25 Fla. L. Weekly Supp. 372a

Online Reference: FLWSUPP 2504NEWBInsurance — Personal injury protection — Deductible — Both PIP statute and PIP policy required insurer to apply deductible to 100% of expenses and losses prior to applying fee schedule reductions

PAN AM DIAGNOSTIC SERVICES, INC., d/b/a WIDE OPEN MRI a/a/o Dolores Newbold, Plaintiff, v. GARRISON PROPERTY AND CASUALTY INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 15-1954 SP 24. April 26, 2017. Diana Gonzalez-Whyte, Judge. Counsel: Melisa Coyle, Wajih A. Shirazi and Antonella Dos Santos, for Plaintiff. Anthony L. Tolgyesi, for Defendant.

ORDER GRANTING PLAINTIFF’S AMENDEDMOTION FOR SUMMARY JUDGMENT AS TODEFENDANT’S IMPROPER APPLICATION OF THEPOLICY DEDUCTIBLE AND DENYING DEFENDANT’SMOTION FOR SUMMARY JUDGMENT ONPAYMENT IN FULL AT FEE SCHEDULE

Plaintiff, Pan Am Diagnostic Services, Inc. d/b/a Wide Open MRI a/a/o Dolores Newbold’s Amended Motion for Summary Judgment as to Defendant’s Improper Application of Policy Deductible and Defendant’s Motion for Summary Judgment on Payment in Full at Fee Schedule were heard before the undersigned Judge on March 21, 2017. Melisa L. Coyle Esq. and Antonella Dos Santos, Esq. appeared on behalf of Plaintiff and Scott Dutton, Esq. and Anthony Tolgesyi, Esq. appeared on behalf of Defendant. After review of both motions, attached exhibits from both parties, Defendant’s Memorandum of Law and applicable legal precedent; and, after having heard argument of counsel, This Court hereby GRANTS Plaintiff’s Motion and DENIES Defendant’s Motion for the reasons set forth below:

Summary of Factual Background

Non-party Dolores Newbold was involved in an automobile accident on October 11, 2013 in which she sustained injuries that required medically necessary diagnostic services which were provided by the Plaintiff, Pan Am Diagnostic Services, Inc. d/b/a Wide Open MRI (herein after “PAN AM”). Ms. Newbold, at the time of the accident, was insured with Garrison Property and Casualty Insurance Company (herein after “GARRISON”) under a policy of automobile insurance which provided No-Fault Insurance Coverage subject to a $500.00 policy deductible. Of relevance to this motion, PAN AM submitted a claim to Defendant seeking payment for treatment provided to Ms. Newbold on November 25, 2013. Defendant’s Explanation of Benefits reviewed by this Court establishes that Plaintiff’s entire proof of claim was accepted as a compensable, covered loss by Defendant, eligible to be paid under the personal injury protection coverage section of GARRISON’S insurance policy.

However, in reimbursing Plaintiff’s claim for medical expenses, GARRISON did not apply 100% of the Plaintiff’s bill to the policy’s $500 deductible. Instead, Defendant reduced Plaintiff’s eligible, covered charges to an amount which it determined to be the “Allowed Amount,” in this case, 200% of the Medicare Part B Fee Schedule formula set forth in §627.736(5)(a)1(f) Florida Statutes (2013). Defendant then subtracted the remaining portion of the $500.00 deductible from this reduced amount.

Garrison’s Policy Language Pertaining to Deductible

The pertinent policy provisions with respect to the no-fault deductible and its application are listed in Part B-1 — Personal Injury Protection Coverage section of GARRISON’S policy:

INSURING AGREEMENT

A. We will pay, in accordance with the Florida Motor Vehicle No-Fault Law, as amended, to or for the benefit of the covered person:

1. Medical Benefits; and

2. Work loss; and

3. Replacement services expenses; and

4. Death benefits of $5000. Death benefits are in addition to the medical benefits, work loss and replacement services expenses provided under the insurance policy.

These must be incurred as a result of BI (1) caused by an accident arising out of the ownership, maintenance, or use of a motor vehicle and (2) sustained by a covered person.

APPLICATION OF DEDUCTIBLE

The amount of any deductible stated on the Declarations, incurred by or on behalf of each person to whom the deductible applies and who sustains BI as a result of any one accident, shall be deducted from 100% of the medical benefits, work loss, and replacement services expenses described in F.S. s. 627.736(1) before the application of any percentage limitation that may result because of the lack of Medical Payments benefits coverage. Such deductible shall not apply to:

1. The death benefit; or

2. Any person determined eligible pursuant to the Florida Crime Compensation Act, excluding s. 960.28 of the act.

Florida PIP Deductible Statute

§627.739(2) Florida Statutes (2013), otherwise known as the PIP deductible statute, is that statute that deals with the application of a PIP deductible. The relevant portion of the statute provides that:

627.739 Personal injury protection; optional limitations; deductibles. —

(1) The named insured may elect a deductible or modified coverage or combination thereof to apply to the named insured alone or to the named insured and dependent relatives residing in the same household, but may not elect a deductible or modified coverage to apply to any other person covered under the policy.

(2) Insurers shall offer to each applicant and to each policyholder, upon the renewal of an existing policy, deductibles, in amounts of $250, $500, and $1,000. The deductible amount must be applied to 100 percent of the expenses and losses described in s. 627.736. After the deductible is met, each insured is eligible to receive up to $10,000 in total benefits described in s. 627.736(1). However, this subsection shall not be applied to reduce the amount of any benefits received in accordance with s. 627.736(1)(c).

Issue for Determination by this Court

The issue for Judicial Determination by this Court is whether §627.739(2) Florida Statutes (2013) and GARRISON’s policy require its deductible to be subtracted from Plaintiff’s unreduced medical bills before applying payment reductions or whether GARRISON can first apply the payment reductions contained in its policy to Plaintiff’s bills and then subtract the deductible from the reduced bills.Analysis

The Court finds that there are no disputed issues of material fact and that the manner in which the deductible is required to be applied is an issue to be decided as a matter of law. The construction of both insurance policies and applicable statutes are legal issues appropriate for summary judgment. Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126 (Fla.2000) [25 Fla. L. Weekly S390a]. (“Where the determination of the issues of a lawsuit depends upon the construction of a written instrument and the legal effect to be drawn therefrom, the question at issue is essentially one of law only and determinable by entry of summary judgment.”). Insurance contracts are construed in accordance with the plain meaning of the policy language. GEICO General Insurance Company v. Virtual Imaging Services, Inc., 141 So.3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a]:

When “interpreting an insurance contract,” this Court is “bound by the plain meaning of the contract’s text.” State Farm Mut. Auto. Ins. Co. v. Menendez, 70 So.3d 566, 569 (Fla.2011) [36 Fla. L. Weekly S469a]. “If the language used in an insurance policy is plain and unambiguous, a court must interpret the policy in accordance with the plain meaning of the language used so as to give effect to the policy as it was written.”

Lastly, in order for an exclusion or limitation in a policy to be enforceable, the insurer must clearly and unambiguously draft a policy provision to achieve that result. Auto-Owners Ins. Co. v. Anderson, 756 So.2d 29, 36 (Fla.2000) [25 Fla. L. Weekly S211a]. When interpreting statutes and insurance policy language that is unambiguous, Courts are bound by the plain meaning of language used. Geico Gen. Ins. Co. v. Virtual Imaging Services, Inc., 141 So.3d 147 (Fla. 2013) [38 Fla. L. Weekly S517a].

“As always, legislative intent is the polestar that guides a court’s inquiry under the No — Fault Law,” including the PIP statute. Holy Cross, 961 So.2d at 334. “Such intent is derived primarily from the language of the statute.” Id. “Where the wording of the Law is clear and amenable to a logical and reasonable interpretation, a court is without power to diverge from the intent of the Legislature as expressed in the plain language of the Law.” United Auto. Ins. Co. v. Rodriguez, 808 So.2d 82, 85 (Fla.2001) [26 Fla. L. Weekly S747a].

When “interpreting an insurance contract,” this Court is “bound by the plain meaning of the contract’s text.” State Farm Mut. Auto. Ins. Co. v. Menendez, 70 So.3d 566, 569 (Fla.2011) [36 Fla. L. Weekly S469a]. “If the language used in an insurance policy is plain and unambiguous, a court must interpret the policy in accordance with the plain meaning of the language used so as to give effect to the policy as it was written.”

At the outset, the Court notes that prior to 2003, the PIP deductible statute was worded in a manner that would essentially support the Defendant’s contention that they can first “reduce” covered expenses and then subtract the deductible from the reduced amount.

(2) Insurers shall offer to each applicant and to each policyholder, upon the renewal of an existing policy, deductibles, in amounts of $250, $500, $1,000, and $2,000, such amount to be deducted from the benefits otherwise due each person subject to the deduction. However, this subsection shall not be applied to reduce the amount of any benefits received in accordance with s. 627.736(1)(c).

However, the 2003 amendment to the PIP deductible statute specifically eliminated the language that previously allowed insurers to “reduce” covered no-fault expenses to amounts determined to be “otherwise due” prior to applying the deductible. In its place, the Legislature inserted specific language mandating that deductibles “must be applied to 100 percent” of expenses and losses. The “amended statute” is reprinted below to illustrate the Legislative changes. (language that was deleted in “strike through” and new added language is in bold:

(2) Insurers shall offer to each applicant and to each policyholder, upon the renewal of an existing policy, deductibles, in amounts of $250, $500, and $1,000, $2,000.

 The deductible amount must be applied to 100 percent of the expenses and losses described in s. 627.736. After the deductible is met, each insured is eligible to receive up to $10,000 in total benefits described in s. 627.736(1). such amount to be deducted from the benefits otherwise due each person subject to the deduction.

 However, this subsection shall not be applied to reduce the amount of any benefits received in accordance with s. 627.736(1)(c).

The Amended PIP deductible statute, which is identical to the present statute, was enacted well before implementation of the “Fee Schedule” payment methodology enacted first by the Legislature in 2008 and then modified in 2012. The Legislature certainly had the opportunity to modify the PIP deductible language during these last two amendments, yet chose to leave the language unchanged. The Court has reviewed the relevant policy language in GARRISON’s policy and finds it, like the PIP deductible statute, to be clear and unambiguous. Its plain language specifically mandates that a PIP deductible “shall be deducted from 100% of the medical benefits”. . . “described in F.S. s. 627.736(1).” There is nothing in the policy language pertaining to the deductible that could possibly be interpreted as allowing Defendant to “reduce” Plaintiff’s expenses to amounts less that one hundred percent. See, Washington National Insurance Corporation v. Ruderman, 117 So.3d 943 (Fla. 2013) [38 Fla. L. Weekly S511a]. (“Where the language in an insurance contract is plain and unambiguous, a court must interpret the policy in accordance with the plain meaning so as to give effect to the policy as written).

Critical to the resolution of this issue is the interpretation of the phrase “described in F.S. s. 627.736(1)” which appears verbatim in both GARRISON’s policy and §627.739(2) Florida Statutes (2013). It appears that Defendant’s argument misapprehends the context that of this language. The Merriam Webster dictionary defines the word “Describe” as “to represent or give an account in words.” An example cited therein — “He described the house in perfect detail.” What becomes readily apparent is that §627.736(1) describes “Medical Benefits” (§627.736(1)(a)),“Disability Benefits” for lost wages (§627.736(1)(b)) and “Death Benefits” (§627.736(1)(c)). Not coincidentally, this description almost exactly mirrors Defendant’s policy as to the “covered” expenses provided, noting that both exclude application of a deductible to death benefits.

The “as described” language merely “describes” the “covered expenses” that GARRISON’s policy affords coverage for pursuant to section A. of the “INSURING AGREEMENT.” Specifically, if a covered person has been involved in an accident arising out of the ownership, maintenance, or use of a motor vehicle and has incurred Medical Benefits, Work Loss, Replacement Service Expenses and/or Death Benefits, they are entitled to coverage under GARRISON’S policy. This plain and ordinary interpretation is consistent with both the policy language as well as the language of Florida’s PIP deductible statute, §627.739(2) Fla. Stat. (2013).

The Court similarly finds that §627.739(2) Florida Statutes (2013) is clear and unambiguous, and for the same reasons, requires GARRISON to apply deductible amounts to 100% of expenses and losses prior to applying fee schedule reductions. In so doing, this Court acknowledges binding precedent from Florida’s Fifth District Court of Appeal, the only Florida District Court that has interpreted this statute. See Mercury Ins. Co. of Florida v. Emergency Physicians of Central, 182 So.3d 661 (Fla. 5th DCA 2015) [40 Fla. L. Weekly D2364a]. In Mercury, an insurer received a $191.00 bill for emergency room services and applied the entire, unreduced amount of the bill to the policy’s $500.00 deductible. The provider objected, arguing that none of their bill should have been applied towards the deductible because their treatment involved “emergency” services,. In rejecting this argument, the Court in held that:

The plain language of section 627.739(2) thus dictates that any contracted-for deductible must be applied “to 100 percent of the expenses and losses described in s. 627.736.”

In the absence of inter-district conflict, district court decisions bind all Florida Courts and accordingly, this Court is bound by the Fifth District Court’s ruling. See, Pardo v. State, 596 So.2d 665 (Fla. 1992).

The Court does not agree with Defendant’s argument that its policy and the no-fault statute allow it to first reduce Plaintiff’s charges to “allowed amounts” using the Medicare Part B Fee Schedule and then apply the deductible to the “payable” amounts. This would essentially revert back to the “benefits otherwise due” method used prior to the 2003 legislative amendments, which would render the present statutory amendment meaningless. See, Doctor Rehab Center, Inc. v. United Automobile, Case No. 11-09772 CA 24 (Fla. 11th Cir. 2012) [24 Fla. L. Weekly Supp. 936a] (Zabel, J.). (“the methodology in computing a PIP deductible was changed when the language of the prior version of 627.739(2) allowing for the PIP deductible to be subtracted from the “benefits otherwise due” was deleted in favor of language requiring deductibles to be applied to 100 percent of expenses and losses).

The Court also does not agree with Defendant’s contention that Plaintiff’s interpretation “removes the protections of the PIP statute.” Defendant’s position misconstrues the basic purpose of the deductible, in which the patient, in exchange for a reduced premium, has agreed to “self-insure” a portion of his medical expenses. Defendant’s contractual obligations do not arise until this financial obligation has been met and for that reason, GARRISON is not permitted to apply its contractual limitations to “out of contract” expenses. This was addressed by Florida’s Supreme Court almost 30 years ago in International Bankers Insurance v. Arnone, 552 So.2d. 908 (Fla. 1989).

“Generally, the functional purpose of a deductible, which is frequently referred to as self-insurance, is to alter the point at which an insurance company’s obligation to pay will ripen.”

The applicable provision of §627.736(5)(a)4 illustrates this point — because amounts under the deductible and over policy limits are excluded the insured faces greater financial exposure while the insurer pays less.

4. If an insurer limits payment as authorized by subparagraph 1., the person providing such services, supplies, or care may not bill or attempt to collect from the insured any amount in excess of such limits, except for amounts that are not covered by the insured’s personal injury protection coverage due to the coinsurance amount or maximum policy limits.

(emphasis added)

Numerous Circuit Court opinions, all in their respective Appellate capacities, have affirmed trial court rulings in accordance with this Court’s interpretation. Progressive Select Insurance Company v. Florida Hospital Medical Center a/a/o Luis Pena, Case No. 2015-CV-68-A-O (Fla. 9th Cir. App. June 2016) (Tynan, J.); Cert. Pet. filed in Progressive Select Insurance Company v. Florida Hospital Medical Center a/a/o Luis Pena, 5d16-2334 (Florida 5th DCA 2016); Progressive American Insurance Company v. Chambers Medical Group a/a/o Shelia Wilcox; Case No. 2015 AP 000850 NC (Fla. 12th Cir. App. February 2016) (Curley, J.); Progressive American Insurance Company v. Chambers Medical Group a/a/o Lisa Pollard; Case No. 2015 AP 000852 NC (Fla. 12th Cir. App. January 2016) (Curley, J.); Progressive American Insurance Company v. Chambers Medical Group a/a/o Jean Cole Spencer; Case No. 2015 AP 000084 NC (Fla. 12th Cir. App. March 2016) (Lakin, J.); Progressive American Insurance Company v. Chambers Medical Group a/a/o Jean Cole Spencer; Case No. 2014 AP 000352 NC (Fla. 12th Cir. App. March 2016) (Economou, J.); Progressive American Insurance Company v. Chambers Medical Group a/a/o Nicole Spontack; Case No. 2015 AP 000086 NC (Fla. 12th Cir. App. March 2016) (Smith, Jr., J.); Progressive American Insurance Company v. Chambers Medical Group a/a/o Aiden Spontack; Case No. 2014 AP 000353 NC (Fla. 12th Cir. App. March 2016) (Smith, Jr., J.).

Additionally, many sister County Court Judges in Miami-Dade County, including the predecessor Judge in this division, have likewise ruled in a similar manner. Biscayne Rehab Center, Inc. a/a/o Jason Cruceta v. Windhaven Insurance Company, Miami Dade County Court Case 2015-2661 SP 24 (July 20, 2016, J. Cannava) (“finding that as a matter of law, Defendant was obligated under the plain language of its policy to apply the policy deductible to 100% of any medical expenses that are eligible to be paid prior to making the decision of what amounts will be deemed payable”); Progressive Health Services, Inc. a/a/o Fernando Angulo v. State Farm, Case No. 13-2642 SP 24 (Fla. 11th Cir. Cty. July 2015) (Cannava, J.) (“Defendant must apply the deductible to 100 per cent of the total amount billed prior to any percentage reductions”). Physical Therapy Rehab and Wellness West, Inc. a/a/o Scott Louis Watson v. Geico Indemnity, Case No. 14-001029 SP 24 (Fla. 11th Cir. Cty. Jan. 2016) (Cannava, J.); Synergy Wellness Clinic, LLC. a/a/o Lesha Wigfall v. United Automobile Insurance Company, Miami Dade County Case 09-10001 SP 26 (April 28, 2016, J. King); Progressive Health Services, Inc. a/a/o Joshua Molina v. State Farm Fire and Casualty Company, Miami Dade County Case 15-2015 SP 26 (March 3, 2017, J. King); Mason Injury & Accident Clinic a/a/o Keli Babcock v. Windhaven Ins. Co., Case No. 2016-20097 CONS (Fla. 7th Cir. Cty. May 2016) (Green, J.); Progressive Select Ins. Co. v. Florida Hospital Med. Ctr., Case No. 2015-CV-68-A-O (Fla. 9th Cir. App. June 2016); Progressive Select Ins. Co. v. Florida Hospital Med. Ctr., Case No. 2015-CV 76-A-O (Fla. 9th Cir. App. June 2016)(“Because the unambiguous language in Florida Statute section 627.736(2) (the PIP deductible statute) precludes Progressive argument that the deductible should be applied to the fee schedule reimbursement limitation under Florida Statute section 627.736(5)(a)1.b., rather than Florida Hospital’s unreduced expenses, we affirm.”). Dussault v. Windhaven, 21 Fla. L. Weekly Supp. 436b (Fla. 13th Cir. Cty. July 2013) (Ober, J.) (“The plain, unambiguous and unequivocal language of §627.739(2) requires the deductible amount must be applied to 100 per cent of the expenses and losses described in s. 627.736. This Court is not permitted to employ other rules of statutory construction”).

Conclusion

On the basis of the foregoing analysis, this Court GRANTS Plaintiff’s Amended Motion for Summary Judgment, finding that as a matter of law, Defendant was obligated under the plain language of its policy and §627.739(2) Florida Statutes (2013) to apply the policy deductible to 100% of any medical expenses that are eligible to be paid prior to making the decision of what amounts will be deemed payable. In this case, Defendant afforded coverage for the entire proof of loss and it was required to subtract the deductible from the entire proof of loss that Plaintiff submitted. Defendant’s failure to do so resulted in an underpayment, entitling Plaintiff, as a matter of law, to recover from the Defendant an additional $219.42, representing 80% of the underpaid amount plus statutory interest due. Accordingly, the Defendant’s Motion for Summary Judgment on Payment in Full at Fee Schedule is DENIED.