26 Fla. L. Weekly Supp. 321a
Online Reference: FLWSUPP 2604WOODInsurance — Personal injury protection — Attorney’s fees — Confession of judgment — Insurer’s post-suit payment of benefits effected a confession of judgment entitling medical provider to attorney’s fees and costs irrespective of whether insurer had notice of suit prior to paying disputed benefits — Provider is also entitled to fees for time spent litigating entitlement to fees
PREMIER DIAGNOSTIC IMAGING, as assignee of Derifond Woodenaw, Plaintiff, v. CENTURY-NATIONAL INSURANCE COMPANY, Defendant. County Court, 15th Judicial Circuit in and for Palm Beach County. Case No. 502017SC001493XXXXMB RL. August, 23, 2017. Dana M. Santino, Judge. Counsel: Shannon M. Mahoney, Shannon M. Mahoney, PLLC, West Palm Beach, for Plaintiff. William McFarlane, Coral Springs, for Defendant.
Order on Plaintiff’s Motion to Deem Confession of Judgment,Motion for Determination of Plaintiff’s Entitlement to Attorneyand Legal Assistant Fees and Costs Until Entitlement isDetermined and Amended Motion to Tax Fees and Costs
THIS CAUSE having come before this Honorable Court on Thursday, August 10, 2017 on Plaintiff’s Motion to Deem Confession of Judgment, Motion for Determination of Plaintiff’s Entitlement to Attorney and Legal Assistant Fees and Costs Until Entitlement is Determined, and Amended Motion to Tax Fees and Costs, and the Court being advised in the premises finds as follows:
I. Facts
On October 25, 2016, Plaintiff, Premier Diagnostic Imaging (“Premier”), rendered MRI services to Defendant, Century-National Insurance Company’s (“Century”), insured, Derifond Woodenaw. Premier submitted its bill to Century. On November 7, 2016, Century received Premier’s bill. Century did not respond to the bill. Having received no response to its bill, Premier submitted a pre-suit demand letter under Florida Statute section 627.736(10). On January 3, 2017, Century received Premier’s pre-suit demand letter. Century did not respond to the pre-suit demand letter. On February 3, 2017, having received no response to its billing and pre-suit demand letter, Premier filed this suit for PIP benefits. On February 14, 2017, Century was served with Premier’s lawsuit. On February 14, 2017, Century tendered payment for the benefits at issue.
Premier asserts that Century effected a confession of judgment by issuing payment after suit was filed pursuant to Florida Statutes section 627.428 and Wollard v. Lloyds & Companies of Lloyd’s., 439 So 2d 217 (Fla. 1983), and its progeny. Therefore, Premier seeks an award of attorneys fees, legal assistant fees and costs for the underlying suit and for establishing entitlement, as well as interest on fees and costs from the date of the confession. Century asserts that the February 14, 2017 payment was not a confession of judgment because Century was not aware of Premier’s lawsuit at the time it issued payment.
II. Law and Analysis
It is “(w)ithout a doubt, [that] the purpose of the no-fault statutory scheme is to provide swift and virtually automatic payment so that the injured insured may get on with his life without undue financial interruption.” Ivey v. Allstate Ins. Co., 774 So 2d 679, 683,684 (Fla. 2000) [25 Fla. L. Weekly S1103a].
For over a quarter of a century, Florida courts have consistently held: [T]he statutory language is clear and unambiguous. The insurance company has thirty days in which to verify the claim after receipt of an application for benefits. There is no provision in the statute to toll this limitation. The burden is clearly upon the insurer to authenticate the claim within the statutory time period. To rule otherwise would render the recently enacted “no fault” insurance statute a “no pay” plan — a result we are sure was not intended by the legislature.
Id. at 684. Ivey was a suit for PIP benefits where The Florida Supreme Court held that, in any dispute, when an insurer pays the claim after the lawsuit has been filed, the payment operates as a confession of judgment and entitled the insured to attorney fees. Id.
Since the Supreme Court’s opinion in Ivey, Florida Statute section 627.736 has been amended, more than once, to require a pre-suit demand letter before filing a lawsuit. Presently, section 627.736(10)(d) provides that the insurer has thirty days from receipt of the demand letter to pay the demand letter. And, if the insurer pays the demand within thirty days, no suit may be brought against the insurer. Significantly, section 627.736(10)(d) states, “The insurer is not obligated to pay any attorney fee if the insurer pays the claim or mails the agreement to pay for future treatment within the [thirty days].”
The statute has also been amended since Ivey under subsection eight to specifically state that with respect to any dispute under 627.736 between the assignee and the insurer, the provisions of 627.428 apply. Fla. Stat. 627.736(8). Under sections (8) and(10)(d), the statute contemplates that an insurer who issues payment after the thirty day demand period expires is subject to attorney fee liability. There is no prevision requiring service of process of a complaint before entitlement to fees is triggered.
The facts of the case at bar are analogous to those in Stewart v. Midland Life Insurance Co, 899 So. 2d 331 (Fla. 2nd DCA 2005) [30 Fla. L. Weekly D552a]. In Stewart, the claimant, Mrs. Stewart, pursued life insurance benefits for her deceased husband. She presented her proof of loss to the insurance company and waited the statutorily required sixty day period. Midland did not respond within the sixty days. Mrs. Stewart filed suit on the eighty-sixth day. Six days later and before the complaint was served on Midland, Midland sent payment to Mrs. Stewart. Mrs. Stewart made a claim for attorney fees based on Midland’s confession of judgment. Midland disputed that a confession of judgement was effected because it had not been served with the complaint at the time of the payment. The trial court agreed and granted summary judgment in Midland’s favor.
On appeal, the district court concluded that the fact that Midland was unaware of the lawsuit at the time of litigation does not defeat Midland’s obligation to pay attorney fees. Id. at 333. The court asked and answered its own rhetorical question: “How long was Stewart’s counsel to wait without payment before suit was filed? Under section 627.428, it was appropriate to file suit and seek attorney’s fees after the applicable sixty-day period.” Id. at 333. The Court remanded the case to the trial court with directions to enter summary judgment in Mrs. Stewart’s favor on entitlement to attorney fees.
Like Mrs. Stewart, Premier sent the billing information to Century. Century failed to respond within the statutory thirty days. Premier then sent a pre-suit demand giving notice of its intent to pursue litigation. Again, Century failed to respond within the statutory thirty days. Like Mrs. Stewart, it was appropriate for Premier to file suit and seek attorney fees after the thirty day demand period expired. And, Century’s payment after suit was filed is a confession of judgment — regardless of whether Century was aware of the lawsuit. Century’s argument that it did not have notice that Premier’s Complaint was filed at the time it issued payment is irrelevant, although flawed because, first, Century received notice of Premier’s billing, second, Century received notice of Premier’s intent to initiate litigation and, third, Century was served with the complaint on February 14, 2017 — the same date that the payment was tendered.
To support its argument that Century’s payment should not be considered a confession of judgment, Century cites a number of home owner’s insurance cases where the insurer disputed the amount owed, the insured filed suit, and then the insurer invoked its contractual right to an appraisal under the insurance policy which resulted in the insured’s recovery of additional money: State Farm Florida Insurance Company v. Lime Bay Condominium, 187 So. 3d 932 (Fla. 4th DCA 2016) [41 Fla. L. Weekly D730a], Clifton v. United Casualty, 31 So 3d 826 (2nd DCA 2010) [35 Fla. L. Weekly D364e] Lewis v. Universal Property and Casualty Ins. Co., 13 So 3d 1079, 1081-1082 (Fla. 4th DCA 2009) [34 Fla. L. Weekly D1104a]. Under these cases, where the insurer disputed the amount owed and invoked its contract right to an appraisal after suit was filed, courts ruled that the lawsuit, as opposed to the appraisal, must be the catalyst for payment in order for the payment to be considered a confession of judgment. But, these cases are inapplicable to the case at bar. First, Century failed to respond, at all, to Premier’s billing and demand letter — having the effect of denying liability for both. Clifton v. United Cas. Ins. Co. of Am., 31 So. 3d 826, 832 (Fla. 2d DCA 2010) [35 Fla. L. Weekly D364e] (When an insurer is aware that an insured disputes the settlement of a claim and the insurer fails to respond in any fashion to the insured’s demand for further action, that failure has the legal effect of denying coverage.) In contrast, in the cases cited by Century, the insurer did not dispute liability, it only disputed the amount of its liability. Second, there is no appraisal election in the PIP statute or the policy at issue.
Defendant also cites to State Farm v. Lorenzo, 969 So. 2d 393 (Fla 5th DCA 2007) [32 Fla. L. Weekly D1791e], for the proposition that the confession of judgment rule cannot be broadly applied. But, the Lorenzo case involved a property damage claim of an insured who concealed necessary information from the insurer to prevent the insurer’s payment and then created a class action suit to sue the insurer for the non-payment. Essentially, the insured set the insurer up to create a case and claim for attorneys fees. These facts are entirely distinguishable and this case is not applicable.
III. Conclusion
Here, Premier submitted its billing, followed by a pre-suit demand. Century failed to respond to both — having the effect of denying the claim twice. Premier timely filed its lawsuit followed by Century’s payment. Century’s payment was the functional equivalent of a confession of judgment entitling Premier to its attorney fees, legal assistant’s fees and costs, plus interest. Any determination otherwise would encourage insurers to deny valid claims with the assurance that no penalty would be assessed if they paid valid claims before service of process was effected. This is clearly not the legislature’s intent in enacting the PIP statute. See Ivey, 774 So 2d at 683, 684 (The purpose behind the PIP statute is swift payment; PIP benefits are overdue if not paid within thirty days.).
Additionally, Plaintiff is entitled to fees for time spent having to establish entitlement to fees. State Farm v. Palma, 629 So. 2d 830 (Fla. 1993)(If an insurer loses a suit but contests the insured’s entitlement to attorney’s fees, this is still a claim under the policy and within the scope of section 627.428.). It is therefore,
ORDERED and ADJUDGED that Premier’s Motion to Deem Confession of Judgment, Motion for Determination of Plaintiff’s Entitlement to Attorney and Legal Assistant Fees and Costs Until Entitlement is Determined is GRANTED. Premier is entitled to attorneys fees, legal assistant fees, and costs for litigating the underlying case and litigating entitlement to fees. Premier is also entitled to interest on the attorney fees and costs. This court reserves jurisdiction to take evidence and determine the reasonable amount of fees and costs.
