27 Fla. L. Weekly Supp. 898a
Online Reference: FLWSUPP 2710FRIEInsurance — Personal injury protection — Attorney’s fees — Claim or defense not supported by material facts or applicable law — Insurer’s motion for section 57.105 sanctions against medical provider who pursued action for PIP benefits despite being advised that benefits had been exhausted is denied where provider had arguable basis to believe that some payments made by insurer to other providers were gratuitous
FRIEDMAN CHIROPRACTIC CENTER, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County, Small Claims Division. Case No. 2015-000021-SP-21, Section HI 01. December 12, 2019. Milena Abreu, Judge. Counsel: Ryan Peterson, The Patino Law Firm, Hialeah, for Plaintiff. Jon Brooks, for Defendant.
ORDER DENYING DEFENDANT’S MOTION FORSANCTIONS PURSUANT TO FLA. STAT. 57.105
COMES NOW, the Court, after a review of the court file, docket history, pleadings, case law, relevant statutes and arguments of Counsel and hereby rules as follows:
1) Defendant requests Sanctions pursuant to Florida Statutes 57.105 after prevailing via summary judgment on a finding of benefits exhausted.
2) Defendant further asserts there is no record evidence from the pleadings challenging the exhaustion of benefits asserted in the Defendant’s Answer.
Florida statute 57.105 states:
“Upon the court’s initiative or motion of any party, the court shall award a reasonable attorney’s fee, including prejudgment interest, to be paid to the prevailing party in equal amounts by the losing party and the losing party’s attorney on any claim or defense at any time during a civil proceeding or action in which the court finds that the losing party or the losing party’s attorney knew or should have known that a claim or defense when initially presented to the court or at any time before trial:
(a) Was not supported by the material facts necessary to establish the claim or defense; or
(b) Would not be supported by the application of then-existing law to those material facts.
Thus, when reviewing a claim under F.S. 57.105, this Court’s inquiry is whether the Plaintiff knew or should have known, that their claim was a) not supported by material facts necessary to establish the claim, or b) would not be supported by the application of then-existing law to those material facts. Exceptions are also made in the statute for any “good faith argument for the extension, modification, or reversal of existing law or the establishment of new law, as it applied to the material facts, with a reasonable expectation of success.” Fla. Stat. 57.105 (1)(b).
PRE-SUIT ACTIVITY
A review of the pre-suit activity in this case is dispositive of the Court’s determination of whether Plaintiff knew or should have known of a). . .material facts necessary to establish the claim.
Prior to suit, Plaintiff submitted a demand letter wherein the Defendant asserted its exhaustion of benefits, enclosing the PIP log of payments. However, Plaintiff noted on Defendant’s PIP log a payment to one of the other providers, “Vivisant” as having been received 42 days after the services were provided. Under Fla. Stat. 627.736 (5) a bill is untimely and unpayable if not submitted within 35 days of the date received. Assuming the bill was submitted untimely and untimely paid by Defendant, then the payment may be considered a gratuitous payment and benefits not exhausted. See Coral Imaging v. Geico, 955 so.2d 11, 12 (Fla. 3rd DCA 2006) [31 Fla. L. Weekly D2478a]. The exception would be if the Defendant timely received a “Notice of Initiation of Treatment”, thereby extending the deadline to 75 days.
Before filing suit, the Plaintiff in this case submitted a letter to State Farm requesting proof of a “Notice of Initiation of Treatment” for the specific Vivisant bill/payment on the PIP log, advising Defendant that failure to respond would result in the lawsuit being filed. The Defendant did not respond and Plaintiff filed suit on January 2, 2015.
Attached with Plaintiff’s complaint were several discovery requests including admissions, production and interrogatories covering the Vivisant payment/bill issue. Additionally, the Plaintiff also served Defendant on February 10, 2015 with requests specific to Exhaustion of benefits discovery that would have naturally covered the Vivisant bill/payment issue. The court docket shows the Defendant did not respond to said discovery requests but instead filed its first 57.105 Motion on February 25, 2015.
The Court notes the parties dispute when the Notice of Initiation of Treatment was submitted; while the Defendant asserts it was submitted on or around February of 2017, Plaintiff asserts they did not see it until the hearing on Defendant’s Motion for Summary Judgment in August of 2018. Regardless of either date, the Defendant submitted the Notice long after the 21 day safe harbor period had expired in 2015.
On August 7, 2018, the Court — now retired Judge Cohn, ultimately heard and granted Defendant’s Motion for Summary Judgment currently on appeal. Plaintiff’s counsel suggests that even if the Appellate Court determines the Vivisant bill was properly and timely paid, there are other good faith bases to go forward with this lawsuit; Specifically,
1) Defendant has paid other medical providers in excess of that which the insurance policy requires — known as the “limiting charge” instead of the participating physician’s fee schedule as required by the schedule of maximum charges limitations in the insurance policy (relying on Millennium Diagnostic v. Sec. Nat’l Ins. Co, 882 So.2d 1027 (Fla. 3d DCA, 2004) [29 Fla. L. Weekly D1817b], and
2) Defendant sued Ceda — a separate medical provider listed in the PIP log in Federal Court — Case No: 19-cv-22487-UU (S.D. Fla. 2019), alleging Ceda along with other named Defendants defrauded State Farm. As a result, Plaintiff now argues that there is no way the Defendant could suggest that the payment of what they claim are “unlawful and medically unnecessary services” to another provider in this claim could be found to be anything but “gratuitous,” as the Defendant themselves seek that same payment back that would in turn, presumably be available to pay the insured’s additional bills in this case.
This Court does not suggest it is ruling on the merits of Plaintiffs arguments as they are not before this Court today; rather, the Court merely seeks to list its reasons for denying Defendant’s request and finding the Plaintiff had an arguable basis for going forward with the lawsuit at the time Defendant filed its 57.105 motion.
Although the Defendant has prevailed on this case by way of summary judgment, (pending a decision on Plaintiff’s appeal), “merely losing a case is not a basis for sanctions under section 57.105.” Minto PBLJ, LLC, v. 1000 Friends of Fla., Inc., 228 So.3d 147 (Fla. 4th DCA 2017) [42 Fla. L. Weekly D2223a]. “Where there is an arguable basis in law and fact for a party’s claim, a trial court may not sanction that party under section 57.105.” Id. An award of attorney’s fees pursuant to section 57.105 is appropriate only when the action is so clearly devoid of merit both on the facts and the law as to be completely untenable.” Department of Revenue v. Marchines, 974 So.2d 1085 (Fla. 2d DCA 2007) [32 Fla. L. Weekly D743a].
Additionally, Florida courts have held that 57.105 sanctions are to be awarded with restraint and under limited circumstances to ensure that such sanctions serve the purpose for which it was intended — specifically to discourage baseless claims and not to cast a chilling effect on use of the courts. See Swan Landing Development, LLC v. First Tennessee Bank National Association, 97 So.2d. 326 (Fla. 2d DCA 2012) [37 Fla. L. Weekly D2225a]. As a result, the Court respectfully deniesthe Defendant’s Motion for Sanctions pursuant to Florida statute 57.105.
