27 Fla. L. Weekly Supp. 130b

Online Reference: FLWSUPP 2702ACEVInsurance — Personal injury protection — Coverage — Lawfully rendered services — Appeals — Cross-appeals — Interlocutory order denying summary judgment on insurer’s affirmative defense of unlawfulness that was entered prior to entirely favorable summary judgment in favor of insurer may be cross — appealed by insurer — Insurer may raise defense that medical provider’s license was unlawful under licensing statute and, therefore, provider is statutorily barred from seeking reimbursement for services rendered

GALLO MEDIC MEDICAL CENTER a/a/o Luz Delia Acevedo, Appellant/Cross-Appellee, v. STATE FARM FIRE & CASUALTY COMPANY, Appellee/Cross-Appellant. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 13-391 AP. L.T. Case No. 05-2315 CC 26. March 26, 2019. An appeal from the County Court, Miami-Dade County. Lawrence D. King, Judge. Counsel: Maria E. Corredor, Law Offices of Corredor, Husseini & Snedaker, P.A., and Rima C. Bardawil, Law Offices of Rima C. Bardawil, P.A., for Appellant/Cross-Appellee. Diane H. Tutt, Conroy Simberg, for Appellee/Cross-Appellant.

Second-Tier Certiorari DENIED. 44 Fla. L. Weekly D2017b

(Before ESPINOSA DENNIS, ARZOLA, and BOKOR, JJ.)

(BOKOR, J.) This second opinion regarding a properly-noticed appeal and cross-appeal addresses two issues — procedurally, does this Court have jurisdiction to hear the cross-appeal at issue, and if so, did the trial court err in granting summary judgment in favor of the cross-appellee on the cross-appellant’s “unlawfulness” affirmative defense? Having heard argument, carefully reviewed the briefs, the record, and the applicable law, we determine that the issue on cross-appeal is properly before us and we REVERSE and REMAND the case for further proceedings consistent with this opinion.

The parties in this case timely appealed and cross-appealed orders of the trial court. The medical provider in a personal injury protection action, Gallo Medical Center, a/a/o Luz Delia Acevedo (“Gallo” or “Appellant/Cross-Appellee”) appealed a final order in favor of the insurer, State Farm Fire & Casualty Co. (“State Farm” or “Appellee/Cross-Appellant”). Conditioned on the appeal of a final order, State Farm cross-appealed an order granting partial summary judgment in favor of Gallo on State Farm’s “unlawfulness” affirmative defense. Both Gallo’s appeal of the final order in favor of State Farm and State Farm’s cross-appeal of the summary judgment order in favor of Gallo were briefed and argued to an appellate panel of this Court on December 9, 2015.

The underlying substantive question on cross-appeal presents a purely legal issue: did the trial court err in granting partial summary judgment in favor of the Appellant/Cross-Appellee on the Appellee/Cross-Appellant’s “unlawfulness” affirmative defense? Before we reach the substantive issue, however, we must examine the procedural history giving rise to this Court’s exercise of jurisdiction. Absent more (such as a petition for a writ of certiorari), appeal of a non-final order fails to trigger appellate jurisdiction. See, e.g., Shupack v. Allstate Ins. Co., 356 So. 2d 1298, 1299 (Fla. 3d DCA 1978) (dismissing appeal of a summary judgment order which is not a final judgment).

I. This Court has Appellate Jurisdiction Over the Cross-Appeal.

This issue comes before us with a long and winding appellate history, which is relevant to this Court’s determination of whether we have jurisdiction to hear the cross-appeal argued before us. A previous appellate panel in this case heard the underlying appeal and cross-appeal. That panel issued an opinion that addressed only Gallo’s appeal and failed to reference or dispose of State Farm’s cross-appeal. See February 1, 2016 Opinion (addressing the issue on appeal and reversing the order dismissing the case for lack of standing and the final judgment entered thereon and remanding for proceedings consistent with such opinion) [24 Fla. L. Weekly Supp. 23c]. The cross-appeal presented a legal question distinct from the issue on appeal and therefore was not subsumed or extinguished by the February 1, 2016 Opinion. State Farm brought such failure to address the cross-appeal to the attention of the Court and moved for rehearing on the basis that “the Court may have overlooked the existence of the cross-appeal. . . [which] presents a completely separate issue from the main appeal. . .”.¹ The original appellate panel in this case agreed and granted the motion for rehearing “only as to State Farm’s cross appeal which presents a completely separate issue from the main appeal.” See March 10, 2016 Order.

Gallo moved to set aside the order granting rehearing and argued that the Court lacks jurisdiction to hear the cross-appeal, as the February 1, 2016 Opinion reversed final judgment in favor of State Farm and remanded the case for further proceedings. Gallo argued that this act rendered the cross appeal interlocutory and premature. See Appellant/Cross-Appellee’s March 24, 2017 motion to set aside order granting rehearing at 3-4. The original appellate panel denied the motion to set aside the order. See April 25, 2016 Order. This opinion sets forth the procedural and legal basis for this Court’s ruling on what, standing alone in other circumstances, may be an interlocutory issue not ripe for appellate review. Specifically, the Appellant/Cross-Appellee here appealed a final order or orders entirely favorable to the Appellee/Cross-Appellant. See October 29, 2013 Notice of Appeal. Prior to entry of the entirely favorable final judgment in favor of State Farm, the trial court entered an interlocutory order against State Farm — the order denying summary judgment on the affirmative defense of “unlawfulness.” See Trial Court’s July 22, 2013 Order on Plaintiff’s Motion for Partial Summary Judgment. Although an interlocutory order would not alone grant appellate jurisdiction, “an interlocutory order entered prior to an entirely favorable final judgment may be cross-appealed by the appellee.” Allen v. TIC Participations Trust, 772 So.2d 260, 261 (Fla. 4th DCA 1998) [24 Fla. L. Weekly D1a] (citing Dauer v. Freed, 444 So.2d 1012 (Fla. 3d DCA 1984) (Hubbard, J. concurring)). In Allen, the Fourth District Court of Appeal explained that “[t]he notice of cross-appeal is technically from the final order, but appellees may assert error as to any adverse interlocutory order preceding the entry of the final order.” Id. citing Dauer at 1016. Because the appeal is technically considered of the final order, “the cross-appeal, pursuant to Rule 9.110(g), is the appropriate method of seeking review of the earlier order.” Id. Accordingly, the cross-appeal brought by State Farm is the proper vehicle to challenge the earlier adverse order.²

II. State Farm May Raise the “Unlawfulness” Affirmative Defense.

Substantively, this cross-appeal hinges on whether State Farm has a right to raise an “unlawfulness” affirmative defense challenging Gallo’s ability to seek personal injury protection benefits. Simply put, State Farm’s affirmative defense alleges something akin to an illegality defense and constitutes an avoidance.³ State Farm asserts that Gallo could not have lawfully received a license under section 400.9935(3) of the Florida Statutes (2004) and therefore State Farm doesn’t have to pay under section 627.736(5)(b)1.b of the Florida Statutes (2004). Gallo argued, and the trial court agreed, that the court had no authority to adjudicate what Gallo framed as an administrative issue, specifically, a nonjusticiable back-door challenge to a licensing decision by a competent state administrative agency authorized to issue these licenses under the Florida Health Care Act. We review a lower court’s legal conclusions de novo. See Volusia Cnty. v. Aberdeen al Ormond Beach, L.P., 760 So. 2d 126, 130-31 (Fla. 2000) [25 Fla. L. Weekly S390a]; Sierra v. Shevin, 767 So. 2d 524, 525 (3d DCA 2000) [25 Fla. L. Weekly D1605a]; see also State v. Joubert, 847 So.2d 1023, 1025 (Fla. 3d DCA 2003) [28 Fla. L. Weekly D1112a] (holding that issues of statutory construction are pure questions of law reviewed under a de novo standard). We hold that State Farm may raise the affirmative defense of “unlawfulness.” As explained below, the affirmative defense at issue is not an impermissible challenge to an agency decision and instead permissibly seeks to avoid liability if the claims can be proved as asserted.

State Farm’s avoidance defense seeks to prove that Gallo’s license was unlawful under the relevant licensing statute, rendering the charges at issue in the case unenforceable against State Farm under the personal injury protection statute.⁴ Gallo asserts that its clinic was licensed by the relevant administrative agency authorized under statute. State Farm’s affirmative defense alleges that Gallo was not lawfully licensed and, therefore, statutorily barred from seeking reimbursement from State Farm for the services rendered. While not contesting the plain meaning of the statutes at issue, Gallo argues that State Farm cannot contest the propriety of Gallo’s licensing in court as such contest impermissibly seeks to undo an agency action without the agency being present. See State Farm Mut. Auto. Ins. Co. v. Universal Med. Cir. of So. Fla., Inc., 881 So. 2d 551 (Fla. 3d DCA 2004) [29 Fla. L. Weekly D652e]. Gallo’s argument miscasts the issue — State Farm is not contesting the competency of the administrative agency to issue licenses, or seeking a private right of action to bring a lawsuit to cancel Gallo’s license. State Farm instead seeks to avoid, through its affirmative defense, liability to Gallo based on Gallo’s alleged failure to comply with statutory requirements in seeking reimbursement of a personal injury protection claim.

In explaining why the trial court erred in barring such affirmative defense, State Farm appropriately relies on the analysis and holding of State Farm Fire & Cas. Co. v. Silver Star Health and Rehab., 739 F. 3d 579, 583 (11th Cir. 2013) [24 Fla. L. Weekly Fed. C834a] (applying Florida law in affirming district court’s determination that State Farm could contest the lawfulness of Silver Star’s personal injury protection charges based on Silver Star’s allegedly improper operational status). See also Active Spine Ctr., LLC v. State Farm Fire & Cas. Co., 911 So. 2d 241 (3d DCA 2005) [30 Fla. L. Weekly D2286a] (affirming trial court’s determination of lawfulness under a similar statutory licensing scheme). The statutes at issue plainly state that a service is lawful when a clinic complies with all relevant statutory and administrative requirements related to the provision of such service. Further, a provider does not have to pay for a service not lawfully rendered. See n.4, supra. State Farm argues that it may raise an affirmative defense to challenge Gallo’s compliance with the requisite statutes, and therefore its ability to seek reimbursement in the underlying lawsuit.

State Farm’s position that a clinic must be lawfully licensed to seek a lawful reimbursement under the statute does not appear controversial. Indeed, Gallo does not (and cannot) argue that the statutes permit unlawful treatments and allow reimbursement for unlawful charges. Gallo instead argues that State Farm cannot challenge such lawfulness and that Silver Star, the main case upon which State Farm relies, is inapposite. The Silver Star chiropractic clinic operated under an exception to licensing under section 400.9905(4)(g) of the Florida Statutes while Gallo was affirmatively licensed under the same statute by the relevant administrative agency. Gallo proposes that the distinction as to how a clinic operates under the relevant statutory scheme influences the justiciability of the “unlawfulness” affirmative defense. See Gallo’s June 15, 2015 Reply Brief and Cross Answer Brief at 28. Gallo’s argument would mean that an insurer could challenge the lawfulness of the charges where the clinic operates under a statutory exception to licensing, like in Silver Star, but where an administrative agency issued a license to operate under the same statutory scheme, the issue of lawfulness becomes off-limits for judicial challenge. Gallo’s interpretation not only twists the logic of Silver Star to its breaking point, it ignores the plain language of the statutes at issue. See Holly v. Auld, 450 So.2d. 217, 219 (Fla. 1984) (explaining that “[w]hen the language of the statute is clear and unambiguous and conveys a clear and definite meaning. . .the statute must be given its plain and obvious meaning”) (internal citations omitted).

Gallo’s argument would also read into the statute a nonexistent provision barring judicial “authority to decide the crucial question on which the lawfulness, compensability, and enforceability of a claim depends.” Silver Star, 739 F. 3d at 583. Worse, it would insert that nonexistent provision barring a defense to a clinic’s recovery in some cases (here) but not others (such as in Silver Star). Such argument impermissibly invites this court to “construe an unambiguous statute in a way which would extend, modify, or limit its express terms or its reasonable and obvious implications. To do so would be an abrogation of legislative power.” Active Spine Ctr., 911 So.2d at 244 (citing Metro. Dade Cty. v. Milton, 707 So.2d 913, 915 (Fla. 3d DCA 1998) [23 Fla. L. Weekly D674c]). State Farm’s affirmative defense does not offend the administrative purview of any agency, and comports with the plain language of the statutory scheme in a personal injury protection case. Accordingly, the trial court’s order granting partial summary judgment in favor of Gallo on the issue of State Farm’s affirmative defense of “unlawfulness” is REVERSED and this matter is REMANDED for proceedings consistent with this opinion.

Cross-Appellee/Appellant’s motion for attorney’s fees and costs is denied. Cross-Appellant/Appellee’ s motion for attorney’s fees and costs as it relates to the cross-appeal is hereby conditionally granted pending the outcome of the case below, with the trial court to make a determination as to amount owed, if appropriate. (ESPINOSA DENNIS and ARZOLA, JJ. concur.)

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¹See Appellee/Cross-Appellant’s February 18, 2016 motion for rehearing at 3. State Farm’s motion for rehearing suggests that the Court may have thought the cross-appeal was factually or legally tied to the main appeal “due to limited time at the oral argument, only the main appeal was argued.” Id. No party argues that the previous panel’s opinion addressed or disposed of the cross-appeal. Additionally, no one argues that the cross-appeal was abandoned or waived.

²The fact that the prior appellate panel did not address the cross-appealed issue in its opinion is not relevant. The panel, as explained earlier, rectified such mistake or inadvertence by granting the motion for rehearing on the issues raised in the cross-appeal. This opinion makes clear, however, that this Court’s continued jurisdiction results only from the fact that the issues were timely raised in a cross-appeal to an appeal of a final order.

³See Fla. R. Civ. P. 1.110(d) (affirmative defenses include “illegality” and “any other matter constituting an avoidance or affirmative defense”).

⁴State Farm’s “unlawfulness” affirmative defense alleges that the owners of Gallo illegally or through fraud obtained a license to operate the medical clinic. State Farm argues that because Gallo was not properly licensed under the Florida Health Care Clinic Act, any charges billed were unlawful and noncompensable under the personal injury protection statute. See § 627.736(5)(b)1.b, Fla. Stat. (2004) (“An insurer. . .is not required to pay a claim or charges [. . .] For any service or treatment that was not lawful at the time rendered. . .) (emphasis added); § 627.732(11), Fla. Stat. (2004) (“Lawful” defined as “in substantial compliance with all relevant applicable criminal, civil, and administrative requirements of state and federal law related to the provision of medical services or treatment.”); see also, § 400.9935(3), Fla. Stat. (2004) (the “Florida Health Care Clinic Act”) (“A charge or reimbursement claim made by or on behalf of a clinic that is required to be licensed under this part but that is not so licensed, or that is otherwise operating in violation of this part. . . is an unlawful charge and is noncompensable and unenforceable.”) (emphasis added).