28 Fla. L. Weekly Supp. 299a

Online Reference: FLWSUPP 2804BERMInsurance — Personal injury protection — Coverage — Medical expenses — Reasonableness of charges — Expert testimony — Where Frye standard was the law when insurer filed its initial brief arguing that trial court erred in discrediting its expert’s affidavit, and Daubert standard was the law when medical provider’s answer brief was filed, insurer did not waive right to argue that court erred in discounting affidavit under Daubert standard — Abuse of discretion to exclude expert’s affidavit on ground that her testimony is based on hearsay where expert relied on own extensive experience and did not become conduit for hearsay — Trial court further abused its discretion by rejecting affidavit within summary judgment order without Daubert motion or hearing on affidavit’s admissibility that would have afforded insurer the opportunity to amend affidavit

UNITED AUTOMOBILE INSURANCE COMPANY, Appellant, v. MIAMI DADE COUNTY MRI CORP., a/a/o Lidia Bermudez, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 2018-164-AP-01. L.T. Case No. 13-11920-SP 23 (01). June 3, 2020. On Appeal from the County Court in and for Miami-Dade County, Hon. Myriam Lehr, Judge. Counsel: Michael Neimand, House Counsel for United Automobile Insurance Company, for Appellant. Chad A. Barr, Law Offices of Chad A. Barr, P.A., for Appellee.

(Before TRAWICK, WALSH and DE LA O¹, JJ.)

(PER CURIAM.) Lidia Bermudez was injured in an accident and assigned her personal injury protection benefits to her medical provider, Miami Dade County MRI Corp. (“The Provider” or “Miami Dade MRI”). United Automobile Insurance Company (UAIC) appeals the trial court’s order granting final summary judgment on behalf of the Provider. In granting summary judgment below, the trial court first found that UAIC failed to establish its affirmative defense of accord and satisfaction. The trial court then struck UAIC’s affidavit of Denorah Lang, UAIC’s adjuster. In refusing to consider UAIC’s conflicting affidavit of Denorah Lang, the trial court rendered the evidence uncontroverted, and thereby entered summary judgment for the Provider.

Before reaching the issue on appeal, the Provider argues that the UAIC has waived its right to argue that the trial court erred as a matter of law in declining to consider UAIC’s affidavit under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). The Provider argues that because UAIC argued in its Initial Brief that the trial court erred in discrediting its affidavit under Frye v. United States, 293 F. 1013 (D.C. Cir. 1923), it has waived any argument with respect to the application of Daubert. To address this waiver argument, it is necessary to describe the timing of Florida’s adoption of the Daubert amendments.

In 2013, the legislature amended sections 90.702 and 90.704, Florida Statutes, and adopted the Daubert standard in lieu of Florida’s long-standing reliance upon Frye and the “pure opinion” standard articulated in Marsh v. Valyou, 977 So. 2d 543 (Fla. 2007) [32 Fla. L. Weekly S750a]. See 2013-107, §§ 1,2, Laws of Fla. In 2017, the Supreme Court of Florida in In re Amends. to the Fla. Evidence Code, 210 So. 3d 1231 (Fla. 2017) [42 Fla. L. Weekly S179a], declined to adopt procedural rules to conform to these legislative amendments. This decision left Florida courts from 2017 through 2018 in a bit of a quandary — which standard should apply to the admission of expert testimony, Daubert or Frye? The trial court here applied Daubert. It was during this period, on May 29, 2018, that the trial court in this case granted summary judgment and that UAIC appealed.

During the pendency of this appeal, in October 2018, the Supreme Court of Florida expressly held that the legislative changes adopting the Daubert standard were unconstitutional. DeLisle v. Crane Co., 258 So. 3d 1219 (Fla. 2018) [43 Fla. L. Weekly S459a]. UAIC’s Initial Brief was filed in January 2019, after the Daubert amendments were rejected by the Supreme Court of Florida.

The Provider’s Answer Brief was not filed until January 9, 2020. Before the Answer Brief was filed, in May 2019, the Supreme Court of Florida reversed course and adopted procedural rules to conform to the legislative amendments in Chapter 2013-107, §§ 1, 2, Laws of Florida. In re Amendments to Florida Evidence Code, 278 So. 3d 551 (Fla. 2019) [44 Fla. L. Weekly S161a]. Thus, when UAIC first briefed this case, Frye was the law. And when the Provider briefed its answer, Daubert became the law.

Under these circumstances, we do not agree that UAIC has waived its position on appeal. First, both the litigants and the court are obligated to apply the law at the time of the appeal. In Larocca v. State, 289 So. 3d 492, 493 (Fla. 4th DCA 2020) [45 Fla. L. Weekly D99a], the Fourth District Court of Appeal explained:

Although Frye was the relevant standard for assessing expert testimony at the time of the trial, during the pendency of this appeal the Florida Supreme Court adopted the Daubert standard for admitting expert scientific testimony. In re Amendments to Fla. Evidence Code, 278 So. 3d 551, 551-52 (Fla. 2019) [44 Fla. L. Weekly S161a]. We apply Daubert to the facts of this case because the amendment implementing Daubert is procedural and so the change applies retroactively. Id. at 552; Pembroke Lakes Mall Ltd. v. McGruder, 137 So. 3d 418, 425 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D446a]. Additionally, “[u]nder Florida’s ‘pipeline rule,’ the ‘disposition of a case on appeal should be made in accord with the law in effect at the time of the appellate court’s decision rather than the law in effect at the time the judgment appealed was rendered.’ ” Kemp v. State, 280 So. 3d 81, 88 (Fla. 4th DCA 2019) [44 Fla. L. Weekly D1974a] (citation omitted)

Accordingly, we find that UAIC has not waived its argument that the trial court erred in discounting the UAIC affidavit under Daubert.

The issue on appeal is whether the trial court erred in granting summary judgment for the Provider. The standard of review of a trial court’s entry of final summary judgment is de novo. See Volusia Cnty. v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000) [25 Fla. L. Weekly S390a]; Sierra v. Shevin, 767 So. 2d 524, 525 (Fla. 3d DCA 2000) [25 Fla. L. Weekly D1605a]. Summary judgment is proper when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. State Farm Mut. Auto. Ins. Co. v. Gonzalez, 178 So. 3d 448, 450 (Fla. 3d DCA 2015) [40 Fla. L. Weekly D2352a], citing State Farm Mut. Auto. Ins. Co. v. Pressley, 28 So. 3d 105, 107 (Fla. 1st DCA 2010) [35 Fla. L. Weekly D150b].

The standard of review of an order admitting or excluding expert testimony is abuse of discretion. See State Farm Mutual Automobile Insurance Company v. CEDA Health of Hialeah, LLC, 2020 WL 1036485 at * 2 (Fla. 3d DCA 2020) [45 Fla. L. Weekly D505a] (The standard of review of an order granting summary judgment is de novo, while the standard of review of trial court’s admission or exclusion of evidence is abuse of discretion.). See also Lesnik v. Duval Ford, LLC, 185 So. 3d 577, 579 (Fla. 1st DCA 2016) [41 Fla. L. Weekly D281a] (trial court order striking witness affidavit is reviewed for abuse of discretion).²

In granting summary judgment, the trial court found against UAIC on its accord and satisfaction defense. UAIC has not raised any issue with respect to that finding. Therefore, the trial court’s determination in favor of the Provider on UAIC’s accord and satisfaction defense is the law of the case and may not be reargued on remand. See Silva v. U.S. Sec. Ins. Co., 734 So. 2d 429 (Fla. 3d DCA 1999) [24 Fla. L. Weekly D933b].

Turning to the only issue on appeal, whether summary judgment was correctly entered on the issue of the reasonableness of the cost of medical services, UAIC does not challenge the trial court’s finding that the provider established its prima facie case for the reasonableness of its bills by introducing the testimony of the provider.³ UAIC’s only argument is that the trial court erred in excluding UAIC’s expert’s affidavit and in granting summary judgment on the issue of reasonableness. On this issue, we agree and reverse.

The UAIC adjuster, Denorah Lang has worked as an insurance adjuster since 2007. In the course of that experience, she has adjusted hundreds of insurance claims, has personal knowledge of the CPT codes commonly associated with PIP insurance claims and the amounts typically paid to reimburse such claims. In her words, she gained “vast knowledge regarding medical pricing including (a) knowledge of various federal and state fee schedules under state/ federal worker’s compensation, Tricare and Medicare, (b) knowledge and reimbursement rates from HMOs/PPOs are generally at a rate less than 200% of Medicare Part B, (c) knowledge that other insurers, specifically PIP insurers, were reimbursing at rates equal to 200% of Medicare Part B Fee Schedule, and (d) experience negotiating claims with providers which resulted in providers being reimbursed at rates less than 200% of Medicare Part B.” In addition to her practical experience, she has taken courses in medical billing and pricing. She is certified as a medical claims and billing specialist.

While a trial court has discretion on the admission and exclusion of evidence, “[t]he trial court’s discretion, however, is constrained by the evidence code and applicable case law.” Ortuno v. State, 54 So. 3d 1086, 1088 (Fla. 1st DCA 2011) [36 Fla. L. Weekly D471a]. Here, it was an abuse of discretion to find that the expert’s testimony should be excluded because it is based on hearsay. If the expert here relied upon hearsay, that is permitted. An expert witness is permitted to rely upon hearsay — so long as she does not become a conduit for hearsay. See Tolbert v. State, 114 So. 3d 291, 294 (Fla. 4th DCA 2013) [38 Fla. L. Weekly D961a], citing Linn v. Fossum, 946 So. 2d 1032, 1037-38 (Fla. 2006) [31 Fla. L. Weekly S741a].

Moreover, this expert did not become a conduit for hearsay. Her testimony relied in part upon her extensive experience with these fee schedules in reaching her opinions. It was not a conduit for hearsay testimony. Further, in her capacity as an insurance adjuster, she was permitted to consider these fee schedules as part of her job. Section 627.736(5)(a) specifically permits an insurer to take all the above information into account when determining whether a medical charge is reasonable. Accordingly, it was an abuse of discretion to strike her testimony.

Additionally, the trial court here found that the affidavit did not meet the requirements of Daubert. It should be noted that the trial judge’s order passed upon Daubert in the context of a summary judgment order, without a Daubert motion or hearing on the admissibility of UAIC’s evidence. Had there been a proper hearing, the insurer could have corrected or amended its affidavit. Merely rejecting evidence within a summary judgment order without giving the proponent the opportunity to amend the affidavit is an abuse of discretion. See United Auto. Ins. Co. v. Affiliated Healthcare Centers, Inc., 43 So. 3d 127, 131 (Fla. 3d DCA 2010) [35 Fla. L. Weekly D1934a].

As this panel and the majority of prior panels from this Court have found, because the trial court misapplied the law under Daubert, it was an abuse of discretion to exclude the affidavit. Taking UAIC’s affidavit into account, it was error to grant summary judgment. See State Farm Mutual Ins. Co. v. Gables Insurance Recovery a/a/o Yuderis Rego, 27 Fla. L. Weekly Supp. 860a (Fla. 11th Cir. Ct. Nov. 20. 2019); United Automobile Insurance Co. v. Open MRI of Miami Dade, Ltd. a/a/o Rosa Castillo, Case No. 2017-326-AP-01 (Fla. 11th Cir. Ct. Nov. 6, 2019) [27 Fla. L. Weekly Supp. 791b]; United Automobile Insurance Co., Appellant, v. Miami Dade County MRI, Corp. a/a/o Marta Figueredo, 27 Fla. L. Weekly Supp. 506b (Fla. 11th Cir. App. July 30, 2019); United Automobile Insurance Co., Appellant, v. Miami Dade County MRI, Corp. a/a/o Javier Rodriguez, 27 Fla. L. Weekly Supp. 225c (Fla. 11th Cir. Ct. July 25, 2019); United Automobile Insurance Co., Appellant, v. Miami Dade County MRI, Corp. a/a/o Rene Dechard, 27 Fla. L. Weekly Supp. 226a (Fla. 11th Cir. Ct., August 12, 2019); United Automobile Insurance Co., Appellant, v. Millennium Radiology, LLC a/a/o Javier Rodriguez, 25 Fla. L. Weekly Supp. 911b (Fla. 11th Cir. Ct., July 19, 2019). Accordingly, the summary judgment and final judgment entered below are hereby REVERSED, and this cause is REMANDED to the trial court.

Appellee’s Motion for Attorney’s Fees is DENIED.⁴ Appellant’s Motion for Attorney’s Fees is conditionally GRANTED (conditioned upon Appellant ultimately prevailing and the enforceability of the proposal for settlement) and REMANDED to the trial court to fix amount.

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

²We are bound by these decisions requiring that we apply an abuse of discretion standard to the trial court’s decision rejecting UAIC’s affidavit in this summary judgment order. However, the trial court’s order was based on a finding that the witness’ opinion was based on hearsay (contrary to law), a determination of the weight given to her testimony (contrary to law) and a conclusion that the witness may not rely on the Medicare fee schedules for her opinion (contrary to law). Where analysis of a legal principle is involved, the standard of review generally is de novo. Demircan v. Mikhaylov, 2020 WL 2550067 (Fla. 3d DCA May 20, 2020) [45 Fla. L. Weekly D1201a], citing Credo LLC v. Speyside Invs. Corp., 259 So. 3d 893, 898 (Fla. 3d DCA 2018) [43 Fla. L. Weekly D2049a] (“If a legal principle is involved, the standard of review is de novo.”) (citations omitted). Thus, the trial court’s rejection of the UAIC affidavit was based on misapplication of law and should, in our view, be subject to a de novo standard of review. While we are bound to apply an abuse of discretion standard, we suggest that the appropriate standard of review should be clarified by the higher courts. Regardless, as set forth below, in this case, we find that the trial court’s decision was an abuse of discretion. See United Auto. Ins. Co. v. Affiliated Healthcare Centers, Inc., 43 So. 3d 127, 131 (Fla. 3d DCA 2010) [35 Fla. L. Weekly D1934a] (finding abuse of discretion in striking a defective affidavit without granting leave to amend or correct).

³See Walerowicz v. Armand-Hosang, 248 So. 3d 140 (Fla. 4th DCA 2018) [43 Fla. L. Weekly D1165a] (testimony by lay witness associating treatment to bill was sufficient to establish reasonableness of the bills); A.J. v. State, 677 So. 2d 935 (Fla. 4th DCA 1996) [21 Fla. L. Weekly D1677e] (patient may testify as to the reasonableness of his own medical bills).

⁴UAIC did not challenge the trial court’s order on the accord and satisfaction defense. Accordingly, the Appellee is not entitled to a conditional order on fees for its work on this issue, as it was never raised.