27 Fla. L. Weekly Supp. 890a
Online Reference: FLWSUPP 2710SRODInsurance — Personal injury protection — Answer — Amendment — Addition of affirmative defense — Insurer waived right to raise fraud defense where insurer was aware of purported fraud by medical provider, having filed Department of Health complaint alleging fraud before provider filed suit for PIP benefits, but insurer did not seek to allege defense of fraud during seven years of litigation — Moreover, insurer abused privilege to amend answer by seeking to amend extremely late in proceedings, and provider would be severely prejudiced by belated proposed amendment — Motion to amend answer is denied
VENUS MEDICAL CENTER CORP., a/a/o Susy Rodriguez, Plaintiff v. UNITED AUTO. INS. CO., Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 2012-020781-CC-25, Section CGO3. November 12, 2019. Patricia Marino Pedraza, Judge. Counsel: Majid Vossoughi and David J. Mannering, Majid Vossoughi, P.A., Miami, for Plaintiff. Paula Elkea Ferris, House Counsel for United Auto. Ins. Co., Miami Gardens, for Defendant.
ORDER DENYING DEFENDANT’SMOTION TO FILE AMENDED ANSWER
THIS CAUSE came before the Court on November 1, 2019 on Defendant’s Motion to File Amended Answer.
The parties were represented by counsel at the hearing who presented arguments to this Court. Paula Elkea Ferris, Esq. appeared on behalf of the Defendant, and Majid Vossoughi, Esq. and David J. Mannering, Esq. appeared on behalf of the Plaintiff.
The Court having reviewed Defendant’s motion, the entire Court file, the relevant legal authorities, and having heard argument from counsel and being otherwise fully advised in the premises, hereby enters this Order DENYING Defendant’s Motion to File Amended Answer and makes the following factual findings and conclusions of law.
BACKGROUND & FACTUAL FINDINGS
Plaintiff rendered treatment to the claimant from November 15, 2011 through February 1, 2012 in relation to an automobile accident that occurred on November 11, 2011 and submitted a claim for payment of Personal Injury Protection (“PIP”) benefits to Defendant.
On March 22, 2012, and well prior to the filing of this action, Defendant lodged a formal Complaint with the Florida Department of Health against Plaintiff alleging that Plaintiff had committed fraud by submitting a claim for date of service 01/16/12 although the patient had allegedly not shown for treatment on said date.
On September 12, 2012, more than seven (7) years ago, Plaintiff filed this breach of contract action seeking payment of unpaid PIP benefits.
On December 7, 2012 Defendant served its Answer in this matter and, despite its prior Complaint lodged with the Florida Department of Health and alleged evidence of fraud, opted not to plead any affirmative defenses to Plaintiff’s Complaint.
The Florida Department of Health investigated the Defendant’s Complaint and, on or about April 4, 2014, dismissed same noting that the matter “has been investigated and reviewed” and that “[a]fter careful consideration of all information and evidence obtained in this case, the Panel Determined that probable cause did not exist” to proceed.
Subsequent to dismissal of its Complaint with the Florida Department of Health, the Defendant elected to continue to travel under its Answer with no pled affirmative defenses and did not seek to amend its pleading or otherwise raise any fraud allegations.
Accordingly, since the inception of this case, the only issues framed by the pleadings have been the reasonableness, relatedness, and medical necessity of treatment rendered by the Plaintiff.
On August 2, 2019 the Court entered its Jury Trial Order imposing various deadlines, setting a Calendar Call for November 1, 2019, and a trial period to commence November 12, 2019. The case was selected for trial because it significantly exceeded the Florida Rules of Judicial Administration Time Standards.
On October 1, 2019 Plaintiff filed its dispositive (i) Motion for Partial Summary Judgment as to Related and Medically Necessary Treatment, and (ii) Motion for Summary Judgment as to Reasonableness of Plaintiff’s Charges establishing Plaintiff’s burden of proof as to the reasonableness, relatedness, and medically necessity of treatment and entitlement to judgment as a matter of law.
On October 9, 2019 Defendant filed its Motion to File Amended Answer seeking to raise a fraud affirmative defense with factual allegations identical to those made by Defendant against Plaintiff some seven (7) years prior in its Complaint to the Florida Department of Health.
In sum, the record before this Court reflects that Defendant, despite its purported evidence and prior allegations of fraud pre-dating the filing of the instant lawsuit, nonetheless litigated this case for more than seven (7) years without ever attempting to raise any fraud defenses to Plaintiff’s Complaint. Instead, Defendant “sat on its hands” opting to wait to seek leave to raise the defense only after the Court had set this matter for trial and Plaintiff had established its entitlement to judgment as a matter of law.
LEGAL ANALYSIS
Fla. R. Civ. Pro. 1.110(d) provides in pertinent part:
RULE 1.110. GENERAL RULES OF PLEADING
(d) Affirmative Defenses. In pleading to a preceding pleading a party shall set forth affirmatively . . . fraud . . . and any other matter constituting an avoidance or affirmative defense.
Fla. R. Civ. Pro. 1.140(h)(1) provides:
RULE 1.140. DEFENSES
(h) Waiver of Defenses.
(1) A party waives all defenses and objections that the party does not present either by motion under subdivisions (b), (e), or (f) of this rule or, if the party has made no motion, in a responsive pleading except as provided in subdivision (h)(2).
“Affirmative defenses required to be defensively pleaded under Rule 1.110(d) are waived if not timely raised by motion to dismiss or responsive pleading.” See Florida Civil Procedure, 2006 Edition, Bruce J. Berman, 140.11[1][d]; Fla. R. Civ. Pro. 1.140(h)(1) (“A party waives all defenses … that the party does not present either by motion … or, if the party has made no motion, in a responsive pleading …”) (emphasis added); See Mangum v. Susser, 764 So.2d 653, 654-55 (Fla. 1st DCA 2000) [25 Fla. L. Weekly D1216a]; see also Wolowitz v. Thoroughbred Motors, Inc., 765 So.2d 920, 923 (Fla. 2d DCA 2000) [25 Fla. L. Weekly D2033a] (defense of accord and satisfaction waived pursuant to R. 1.140(h) since not pled as a defense as otherwise required under R. 1.110(d)); Fisher v. Fisher, 613 So.2d 1370 (Fla. 2d DCA 1993) (defense of laches waived pursuant to R. 1.140(h) since not pled as a defense as otherwise required under R. 1.110(d)); Miami Elec. Ctr., Inc. v. Saporta, 597 So.2d 903 (Fla. 3d DCA 1992) (defense of illegality waived pursuant to R. 1.140(h) since not pled as a defense as otherwise required under R. 1.110(d)); Kersey v. City of Rivera Beach, 337 So.2d 995 (Fla. 4th DCA 1976) (defense of estoppel waived pursuant to R. 1.140(h) since not pled as a defense as otherwise required under R. 1.110(d)); St. Paul Fire & Marine Ins. Co. v. Walsh, 501 So.2d 54 (Fla. 4th DCA 1987) (holding that settlement is an affirmative defense that ought to be pled or waived pursuant to R. 1.140(h)).
In addition to the foregoing, binding decisional precedent holds that waiver is “the voluntary and intentional relinquishment of a known right or conduct which implies the voluntary and intentional relinquishment of a known right”. Raymond James Financial Services v. Steven W. Saldukas, 896 So. 2d 707 (Fla. 2005) [30 Fla. L. Weekly S115a].
The record before this Court reflects that Defendant’s knowledge and purported evidence pertaining to an alleged fraud pre-dates the filing of the instant lawsuit. Nevertheless, Defendant failed to raise a fraud defense at inception of this case as is otherwise required by the applicable rules of procedure noted above. Likewise, Defendant failed to timely seek an amendment to its pleading at any point over the past seven (7) years of litigation opting to travel under the issues of reasonableness, relatedness, and medical necessity of Plaintiff’s treatment as framed by the pleadings. It was not until this Court had set this matter for trial and Plaintiff had motioned this Court for entry of judgment in its favor that Defendant made any attempt to plead and pursue a fraud defense.
Based on the foregoing, this Court finds that Defendant, by its own conduct, has waived its right to raise a fraud defense in this case.
Further, the Court finds that the Defendant has abused the privilege to amend since “the amendment [was] sought extremely late in the proceedings, without justification for the delay, [and] the facts were long known” to the Defendant. See Florida Civil Procedure, 2006 Edition, Bruce J. Berman, 190.3[3][b] (noting that there appears to be two kinds of circumstances that fall under the “abuse of privilege to amend” category: “one, where a party has already been given numerous, and arguably sufficient, opportunities to amend; and another, where the amendment is sought extremely late in the proceeding, without justification for the delay, as where the facts were long known to the party belatedly seeking leave”); see also Wooten v. Wooten, 213 So.2d 292 (Fla. 3d DCA 1968) (denied proposed amendment to complaint seeking to add cause of action at late stage of proceedings where plaintiff knew of underlying facts before the complaint was even filed); Horacio O. Ferrea N. Am. Div., Inc. v. Moroso Performance Prod., Inc., 553 So.2d 336 (Fla. 4th DCA 1989) (denied leave to add setoff defense three days before trial where previously known to defendant and prejudicial to plaintiff); United States v. State, 179 So.2d 890 (Fla. 3d DCA 1965) (denied impleader amendment where the movant knew for more than two years that the party sought to be impleaded had an interest); Aydelott v. Greenheart (Demerara) Inc., 162 So.2d 286 (Fla. 2d DCA 1964) (proposed counterclaim “was not seasonably filed” since “the matters attempted to be raised by the tardy counterclaim were essentially within the knowledge of the defendant at the time he filed his answer”); Mrmich v. Switzer, 553 So.2d 1308, 1309 (Fla. 3d DCA 1989) (affirming denial of amendment and finding no abuse of discretion where “the action had been pending nearly five years” and that “no valid excuse was offered below for waiting this long period”).
This Court further finds that given the age of this PIP case, the specific dilatory conduct of Defendant as more fully set forth above, and the drastic change of the issues proposed by Defendant within its desired amendment, any liberally in allowing an amendment to Defendant’s pleadings at this procedural posture has diminished. See Levine v. United Cos. Life Ins. Co., 659 So.2d 265, 266-67 (Fla. 1995) [20 Fla. L. Weekly S444c] (“the trial court had not abused its discretion [in denying amendment of the answer] because the liberality typically associated with amendments to pleadings diminishes as the case progresses”); Noble v. Martin Memorial Hospital Association, 710 So.2d 567 (Fla. 4th DCA 1997) [23 Fla. L. Weekly D58a] (“[t]here comes a point in litigation where each party is entitled to some finality. The rule of liberality “gradually diminishes as the case progresses to trial”); Randle v. Randle, 274 So.2d 557 (Fla. 3d DCA 1973) (no abuse of discretion to deny leave to amend answer to add counterclaim where motion came two and a half years after the answer and not sought until the eve of a summary judgment hearing); Ohio v. Cas. Ins. Co. v. MRK Constr., Inc., 602 So.2d 976, 978 (Fla. 2d DCA 1992) (“liberality in granting leave to amend diminishes, however, as the case progresses to trial”); Title & Trust Co. v. Parker, 468 So.2d 520, 522 (Fla. 1st DCA 1985) (“the liberality to be exercised in granting amendments diminishes as case progresses to trial”); Lasar Mfg. Co. v. Bachanov, 436 So.2d 236, 237-38 (Fla. 3d DCA 1983); Newman v. State Farm Mut. Auto. Ins. Co., 858 So.2d 1205, 1206 (Fla. 4th DCA 2003) [28 Fla. L. Weekly D2590a]; see also International Patrol and Detective Agency, Inc. v. Aetna Casualty & Surety Company, 396 So.2d 774 (Fla. 1st DCA 1981) citing to Warfield v. Drawdy, 41 So.2d 877 (Fla. 1949) (“amendments are not allowable if they would change the issues, introduce new issues, or materially vary the grounds for relief”); Title & Trust Company of Florida v. Parker, 468 So.2d 520 (Fla. 1st DCA 1985); Versen v. Versen, 347 So.2d 1047 (Fla. 4th DCA 1977); United States v. State of Florida, 179 So.2d 890 (Fla. 3d DCA 1965).
Finally, this Court finds that Plaintiff will be severely prejudiced by Defendant’s belated proposed amendment given the facts of this case. “Under Rule 1.190, a test of prejudice to the [party opposing an amendment] is the primary consideration in determining whether a motion for leave to amend should be granted or denied”. Lasar Mfg. Co. v. Bachanov, 436 So.2d 236, 237-38 (Fla. 3d DCA 1983); Leavitt v. Garson, 528 So.2d 108, 110 (Fla. 4th DCA 1988); Newman v. State Farm Mut. Auto. Ins. Co., 858 So.2d 1205, 1206 (Fla. 4th DCA 2003) [28 Fla. L. Weekly D2590a]. In considering prejudice, the untimeliness of Defendant’s motion is paramount since a motion to amend must be promptly made. Griffin v. Societe Anonyme, 53 Fla. 801, 830, 44 So. 342, 351 (1907).
Defendant investigated this claim and obtained its purported evidence in support of its alleged fraud defense no less than seven (7) years ago. Nevertheless, Defendant opted not to timely raise any defenses and, accordingly, Plaintiff prosecuted this case with the sole issues being reasonableness, relatedness, and medical necessity of its treatment. At this juncture, Plaintiff’s ability to conduct any meaningful discovery to oppose the alleged defense of fraud has been significantly hampered as a result of the Defendant’s conduct and severe delay in seeking leave to amend. Specifically, due to the substantial passage of time, crucial witnesses may now be unavailable and their memories of events from some seven (7) years ago long faded and unreliable, not to mention that potential documentary evidence refuting the Defendant’s allegations likely no longer exists. This extended lapse of time and delay caused by Defendant simply cannot be cured. Accordingly, the Court finds that to allow Defendant’s proposed amendment at this late stage of the proceedings would irremediably prejudice the Plaintiff in its ability to conduct discovery and this prejudice outweighs any liberality interests in permitting an amendment. See e.g., Horacio O. Ferrea N. Am. Div., Inc. v. Moroso Performance Prods. Inc., 553 So.2d 336, 337 (Fla. 4th DCA 1989); Saunders v. Goulard, 569 So.2d 1305, 1306-07 (Fla. 5th DCA 1990). The Court also finds that Plaintiff will be prejudiced by Defendant’s belated amendment as it has now expended substantial time and resources prosecuting this matter and rejected prior offers of judgment served by the Defendant premised on the issues as framed by the pleadings. See e.g. Saunders v. Goulard, 569 So.2d 1305, 1306-07 (Fla. 5th DCA 1990).
For the foregoing reasons, Defendant’s unjustified delay in raising its purported defense clearly prejudices the Plaintiff and, accordingly, the proposed amendment must be denied.
Therefore, based on this Court’s analysis set forth above, it is
ORDERED AND ADJUDGED that Defendant’s Motion to File Amended Answer is DENIED.
