26 Fla. L. Weekly Supp. 512c
Online Reference: FLWSUPP 2606DORTInsurance — Personal injury protection — Attorney’s fees — Claim or defense not supported by material facts or applicable law — Where medical provider knew or should have known before filing suit that its demand letter was invalid for failing to include itemized statement of charges and assignment of benefits, insurer’s motion for section 57.105 sanctions is granted — Further, motion for sanctions for provider’s failure to comply with discovery order is granted — Provider’s concession that insurer is entitled to reasonable attorney’s fees and costs did not render motions for sanctions moot
CONFORTI CHIROPRACTIC AND WELLNESS CENTER, INC. a/a/o Albert Dort, Plaintiff, v. USAA GENERAL INDEMNITY COMPANY, Defendant. County Court 13th Judicial Circuit in and for Hillsborough County. Case No. 17-CC-015417, Division J. June 8, 2018. Gaston J. Fernandez, Judge. Counsel: Todd Landau, Landau & Associates, P.A. Hallandale Beach, for Plaintiff. Jesse Groves, Dutton Law Group, P.A., Tampa, for Defendant.
ORDER GRANTING DEFENDANT’S 57.105 MOTIONFOR SANCTIONS REGARDING INVALID DEMANDLETTER AND GRANTING DEFENDANT’S MOTIONFOR SANCTIONS FOR FAILURE TO COMPLYWITH COURT ORDER
This matter, having come before the Court on May 15, 2018 for hearing on Defendant’s 57.105 motion for sanctions regarding invalid demand letter and Defendant’s motion for sanctions for failure to comply with court order, and after reviewing the motions, matters of record on file with the Court, statutes and case law provided by counsel, and after having considered argument of counsel it is ordered and adjudged that Defendant’s motions are GRANTED for the reasons set forth below:
FACTUAL FINDINGS
The subject action involves a claim for personal injury protection benefits filed by Plaintiff against the Defendant arising out of a motor vehicle accident that allegedly occurred on June 11, 2016. The subject policy of automobile insurance was issued by Defendant to the assignor. It was undisputed that the policy incorporated the schedule of maximum charges pursuant to Section 627.736(5)(a), F.S., otherwise commonly referred to as the fee schedules.
The Plaintiff filed its lawsuit on April 25, 2017. Subsequently, the Defendant advised Plaintiff on three separate occasions1 that its demand letter was invalid and requested the case be dismissed. Plaintiff did not respond to the Defendant’s requests for a dismissal. On August 24, 2017, the Defendant served upon Plaintiff a request for admissions seeking admissions as to authentication of the demand letter and documents sent therewith, and seeking an admission that no written assignment of benefits had been included therein. Plaintiff never responded to those admissions, never sought relief from technical admissions, and never raised any dispute as to the demand letter at issue or the fact that it had not included an assignment of benefits. On October 12, 2017, the Defendant filed a motion for sanctions for Plaintiff’s failure to comply with court order requiring Plaintiff to respond to Defendant’s previously filed discovery.
On October 16, 2017, the Defendant served upon Plaintiff a 57.105 motion for sanctions regarding invalid demand letter. That 57.105 motion asserted that Plaintiff’s demand letter was invalid because it: 1) did not include a written assignment of benefits; 2) failed to account for the fee schedule limitations; 3) failed to account for prior payments made by Defendant; 4) did not include a valid itemized statement specifying each exact amount claimed to be due; 5) included a ledger that listed the charges submitted by Plaintiff that indicated a balance that contradicted the amount claimed due on the face of the demand; and 6) was sent despite the fact that all of Plaintiff’s charges had been properly adjusted in the first place and nothing was overdue. That 57.105 requested Plaintiff dismiss its case within the safe harbor period. Plaintiff did not dismiss its case and the 57.105 was filed on November 14, 2017.
On October 17, 2017, the parties coordinated a hearing on Defendant’s motion for sanctions for failure to comply with the court order regarding discovery. That matter was set to be heard on Monday, January 8, 2018. On Friday, January 5, 2018, the Plaintiff filed a notice of dismissal without prejudice of this matter.
Thereafter, the parties coordinated a hearing on Defendant’s 57.105 motion for sanctions, Defendant’s motion for entitlement to reasonable fees and costs2, and Defendant’s motion for sanctions for failure to comply with court order regarding discovery. That hearing was set for May 15, 2018. On May 14, 2018, the Plaintiff advised Defendant that it conceded Defendant’s entitlement to reasonable fees and costs. However, Plaintiff refused to agree to an order granting Defendant’s 57.105 motion or Defendant’s motion for sanctions for failure to comply with court order. Thus, the hearing went forward as schedule on May 15, 2018.
It was undisputed that Plaintiff’s demand letter did not include a written assignment of benefits, did not account for the fee schedule limitations in the policy, did not account for prior payments made by Defendant, did not include an itemized statement specifying each exact amount claimed due and instead only included a ledger showing the charges submitted which indicated a contradictory amount claimed due, and that Plaintiff’s charges had been properly adjusted prior to service of the demand letter.
LEGAL ANALYSIS AND DISCUSSION
Section 627.736(10), F.S., states that “[a]s 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.” That provision of the PIP statute further requires that the “notice must state. . .with specificity. . .an itemized statement specifying each exact amount, the [date of service], and the type of benefit claimed to be due.” (Emphasis added). That provision further requires that a demand letter include “a copy of the assignment giving rights to the claimant if the claimant is not the insured.”
The plain language of the demand provisions in the PIP statute require that a demand include a written assignment of benefits and an itemized statement specifying each exact amount claimed owed and that no suit can be brought until after the 30 day safe harbor period has expired. This Court is bound by the opinion issued in Chambers Medical Group, Inc. (a/a/o Marie St. Hillare) vs. Progressive Express Insurance Company, 14 Fla. L. Weekly Supp. 207a (13th Judicial Circuit (Appellate) 2006), which held that “[w]e conclude that strict compliance with the notice requirements is required to effect the purpose of the statute. A “substantial compliance” standard would trigger significant litigation as to the sufficiency of the papers attached to a demand letter. . . .”
In Chambers, the Court assessed a demand letter from the provider which had included copies of the claim forms previously submitted to the insurer. Id. The provider in Chambers took the position that the claim forms themselves constituted an itemized statement; however, in ruling on the sufficiency of the demand in that matter, the Court stated that “[n]ot only did the claim forms as submitted by the provider not reflect the payments, but the demand letter also did not set forth an itemized statement. . . .” Id. The Court further noted that “[i]naccurate, misleading, illegible, or stale information contained in a demand does not strictly comply with the statutory requirements.” Id. Thus the Court in Chambers specifically ruled that a mere list of the charges at issue was not sufficient to constitute an itemized statement; otherwise, the claim forms sent with the demand letter in that matter would have sufficed.
As noted above, it was undisputed that Plaintiff did not strictly comply with the demand letter provisions of the PIP statute. Plaintiff should have known prior to filing suit that its demand letter was per se invalid. Furthermore, Plaintiff was advised on four separate occasions after suit was filed that its demand letter was invalid. Despite this, Plaintiff refused to dismiss its case within the safe harbor period and instead chose to drag out litigation for over a year.
The only argument presented by Plaintiff at the hearing on May 15, 2018 was that the Defendant’s 57.105 motion for sanctions and Defendant’s motion for sanctions regarding failure to comply with court order were rendered moot when Plaintiff advised Defendant that it conceded entitlement to reasonable fees and costs. However, the Plaintiff’s argument in that regard is without merit. The Defendant’s 57.105 motion and motion for sanctions regarding failure to comply with court order were properly served and filed prior to Plaintiff’s dismissal of this case and were properly before the court despite Plaintiff’s concession of entitlement.
The Plaintiff refused to concede that Defendant’s 57.105 motion be granted despite Defendant’s request to enter an agreed order to that affect. Defendant did not plead entitlement to fees and costs in a pleading in this matter; however, the Florida Supreme Court has specifically ruled that such entitlement does not have to be pled when the entitlement stems from a 57.105 motion. Fred Ganz v. HZJ, Inc., 605 So. 2d 871 (Fla. 2006). Thus, Defendant’s request for an order on its 57.105 was properly before the court and had a rational basis in establishing clarity of the record.
With regard to the motion for sanctions for failure to comply with discovery order; it goes without saying that this Court has inherent authority to sanction a party for failure to comply with court orders. Such sanctions are not limited to a mere assessment of reasonable attorney’s fees associated with bringing such matter before the court. The sanctions sought by Defendant in that regard did not stem from Rule 1.380 and were not limited to an award of expenses for bringing the motion. Thus, Plaintiff’s concession of entitlement had no bearing on that motion whatsoever.
CONCLUSION
The Plaintiff’s demand letter was invalid because it did not strictly comply with the provisions of the PIP statute as required by Chambers. The Plaintiff knew or should have known prior to filing suit that its claim of compliance with all conditions precedent was not supported by the material facts necessary to establish such claim and was not supported by the application of then-existing law to those material facts. Plaintiff’s concession of Defendant’s entitlement did not render moot the Defendant’s 57.105 motion and Defendant’s motion for sanctions for failure to comply with court order.RULING
IT IS THEREFORE ORDERED AND ADJUDGED that Defendant’s 57.105 motion for sanctions regarding invalid demand letter is GRANTED and that Defendant’s motion for sanctions for failure to comply with court order is GRANTED. This Court retains jurisdiction as to the Defendant’s reasonable attorney’s fees and costs, as to division of liability for same, and as to the appropriate sanction for Plaintiff’s failure to comply with court order, with such matters to be determined at an evidentiary hearing.
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1Defense counsel emailed Plaintiff’s counsel concerning that issue on June 12, 2017, June 14, 2017 and June 15 2017.
2Defendant’s motion for entitlement was not ruled upon because Plaintiff conceded Defendant’s entitlement to reasonable fees and costs.
