7 Fla. L. Weekly Supp. 613a
Insurance — Personal injury protection — Insurer refusing to pay medical bill based on determination that charges were not reasonable, necessary and related to subject accident — Only way an insurer may legally make unilateral decision as to whether medical expense is reasonable, necessary or related is for it to provide indemnification for medical expenses up to policy limits, and /or provide unqualified defense to insured if sued, even if such defense exceeds policy limits — Defense promised by defendant is anything but unqualified where contract provision purports to protect insured from any claim or law suit filed by medical provider, but explanation of that protection indicates that such protection is subject to limits of insured’s coverage — Further, there is no insurance regulation providing protection for insured and no evidence that insurer secured releases from medical providers
TERRY ANDREWS, Plaintiff, vs. ALLSTATE INSURANCE COMPANY, Defendant. County Court, 1st Judicial Circuit in and for Escambia County. Case No. 99-1217-SP-11. June 21, 2000. G.J. Roark, III, Judge. Counsel: David L. Sellers, for Plaintiff. Yancey F. Langston, for Defendant.
ORDER DENYING MOTION FOR SUMMARY JUDGMENT FINDINGS OF FACT
THIS CAUSE came before the Court on Defendant’s Motion for Summary Judgment, and the Court, after reviewing the pleadings, argument and authority submitted finds as follows:
1. Plaintiff was involved in a motor vehicle accident on or about August 7, 1998. As part of her treatment, she received services from Nu-Best Diagnostics on December 10, 1998. This bill was submitted to Defendant on or about December 21, 1998 and received by them on or about January 4, 1999.
2. Defendant referred this bill and the accompanying records to NTC, Inc., a medical review company, which hired a Dr. Michael H. Schwartz to review and render an opinion on whether the bill was reasonable, necessary and related to the accident. Dr. Schwartz reviewed the bill and issued an opinion stating that the charges were not reasonable, necessary and related, and issued a report so stating on January 19, 1999.
3. On January 28, 1999 Defendant notified Nu-Best of the results of Dr. Schwartz’s review, and notified Nu-Best in the same letter that it was refusing to pay the $650.00 bill. In the same letter, the Defendant agreed to indemnify, defend and hold harmless the Plaintiff from any law suit brought by Nu-Best caused by the enforcement or attempted enforcement of the unpaid amount of the bill “up to the available limits of coverage should coverage still be available.”
4. Plaintiff’s contract of insurance with Defendant states the following as to personal injury protection benefits:
Unreasonable or Unnecessary Medical Expenses
If an insured person incurs medical expenses which we deem to be unreasonable or unnecessary, we may refuse to pay for those medical expenses and contest them.
If the insured person is sued by a medical services provider because we refuse to pay medical expenses which we deem to be unreasonable or unnecessary, we will pay resulting defense costs and any resulting judgment against the insured person. We will choose the counsel. The insured person must cooperate with us in the defense of any claim or lawsuit. If we ask an insured person to attend hearings or trials, we will pay up to $50.00 per day for loss of wages or salary. We will also pay other reasonable expenses incurred at our request.
5. Upon being advised of Defendant’s position, Plaintiff filed this law suit. Defendant answered, simply admitting or denying the allegations set forth in Plaintiff’s complaint. There were no affirmative defenses alleged. Later, Defendant filed a Motion for Summary Judgment alleging that it had exercised its right under its contract to determine the disputed bill to be unreasonable or unnecessary, and further alleging that Plaintiff had not incurred any damages because she had not been sued by her provider and in addition, that Defendant’s contractual obligation to indemnify Plaintiff if sued by her provider was enforceable. Of those three allegations, the only one which was supported by an affidavit with personal knowledge was that referencing the policy provisions set forth above that form the basis of the theory that Defendant’s obligation to defend and indemnify left Plaintiff with no remedy and thus no law suit.
6. Defendant did not file any counter affidavits.
CONCLUSIONS OF LAW
Plaintiff furnished the Court with two Michigan cases, McGill, et al. v. Automobile Association of Michigan, 526 N.W.2d 12 (Mich.Ct.App. 1994) and LaMothe v. Auto Club Insurance Association, 543 N.W.2d 42 (Mich.Ct.App. 1995), which held that where the insurer agrees to defend and indemnify the insured, and to attempt to protect the insured from bad credit ratings, and where Michigan insurance regulations require insurers to provide insureds with complete protection from economic loss and ensure that they are not exposed to harassment, dunning, disparagement of credit or law suit, that the insured is protected from incurring damages and accordingly no case or controversy exists. The Florida trial court cases submitted by Defendant all follow these two Michigan cases in one way or another. The Defendant also submitted a Massachusetts decision which followed the Michigan cases, but which clearly turned on the fact that the insurers there had secured releases from the providers, thus obviating Plaintiff’s exposure to any manner of collection efforts. NY v. Metropolitan Property & Casualty Insurance Co., West Law No.603138 (Mass.App.Div. 1998).
In this case, there is no such regulation providing protection for the insured. Nor is there any evidence of a release as in Ny. The only protection, if any, for the insured is the Defendant’s offer of indemnification and defense. While the contract provision purports to protect the insured from any claim or law suit filed by a medical provider, the explanation of that protection contained in the Defendant’s January 28, 1999 letter to Nu-Best indicates that such protection is subject to the limits of insured’s coverage, “should coverage be available”. This seems to indicate that should the Defendant provide an attorney for a Plaintiff engaged in a law suit with his or her provider, that as soon as the coverage was used up no further defense costs would be paid. While this may not be an issue when the insured has $8,000.00 to $10,000.00 of coverage remaining, those with minimal remaining coverage would certainly be at risk.
It seems apparent that the only way an insurer may legally make a unilateral decision as to whether a medical expense is reasonable, necessary or related is for it to provide indemnification for medical expenses up to the policy limits and/or provide an unqualified defense to the insured if sued, even if such defense exceeds policy limits. The Court concludes that the defense promised by Defendant is anything but unqualified, and accordingly Defendant cannot take advantage of the theory espoused in McGill and the cases which follow it.
The Court is not unmindful of the recent case of Livingston v. State Farm Mutual Automobile Insurance Company, [25 Fla. L. Weekly D533] 2000 WL 234691 (Fla.App. 2 Dist.) decided by the 2d DCA on March 3, 2000. In that case, the Court held that an insured whose worst case scenario was having to add the insurer as a third party defendant if sued by her provider did not have a claim for breach of contract because she suffered no compensable damages. Whether this case makes any sense or not is irrelevant, because the Plaintiff in this action is apparently exposed to any attorney’s fees which would exceed her PIP coverage.
Accordingly, it is ORDERED AND ADJUDGED that the Motion for Summary Judgment be denied.
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