28 Fla. L. Weekly Supp. 56a
Online Reference: FLWSUPP 2801TAERInsurance — Personal injury protection — Affirmative defenses — Setoff — Insurer’s motion to amend affirmative defenses to add setoff defense claiming entitlement to setoff for money paid to insured in settlement of action against tortfeasor is denied — Insurer is not entitled to setoff as matter of law where there is no possibility of double recovery by insured because, pursuant to section 627.736(3), insured could not have recovered any medical expenses from tortfeasor — Further, under PIP statute, only tortfeasor is entitled to setoff for PIP benefits paid or payable — Subrogation provision in policy does not give rise to setoff defense
AVENTURA ORTHOPEDIC CARE CENTER, a/a/o Eli Taerstein, Plaintiff, v. DAIRYLAND INS. CO., Defendant. Circuit Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 2017-009000-CA-01, Section CG01. February 25, 2020. Linda Diaz, Judge. Counsel: Kenneth B. Schurr, Law Offices of Kenneth B. Schurr, P.A., Coral Gables, for Plaintiff. Stephen Mellor, for Defendant.
ORDER ON DEFENDANT’S MOTION FORLEAVE TO AMEND ITS AFFIRMATIVE DEFENSESTO ADD SET-OFF AS A DEFENSE
THIS MATTER, having come before the Court on January 23, 2020, on Defendant’s Motion for Leave of Court to Amend its Affirmative Defenses in which Defendant seeks to add ‘set-off’ as a defense in this case, and after hearing the arguments of counsel, having reviewed all authorities cited by the parties and being otherwise fully advised therein, the Court finds as follows:
This is an action filed by Plaintiffs, Aventura Orthopedic Care and Eli Taerstein, seeking to recover damages for unpaid medical bills incurred by Plaintiff Taerstein for injuries sustained in a motorcycle accident on January 8, 2012. Plaintiffs claim that Defendant Dairyland owes them more than $22,000 in unpaid medical bills as a result of that accident. In 1999, Defendant Dairyland issued a motorcycle insurance policy to Taerstein while he resided in New York. A few years later, between 2004 and 2005, Taerstein moved to Florida and advised Dairyland of his move. Dairyland proceeded to mail notices and insurance premium invoices to Taerstein at his Florida address for the next 6-7 years. Taerstein claims he requested and purchased insurance coverage to pay his medical bills in the event he was injured in an accident while operating his insured motorcycle.
After the January 8, 2012 accident, Taerstein asserted a claim against the tortfeasor to recover damages for his accident-related bodily injuries. Prior to the initiation of this action, Taerstein reached a settlement with the tortfeasor (and the tortfeasor’s liability insurer, State Farm), for the sum of $115,000.
Defendant Dairyland seeks to amend its defenses to add a setoff defense claiming it is entitled to a setoff for the money paid by the tortfeasor (and the tortfeasor’s liability insurer) to Taerstein. Plaintiffs contend that Dairyland, as Taerstein’s PIP insurer is not entitled to a setoff for moneys paid by the tortfeasor, as a matter of law. Obviously, Defendant’s claim for a setoff only pertains to Taerstein, and not to Aventura Orthopedic Care because it is undisputed that Aventura Orthopedic Care never had a legal basis to assert a tort claim against the tortfeasor, and the tortfeasor never had any obligation to pay anything to Aventura Orthopedic. Therefore, Defendant’s request to add a setoff defense only pertains to Taerstein.
Rule 1.190 provides: Amended and Supplemental Pleadings
a. Amendments. A party may amend a pleading once as a matter of course at any time before a responsive pleading is served or, if the pleading is one to which no responsive pleading is permitted and the action has not been placed on the trial calendar, may so amend it at any time within 20 days after it is served. Otherwise a party may amend a pleading only by leave of court or by written consent of the adverse party. If a party files a motion to amend a pleading, the party shall attach the proposed amended pleading to the motion. Leave of court shall be given freely when justice so requires. A party shall plead in response to an amended pleading within 10 days after service of the amended pleading unless the court otherwise orders.
In Quality Roof Services, Inc. v. Intervest Nat’l Bank 21 So. 3d 883 (Fla 4th DCA 2009) [34 Fla. L. Weekly D2205d], the District Court provided analysis of Florida law relative to the standard of review on a motion for leave to amend and held that a trial court’s denial of a motion to amend is reviewed for abuse of discretion. See Noble v. Martin Mem’l Hosp. Ass’n, 710 So.2d 567, 568 (Fla. 4th DCA 1997) [23 Fla. L. Weekly D58a]. Florida Rule of Civil Procedure 1.190(e) states that “[a]t any time in furtherance of justice, upon such terms as may be just, the court may permit any process, proceeding, pleading, or record to be amended or material supplemental matter to be set forth in an amended or supplemental pleading.” A court “should be especially liberal when leave to amend is sought at or before a hearing on a motion for summary judgment.” Thompson v. Bank of New York, 862 So.2d 768, 770 (Fla. 4th DCA 2003) [28 Fla. L. Weekly D2536d] (citation omitted); see also Montero v. Compugraphic Corp., 531 So.2d 1034, 1036 (Fla. 3d DCA 1988). In ruling on a motion for leave to amend, “all doubts should be resolved in favor of allowing an amendment and the refusal to do so generally constitutes an abuse of discretion unless it clearly appears that allowing the amendment would prejudice the opposing party, the privilege to amend has been abused, or amendment would be futile.” Cason v. Fla. Parole Comm’n, 819 So.2d 1012, 1013 (Fla. 1st DCA 2002) [27 Fla. L. Weekly D1538a]; see also Fields v. Klein, 946 So.2d 119, 121 (Fla. 4th DCA 2007) [32 Fla. L. Weekly D200a]; Thompson, 862 So.2d at 770. A proposed amendment is futile if it is insufficiently pled, id., or is “insufficient as a matter of law,” Burger King Corp. v. Weaver, 169 F.3d 1310, 1320 (11th Cir. 1999). Quality Roofing at 885.
While Defendant has not abused its right to seek leave to amend its defenses and Plaintiff has not argued that the proposed amendment would cause irreparable prejudice, Plaintiff asserts that Defendant’s proposed setoff amendment is futile because Defendant is not entitled to a setoff for money paid to Taerstein by the tortfeasor, and that only the tortfeasor is entitled to a setoff, not the PIP insurer.
The purpose of a setoff is to prevent a plaintiff from obtaining a double recovery, i.e., receiving as damages sums for which PIP benefits were already paid. See, § 627.736(3), Fla. Stat. A plaintiff is not permitted to recover from the defendant the same damages it already received from another payor. In the context of the instant case, Plaintiff Taerstein is seeking to recover unpaid PIP benefits from Defendant Dairyland based on an insurance contract between Dairyland and Taerstein. Although Dairyland admittedly paid nothing towards Plaintiff’s PIP benefits / medical expenses, it claims entitlement to a setoff to the extent that those expenses were already paid by the tortfeasor.
In considering a litigant’s entitlement to a setoff, the initial question is whether Fla. Stat. section 627.736(3) (dealing with setoff of PIP benefits which are “paid or payable”), or whether Fla. Stat. 768.76, the collateral source rule, applies to the setoff of PIP benefits. Rollins v. Pizzarelli 761 So. 2d 294 (Fla. 2000) [25 Fla. L. Weekly S331a] unequivocally held that Fla. Stat. 627.736 (3) applies to the setoff of PIP benefits.
The Court in Caruso v. Baumle 880 So. 2d 540 (Fla. 2004) [29 Fla. L. Weekly S316a] explained that under section 768.76(1), the trial court will reduce the jury award by the amount of collateral source benefits. That section itself states that it must be followed “in any action in which this part applies.” “This part” refers to Part II of Chapter 768, sections 768.71-.81, Florida Statutes (2001). Part II applies “[e]xcept as otherwise specifically provided, . . . to any action for damages, whether in tort or in contract.” See section 768.71(1). The statute clarifies, however, that “[i]f a provision of this part is in conflict with any other provision of the Florida Statutes, such other provision shall apply. Id. Another provision, section 627.736(3), is in conflict. That section is part of the Florida Motor Vehicle No-Fault Law, sections 627.730-627.7405 Florida Statutes, which, among other things, governs suits arising out of motor vehicle accidents, and it provides:
(3) INSURED’S RIGHTS TO RECOVERY OF SPECIAL DAMAGES IN TORT CLAIMS. — No insurer shall have a lien on any recovery in tort by judgment, settlement, or otherwise for personal injury protection benefits, whether suit has been filed or settlement has been reached without suit. An injured party who is entitled to bring suit under the provisions of ss. 627.730-627.7405, or his or her legal representative, shall have no right to recover any damages for which personal injury protection benefits are paid or payable. The plaintiff may prove all of his or her special damages notwithstanding this limitation, but if special damages are introduced in evidence, the trier of facts, whether judge or jury, shall not award damages for personal injury protection benefits paid or payable. In all cases in which a jury is required to fix damages, the court shall instruct the jury that the plaintiff shall not recover such special damages for personal injury protection benefits paid or payable.(Emphasis added.)
Thus, in contrast to the procedure under section 768.76(1), in which the court offsets the collateral source amount, under section 627.736(3), the trier of fact — whether judge or jury — is to offset the amount. As noted, section 768.71(3) provides that any conflicting statute governs over section 768.76. Therefore, in lawsuits concerning motor vehicle accidents (like the instant case), section 627.736(3), not section 768.76(1), applies. PIP benefits are collateral sources; “that is, first-party benefits for which the insured has paid a separate premium.” Rollins, 761 So.2d at 300.
But, since Fla. Stat. 627.736(3) provides that a plaintiff (like Taerstein) “shall have no right to recover any damages for which [PIP] benefits are paid or payable” then by operation of law, Taerstein was not entitled to recover and could not have recovered any medical expenses from the tortfeasor, which also means that the tortfeasor (and its liability insurer were supposed to be paid or payable through Taerstein’s PIP coverage. The tortfeasor would still be entitled to a setoff for the first $10,000 in medical expenses paid or payable, even if Taerstein did not even have PIP coverage. See, Holt v. King 707 So. 2d 1141 (Fla. 4th DCA 1998) [23 Fla. L. Weekly D498a]. See also, Allstate v. Rudnick 761 So. 2d 289 (Fla. 2000) [25 Fla. L. Weekly S329d]. Hence, although a setoff is intended to prevent a plaintiff from obtaining as damages sums for which PIP benefits were already paid (i.e., a double recovery) there is no possibility of a double recovery in this case because neither the tortfeasor nor Defendant Dairyland have paid anything towards the first $10,000 of Taerstein’s medical bills. Accordingly, Defendant Dairyland is not entitled to a setoff as a matter of law for those expenses and therefore the proposed setoff defense is futile.
Furthermore, under Florida law — as it pertains to setoffs involving motor vehicle accidents — only the tortfeasor is entitled to the benefit of a setoff for PIP benefits paid or payable. There is nothing in the law which provides for a setoff for the benefit of the PIP insurer, like Defendant Dairyland. Defendant’s reliance on DeCespedes v. Prudence Mut. Cas. Ins. Co. (Fla. 3rd DCA 1966) is misplaced because it predates the no-fault / PIP statutory scheme and the incorporated setoff provisions unique to PIP and motor vehicle accidents by at least 5 years. See, Fla. Stat. 627.736(3).
The cases relied upon by Defendant support the conclusion that the setoff belongs to the tortfeasor, not the PIP insurer. See, Caruso v. Baumle 880 So. 2d 540 (Fla. 2004) [29 Fla. L. Weekly S316a] (the tortfeasor is entitled to the setoff, not the PIP insurer; and the injured party is not entitled to sue the tortfeasor for PIP benefits that are paid or payable). See also, Felgenhauer v. Bonds 891 So. 2d 1043 (Fla. 2nd DCA 2004) [29 Fla. L. Weekly D2049a] (only the tortfeasor is entitled to the benefit of a PIP set off.).
Finally, Defendant’s reliance on its own policy provision labeled “Our Right to Recover From Others” found at page 6 of the subject policy, is a subrogation clause which allows the Defendant insurer to recover from the person or entity that caused injuries to Taerstein, which necessitated the medical bills referenced above. It does not give rise to a setoff defense. In fact, Defendant’s subrogation provision, by its own terms, is not even triggered until “. . .after. . .” Dairyland has “. . .made payment” and it is undisputed that Dairyland has not made any payment to or for the benefit of Taerstein as of the date of this order.
Accordingly, for the reasons expressed above, Defendant’s Motion for Leave to Amend to Add the Affirmative Defense of Setoff is hereby DENIED, without prejudice. Defendant Dairyland may revisit its motion after the verdict, if necessary.
