25 Fla. L. Weekly Supp. 418a

Online Reference: FLWSUPP 2505WERNInsurance — Personal injury protection — Coverage — Medical expenses — Lawfully rendered services — Appeals — Issue not raised below — Provider failed to preserve for appeal issue of whether its records substantially comply with rule where, in opposition to motion for summary judgment arguing that services were not lawfully rendered due to noncompliance with administrative rule regarding record keeping, medical provider argued only that insurer did not have standing to raise noncompliance as defense to liability, that trial court did not have jurisdiction to decide matter, and that insurer waived issue by failing to raise it as affirmative defense — Where insurer’s answer stated that it would demonstrate that provider is in violation of or has failed to comply with section 627.736(5), including but not limited to improper billing, and its motion for summary judgment asserted that provider violated administrative rule, insurer provided adequate notice of its statutory defense — Where insurer conclusively proved provider’s noncompliance with record keeping rule through deposition testimony of provider’s president and sole practitioner, trial court correctly entered summary judgment in favor of insurer — Insurer’s motion for appellate attorney’s fees pursuant to proposal for settlement is granted, conditioned on trial court finding that proposal is valid, enforceable and made in good faith

PARKSIDE CHIROPRACTIC, INC., (a/a/o Cheryl Werner), Plaintiff/Appellant, v. UNITED SERVICES AUTOMOBILE ASSOCIATION, Defendant/Appellee. Circuit Court, 12th Judicial Circuit (Appellate) in and for Manatee County. Case No. 2013-AP-000193. L.T. Case No. 2011-CC-002638. April 13, 2015. Appeal from County Court for Manatee County. K. Douglas Henderson, Judge. Counsel: Marlene S. Reiss, Miami, for Appellant. Douglas H. Stein, Miami, for Appellee.

ORDER AND OPINION

(LAKIN, Judge.) THIS MATTER is before the Court on Appellant Parkside Chiropractic, Inc.’s (“Parkside”) appeal from Final Summary Judgment entered May 9, 2013, in favor of Appellee United Services Automobile Association (“USAA”). The trial court granted USAA’s Motion for Final Summary Judgment on the basis of Parkside’s undisputed violation of Florida Administrative Code (“FAC”) 64B2-17.0065. Parkside timely filed its Notice of Appeal on June 5, 2013. Thereafter, Parkside filed its Initial Brief (“Appellant’s Br.”) on November 6, 2013, and its Motion for Appellate Attorney’s Fees on August 14, 2013. In response, USAA filed its Answer Brief (“Appellee’s Answer Br.”) on January 27, 2014, with its Motion for Attorney’s Fees pursuant to Florida Rules of Appellate Procedure 9.400(b) and Florida Statute Section 768.79(3). For the following reasons, the trial court is affirmed.

FACTUAL AND PROCEDURAL BACKGROUND

In March of 2007, Cheryl Werner was allegedly involved in an automobile accident. At the time of her accident, Ms. Werner maintained automobile insurance with USAA, which provided her Personal Injury Protection (“PIP”) pursuant to Fla. Stat. Sec. 627.736.

More than two years after her accident, beginning June 19, 2009, Ms. Werner sought and received chiropractic treatment from Parkside. In exchange for services, Ms. Werner assigned her USAA insurance and PIP benefits to Parkside. Parkside continued to provide Ms. Werner treatment until October 12, 2009, and thereafter, sought payment of $7,061.74 for its services, which USAA denied.¹

On December 27, 2010, Appellant filed a one-count Complaint for breach of contract.² In its Answer, USAA’s Fourth Affirmative Defense asserted:

[Parkside] is in violation or has otherwise failed to comply with Florida Statute §627.736(5) including but not limited to untimely billing and billing which fails to comply with the Physicians Current Procedural Terminology (CPT), ICD-9 standards and HCPCS standards and; failure to properly complete the HCFA forms; upcoding and unbundling of bills.

(R. at 38.) Thereafter, during the deposition of Chris Brugger, D.C. (“Dr. Brugger”), Parkside’s President and sole practitioner, USAA’s counsel asked: “Is it your testimony today that your records [for Ms. Werner] comply with [FAC 64B2-17.0065(5)] of [the] Minimal Recordkeeping Standards?”³ Dr. Brugger responded: “No. There was a mistake, that has long since been corrected, where my name did not appear on those SOAP notes.”⁴ (R. at 461:5-10.)

Arguing unlawfully rendered medical treatment under Fla. Stat. Sec. 627.736(5)(b)1.b., USAA motioned for Final Summary Judgment on October 12, 2012, based on Parkside’s failure to maintain adequate records, violating FAC 64B2-17.0065. (R. at 403-12.) In its January 7, 2013 response, Parkside solely argued: “Florida Law prevents a PIP insurer from escaping liability based on Florida’s Administrative Code.” (R. at 509.)

During the hearing held April 17, 2013, on USAA’s Motion for Final Summary Judgment, Parkside asserted that (1) the trial court did not have jurisdiction to determine compliance with administrative code and (2) USAA had not raised unlawful treatment or services by violating FAC 64B2-17.0065 in its affirmative defenses. On May 9, 2013, the trial court granted USAA’s Motion for Final Summary Judgment and entered Final Summary Judgment in favor of USAA.

ARGUMENTS ON APPEAL

On appeal, Parkside first argues that the trial court proceeded, over repeated objections, to rule on the merits of an affirmative defense raised outside the pleadings, and summary judgment was error as “a party may not prevail on an unpled defense and a statutory defense that is not pled is waived.” (Appellant’s Br. 9.) In its second argument, Parkside alleges that “USAA did not satisfy its burden of proving that Parkside did not ‘substantially comply’ with” FAC 64B2-17.0065’s recordkeeping requirements. (Id. at 17.) Finally, Parkside argues in its Reply Brief that USAA’s defective pleading deprived Parkside of fundamental due process. (Appellant’s Reply Br. 3-7.)⁵

In response, USAA first contends that “the issue upon which summary judgment was entered was properly pled as an affirmative defense.” (Appellee’s Answer Br. 10.) USAA further argues that Parkside did not demonstrate harmful error, as [o]nly ‘harmful’ error requires a reversal of a trial court’s ruling.” (Id.) As its second argument, USAA asserts that its Fourth Affirmative Defense was founded on section 627.736(5), Florida Statutes, and a “non-exhaustive list of reasons that [Parkside] violated Florida Statute §627.736(5) does not render USAA’s affirmative defense insufficiently pled.”⁶ (Id. at 17, 19.) Finally, USAA points out that Parkside did not preserve a substantial compliance argument for appeal, and “[i]t is undisputed that [Parkside] did not substantially comply with the Florida Administrative Code.” (Id. at 22, 24.)

STANDARD OF REVIEW

Appellate courts review a trial court’s entry of final summary judgment de novo. Volusia Cnty. v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000) [25 Fla. L. Weekly S390a]; see also Major League Baseball v. Morsani, 790 So. 2d 1071, 1074 (Fla. 2001) [26 Fla. L. Weekly S465a] (“The standard of review governing a trial court’s ruling on a motion for summary judgment posing a pure question of law is de novo.”). “Summary judgment is proper only when no genuine issue of material fact exists after all reasonable inferences have been drawn in favor of the nonmovant.” Huntington Nat’l Bank v. Merrill Lynch Credit Corp., 779 So. 2d 396, 398 (Fla. 2d DCA 2000) [25 Fla. L. Weekly D1849c].

DISCUSSION

Summary judgment is granted when the movant competently demonstrates that there is no genuine dispute of any material fact and the nonmoving party fails to reveal sufficient counterevidence. Rooker v. Ford Motor Co., 100 So. 3d 1229, 1231 (Fla. 2d DCA 2012) [37 Fla. L. Weekly D2629a]. A jury will only decide questions of fact (i.e., conflicting evidence, differing reasonable inferences of fact, or evidence that tends to prove the issues). See Moore v. Morris, 475 So. 2d 666, 668 (Fla. 1985). When the record supports its ruling, “[a] trial court’s order granting summary judgment is entitled to the presumption of correctness.” Easterling v. Keels, 681 So. 2d 744, 744 (Fla. 2d DCA 1996) [21 Fla. L. Weekly D1525b] (per curiam).

As a preliminary matter, USAA argues, “Only ‘harmful’ error requires reversal of a trial court’s ruling” on a motion for summary judgment. (Appellee’s Answer Br. 10.) This statement is misleading. See, e.g., Stahan Mfg. Co. v. Pike, 194 So. 2d 277, 278 (Fla. 2d DCA 1967) (Where estoppel was not raised in any pleading, “[t]he trial court erred in holding on a motion for summary judgment, when no answer had been filed, that appellant was estopped to claim possession of the mobile home.”). Harmful error is sufficient but not necessary. Parkside’s sole burden is “to demonstrate reversible error and present an adequate record for review.” J P Morgan Chase Bank v. Combee, 883 So. 2d 330, 331 (Fla. 1st DCA 2004) [29 Fla. L. Weekly D1985b] (emphasis added).

No-fault statutes, such as PIP, are coupled with the understanding that the law generally favors the insured. See Fla. Med. & Injury Ctr., Inc. v. Progressive Express Ins. Co., 29 So. 3d 329, 340-41 (Fla. 5th DCA 2010) [35 Fla. L. Weekly D215b]. However, Fla. Stat. Sec. 627.736(5)(b)1.b. grants insurers a statutory right to avoid payment for “services or treatment that was not lawful at the time rendered.” Fla. Stat. § 627.736(5)(b)1.b. (2009). Our legislature defines lawful as “in substantial compliance with all relevant applicable . . . administrative requirements of state and federal law related to the provision of medical services or treatment.” Id. § 627.732(11).

In this case, USAA correctly points out that Parkside did not preserve for appeal its contention with whether the “services or treatment was lawful at the time rendered” or in substantial compliance with the administrative code. See id.; accord Appellee’s Reply Br. 22-23. Indeed, Parkside raised only three issues below: (1) USAA’s standing to assert an administrative code violation, (R. at 509-10 (“Defendant may not raise noncompliance of administrative rules as a defense to its liability.”)); (2) the trial court’s jurisdiction to decide such matter, (R. at 1136:10-11 (“[T]his isn’t really a forum to hear whether or not [Parkside] complied with the administrative code.”)), (R. at 1141:1-3 (“Honestly, Your Honor, that’s really for the Florida Department of Health to make a determination.”); and (3) inadequacy of USAA’s defensive pleadings. (R. at 1135:19-24 (“[T]he problem that I see with this motion is it has never been pled before. It’s not been pled in an appropriate defense. And in order for it to go into a summary judgment, it needs to be pled.”)), (R. at 1136:4-7 (“There’s case law that says the trial court’s not committed to enter a final judgment or judgment based on issues not raised . . . in the pleading.”)). After a thorough review of the record, the Court finds Parkside waived its argument as to whether Dr. Brugger’s records substantially comply with FAC 64B2-17.0065.

“Absent fundamental error, an issue will not be considered for the first time on appeal.” Farinas v. State, 569 So. 2d 425, 429 (Fla. 1990); see also Forney v. Crews, 112 So. 3d 741, 743 (Fla. 1st DCA 2013) [38 Fla. L. Weekly D1036a] (“[R]eview is limited to matters contained in the record on appeal.”). The fundamental error doctrine is limited “to situations in which the trial court granted relief when the party obtaining the relief was, as a matter of law, not entitled to it.” O’Brien v. Fla. Birth-Related Neurological Injury Comp. Ass’n, 710 So. 2d 51, 52 (Fla. 4th DCA 1998) [23 Fla. L. Weekly D748a]. Appellate courts should exercise “the doctrine of fundamental error very guardedly.” Sanford v. Rubin, 237 So. 2d 134, 137 (Fla. 1970).

In response to USAA’s Motion for Final Summary Judgment and during a subsequent hearing, Parkside raised no factual arguments concerning Dr. Brugger’s records. Specifically addressing the court’s question as to whether Dr. Brugger “did say something that conceded the records weren’t in compliance with FAC,” Parkside’s counsel stated, “I’m not saying that the records don’t comply. What I’m saying is that that was [Dr. Brugger’s] testimony at the time, that it may not.” (R. at 1140:14-20.) After being presented a second opportunity to address substantial compliance, Parkside argued Dr. Brugger’s recordkeeping was not an issue. (R. at 1142:18-22 (“Again, I don’t really think that’s particularly an issue because, again, if there was an issue with the way [Dr. Brugger] keeps his records, it would have to come by the Florida Department of Health, and it hasn’t.”).) Rather, Parkside’s first mention of fundamental error occurred in its Reply Brief (Appellant’s Reply Br. 3), regarding an “[un]fair opportunity to litigate this case on the basis of the unpled defense.” (Id. at 5.) Thus, this Court finds Parkside waived its substantial compliance argument and no fundamental error has been established.

The Court’s review is limited to whether USAA’s Motion for Final Summary Judgment was sufficiently pleaded as an affirmative defense. “An affirmative defense is an assertion of facts or law by the defendant that, if true, would avoid the action.” Custer Med. Ctr. v. United Auto Ins. Co., 62 So. 3d 1086, 1096 (Fla. 2010) [35 Fla. L. Weekly S640a] (emphasis added). The court must only find that an affirmative defense was sufficiently pleaded to put the adverse party on notice. See City of Miami Beach v. Carner, 579 So. 2d 248, 254-55 (Fla. 3d DCA 1991); see also Agrofollajes, S.A. v. E.I. Du Pont De Nemours & Co., Inc., 48 So. 3d 976, 996 (Fla. 3d DCA 2010) [35 Fla. L. Weekly D2651a] (“Defenses are required to be pled with as much specificity as are claims.”). Hence, USAA’s Fourth Affirmative Defense would not require particularity and specificity so long as sufficient notice was provided. The burden of proof, however, still rests upon the party asserting the defense. Custer Med. Ctr., 62 So. 3d at 1096.

Regarding notice, “’Florida law clearly holds that a trial court lacks jurisdiction to hear and to determine matters which are not the subject of proper pleading and notice, and to allow a court to rule on a matter without proper pleadings and notice is violative of a party’s due process rights.” Pro-Art Dental Lab, Inc. v. V-Strategic Group, LLC, 986 So. 2d 1244, 1252 (Fla. 2008) [33 Fla. L. Weekly S503a] (quoting Carroll & Assocs., P.A. v. Galindo, 864 So. 2d 24, 28-29 (Fla. 3d DCA 2003) [28 Fla. L. Weekly D2676a] (emphasis and internal quotation marks omitted). However, deprivation of notice does not occur via an insubstantial change of a defensive pleading. Cf. State Farm Mut. Auto. Ins. Co. v. Horkheimer, 814 So. 2d 1069, 1074 (Fla. 4th DCA 2001) [27 Fla. L. Weekly D1149a] (citing Kitchens v. Kitchens, 162 So. 2d 539, 541 (Fla. 3d DCA 1964) (stating grant of substantially different relief from that initially sought violates due process). Furthermore, courts may liberally grant motions for leave to amend the pleadings unless the opposing party is prejudiced, abuse of the privilege occurs, or leave to amend would be futile. Hutson v. Plantation Open MRI, LLC, 66 So. 3d 1042, 1044-45 (Fla. 4th DCA 2001) [36 Fla. L. Weekly D1682a]. The Court finds that Parkside was not deprived of notice where any change to USAA’s pleading was insubstantial and Parkside was provided an opportunity to be heard.

In support of its appeal, Parkside cites to the Second District Court of Appeal’s decision in Copeland v. Albertson’s Inc., 947 So. 2d 664 (Fla. 2d DCA 2007) [32 Fla. L. Weekly D322a]. In Copeland, the court ruled, “A defendant cannot present evidence of a statutory defense unless that defense is pleaded.” Id. at 666. Consistent with the analysis conducted in Copeland, this Court finds USAA had pleaded its statutory affirmative defense. Based on its Answer to Parkside’s Complaint, filed on January 28, 2011, USAA’s Fourth Affirmative Defense provided it would demonstrate that Parkside “is in violation of or has failed to comply with Florida Statutes §627.736(5) including but not limited to [improper] billing.” (R. at 38.) Thereafter, in its Motion for Final Summary Judgment, filed on October 12, 2012, USAA asserted that Parkside unlawfully violated FAC 64B2-17.0065 and PIP “benefits are not due for any medical treatment that is not lawfully rendered” under section 627.736(5)(b)l.b., Florida Statutes. (R. at 404 ¶¶ 4-5.)

Parkside did not raise issue with notice regarding USAA’s pleadings in its Response to Defendant’s Motion for Final Summary Judgment. (R. at 507-11.) Its response was strictly limited to whether USAA, rather than Florida’s Department of Health, had standing to determine violations of FAC 64B2-17.0065. (R. at 507, 509-11.) At the subsequent hearings on USAA’s motion, more than six months after receiving notice, Parkside first raised issue with USAA’s purportedly defective pleading and jurisdiction. (R. at 1126-58 passim.) Absent from Parkside’s argument is any demonstration of prejudice other than a “procedural deficiency”:

I just don’t think [USAA] can bring this up as a motion without affirmatively pleading it . . . . So if something were to happen down the road where [USAA] were to . . . move to amend [its] affirmative defenses and add something like this, then it would be appropriate for the Court to allow to amend it, but we’re not there yet.

(R. at 1145:17-25.) Therefore, the Court finds that USAA’s Fourth Affirmative Defense, utilizing section 627.736(5), Florida Statutes, and its Motion for Final Summary Judgment, based on section 627.736(5)(b)1.b. and FAC 64B2-17.0065, adequately provided Parkside notice of its statutory defense.⁷ See Agrofollajes, S.A., 48 So. 3d at 996; accord Copeland, 947 So. 2d at 666.

With regard to Parkside’s violation of FAC 64B2-17.0065, USAA conclusively proved Parkside’s recordkeeping failure. USAA demonstrated proof, via Dr. Brugger’s testimony, that records of Ms. Werner’s treatment fail to comply with FAC 64B2-17.0065(5). (R. at 1142:1-7 (“Is it your testimony today that your records comply with [sub]section [(5)] of minimal recordkeeping standards? ANSWER: No. There was a mistake. That has long since been corrected where my name did not appear on those SOAP notes.”).) Parkside never undermined this proof. Furthermore, USAA was able to show Parkside’s failure to demonstrate a nexus between Ms. Werner’s 2007 accident and the treatment and services provided in 2009. (R. at 1143:14-25, 1144:1-9.)

After USAA was able to provide the trial court with conclusive evidence, Parkside continued to assert a pleading deficiency and persuasive case law to support its argument. (R. at 1144:18-22). Examining the facts in a light most favorable to Parkside, it would be unreasonable to infer that Parkside complied with FAC 64B2-17.0065 after USAA’s undisputed, conclusive demonstration of its noncompliance. Rooker, 100 So. 3d at 1231. Since Parkside’s appeal is a pure question of law, the trial court correctly ruled that USAA was entitled to summary judgment. See Morsani, 790 So. 2d at 1075.

APPELLANT’S MOTION FOR ATTORNEY’S FEES

In its Motion for Attorney’s Fees, filed August 14, 2013, Parkside cites Fla. Stat. Sec. 627.428(1), which provides for recovery of attorney’s fees by an insured in any appeal in which the insured prevails. Having failed to prevail in this appeal, however, Parkside’s motion for attorney’s fees will be denied.

APPELLEE’S MOTION FOR ATTORNEY’S FEES

In its Motion for Attorney’s Fees Pursuant to Proposal for Settlement, filed January 27, 2014, USAA asserts entitlement to attorney’s fees pursuant to section 768.79(3), Florida Statutes, and Florida Rules of Appellate Procedure 9.400(b). In support of its motion, USAA also attached a copy of “Defendant’s Proposal for Settlement,” dated October 20, 2011.

On appeal, the “party seeking attorney’s fees in an appellate court must provide substance and specify the particular contractual, statutory, or other substantive basis for an award of fees.” United Servs. Auto. Ass’n v. Phillips, 775 So. 2d 921, 922 (Fla. 2000) [25 Fla. L. Weekly S705a]. Florida Statute Section 768.79(1) provides in relevant part, “In any civil action for damages filed in the courts of this state, if a defendant files an offer of judgment which is not accepted by the plaintiff within 30 days, the defendant shall be entitled to recover reasonable costs and attorney’s fees incurred by her or him . . . if the judgment is one of no liability.” Here, USAA’s Motion, citing Frosti v. Creel, 979 So. 2d 912 (Fla. 2008) [33 Fla. L. Weekly S199b], asserts “[s]ection 768.79(3) is applicable to attorney’s fees incurred on appeal.” The Court agrees, conditioned on the trial court finding that USAA’s proposal for settlement is valid, enforceable, and made in good faith.

Based on the foregoing, it is hereby,

ORDERED AND ADJUDGED that the trial court’s Order Granting Defendant’s Motion for Final Summary Judgment, as well as the Final Summary Judgment entered in USAA’s favor, are AFFIRMED.

It is further, ORDERED AND ADJUDGED that Parkside’s Motion for Attorney’s Fees is DENIED.

It is further, ORDERED AND ADJUDGED that USAA’s Motion for Attorney’s Fees Pursuant to Proposal for Settlement is GRANTED, conditioned on the trial court finding USAA is entitled to attorney’s fees pursuant to the proposal for settlement, Fla. Stat. Sec. 768.79, and Fla. R. Civ. P. 1.442.

Finally, it is further ORDERED AND ADJUDGED that USAA’s Motion for Attorney’s Fees Pursuant to Proposal for Settlement is REMANDED to the trial court for such a determination of appropriate fees, if any.

__________________

¹USAA found Parkside’s treatment was unrelated to Ms. Werner’s 2007 motor vehicle accident and not medically reasonable or necessary. (R. at 92-97, ¶¶ 4, 6-11,14-16.)

²The Complaint was originally filed in Palm Beach County (R. at 57), and an order to transfer venue to Manatee County was entered on May 26, 2011. (R. at 1.)

³In an over simplification, Minimal Recordkeeping Standards require all licensed chiropractic physicians and assistants to document evidence of a patient’s treatment and the services rendered. See Fla. Admin. Code R. 64B2-17.0065.

⁴SOAP is the acronym for Subjective Objective Assessment and Plan.

⁵Parkside does not address whether the trial court was the proper forum to decide administrative law; therefore, this issue does not require further attention.

⁶In its Statement of the Case and Facts, USAA asserts Parkside “did not move to strike any of the affirmative defense [sic] nor in any manner contend that they were vague.” (Id. at 3.) USAA would be incorrect: Parkside filed its Motion to Strike Affirmative Defenses on February 4, 2011, in Palm Beach County, and “alleged [USAA provides] no facts showing that [Parkside] is not entitled to all applicable benefits, restrictions and limitations of Chapter 627, Florida Statutes . . . [and] [t]he defense as stated is vague and lacks the requisite specificity.” (R. 21-24, 21.)

⁷Assuming arguendo that Parkside did not have sufficient notice, the trial court unequivocally stated it would grant USAA’s leave to amend its pleadings to explicitly assert FAC 64B2-17.0065 under its Fourth Affirmative Defense. (R. 1149:3-8.) Thus, Parkside’s pleadings-based notice argument is futile.