notice by the insurer, the overdue claim specified in the notice is paid by the insurer together with 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. If the demand involves an insurer’s withdrawal of payment under paragraph (7)(a) for future treatment not yet rendered, no action may be brought against the insurer if, within 30 days after its receipt of the notice, the insurer mails to the person filing the notice a written statement of the insurer’s agreement to pay for such treatment in accordance with the notice and to pay a penalty of 10 percent, subject to a maximum penalty of $250, when it pays for such future treatment in accordance with the requirements of this section. To the extent the insurer determines not to pay any amount demanded, the penalty is not payable in any subsequent action. For purposes of this subsection, payment or the insurer’s agreement shall be treated as being made on the date a draft or other valid instrument that is equivalent to payment, or the insurer’s written statement of agreement, is placed in the United States mail in a properly addressed, postpaid envelope, or if not so posted, on the date of delivery. The insurer is not obligated to pay any attorney fees if the insurer pays the claim or mails its agreement to pay for future treatment within the time prescribed by this subsection.
(e) The applicable statute of limitation for an action under this section shall be tolled for 30 business days by the mailing of the notice required by this subsection.
F.S. §627.736(10) (2016). While much of subsection 10 describes what an insured, or an assignee of an insured, must do prior to filing suit, Subsection 10(d) discusses what an insurer can do to avoid suit. Specifically, if an insurer pays an overdue claim (plus applicable interest and penalty) within 30 days after receipt of the demand letter, the insured, or assignee of the insured, is not permitted to file suit. The statute is silent as to whom the insurer must pay. While common sense might dictate that the insurer should pay the in accordance with the payment instructions in the overdue claim demand letter, the statute does not mandate that an insurer must or shall pay pursuant to the overdue claim demand letter’s individualized payment instructions1.
While there has been much litigation regarding whether or not a plaintiff must strictly comply with the above listed statutory requirements, there have been very few published opinions (and the Court is not aware of any binding opinions) regarding what level of compliance of the demand letter’s instructions is required by the insurer. In support of Plaintiff’s position, Plaintiff directed the Court to the following opinions: Palmetto Physical Therapy, Inc. v. United Services Automobile Association, 24 Fla. L. Weekly Supp. 847a (Miami-Dade County Court, Judge Gloria Gonzalez-Meyer, June 20, 2013) (Per Curium Affirmed, 11th Judicial Circuit, Appellate, March 25, 2015); and Bellamar Medical Center, Inc. v. United Automobile Insurance Company, 17 Fla. L. Weekly Supp. 475a (Hillsborough County Court, Judge Paul L. Huey, May 1, 2008). The Court does not find the Palmetto case to be persuasive because the Palmetto court analyzed whether the defendant in that case was required to strictly comply with a purported agreed order which had been signed by the court (the court there did not analyze whether a defendant must strictly comply with the terms of a statutory demand letter).
Likewise, while the Court recognizes that the facts in Bellamar are relatively similar to the case at hand, the court in Bellamar, citing to F.S. §627.736(11)(d) [an earlier version of F.S. §627.736(10)(d) containing identical language as F.S. §627.736(10)(d) with the exception of a 15 day grace period versus the current version’s 30 day grace period] stated, “Section 627.736(11)(d) gave United an escape hatch. To open the hatch, United was required, among other actions, to (1) make payment to the ‘person filing the notice of written statement’ . . . .” The Bellamar court took the quoted language from the sentence in subsection (10)(d) which discusses what an insurer can do to avoid liability in a situation where the insured, or assignee of an insured, sends a demand letter following the insurer’s withdrawal of payment under subsection 7(a) [the current (7)(d)]. The Bellamar court applied that language to the previous sentence in subsection (10)(d) which deals with demand letters for overdue claims. Unfortunately, the Bellamar court did not provide any explanation or reasoning for why it modified the overdue claim sentence with the language appearing in the withdrawal of payment sentence. Therefore, the Court does not find that Bellamar assists in its analysis.
As detailed above, there is no statutory requirement, binding precedent, or even persuasive case law that say that an insurer must strictly comply with the individualized directions made by an insured, or assignee or an insured, in its F.S.§627.736(10) overdue claim demand letter. There is no question that Defendant sent its original payment, made out to Plaintiff itself, in response to Plaintiff’s demand letter during the 30 day “safety harbor” of F.S. §627.736(10)(d). The August 4, 2015 letter from Defendant (sent along with the original checks) states that the payment provided was in response to Plaintiff’s July 9, 2015 demand letter, and references the exact insured/assignee’s name, claim number, and dates of service listed in the demand letter. The check stubs attached to the original payment checks further notate the same insured/assignee’s name, claim number, and the specific dates of service which correspond to the individual check payments. The check stubs further list the portions of the checks being paid as benefits and the portions that represented statutory interest. While the original payment checks were not made out to the payees requested in Plaintiff’s demand letter2, Defendant otherwise made payment in response to the demand letter within the statutory 30 day safety harbor period. Therefore, the Court finds that Defendant complied with F.S. §627.736(10)(d)3.
The Court further finds that Defendant substantially complied with Plaintiff’s demand letter. Although Plaintiff’s counsel received Defendant’s letter and original check payments on August 7, 2015, Plaintiff did not voice any objection to the checks until August 20, 2015. Upon Plaintiff’s counsel’s notification as to its objection to the payee on the checks, Defendant issued a new, all-encompassing check to Plaintiff’s counsel’s preferred payee with a reasonable amount of time (eight days, which was only one day past Plaintiff’s arbitrary deadline). Therefore, the Court finds that Defendant timely and substantially complied with Plaintiff’s demand letter through all of the abovementioned conduct and is therefore immune from suit pursuant to F.S. §627.736(10)(d).
The Court notes that even if the Court did not find that Defendant was immune from suit, Defendant’s August 28, 2015 reissued payment would not be considered a confession of judgment. Ordinarily, where an insurer pays policy proceeds after suit has been filed, but before judgment has been rendered, the payment of the claim constitutes the functional equivalent of a confession of judgment or verdict in favor of the insured, thereby entitling the insured to attorney’s fees. Ivey v. Allstate Insurance Co., 774 So.2d 679 (Fla. 2000) [25 Fla. L. Weekly S1103a]. However, not every situation where an insurer’s payment occurs after suit has been filed (but before judgment) qualifies. The confession of judgment doctrine specifically applies where an insurer has denied benefits the insured was entitled to, forcing the insured to file suit, resulting in the insurer’s change of heart and payment before judgment. State Farm Florida Insurance Company v. Lorenzo, 969 So.2d 393 (Fla. 5th DCA 2007) [32 Fla. L. Weekly D1791e]. Courts generally do not apply the doctrine where the insureds were not forced to sue to receive benefits; applying the doctrine would encourage unnecessary litigation by rewarding a race to the courthouse for attorney’s fees even where the insurer was complying with its obligations under the policy. Id. [citing Basik Exports & Imports, Inc. v. Preferred National Insurance Company, 911 So.2d 291 (Fla. 4th DCA 2005) [30 Fla. L. Weekly D2359a]. Here, Defendant issued its original checks on August 4, 2015 in response to Plaintiff’s July 9, 2015 demand letter. At that point (several weeks prior to suit being filed), Defendant was no longer denying benefits. Furthermore, Defendant reissued payment to Plaintiff’s preferred payee the same day Plaintiff filed suit (and three weeks prior to Defendant being served with Plaintiff’s lawsuit). Based upon the above, the Court finds that at the time of the filing of the lawsuit, Defendant was not denying benefits, Plaintiff was not forced to sue in order to receive benefits, and therefore no confession of judgment could have resulted.
ORDERED AND ADJUDGED that Plaintiff’s Motion for Final Summary Judgment based upon Defendant’s Confession of Judgment is hereby Denied.
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1The Court notes that there is a statutory requirement in subsection (10)(d) which provides the following:
If the demand involves an insurer’s withdrawal of payment under paragraph (7)(a) for future treatment not yet rendered, no action may be brought against the insurer if, within 30 days after its receipt of the notice, the insurer mails to the person filing the notice A written statement of the insurer’s agreement to pay for such treatment in accordance with the notice and to pay a penalty of 10 percent, subject to a maximum penalty of $250, when it pays for such future treatment in accordance with the requirements of this section.
F.S. §627.736(10)(d) (2016) (emphasis added). However, there is no parallel statutory requirement directing an insurer to mail to, or make payment to, “the person filing the notice” when an insured, or an assignee of an insured, sends an insurer a demand letter for an overdue claim.
2Although Plaintiff’s demand letter requested that separate checks be issued to separate payees for benefits and penalty, interest, and postage, Plaintiff abandoned that request in its faxed correspondence on August 20, 2015.
3Plaintiff raises no objection or argument regarding the amount of the payment as a whole or the amounts of interest, penalty, or postage.
