7 Fla. L. Weekly Supp. 299b
Attorney’s fees — Insurance — Personal injury protection — Delay in payment of benefits — Insurer did not wrongfully withhold benefits where it was provided incorrect and incomplete information which made it appear that there was no coverage for the claims presented — Record shows that insurer made numerous attempts to verify coverage for claimants involved in the accident at issue — No statutory basis for attorney’s fees where insurer did not wrongfully withhold benefits
Cert. granted. QUASHED at 26 Fla. L. Weekly D278a
DEBORAH PALMER, as Personal Representative of the Estate of Corey Henne, Appellant, v. FORTUNE INSURANCE COMPANY, Appellee. Circuit Court, 5th Judicial Circuit (Appellate) in and for Lake County. Appellate Case No. 99-00007-AC-00101. County Case No. 97-0235-CC-00101 (Lake). Opinion filed February 10, 2000. Appeal from the County Court for Lake County. The Honorable Richard W. Boylston, County Judge. Counsel: Brent C. Miller, Leesburg, for Appellant. Jerri A. Blair, Tavares, for Appellee.
OPINION
(STANCIL, H.) We believe there is no statutory basis for attorney’s fees because Fortune did not wrongfully withhold benefits. The purpose of Section 627.428, Fla. Stat. is to penalize an insurer for wrongfully forcing an insured to resort to litigation to resolve coverage issues when it was reasonably within the insurer’s power to do so. In this case, incorrect and incomplete information was provided to the insurer which made it appear that there was no coverage for any claim by Palmer under the Burch policy. The facts in this case are analogous to those in Allstate Insurance Company v. Ivey, 728 So. 2d 282 (Fla. 3rd DCA 1999). In Ivey the insured brought an action to recover attorney’s fees for untimely payment of PIP benefits. However, subsequent to filing the action, the insured’s doctor recognized that the billing on the Health Insurance Claim form was incorrect. The Court found that Allstate and its claims adjuster had a right to rely on the Health Insurance Claim Form without having to look beyond it unless given notice of an error. In this case, the PIP application, the police report, the EMS bill and the funeral bill all listed Corey Henne’s address as residing with Palmer. If, in fact, Cory Henne had resided with Palmer then there would be no coverage under the Burch policy. It was not until after this action was filed, that written notice was provided to Fortune which provided a basis for the payment of benefits under the Burch policy and within 30 days Fortune paid the claim.
We further believe the record shows that Fortune made numerous attempts to verify coverage for the claimants involved in this accident. Some, if not all, of the passengers involved in the accident were represented by the same attorney as Palmer. As early as July 3, 1997, Fortune made numerous requests of Palmer’s attorney for additional information regarding this accident including a request for a police report or enough information to obtain a police report. Although it is not until October 10, 1997, that the record refers specifically to Cory Henne, it appears clear that Fortune was making diligent efforts to investigate all the claims in connection with this accident. We do not find, as stated by the dissent relying on Martinez v. Fortune Ins. Co., 684 So. 2d 201 (Fla. 4th DCA 1996), that Fortune simply held the payment of claims until they received proof of the loss.
Accordingly, the trial court’s final judgment is affirmed. We do find however that there was a justiciable issue of law raised by Palmer and therefore Fortune’s Motion for Attorney’s Fees is denied. (HILL, M., concurring.)
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(SWIGERT, W., dissenting.) I respectfully dissent.
This cause came before the appellate division on an appeal of a final judgment entered in favor of Appellee, Fortune Insurance Company (Fortune) entered pursuant to the trial court’s order denying Deborah Palmer’s (Palmer) motion for summary judgment. The material facts of this case are not in dispute.
On June 3, 1997, Corey Henne (Henne) was killed in a motor vehicle accident. At the time of the accident, Henne was driving, with permission, a vehicle owned by Edwin Burch (Burch). Also present in the car at the time of the accident were Katharine Verdon, Bonnie Simons, and Keith Fontain. Burch carried a policy of Personal Injury Protection insurance with Appellee, Fortune. On or about September 2, 1997, Palmer, as natural mother and personal representative of Henne’s estate, submitted to Fortune (via her attorney) a Personal Injury Protection (PIP) Application, a death certificate for Henne, a funeral home bill, and a request for the $5,000 death benefit provided for at sec. 627.736, Florida Statutes. Both the PIP application and the death certificate listed Henne’s home address as 465 King Charles Circle, Deland, Florida. This was the same address as Henne’s mother, Deborah Palmer, and his step-father, William Palmer. On or about September 8, 1997, Palmer forwarded an ambulance bill for $260.00 to Fortune and requested payment.
On October 10, 1997, Wendy Calkins, a claims examiner for Fortune, telephoned Palmer’s attorney and informed him that Fortune did not have enough information to pay the claim and requested that he forward her a copy of the police report. This conversation was followed up by a letter dated October 13,1997. On October 17,1997, Palmer’s attorney provided Fortune with a copy the police report. The police report indicated that Henne was driving the vehicle owned by Burch at the time of the accident. It also indicated that Palmer’s address was 465 King Charles Circle, Deland, Florida. Based upon the information contained in the police report, Fortune obtained a motor vehicle report on both Henne and the residence located at 465 King Charles Circle. It was at this time that Fortune learned Henne’s step-father, William Palmer, had a policy of Personal Injury Protection insurance with State Farm. While this activity occurred, Palmer filed suit against Fortune claiming entitlement to PIP benefits. Suit was filed on November 6, 1997.
After Fortune obtained a motor vehicle report, and apparently after suit was filed, another claims examiner, D. Scott Headland, contacted Palmer’s attorney and informed him that Fortune believed the Henne loss was covered by another policy since Henne resided with a covered relative, William Palmer, at the time of the accident. It was at this time that Palmer’s attorney informed Fortune that Henne did not reside at 465 King Charles Circle at the time of the accident. Palmer’s attorney gave the claims examiner for Fortune the names of several individuals who could verify Henne’s address. Fortune’s examiner had several conversations with individuals in late November and early December 1997 regarding Henne’s residence. On December 3rd or 4th, 1997, Fortune’s examiner mailed an affidavit to Palmer’s attorney for Deborah Palmer’s signature regarding Henne’s address. In the meantime, Fortune — via its attorney — filed an answer and affirmative defenses on December 23, 1997 wherein it denied late payment of benefits. On or about December 29, 1997, Fortune received a completed affidavit from Deborah Palmer where she affirmed that Henne did not reside at 465 King Charles Circle on the date of the accident. Fortune then paid Palmer $5,208.00 which represented the death benefit plus 80% of the ambulance bill.
Palmer then moved for summary judgment arguing, as a matter of law, that since Fortune paid the $5,208.00 in benefits late, Palmer was entitled to her attorney’s fees plus interest on the benefits paid. Fortune responded, arguing that it was not responsible for interest or Palmer’s attorney’s fees because it paid the claim as soon as it received enough information to determine that the claim was covered. The trial court denied Palmer’s motion for summary judgement and then entered a final judgment in Fortune’s favor. Palmer then filed the instant appeal.
The dispute in this case revolves around the parties’ differing interpretations of section 627.736(4)(b), Florida Statutes, which reads in relevant part:
Personal injury protection insurance benefits paid pursuant to this section shall be overdue if not paid within 30 days after the insurer is furnished with written notice of a covered loss and of the amount of same.
Palmer argues that since it gave written notice, via a PIP application and request for benefits, on September 2, 1997, Fortune had until October 2, 1997 to pay the claim. Since Fortune did not pay the claim until December 29, 1999 — some 115 days after the PIP application was filed — Palmer is entitled to attorneys fees and interest from October 2 to December 29 as a matter of law. Fortune argues that the PIP application submitted on September 2, 1997 was incomplete and that Fortune did not determine that it was required to pay coverage until Palmer submitted an affidavit regarding Henne’s residency on December 29, 1997. Therefore, Fortune states that it did not receive written notice of a “covered” loss until December 29th, at which time it immediately paid the claim.
The case supplied by the parties which is most instructive to this court is Martinez v. Fortune, 684 So.2d 201 (Fla. 4th DCA 1996). In Martinez, a claimant submitted a PIP application to Fortune on July 30, 1993 indicating that he suffered lost wages as the result of a covered automobile accident. Fortune attempted to verify the lost wage claim by sending a disability evaluation request to the claimant’s doctor. Fortune had difficulty obtaining the disability evaluation from the claimant’s doctor, but eventually received the report and paid the claim within 30 days of receipt of the evaluation. The claimant filed suit, alleging that Fortune paid the claim late since it paid the claim over 30 days after receipt of his PIP application. Fortune responded, as it has in the instant appeal, by arguing that the claim was not paid late because Fortune did not receive notice of a “covered” loss until it received the written physicians’ report verifying the wage loss. The Fourth District rejected Fortune’s argument and found for the claimant. In making its decision, the Fourth District cited as support Dunmore v. Interstate Fire Ins. Co., 301 So.2d 502 (Fla. 1st DCA 1976), where the First District held:
The insurance company has thirty days in which to verify the claim after receipt of an application for benefits. There is no provision in the statute to toll this time limitation. The burden is clearly on the insurer to authenticate the claim within the statutory time period.
Fortune attempts to distinguish the instant claim from Martinez and Dunmore. Fortune points out that in Martinez, the claimant submitted a facially sufficient claim for wage loss benefits. Unlike in the instant case, there was no question that Martinez had coverage with Fortune — only whether the wage loss claim was a covered loss. In the instant case, Fortune had no reason to believe that Henne was entitled to coverage of any kind on the Burke policy when it received Palmer’s PIP application and request for benefits. It was only after Palmer finally supplied a copy of the police report that Fortune was able to learn first, that Henne may have coverage under another policy of insurance, and finally — on December 29th, that Henne was entitled to coverage under Burke’s policy with Fortune.
It appears from the record that Fortune had been on notice of the June 3, 1997 accident since July 1, 1997 when it first received a claim from the passengers in the Burke vehicle.1 Fortune was first informed of Palmer’s claim for coverage under the Burke policy on September 2, 1997. Fortune may indeed be correct that the September 2, 1997 PIP application and request for payment did not give Fortune adequate information to know whether or not there was coverage. However, the record is clear that Fortune made no attempt to verify coverage until October 10, 1997 — some 38 days after it first received written notice of the claim. The burden is on Fortune, as the insurer, to authenticate the claim within thirty (30) days. Martinez v. Fortune Ins. Co., 684 So.2d at 203. Despite this burden, Fortune failed to take any action to authenticate or otherwise investigate the claim until after this thirty day period had expired.
Fortune argues that to apply this rule to the instant case would lead to absurd results. To quote the answer brief: “Scam artists could submit claims for coverage under other people’s policies and the insurer would have to pay the claims within thirty days even though there was no way to tie coverage to its insured’s policy.”2 Fortune’s absurd result scenario is rebutted, at least in the instant case, by the remainder of sec. 627.736(4)(b), not quoted by either party in their briefs, which states in relevant part:
However, any payment shall not be deemed overdue when the insurer has reasonable proof to establish that the insurer is not responsible for payment, notwithstanding that written notice has been furnished to the insurer.
I hold that this portion of section 627.736(4)(b), when combined with the insurer’s burden to authenticate the claim within thirty days, gives an insurer thirty (30) days not only to authenticate coverage, but conversely to establish reasonable proof that it is not responsible for the claim. Thirty days is clearly enough time for an insurer, if not to tie coverage to its insured’s policy, to produce reasonable proof that there is no coverage afforded by its insured’s policy. In the instant case, Fortune discovered rather quickly once it initiated its investigation that, based upon the address for the deceased given it by Palmer, another insurer covered the loss. It was only after the fact that Palmer rebutted this “reasonable proof” by way of an affidavit. However, since Fortune took no steps to either verify or dispute coverage within thirty days, Fortune is responsible under the statute for both interest and Palmer’s attorney’s fees. Accordingly, I would reverse.
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1It appears some, if not all of the passengers involved in the accident, were represented by the same attorney as Palmer.
2This Court assumes that such a scam artist would be subject to criminal and civil penalties for filing a fraudulent insurance claim. See § 817.234, F.S.
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