7 Fla. L. Weekly Supp. 292a
Insurance — Personal injury protection — When insurer fails to pay expenses of insured’s treating physicians within 30 days of their submission and without reasonable proof establishing that insurer is not responsible for payment, insurer is not precluded from disputing propriety of charges — Insured’s motion for partial summary judgment asserting that, by failing to timely pay expenses without adequate justification, insurer was precluded from contesting charges denied
DIANA BRANKS, Plaintiff, vs. ALLSTATE INSURANCE COMPANY, Defendant. County Court, 18th Judicial Circuit in and for Brevard County. Case No. 98-12871-CC-4. December 13, 1999. David E. Silverman, Judge. Counsel: Jack L. Platt, Melbourne, for Plaintiff. John P. Daly, Ressman, Weisberg, Barrett, Hurt, Donahue & McClain, P.A., Orlando, for Defendant.
ORDER
This cause coming before this Court on the Motion for Partial Summary Judgment filed by the plaintiff, and the Court having considered the pleadings, any affidavits or other sworn filings in support of and in opposition to the motion, the Court having considered the argument of counsel and any memorandum filed by counsel and the Court having been otherwise advised in the premises,
The Court hereby finds and concludes, as follows:
Factual Background
The plaintiff claims that the defendant refused to pay medical expenses properly payable pursuant to her personal injury protection policy. The essential facts are undisputed.
In February and March of 1998 the plaintiff furnished the defendant with notice of claims for the charges of her treating physicians. The defendant omitted to pay the expenses within thirty days of their submission. In May, 1998, at the defendant’s request, the plaintiff underwent an independent medical examination. The examination resulted in a report indicating that a portion of the expenses were not reasonable, related or necessary. However, prior to that examination, the defendant was not in possession of proof sufficient to permit reasoned denial of the propriety of the charges.
PIP Statutes
The plaintiff moved for summary judgment asserting that, by failing to timely pay the expenses without adequate justification, the defendant was precluded from contesting the propriety of the charges.
Section 627.736(1), Florida Statutes, requires an insurer to provide personal injury protection (PIP) benefits for, “loss sustained … as a result of bodily injury, sickness, disease, or death arising out of the ownership, maintenance, or use of a motor vehicle.” Personal injury protection benefits include “[e]ighty percent of all reasonable expenses for necessary medical … services.” § 627.736(1)(a), Florida Statutes.
Section 627.736(4)(b), Florida Statutes, requires that such payment be made within, “30 days after the insurer is furnished with written notice,” of the expenses claimed. The amounts supported by such notice are, “overdue if not paid within 30 days after such written notice” unless the insurer has “reasonable proof” establishing that the insurer is not responsible for the payment.
The reasonable proof standard used to justify refusing payment is similar to but distinct from the provisions of Section 627.736(7)(a), Florida Statutes, prohibiting the insurer from withdrawing payment of a treating physician without first obtaining a report from a similarly licensed physician, “stating that treatment was not reasonable, related, or necessary.”
Conflicting Districts
The consequences of failing to make timely payment, as set forth in Sections 627.4265 and 627.428, Florida Statutes, include statutory interest and attorneys fees, respectively, that may be awarded against the insurer. The issue in the instant case is whether precluding the insurer from disputing the obligation to pay the charges is another consequence of non-payment, without reasonable proof, in violation of Section 627.736(4)(b).
Reciting the maxim of statutory construction that Florida’s no fault laws will be construed liberally in favor of the insured, Derius v. Allstate Indem. Co., 723 So.2d 271, 272-273 (Fla. 4th DCA 1998) identified both reasonableness and necessity as essential elements of a plaintiff’s case in a lawsuit for benefits under a personal injury protection policy.
There is nothing in the PIP statute suggesting a legislative intent to alter the normal dynamics of a lawsuit by placing the burden on the defendant in a PIP case to prove that a proposed charge was unreasonable or that a given service was not necessary.
Two appellate cases have directly addressed whether the plaintiff is relieved of the burden of proving those elements at trial when the insurer has failed to pay without reasonable proof, in violation of Section 627.736(4)(b), and have reached contrary conclusions.
The Fifth District Court of Appeals considered the plaintiff’s contention in Jones v. State Farm Mut. Auto. Ins. Co., 694 So.2d 165, 166 (Fla. 5th DCA 1997), stating that,
[w]e cannot credit Jones’ contention that State Farm’s failure to pay Jones’ surgical bills within thirty days relieved him of any further obligation under the policy and requires that judgment be entered in his favor….
Finding that the insurer lacked reasonable proof to justify non-payment, the Court in Jones explained and limited the consequences, indicating that the insurer is,
[e]xposed to the statutory penalties attendant to an “overdue” claim. State Farm does not, however, lose its right to contest the claim. For this reason, State Farm’s failure to pay the claim in thirty days does not relieve Jones from the obligation to submit to an independent medical examination. Jones, supra, at 166.
However, the Court in Perez v. State Farm Fire and Cas. Co., 24 Fla. L. Weekly D2355, 24 Fla. L. Weekly D2439 (Fla. 3rd DCA, Oct. 13, 1999) reached a contrary conclusion. The analysis in Perez emphasized the legislative intent of the PIP statutes to induce prompt payment of legitimate claims. Perez held that this intent required a reading of statute that precluded an insurance carrier from contesting the claim under such circumstances.
The insurers’ contentions that while they failed to obtain a report within the statutory period, they can only be required to pay interest and attorney’s fees is not persuasive. Since 1974, Florida courts have uniformly held that the statutory language is clear and unambiguous. 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 upon the insurer to authenticate the claim within the statutory time period. To rule otherwise would render the recently enacted “no fault” insurance statute a “no-pay” plan — a result we are sure was not intended by the legislature. Pacheco, 695 So.2d at 395 [Fortune Ins. Co. v. Pacheco, 695 So. 2d 394 (Fla. 3d DCA 1997)]. Perez, supra, at D2355 quoting Dunmore v. Interstate Fire Ins. Co., 301 So.2d 502, 502 (Fla. 1st DCA 1974).
Additional support for this position comes from the recent case of Amador v. United Auto. Ins. Co., 24 Fla. L. Weekly D2437 (Fla. 3rd DCA, Oct 27, 1999). The Amador court reiterated that the legislative intent of imposing an obligation on the insurer to authenticate the claim within 30 days of receipt is designed, “to guarantee swift payment of PIP benefits.” Amador, supra, at D2437, quoting Crooks v. State Farm Mut. Auto. Ins. Co., 659 So. 2d 1266, 1268-1269 (Fla. 3d DCA 1995). Amador also intimated that under elementary precepts of contract law, the insurer may be precluded from enforcing its rights as set forth in the policy, where it fails to timely pay as required by Section 627.736(4).
Accordingly, contrary to United Auto’s argument that the insureds were barred from filing suit without first submitting to an examination under oath, we hold that, because of the special nature of, and protection afforded by, the PIP statute, upon expiration of the 30-day period, the insurer is itself in breach of the contract and may therefore, not deny an insured the right to access the courts for purposes of enforcing the PIP statute. Amador, supra, at D2437.
The holding in Perez cannot be reconciled with the language of the earlier Jones decision. Perez distinguished Jones as addressing a summary judgment in favor of the insurer where the insured had failed to submit to an independent medical examination. In that different context, the Fifth District stated that the insurer was not precluded from presenting its defense.
This comment, [the quoted language in Jones] however, was clearly dicta as it was not necessary to the disposition of the case. In any event, the Eleventh Circuit Court is bound to follow the precedent in this District, see Pardo v. State, 596 So.2d 665 (Fla. 1992), and its failure to do so was error; the error resulted in a miscarriage of justice. Perez, supra, at D2355.
Binding Authority
Resolution of this issue, therefore, depends upon whether this Court is bound to follow the language in Jones, a case decided in the Fifth District Court of Appeals, or the holding of Perez, a Third District case. Initially, it is clear that District Court of Appeals decisions are binding upon trial courts. The Florida Supreme Court has stated that, “[t]he decisions of the district courts of appeal represent the law of Florida unless and until they are overruled by this Court.” Stanfill v. State, 384 So.2d 141, 143 (Fla. 1980).
The Court in Pardo v. State, 596 So.2d 665, 666-667 (Fla. 1992) quoted State v. Hayes, 333 So.2d 51, 53 (Fla. 4th DCA 1976), for an explanation of the purpose of the rule and a description of the binding effect of a decision in the district where the trial court is located.
The District Courts of Appeal are required to follow Supreme Court decisions. As an adjunct to this rule it is logical and necessary in order to preserve stability and predictability in the law that, likewise, trial courts be required to follow the holdings of higher courts — District Courts of Appeal. The proper hierarchy of decisional holdings would demand that in the event the only case on point on a district level is from a district other than the one in which the trial court is located, the trial court be required to follow that decision. Alternatively, if the district court of the district in which the trial court is located has decided the issue, the trial court is bound to follow it. Contrarily, as between District Courts of Appeal, a sister district’s opinion is merely persuasive.
The Court in Perez characterized the quoted language in Jones as dicta. Dicta is defined as statements or comments in an opinion concerning some rule of law or legal proposition, “not necessarily involved nor essential to determination of the case in hand,” and lacking the force of an adjudication. Black’s Law Dictionary 541 (4th Ed. 1968). If properly characterized as obiter dicta, the language in Jones would lack precedential value.
The Perez opinion suggested that since Jones was decided in the context of evaluating a summary judgment in favor of the insurer, determination of the issue was not essential to the rationale employed or the conclusion reached by the Fifth District. However, by suggesting that, “[I]n any event, the Eleventh Circuit Court is bound to follow the precedent in this District,” Perez, supra, at 2355, the Perez court also suggests that even if the quoted language from Jones has precedential and binding effect on trial courts in the Fifth District, it did not bind those in the Third.
The quoted language in Jones represented an important step in that Court’s analysis. It was included in the text rather than a footnote of the case and was part of the first headnote in the opinion. It articulated the continuing right of the insurer to contest the claim without equivocation as though it was settled law.1
The Fifth District clearly identified the legal principles set forth in the quoted passage as a basis for the reversal of the judgment. While not binding on this Court, the concurring opinion of Judge Cowart in Mouzon v. Mouzon, 458 So.2d 381, 391 n.18 (Fla. 5th DCA 1984), J. Cowart concurring, is persuasive regarding the precedential effect of such an expression.
When an appellate opinion assigns multiple reasons to support its determination of a point of law, or multiple points of law to support its conclusion, each reason or point becomes embodied in the rationale and resolution or determination of the case and has precedential value.
Consequently, this Court is unable to find that the quoted language in Jones is without precedential effect and would not bind this court.2
Judgment
It is therefore ORDERED and ADJUDGED that the plaintiff’s Motion for Partial Summary Judgment is and the same shall be denied.
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1Jones’ position would permit an insurer to delay payment on the speculation that their insureds would be reluctant to litigate over a small medical bill, provided the carrier is willing to risk attorneys fees and costs. The contrary position appears to require the insurer to pay the plaintiff’s expenses, even those found later to be excessive, medically unnecessary and unrelated to the accident, as well as attorneys fees and interest, where the carrier lacked reasonable proof to promptly deny the claim. Clarification of the consequences of an insurer failing to pay timely is an appropriate subject for legislation.
2Section 34.017(1)(a), Florida Statutes (1997), precludes a county court from certifying a question to the district court of appeal except, “. . . in a final judgment if the question may have statewide application,” and is of great public importance or will affect the uniform administration of justice. Since this is an interlocutory order it is not appropriate to certify a question, despite the conflicting positions of the District Courts of Appeal.
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