26 Fla. L. Weekly Supp. 979b
Online Reference: FLWSUPP 2612PERIInsurance — Personal injury protection — Coverage — Medical expenses — Exhaustion of policy limits — Insurer is precluded from asserting exhaustion of benefits defense where insurer initially denied claim on basis that claimant was not covered under daughter’s PIP policy, but failed to inform medical provider for four years that claimant was covered under policy on another of its insureds and did not notify court of exhaustion of benefits under that other policy until four years after exhaustion
OPTIMAL WELLNESS & REHAB CENTER, P.A. a/a/o Velania Perito, Plaintiff, v. GEICO GENERAL INSURANCE COMPANY Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Civil Division. Case No. 10-03609 CC 23 02. March 1, 2018. Caryn Schwartz, Judge. Counsel: Crystal L. Eiffert, Eiffert & Associates, P.A., Orlando, for Plaintiff. Karen N. Baez, Law Office of Haydee De La Rosa-Tolgyesi, Coral Gables, for Defendant.
ORDER ON EVIDENTIARY HEARING ON EXHAUSTION OFBENEFITS AND DEFENDANT’S CONFESSION OF JUDGMENT
THIS MATTER came before the Court on February 8, 2018 wherein the Court held an Evidentiary Hearing to Determine the Issue of Exhaustion of Benefits and Defendant’s Notice of Filing Confession of Judgment, and, being considered by the Court and otherwise being fully advised of the premises; it is hereby ORDERED AND ADJUDGED that:
1. This case was filed on February 18, 2010 wherein the Plaintiff was seeking Personal Injury Protection benefits from the Defendant for services provided to Velania Perito for injuries sustained in a June 2, 2009 motor vehicle accident.
2. Defendant filed its Answer and Affirmative Defenses on March 22, 2010 listing one sole affirmative defense that Velania Perito does not qualify for personal injury protection benefits under Geico’s insured, Vanessa De Jesus’s, policy because she was not considered a household relative.
3. Plaintiff served discovery upon the Defendant on February 18, 2010 in the form of Interrogatories, Request to Produce and Request for Admissions.
4. Defendant did not respond to Plaintiff’s discovery requests.
5. The case was transferred to Plaintiff’s current counsel on March 25th, 2011.
6. Plaintiff’s counsel did not work on the case from 2012 until January 14, 2015.
7. On June 16, 2016, Defendant responded to Plaintiff’s discovery requests in the form of Request for Production and Request for Interrogatories in accordance with the Order from the Court.
8. On June 28, 2016 Defendant responded to Plaintiff’s Interrogatories. When Defendant filed its Verified Responses to Plaintiff’s Interrogatories, Defendant advised, for the first time, that “the benefits have been exhausted”.
9. Conversely, Defendant’s sole defense in this case was that no coverage existed for Assignor Perito under Geico’s policy of insurance issued to Vanessa De Jesus which was the policy subject of the suit in question.
10. The deposition of Defendant’s Corporate Representative, Fran Korkus, took place on August 29, 2016.
11. It was thereafter discovered by Plaintiff at the deposition of Defendant’s Corporate Representative that benefits had been paid under another Geico policy of insurance issued to the driver of the host vehicle, Mr. Thiago Lins and that coverage was afforded to Velania Perito under that policy. Defendant claimed that benefits exhausted under the policy of Mr. Lins.
12. However, Plaintiff was unable to obtain any information concerning the policy of Mr. Lins during the deposition because Defendant’s Corporate Representative did not produce any of those records at the deposition despite the duces tecum requiring them to be produced. The Corporate Representative claimed that the documents were not produced as they were not the subject of the current lawsuit. In light of same, Plaintiff’s counsel suspended the deposition of the Corporate Representative in order to address the outstanding questions pertaining to the policy of Thiago Lins for which Geico claimed benefits were exhausted.
13. The Defendant did not file an objection to the documents requested by Plaintiff in the duces tecum, or to file a Protective Order for any of the documents requested in the duces tecum and did not file a Privilege Log.
14. Following the deposition of Defendant’s Corporate Representative, Plaintiff filed a Motion to Amend its Complaint seeking to add a Declaratory Judgment count in regard to the ambiguity of coverage among the policy of Velania Perito and Thiago Lins as well as a Bad Faith count.
15. This Court entered an Order on November 30, 2016 granting Plaintiff’s Motion to Amend and Abated Plaintiff’s bad faith Count.
16. Plaintiff’s Second Amended Complaint was filed on January 6, 2017.
17. Defendant filed its Answer and Affirmative Defenses to Plaintiff’s Second Amended Complaint on January 29, 2017.
18. Defendant again listed one affirmative defense that Velania Perito does not qualify for personal injury protection benefits under Geico’s insured, Vanessa De Jesus’s, policy.
19. On April 4, 2017, Defendant filed a Notice of Confession of Judgment stating the following: Defendant “hereby confesses judgment on Plaintiff’s claim. Benefits were paid for the claim involving the assignor in the instant lawsuit for the motor vehicle accident dated June 2, 2009. The benefits were reimbursed up to exhaustion of policy limits on May 22, 2013”. Defendant also stipulated to Plaintiff’s entitlement to reasonable attorney’s fees and costs.
20. Plaintiff disputed the validity of the Notice of Confession of Judgment and wanted to proceed with the litigation of this matter.
21. On April 4, 2017, Defendant filed a Motion for Protective Order as to the deposition of Defendant’s Corporate Representative scheduled for the following day based on the filing of the Notice of Confession of Judgment.
22. Thereafter, Plaintiff filed a Motion for Sanctions for Defendant’s failure to comply with three (3) prior Court orders and a Motion for Sanctions for Defendant’s failure to produce the documents. A hearing was scheduled for June 16, 2017.
23. At the hearing, this Court again entered an Order requiring Defendant to produce the documents responsive to Plaintiff’s Duces Tecum and also ordered Defendant to produce the entire claims files for the two (2) claims associated with Velania Perito. Additionally, the Court awarded Plaintiff sanctions in the amount of $750.00.
24. The Court ordered the parties to schedule an Evidentiary Hearing on the issue of exhaustion of benefits as indicated in Defendant’s Notice of Filing Confession of Judgment.
25. The Plaintiff noticed the Evidentiary Hearing to occur on February 8, 2018.
26. Prior to the scheduled hearing, Plaintiff conducted the deposition of Defendant’s Corporate Representative on January 29, 2018. The parties agreed that the deposition transcript would be utilized at the Evidentiary Hearing in lieu of a live appearance by Defendant’s representative.
27. According to Plaintiff’s deposition notice, Defendant’s Corporate Representative was required to bring both claims files to the deposition. Again, the Defendant did not file a Motion for Protective Order or an Objection to the requested materials. The deposition was to be a continuation of the deposition of the Corporate Representative taken on August 29th, 2016.
28. The Plaintiff filed the deposition transcript of the testimony of the Corporate Representative along with its corresponding exhibits for use at the Evidentiary Hearing.
29. On February 8, 2018, counsel for Plaintiff and counsel for Defendant were present for the Evidentiary Hearing.
30. The Plaintiff presented evidence at the hearing demonstrating the history of this litigation, Defendant’s Verified Responses to Plaintiff’s Interrogatories, the deposition notices for Defendant’s Corporate Representatives, Defendant’s PIP log indicating the date payments were made under the policy of the host driver, Thiago Lins, pre-suit PIP demand letters received by Geico on behalf of another medical provider, Geico’s response to that PIP demand letter, and also the deposition transcripts of Fran Korkus and Nina Gomes, Defendant’s Corporate Representatives.
31. The Defendant presented evidence based on the deposition transcript of the testimony of Corporate Representative Nina Gomes. Said transcript was already entered into evidence by Plaintiff. Ms. Gomes brought forth copies of three checks which were also entered into evidence as part of exhibits to the deposition transcript. The checks were paid to different providers and amounted to the policy limits of $10,000. The payments were made in response to a demand letter submitted from a different attorney on behalf of provider Fort Myers Total Rehabilitation Center in 2013 after the instant suit was filed. The demand letter was made under the policy of claimant’s daughter, Vanessa de Jesus.
32. The Defendant also relied on its response to the demand letter submitted in 2013 on behalf of Fort Myers Total Rehabilitation where the caption of the letter states that the benefits were being paid under the policy of the host driver, Thiago Lins. In addition, the PIP log showing the exhaustion of benefits under said policy was also introduced into evidence as part of the transcript of Corporate Representative, Nina Gomes.
33. Based on the evidence presented, this Court finds that Geico made an egregious error in handling and adjusting this claim.
34. The Defendant was aware in August 2012 that Velania Perito qualified for coverage under another Geico policy but failed to notify Plaintiff of this discovery. The Defendant should have notified the Plaintiff in 2012 of the Geico policy belonging to the host vehicle for Thiago Lins so that Plaintiff could have re-submitted their bills under that policy.
35. Instead, this lawsuit dragged on for a number of years creating needless litigation and a significant waste of this Court’s time and Plaintiff’s counsel’s time.
36. The Defendant has provided no reasonable or credible explanation for its failure to notify Plaintiff or Plaintiff’s counsel and this Court that not only another Geico policy existed for which coverage was available for Velania Perito but also that benefits had been exhausted under that policy.
37. The Defendant put this Court on notice of the exhaustion issue for the first time on April 4, 2017, four (4) years after Defendant contends benefits exhausted.
38. The Court finds that the Defendant is precluded from asserting the defense of exhaustion in this case and that the law on exhaustion does not protect Geico under these particular facts. Northwoods Sports v. State Farm, 137 So. 3d 1049 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D491a]; Emergency Physicians of Central Florida, LLP v. United Services Auto. Assoc., 19 Fla. L. Weekly Supp. 746a (9th Judicial Circuit, Osceola County, FL, March 20, 2012); Orthopaedic Clinic of Daytona Beach, P.A. a/a/o Charles Murray v. State Farm, 17 Fla. L. Weekly Supp. 1145(a) (7th Judicial Circuit, Volusia County, FL, July 15, 2010). .
39. The conduct of the Defendant during this litigation have resulted in an unnecessary waste of time to the Plaintiff and the Court. The Defendant knew or should have known that coverage was afforded under another Geico policy in August 2012 and that benefits exhausted under that policy in May of 2013. The Defendant provided no credible reason for this substantial delay and, upon reviewing the deposition transcripts from the Defendant’s corporate representatives, when she was specifically asked why Defendant did not notify the Plaintiff or its counsel that another policy existed, Defendant stated, “I don’t know.” When asked why Defendant did not notify the Plaintiff or its counsel that benefits exhausted in May 2013, again the Defendant stated, “I don’t know.”
40. The Court does not know if Defendant’s actions rise to the level of bad faith and it is not a determination that will be made at this time.
41. The evidence presented during the hearing demonstrated that the Defendant never notified Plaintiff’s counsel of another Geico policy until August 2016 and Defendant did not notify the Court of the issue of exhaustion until April 2017. Defendant’s failure to advise the Plaintiff and this Court of the other Geico policy and of the exhaustion in a timely fashion caused the Plaintiff to incur unnecessary fees and costs. Barnes v. Pro Imaging, 15 Fla. L. Weekly Supp. 981b (17th Judicial Circuit, Broward County, FL 2008).
42. This Court is aware of its inherent authority to impose sanctions, even in the absence of statutory authority, and this imposition should be done sparingly and cautiously. Moakley v. Smallwood, 826 So. 2d 221 (Fla. 2002) [27 Fla. L. Weekly S175b]; see also, Koch v. Koch, 47 So. 3d 320 (Fla. 2d DCA 2010) [35 Fla. L. Weekly D2091a]. The Court will determine if sanctions are warranted at a separate evidentiary hearing, if necessary.
43. This Court hereby awards Plaintiff $2,123.20 in benefits and compels the Defendant to pay the reasonable attorney’s fees and costs incurred by the Plaintiff for unneccessary litigation. The parties shall schedule an evidentiary hearing to determine the amount of attorney’s fees.
