28 Fla. L. Weekly Supp. 277a

Online Reference: FLWSUPP 2804RAMO

Insurance — Personal injury protection — Affirmative defenses — Accord and satisfaction — Where there was no dispute regarding amount of medical provider’s bill prior to insurer’s having issued check for partial payment, there could be no common law accord and satisfaction — Conspicuous statement — Check for partial payment did not contain conspicuous statement required for statutory accord and satisfaction where check included phrase stating that it was full and final payment of PIP benefits in all capitals on payee line, but phrase is not set off from other text by heading, size, type, font, color or symbols — Trial court correctly found that partial payment was not accord and satisfaction

UNITED AUTOMOBILE INSURANCE COMPANY, Appellant, v. MIAMI DADE COUNTY MRI, CORP., a/a/o Jose Ramos, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 2018-218-AP-01. L.T. Case No. 2012-14300-SP-23. June 11, 2020. An Appeal from the County Court for Miami-Dade County, Laura S. Cruz, Judge. Counsel: Michael J. Neimand, House Counsel of United Automobile Insurance Company, for Appellant. Chad A. Barr, Law Office of Chad A. Barr, P.A., for Appellee.

(Before TRAWICK, WALSH, and DE LA O, JJ.¹)

(TRAWICK, J.) On July 9, 2008, Jose Ramos was involved in an automobile accident and sustained personal injuries. He was insured under an automobile policy issued by the Appellant, United Automobile Insurance Company (“United Auto”). Ramos was treated by Appellee Miami Dade County MRI, Corp (“MRI”). Ramos’ father assigned his son’s right to PIP benefits under the United Auto policy to MRI. MRI then billed United Auto for services rendered to Ramos, but United Auto only made a partial payment. MRI subsequently filed a complaint for breach of contract. United Auto filed an answer and later an amended answer, raising the defense of accord and satisfaction. United Auto then filed a motion for final summary judgment on this affirmative defense, and MRI responded with a like motion on the same issue. The trial court denied United Auto’s motion and granted MRI’s, ruling that United Auto’s partial payment did not meet the elements of accord and satisfaction under either the common law or the Uniform Commercial Code (“UCC”). United Auto appeals the trial court’s decision on both motions.

The standard of review for summary judgment is de novo. Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000) [25 Fla. L. Weekly S390a]. “Summary judgment is proper if there is no genuine issue of material fact and the moving party is entitled to summary judgment as a matter of law.” Id. “A summary judgment should not be granted unless the facts are so crystallized that nothing remains but questions of law.” Moore v. Morris, 475 So. 2d 666, 668 (Fla. 1985).

The elements of the affirmative defense of common law accord and satisfaction are set forth in Republic Funding Corp. v. Juarez, 563 So. 2d 145, 146 (Fla. 1990): (1) a preexisting dispute as to the amount due from one party to another, (2) a mutual intent to effect settlement of that dispute by a superseding agreement, and (3) the subsequent tender and acceptance of performance of the new agreement in full satisfaction of the prior disputed obligation. See St. Mary’s Hospital, Inc. v. Schocoff; 725 So. 2d 454, 455 (Fla. 4th DCA 1999) [24 Fla. L. Weekly D405a].

United Auto, after being billed by MRI, issued a check in partial payment of the billed amount. The trial court found that there was no evidence of a dispute as to the amount of the bill prior to United Auto’s issuance of this check. Thus, there could be no common law accord and satisfaction. However, even if such a dispute did exist, and each of the elements of common law accord and satisfaction had been established, those elements differ from those required for statutory accord and satisfaction, §673.3111, Fla. Stat. (2019). If a conflict exists between a common law defense and a statutory defense, the statutory defense controls. See §2.01, Fla. Stat. (2019); Berman v. U.S. Financial Acceptance Corp., 669 So. 2d 1116, 1117 (Fla. 4th DCA 1996) [21 Fla. L. Weekly D719b].

The UCC, codified in §673.3111, Fla. Stat. (2019) (Accord and Satisfaction by use of instrument), provides in pertinent part:

(1) If a person against whom a claim is asserted proves that that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, that the amount of the claim was unliquidated or subject to a bona fide dispute, and that the claimant obtained payment of the instrument, the following subsections apply.

(2) Unless subsection (3) applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.²

The check which United Auto issued to MRI included the phrase “MIAMI DADE COUNTY MRI, AAO JOSE R. RAMOS FOR FULL AND FINAL PAYMENT OF PIP BENEFITS DOS 8/28/08” on its payee line. United Auto argues that this language was sufficient to meet the requirements of the UCC. We do not agree.

Section 673.1111(2) requires that a check or an accompanying “written communication” submitted as an accord and satisfaction of a disputed claim contain “a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.” §671.201(10), Fla. Stat., states:

“Conspicuous,” with reference to a term, means so written, displayed, or presented that a reasonable person against which it is to operate ought to have noticed it. Whether a term is “conspicuous” is a decision for the court. Conspicuous terms include the following:

(a) A heading in capitals equal to or greater in size than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same or lesser size; and

(b) Language in the body of a record or display in larger type than the surrounding text or set off from surrounding text of the same size by symbols or other marks that call attention to the language.

The subject check³ does not meet the requirements for conspicuousness under §671.201(10). The disputed language, while in all capitals, is not separated from other language by any “heading.” While this language is on the payee line, it is the same size as the surrounding text and is not in a type, font, or color in contrast to the surrounding text of the same size. The language was also not set off from surrounding text of the same size by symbols or other marks that call attention to the language. All of these non-exhaustive statutory options support the same requirement — that the “conspicuous terms” be noticeable to the average eye. Thus, in our view, the requirement that the language used to support an accord and satisfaction be conspicuous has not been met here.

The Dissent argues that because the statute includes a list of options, the list is not exhaustive. Our colleague believes that the language in the check is conspicuous because it is in all capitals and appears on the payee line. We disagree. Indeed, within this very opinion, the words “ACCORD AND SATISFACTION” — in Times New Roman 14-point — stand out to the reader, especially, when viewed against the remaining text of the opinion. On the check, however, the words are not in a distinctive font or made to stand out in any way and are thus not consistent with the purpose of the statute — to be noticed by a reasonable person.⁴

“[T]he burden of proving each element of an affirmative defense rests on the party that asserts the defense.” Custer Medical Center v. United Auto. Inc. Co., 62 So. 3d 1086 1097 (Fla. 2010) [35 Fla. L. Weekly S640a]; see also State Farm Mut. Auto. Ins. Co. v. Curran, 135 So. 3d 1071, 1079 (Fla. 2014) [39 Fla. L. Weekly S122a]. United Auto failed to meet its burden in establishing that the disputed language was conspicuous. As a result, the trial court correctly found that the partial payment by United Auto was not an accord and satisfaction.

Accordingly, the Final Judgment in favor of MRI is AFFIRMED. Appellee’s Motion for Award of Appellate Attorneys’ Fees pursuant to Florida Rule of Appellate Procedure 9.400 and §§628.736(8) and 627.428, Fla. Stat. is hereby GRANTED and this matter is REMANDED for a determination of attorneys’ fees. The Appellant’s Motion for Attorney’s Fees pursuant to Florida Rule of Appellate Procedure 9.400(b) and §§768.79 and 59.46, Fla. Stat. is hereby DENIED. (WALSH, J., concurs.)

__________________

¹Judge de la O did not participate in oral argument.

²Subsection (3) is inapplicable to the facts of this case. It concerns the application of §673.3111 to situations where the claimant is a large organization and the person who received the full payment check was without authority to settle the claim.

³Below is an image of the check at issue:

⁴Normally, this type of judgment-call would be decided by a jury. However, the Legislature saw fit to require that “[w]hether a term is “conspicuous” is a decision for the court.” § 671.201(10)(a), Fla. Stat.

__________________

(DE LA O, dissents.) This dispute should be resolved by a jury. Neither party was entitled to summary judgment. I disagree with the majority’s conclusions that the check lacked a conspicuous statement that the payment was tendered in full satisfaction of the claim. However, there are disputed issues of fact that prevent both United Auto and MRI from establishing whether United Auto submitted the partial payment in good faith or not.

CONSPICUOUSNESS

I would find that the language in the check is sufficiently conspicuous because it appears in the payee line. There are two locations on a check that a recipient will natural look to upon receipt. First, of course, is the amount. But not far behind is the payee. In other words, a business that receives a check wants to know the value of the check and that the check is made out to the correct business.

The majority concludes that the language in the check was not conspicuous because it did not comply with Florida Statutes section 671.201(10) due to the “FULL AND FINAL PAYMENT” language in the payee line being “the same size as the surrounding text and is not in a type, font, or color in contrast to the surrounding text of the same size.” However, section 671.201(10) does not require that the statement be a heading, or in a different font, color, or size. Rather, the plain language of the statute provides that these are merely factors the trial court can look to in determining whether, as a matter of law, the statement is sufficiently conspicuous to warrant discharge of the claim. We know this because the statute prefaces these factors by stating that “[c]onspicuous terms include the following:” (emphasis added). This means the list is not exhaustive. See Miami Country Day Sch. v. Bakst, 641 So. 2d 467, 469 (Fla. 3d DCA 1994) (“Pursuant to section 222.05, the term dwelling house includes a mobile home and a modular home: that language suggests that the legislature intended to enlarge the definition of the term ‘dwelling house’ rather than to limit the term to modular and mobile homes or to list every possible type of dwelling house.”) (emphasis in original). “The participle including typically indicates a partial list.” In re B.R.C.M., 182 So. 3d 749, 752 (Fla. 3d DCA 2015) [41 Fla. L. Weekly D36b], decision quashed on other grounds, 2017 WL 1709786 (Fla. Apr. 20, 2017) [42 Fla. L. Weekly S472a]. See Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 132 (2012) (“[T]he word include does not ordinarily introduce an exhaustive list. . . .”).

Generally, it is improper to apply expressio unius to a statute in which the Legislature used the word “include.” See 2A Norman J. Singer, Sutherland Statutory Construction § 47.25 (7th ed. 2014). This follows the conventional rule in Florida that the Legislature uses the word “including” in a statute as a word of expansion, not one of limitation.

White v. Mederi Caretenders Visiting Services of Se. Florida, LLC, 226 So. 3d 774, 781 (Fla. 2017) [42 Fla. L. Weekly S803a].

Obviously, complying with these factors increases the likelihood a court will find the language was sufficiently conspicuous. In the end, however, the central question is whether the language was “so written, displayed, or presented that a reasonable person against which it is to operate ought to have noticed it.” § 671.201(1), Fla. Stat. (2019). I conclude that, as a matter of law, a reasonable person ought to notice the words “FOR FULL AND FINAL PAYMENT OF PIP BENEFITS” in the payee line of a check, when displayed in the same size and font as the payee’s name.

GOOD FAITH

To succeed on its accord and satisfaction affirmative defense, United Auto must also prove that it tendered the check to MRI in good faith. § 673.3111(1), Fla. Stat. (2019). Conversely, to defeat this affirmative defense and obtain summary judgment against United Auto, MRI must establish, inter alia, that United Auto did not act in good faith and that there is no disputed issue of material fact that would show otherwise. Of course, “[i]f the record on appeal reveals the merest possibility of genuine issues of material fact, or even the slightest doubt in this respect, the summary judgment must be reversed.” Piedra v. City of N. Bay Vill., 193 So. 3d 48, 51 (Fla. 3d DCA 2016) [41 Fla. L. Weekly D1087a]. See Berges v. Infinity Ins. Co., 896 So. 2d 665, 680 (Fla. 2004) [29 Fla. L. Weekly S679a] (“[W]here material issues of fact which would support a jury finding of bad faith remain in dispute, summary judgment is improper.”).

Generally, establishing good or bad faith at the summary judgment stage is difficult. See Cox v. CSX Intermodal, Inc., 732 So. 2d 1092, 1098 (Fla. 1st DCA 1999) [24 Fla. L. Weekly D195a] (“[B]ecause reasonable persons could differ as to whether CSXI’s conduct in the performance of its contract with appellants violated the duty of good faith and fair dealing, the grant of summary final judgment was improper.”). Here, the task is doubly difficult for MRI because of the UCC’s definition of good faith in the context of accord and satisfaction by a negotiable instrument. The comments to the UCC section corresponding to section 673.3111(1) explain how good faith should be determined.

“Good faith” in subsection (a)(i) is defined in Section 3-103(a)(6) as not only honesty in fact, but the observance of reasonable commercial standards of fair dealing. The meaning of “fair dealing” will depend upon the facts in the particular case. For example, suppose an insurer tenders a check in settlement of a claim for personal injury in an accident clearly covered by the insurance policy. The claimant is necessitous and the amount of the check is very small in relationship to the extent of the injury and the amount recoverable under the policy. If the trier of fact determines that the insurer was taking unfair advantage of the claimant, an accord and satisfaction would not result from payment of the check because of the absence of good faith by the insurer in making the tender. Another example of lack of good faith is found in the practice of some business debtors in routinely printing full satisfaction language on their check stocks so that all or a large part of the debts of the debtor are paid by checks bearing the full satisfaction language, whether or not there is any dispute with the creditor. Under such a practice the claimant cannot be sure whether a tender in full satisfaction is or is not being made. Use of a check on which full satisfaction language was affixed routinely pursuant to such a business practice may prevent an accord and satisfaction on the ground that the check was not tendered in good faith under subsection (a)(i).

§ 3-311. Accord and Satisfaction by Use of Instrument., Uniform Commercial Code § 3-311, comment 4.

The comment sets out two examples of bad faith. Doubtless there are more. But I cannot overlook the fact that neither example applies to the facts before us. The payment submitted by United Auto to MRI was not arbitrarily small in relation to the claim. Rather, United Auto asserts that it is based on a formula grounded in the Medicare reimbursement rates.

Nor did United Auto pre-print the FULL AND FINAL PAYMENT language on their check stock. Rather, the language was typed into the payee line. This is an important distinction because the majority relies on this language from the UCC comment to conclude that MRI proved United Auto acted in bad faith. But the example in the comment is not applicable here.

Where the determination of good faith is so fact dependent, the matter should ordinarily be left to a jury. This is particularly true where the finding of good faith revolves around “reasonable commercial standards.” See Snow v. Byron, 580 So. 2d 238, 243 (Fla. 1st DCA 1991) (Bank’s liability “dependent upon whether it dealt with the forged check ‘in good faith and in accordance with reasonable commercial standards’ . . . . The assertion of good faith and reasonable commercial standards is an affirmative defense. This defense involves factual issues to be determined by the trier of fact.”) (citations omitted).

MRI argues that United Auto did not act in good faith because the assignor (United Auto’s insured) “instructed” United Auto in the AOB not to send partial payment to MRI unless there was a prior written agreement. Yet, a jury could conclude that MRI chose to accept the offered amount as “full and final payment” to resolve the claim. As the assignee of the AOB, MRI was free to waive any terms of the AOB for its benefit. By what right can the assignor reject future payments to the assignee when he has irrevocably assigned the claim? To ask the question is to answer it. The assignee can do no such thing, and it is quite a legal stretch for MRI to assert United Auto is acting in bad faith for ignoring instructions from its insured as to how United Auto must handle the claim after the insured irrevocably assigns it.

MRI did produce evidence from which a jury could perhaps conclude United Auto did not act in good faith because it routinely submitted partial payments to providers as full and final settlement of PIP benefits. On the other hand, the jury could conclude that because United Auto was basing its payment on a formula grounded in Medicare reimbursement rates, it was acting in a principled and good faith manner using commercially reasonable standards, even if it does so routinely. Or the jury could conclude it is not commercially reasonable to base the payment on Medicare reimbursement rates. The point is that a trial court cannot say that as a matter of law that it is not commercially reasonable for United Auto to send full and final payments based on the Medicare reimbursement schedule. Only a jury can do so. See Mills v. State Farm Mut. Auto. Ins. Co., 27 So. 3d 95, 96 (Fla. 1st DCA 2009) [34 Fla. L. Weekly D2614d] (“The question of whether a liability insurer has acted in bad faith in handling a claim against the insured is determined upon the totality of the circumstances, with each case determined on its own unique facts. The question of failure to act in good faith is ordinarily for the jury. Where material issues of fact which might support a jury finding of bad faith are in dispute, summary judgment is improper.”) (citations omitted).

For these reasons, I would affirm the trial court’s denial of United Auto’s motion for summary judgment, but would reverse the trial court’s grant of summary judgment to MRI, and the entry of final judgment against United Auto, and would remand for a trial by jury