27 Fla. L. Weekly Supp. 483a

Online Reference: FLWSUPP 2705ANDEInsurance — Personal injury protection — Attorney’s fees — Proposal for settlement — Nominal offer — Insurer had reasonable foundation for nominal offer where insurer had three independent bases upon which to prevail at summary judgment, including lack of emergency medical condition determination, failure to respond to request for documentation and invalid demand letter, and there were multiple favorable orders on EMC defense at time proposal for settlement was served — Further, where appellate court granted motion for attorney’s fees without objection and remanded case only for determination of amount of fees, ruling on entitlement to fees is binding on trial court — Fact that insurer paid additional benefits upon receipt of post-suit EMC determination does not render proposal for settlement a nullity

HEALTH DIAGNOSTICS OF FT. LAUDERDALE, d/b/a STAND UP MRI OF FT. LAUDERDALE, a/a/o Martha J. Anderson, Plaintiff, v. USAA CASUALTY INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 2014-5989 SP 25. July 2, 2019. Linda Diaz, Judge. Counsel: Martin I. Berger, for Plaintiff. Scott W. Dutton, Dutton Law Group, Tampa, for Defendant.

ORDER GRANTING DEFENDANT’S MOTIONTO DETERMINE ENTITLEMENT TOREASONABLE ATTORNEYS FEES AND COSTS

This matter came on to be heard on June 12, 2019 on USAA CASUALTY INSURANCE COMPANY’s Motion to Determine Entitlement to Reasonable Attorneys Fees and Costs and after having reviewed the record and heard argument of counsel the Court finds as follows:

1. The subject action arises out of a claim for personal injury protection benefits filed by the Plaintiff, as assignee of Martha J. Anderson (“Anderson”) against the Defendant, USAA Casualty Insurance Company (“USAA”), arising out of a motor-vehicle accident that occurred May 22, 2013.

2. On August 3, 2013, the Plaintiff rendered an MRI and billed its services to the Defendant, USAA.

3. USAA responded with an Explanation of Reimbursement for the date of service of August 3, 2013 advising that payment was declined because there was no determination of an emergency medical condition by a medical provider authorized in section 627.736 (1) (a) (4) at that time and PIP payments had already been issued up to the limit of $2,500:

Per F.S.A 627.736(1)(a)4, $2500.00 has been reimbursed. In order to make any additional reimbursement decisions, please provide the determination of the patient’s emergency medical condition by a provider authorized in 627.736(1)(a)3 & 4.

4. The Explanations of Reimbursement also expressly requested the Plaintiff to provide information as to whether a determination of an emergency medical condition had been made as to Anderson’s condition.

5. USAA made the request in its Explanation of Reimbursement for information pursuant to Florida Statute §627.736(6)(b).

6. Despite USAA’s request for information pursuant to Florida Statute §627.736(6)(b), Plaintiff never responded prior to suit.

7. Plaintiff then sent a purported pre-suit demand letter dated October 29, 2013, which was received by USAA on November 13, 2013.

8. USAA responded on December 9, 2013 stating, again, that the $2,500 reimbursement limits had been reached, and again requested documentation as to whether a determination of an emergency medical condition by an authorized medical provider had been made.

9. Plaintiff did not respond to this request for information; rather, Plaintiff filed suit on May 12, 2014.

10. Defendant responded with an Answer on July 9, 2014 in which it alleged eight different Affirmative Defenses.

11. At the time suit was filed, USAA never considered the charges to be due or overdue given the fact Plaintiff never responded to the requests for an emergency medical condition determination made pursuant to Florida Statute §627.736(6)(b), either prior to their purported Pre-suit Demand letter or prior to suit.

12. Importantly, no documentation was ever received by USAA stating an emergency medical condition existed for the claimant prior to suit.

13. In 2012, the Florida Legislature amended the PIP Statute to provide: (a) provide that an insured cannot access the full $10,000 of available PIP benefits unless a medical provider has determined that the insured has an emergency medical condition (“EMC”); and (b) limit medical benefits to $2,500 when there is no medical determination of an EMC. The amended PIP Statute contains two new sub-sections:

3. Reimbursement for services and care provided in subparagraph 1. or subparagraph 2. up to $10,000 if a physician licensed under chapter 458 or chapter 459, a dentist licensed under chapter 466, a physician assistant licensed under chapter 458 or chapter 459, or an advanced registered nurse practitioner licensed under chapter 464 has determined that the injured person had an emergency medical condition.

4. Reimbursement for services and care provided in subparagraph 1. or subparagraph 2. is limited to $2,500 if a provider listed in subparagraph 1. or subparagraph 2. determines that the injured person did not have an emergency medical condition.

Fla. Stat. §§ 627.736(1)(a)(3) & (4) (2013) (emphasis added).

14. Therefore, based upon the EMC statute, the Defendant initially, prior to suit, limited the reimbursements to $2,500 because the medical records provided did not contain a determination by a person authorized by statute that the claimant had an emergency medical condition.

15. Simply put, no medical provider authorized in § 627.736(1)(a)(3), Fla. Stat. submitted a determination that the insured had an EMC prior to service of the Plaintiff’s demand letter or service of the complaint.

16. Moreover, it is undisputed that the Plaintiff never responded to the request for information made in the Explanation of Reimbursement prior to its Pre-suit Demand letter, prior to the exhaustion of the $2,500.00 in PIP benefits, or prior to the filing of this suit.

17. On May 12, 2014, instead of providing Defendant an EMC determination, Plaintiff filed suit.

18. On July 9, 2014, Defendant served its Answer and eight affirmative defenses.

19. On August 2, 2014, Defendant moved for summary judgment regarding EMC, failure to respond to request for information, and premature demand letter, which pertain directly to Defendant’s second, third, fifth, sixth, seventh, and eighth affirmative defenses, each of which was independently dispositive of the case in favor of Defendant.

20. On October 21, 2014, Defendant served a timely Proposal for Settlement inclusive of indemnity benefits, attorney’s fees and costs.

21. By the date the Defendant’s Proposal for Settlement was tendered to Plaintiff, there were at least eight favorable rulings¹ supporting Defendant’s position on the emergency medical condition issue that had been rendered by both the federal courts and the state courts that had considered some or all of the issues raised by Defendant.²

22. There were no unfavorable rulings on the EMC issue presented to the court rendered by any of the courts throughout the state.

23. Plaintiff never responded to, nor objected to the Proposal for Settlement.

24. On November 13, 2014, Plaintiff served upon the Defendant an EMC determination in the form of an affidavit from the treating physician who referred the insured to the Plaintiff for the MRI.

25. Thereafter, after receiving the EMC determination, Defendant’s duty to pay benefits above the $2,500 limit arose, and consequently Defendant timely and appropriately issued payment to the providers, including the Plaintiff.

26. On November 20, 2014, the 30-day time period during which Plaintiff could have accepted Defendant’s Proposal for Settlement expired.

27. Because of Defendant’s payment to Plaintiff in suit but after receipt of the EMC determination, Plaintiff moved for entitlement to attorney’s fees and costs based upon an alleged confession of judgment by payment.

28. Thereafter litigation continued.

29. On April 13, 2015, the trial court entered an order in which it denied Defendant’s Motion For Summary Judgment and granted Plaintiff’s Motion for Attorney’s Fees and Costs based upon alleged confession of judgment by Defendant’s payment in suit.

30. Thereafter an appeal ensued.

31. While the matter was pending on appeal, on April 14, 2016, Defendant served a timely Motion for Attorney’s Fees based upon the October 21, 2014 Proposal for Settlement.

32. No objection was filed by Appellee/Plaintiff in response to Appellant’s Motion for Attorney’s Fees.

33. On May 31, 2018, the Appellate Division of the Eleventh Judicial Circuit in and for Miami-Dade County rendered an opinion in which it reversed the trial court’s order denying Defendant’s Motion for Summary Judgment and remanded the case back to the trial court directing the trial court to enter an order granting Defendant’s summary judgment motion [27 Fla. L. Weekly Supp. 463a].

34. On January 9, 2019, upon Defendant’s motion, the trial court entered an order in favor of Defendant consistent with the appellate court’s opinion in mandate, denied Plaintiff’s motion for attorney’s fees and costs, and entered final judgment in favor of Defendant reserving jurisdiction to determine entitlement to the amount of attorney’s fees and costs to Defendant [27 Fla. L. Weekly Supp. 482a].

35. After receiving a “Final Judgment” in its favor, Defendant, as Appellant in the appeals court, served “APPELLANT’S MOTION FOR RULING ON MOTION FOR ATTORNEYS FEES” on February 6, 2019. In its motion, USAA referred to its Appellant’s Motion for Attorney’s Fees served April 11, 2016, Defendants Proposal for Settlement served October 21, 2014, the Opinion of the appellate court dated May 31, 2018, and the Mandate issued by the Appellate Court on September 21, 2018.

36. No objection was filed by Plaintiff/Appellee to either the original motion for appellate attorney’s fees filed April 14, 2016, or toward the instant motion served February 6, 2019.

37. Upon consideration of Appellant’s/Defendant’s Motion for Attorney’s Fees, the Appellate Court rendered its Order on March 27, 2019 granting Appellant’s/Defendants Motion for Ruling on Motion for Attorney’s Fees and remanding to lower court “to determine the amount of a reasonable fee.”

38. Appellee/Plaintiff failed to serve any motion for rehearing or clarification of the Appellate Court’s Order granting Appellant/Defendant’s attorney’s fees.

39. The Order granting Appellant’s Motion for Ruling on Motion for Attorney’s Fees was in no way a “contingent” order. It left no discretion with the trial court regarding determining entitlement to attorney’s fees, especially not regarding appellate fees, but rather it simply “remanded to the lower court to determine the amount of a reasonable fee.”:

CONCLUSIONS OF FACT AND LAW

40. “A proposal shall be deemed rejected unless accepted by delivery of a written notice of acceptance within 30 days after service of the proposal. . . .” 1.442(4)(1), Fla. R. Civ. P.

41. An offeror that prevails in a lawsuit is entitled to reasonable attorney’s fees and costs when an offeree rejects a proposal for settlement that complies with section 768.79 and rule 1.442. As succinctly explained by the Florida Supreme Court:

This Court has explained that the offer of judgment statute creates an entitlement to attorneys’ fees when the statutory and procedural requirements have been satisfied. Attorneys’ Title Ins. Fund, Inc. v. Gorka, 36 So.3d 646, 649 (Fla.2010) [35 Fla. L. Weekly S196a]. The mandatory language of section 768.79 reinforces the notion that a proper offer automatically creates that entitlement, unless the offer is made in bad faith. See § 768.79(1), Fla. Stat. (“[I]f a Defendant files an offer of judgment which is not accepted by the Plaintiff within 30 days, the Defendant shall be entitled to recover reasonable costs and attorney’s fees. . . . Thus, an offer that complies with section 768.79 and Rule 1.442 creates a “mandatory right” to collect attorneys’ fees. TGI Friday’s, Inc. v. Dvorak, 663 So.2d 606, 611 (Fla.1995) [20 Fla. L. Weekly S436a] (citing Schmidt v. Fortner, 629 So.2d 1036 (Fla. 4th DCA 1993)).

Anderson v. Hilton Hotels Corp., 202 So. 3d 846, 856 (Fla. 2016) [41 Fla. L. Weekly S500a].

42. The sole basis on which this court could fail to grant a motion for entitlement to attorney’s fees when all requirements of section 768.79 and rule 1.442 have been met is if this court determines that the proposal for settlement was not made in good faith. See Bosem v. Commerce and Industry Ins. Co., 35 So. 3d 944, 946 (Fla. 3d DCA 2010) [35 Fla. L. Weekly D892a], quoting TGI Friday’s, Inc. v. Dvorak, 663 So. 2d 606, 612 (Fla. 1995) [20 Fla. L. Weekly S436a] (“The statute allows the court, in its discretion, to deny an award of attorney’s fees, but only if it determines that a qualifying offer “was not made in good faith.”); Downs v. Coastal Systems Intern, Inc., 972 So. 2d 258, 261 (Fla. 3d DCA 2008) [33 Fla. L. Weekly D107a] (“[A]bsent a finding that a party’s offer of judgment was not made in good faith, the trial court cannot disallow an entitlement to an award of fees.”)

43. A good faith offer is one where the offeror had a reasonable foundation upon which to make the offer and an intent to settle the case. Downs, 972 So. 2d 258, 261 (“When a court determines the existence or non-existence of good faith, the court must consider whether or not there was a reasonable basis for making the offer and an intent to settle the case.”) (citing opinion omitted); see also Wagner v. Brandeberry, 761 So. 2d 443 (Fla. 2d DCA 2000) [25 Fla. L. Weekly D1344b] (“[T]he question of whether a proposal was served in good faith turns entirely on whether the offeror had reasonable foundation upon which to make his offer and made it with the intent to settle the claim should the offer be accepted.”) (citing opinions omitted).

44. If an offeree challenges a proposal for settlement as not having been made in good faith, the offeree bears the burden of proving the offer was made in bad faith. Levine v. Harris, 791 So. 2d 1175, 1178 (Fla. 4th DCA 2001) [26 Fla. L. Weekly D1824a] (“The burden is on the offeree to prove that the offeror acted without good faith”) (citing opinions omitted); United Services Auto. Ass’n v. Virtual Imaging Services, Inc., 22 Fla. L. Weekly Supp. 516a (Fla. 11th Cir. App. 2014) (finding that the burden is on offeree to prove bad faith, not on the offeror to prove good faith).

45. An offer in a nominal amount is not evidence that the proposal for settlement was made in bad faith where there is record evidence that, at the time the offer was made, the offeror had a reasonable basis to conclude that its exposure was nominal. See Downs, 972 So. 2d 258, 261 (“Even nominal offers may be made in good faith.”) (citing opinions omitted); see also Isaias v. H.T. Hackney Co., 159 So. 3d 1002, 1005 (Fla. 3d DCA 2015) [40 Fla. L. Weekly D753a] (“The determination of whether a ‘nominal’ offer is in good faith requires the trial court to consider whether the offeror had a reasonable basis to conclude, at the time of making the offer, that its exposure was nominal.”), citing State Farm Fla. Ins. Co. v. Laughlin-Alfonso, 118 So.3d 314 (Fla. 3d DCA 2013) [38 Fla. L. Weekly D1654a] (footnoted citations omitted); and Dep’t of Highway Safety & Motor Vehicles v. Weinstein, 747 So. 2d 1019, 1020 (Fla. 3d DCA 1999) [24 Fla. L. Weekly D2799b] (finding no evidence of bad faith where “although the offer was essentially nominal, the record demonstrates conclusively that, at the time it was made, “the [offeror] . . . had a reasonable basis . . . to conclude that [its] exposure was nominal.”) (internal citations and emphasis omitted).

46. Here, there is no basis to deny Defendant’s Motion to Determine Entitlement to Reasonable Attorney’s Fees and Costs.

47. Defendant is the prevailing party in this case, having won final summary judgment in accordance with the Appellate Court’s opinion and mandate.

48. The undisputed record evidence shows that Defendant had a reasonable foundation upon which to serve its Proposal for Settlement. In fact, Defendant had not just one, but three independent bases (i.e. defenses based on EMC, 6b request for information, and invalid pre-suit demand letter) upon which to prevail on summary judgment. Moreover, Defendant had eight favorable orders pertaining to its EMC defense at the time the Proposal for Settlement was served, and no unfavorable EMC orders.

49. Thus, Defendant’s exposure was minimal as evidenced by its filing and ultimately prevailing on its motion for summary judgment. See Downs v. Coastal Systems Intern., Inc., 972 So. 2d 258, 262 (Fla. 972 So. 2d 258) [(Fla. 3d DCA 2008)] [33 Fla. L. Weekly D107a](finding no evidence in the record to conclude that a nominal proposal for settlement was made in bad faith where the Defendant moved for summary judgment and prevailed, finding that this fact supported the argument that Defendant had a reasonable basis to have concluded that it had limited exposure and liability).

50. Secondly, and importantly, the Appellate Court in this case, without objection at either the trial court level or the appellate court level, granted Appellant’s Motion for Ruling on Motion for Attorney’s Fees. This ruling is binding upon this court as law the case or res judicata.

51. As explained by the Third District Court of Appeal in Arce v. Wackenhut Corp., 146 So. 3d 1236, 1241-42 (Fla. 3d DCA 2014) [39 Fla. L. Weekly D1932a]:

[O]nce this Court issued its order granting the motion and remanding with the single directive to the trial court “to fix [the] amount” of fees and costs, Arce acted at his own peril in failing to seek rehearing, reconsideration or clarification whether this Court’s order foreclosed his ability to raise lack of good faith on remand. In failing to seek a clarification of this Court’s order, Arce and the trial court were bound by the plain meaning of the order, and the mandate that followed, which implicitly and necessarily excluded any consideration of lack of good faith and became law of the case. Barrero v. Ocean Bank, 729 So.2d 412 (Fla. 3d DCA 1999) [24 Fla. L. Weekly D446b]. The trial court correctly determined that, in light of this Court’s order, Arce could not raise, and the trial court could not consider, Arce’s claim of lack of good faith.

Our reasoning also disposes of the cross-appeal. Because our order granting fees and costs for the appeal, and remanding for the trial court to fix amount, necessarily determined the issue of good faith (in the absence of an objection by Arce and the failure to seek rehearing or clarification) the law of the case binds the trial court as to any claimed lack of good faith on the issue of trial fees and costs as well. See Silva v. U.S. Sec. Ins. Co., 734 So.2d 429 (Fla. 3d DCA 1999) [24 Fla. L. Weekly D933b]. See also, Specialty Restaurants Corp. v. Elliott, 924 So.2d 834, 837 (Fla. 2d DCA 2005) [31 Fla. L. Weekly D67a] (noting “this doctrine includes not only issues explicitly ruled upon by the court, but also those issues which were implicitly addressed or necessarily considered by the appellate court’s decision”).

Arce v. Wackenhut Corp., 146 So. 3d [1236] at 1241-42 [(Fla. 3d DCA 2014)] [39 Fla. L. Weekly D1932a].

52. In Silva v. U.S. Sec. Ins. Co., 734 So.2d 429 (Fla. 3d DCA 1999) [24 Fla. L. Weekly D933b], cited in the Arce opinion, the Third District Court of Appeal came to a similar result in a setting factually similar to the one before this court.

53. In Silva the insured, Silva, prevailed on summary judgment at the trial court level. The insurer, U.S. Security Insurance Company, appealed. The appellate court reversed the summary judgment that had been entered in favor of the insured and remanded for entry of final judgment in favor of the insurer. As a part of that appeal, the appellate court in Silva granted the insurer’s unopposed motion for appellate attorney’s fees, which was based on an offer of judgment. On remand, the insurer moved for trial court attorney’s fees as well as a determination of the amount of appellate attorney’s fees. The insured challenged the applicability of the offer of judgment statute to PIP cases; however, the trial court rejected the argument and awarded the fees. The insured appealed. On appeal of the fee award, the Third District concluded that where the insured failed to raise the issue posed on appeal of the order establishing entitlement during the prior appeal, the prior order of the appellate court establishing the insurer’s entitlement to attorney’s fees pursuant to the offer of judgment statute necessarily became the law of this case so as to foreclose any re-litigation of this issue on remand. See Silva v. U.S. Sec. Ins. Co., 734 So.2d 429 (Fla. 3d DCA 1999) [24 Fla. L. Weekly D933b].

54. Plaintiff now makes much of the fact that, after Plaintiff provided Defendant with an EMC determination in suit, Defendant made payment after receiving the requested EMC determination. Plaintiff insists that somehow rendered the effect of the Proposal for Settlement either ambiguous or a nullity.

55. First, Plaintiff admitted Defendant’s entitlement to attorney’s fees by failing to timely respond to Defendant’s Request for Admissions that repeatedly requested Plaintiff admitted entitlement.

56. Second, Plaintiff recovered nothing by or through this action and litigation. When suit was filed, Defendant owed nothing to Plaintiff. That is the law of the case.

57. It was long after suit was filed in May of 2014 that Plaintiff provided the requested EMC determination that triggered, for the first time in November of 2014, Defendant’s duty to pay benefits above the $2,500 limit. That fact cannot negate the Defendant’s summary judgment, as opined by the Appellate Court, nor does it render the proposal for settlement a nullity.

58. Moreover, Defendant’s payment of benefits after receiving the EMC determination did not end the litigation. Had Plaintiff accepted Defendant’s proposal for settlement, litigation in this case would have ended. Plaintiff, however, rejected Defendant’s proposal for settlement by failing to respond within 30 days. Plaintiff then continued its litigation throughout the hearing on Defendant’s summary judgment motion and Plaintiff’s Motion for Attorney’s Fees and Costs, then through the appellate process that Plaintiff lost, and up through the present time.

59. Plaintiff attempted to reargue the merits of the case at the entitlement hearing, however all of the points raised by Plaintiff at the entitlement hearing about the merits of its case were argued and rejected by the Appellate Court.

Accordingly, It is therefore,

ORDERED AND ADJUDGED that the Defendant USAA Casualty Insurance Company’s Motion to Determine Entitlement to Reasonable Attorneys Fees is hereby GRANTED.

IT IS FURTHER ORDERED AND ADJUDGED that the Court reserves jurisdiction to determine the amount of attorney’s fees and costs. The parties must attend mediation prior to setting this matter for hearing before the Court on Defendant’s Motion for Attorneys Fees and Costs.

__________________

¹1) Enivert v. Progressive Select Ins. Co., 62 F. Supp.3d 1352 (S.D. Fla. July 23, 2014) [25 Fla. L. Weekly Fed. D123a]; 2) Robbins v. Garrison Prop. & Cas. Ins. Co., 62 F.Supp.3d 1349 (S.D. Fla July 18, 2014), aff’d, 809 F.3d 583 (11th Cir. 2015) [25 Fla. L. Weekly Fed. D125a]; 3) Orthopedic Specialists LLP (a/a/o Colleen Fontana) v. USAA Cas. Ins. Co., 22 Fla. L. Weekly Supp. 131a (Fla. Palm Beach Cty. Ct. June 3, 2014); 4) Southside Chiropractic Centre, Inc. (a/a/o Telly Miller) v. USAA Gen. Ind. Co., 22 Fla. L. Weekly Supp. 152a (Fla. Broward Cty. Ct. June 10, 2014); 5) Precision Diag., Inc. (a/a/o Allen, Jessica) v. United Serv. Auto. Assoc., 22 Fla. L. Weekly Supp. 389c (Fla. Broward Cty. Ct. Aug. 14, 2014); 6) Medical Center of the Palm Beaches (a/a/o Carmen Santiago) v. USAA Cas. Ins. Co., 22 Fla. L. Weekly Supp. 279a (Fla. Palm Beach Cty. Ct. August 20, 2014), aff’d 202 So. 3d 88 (Fla. 4th DCA 2016) [41 Fla. L. Weekly D2018b]; 7) Pembroke Pines MRI, Inc. (a/a/o Steven Weinkle) v. USAA Cas. Ins. Co., 22 Fla. L. Weekly Supp. 448a (Fla. Broward Cty. Ct. October 20, 2014); 8) L. Lee Smith, D.C., P.A. (a/a/o Petrina Easton) v. USAA Cas. Ins. Co., 22 Fla. L. Weekly Supp. 445a (Fla. Palm Beach Cty. Ct. October 21, 2014).

²Since that time, in total, there are over 55 favorable opinions and orders to include one federal court appellate opinion, and two state court District Court of Appeal opinions (including one from the Third District Court of Appeal), as well as multiple Circuit Court appellate opinions supporting Defendant’s position on the emergency medical condition issue.