8 Fla. L. Weekly Supp. 321b
Insurance — Personal injury protection — PIP insurer fulfilled its duty to pay legitimately payable hospital expenses when it apportioned PIP benefits between two hospital bills — Insurer was not under duty to withhold PIP benefits from a hospital lienor submitting a legitimate claim and coordinate benefits with another health insurer in order to pay a potential wage loss claim that might be submitted later — Even if PIP insurer was under duty to coordinate benefits, it was duty to coordinate among existing claims — Insured’s furnishing of request to insurer to reserve benefits for developing wage loss claim does not authorize judicial imposition of obligation to coordinate benefits which may tend to impair insurer in fulfillment of its duty to make prompt payment of legitimate claims for medical expenses — PIP insurer is not under duty to coordinate benefits with another insurer in derogation of its obligation to promptly pay legitimate claims submitted by medical service providers
JOY YOSHIDA, Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 18th Judicial Circuit in and for Brevard County. Case No. 05-2000-CC-8118. February 19, 2001. David E. Silverman, Judge. Counsel: Samuel S. Henderson, Trachtman and Henderson, P.A., Melbourne, for Plaintiff. Christopher Laymen, The Turner Law Firm, L.L.C., Melbourne, for Defendant.ORDER
This cause coming before this Court on the 9th day of February, 2001, on the Motion for Rehearing filed by the plaintiff and the Motion to Strike Plaintiff’s Motion for Rehearing filed by the defendant and the Court having been advised in the premises,
Rather than merely ruling on the motions, the Court outlines in this Order its findings of fact and conclusions of law in order to explain its reasoning and facilitate appellate review.
We start out with the proposition that the purpose of the No Fault Insurance law is to promote prompt payment of an insured’s legitimate covered expenses. Nationwide Mut. Fire Ins. Co. v. Pinnacle Medical, Inc., 753 So.2d 55 (Fla. 2000). This is the prime directive for a PIP insurer.
Orlando Regional Medical Center, hereinafter “ORMC”, submitted the first claim on the PIP benefits to the defendant. The claim exceeded the policy limit and appears to have had the dignity and priority of a hospital lien. See, Orlando Regional Medical Center, Inc. v. Estate of Heron, 596 So.2d 1078 (5th DCA 1992), review denied, 604 So.2d 487 (Fla. 1992).
The insurer apportioned the PIP benefits between ORMC and a later hospital bill from Cape Canaveral Hospital, hereinafter “CCH”. The apportionment was made in an apparent effort to preclude claims by the hospitals against the insurance carrier. It is undisputed that all the hospital charges were reasonable, medically necessary and related to the accident.1
The defendant is not under a duty to coordinate benefits with a different insurer2 in derogation of its obligation to pay promptly legitimate claims submitted by medical service providers. The absence of such a duty is the postulate upon which the granting of the summary judgment rests.
Section 627.7401, Florida Statutes, only imposes an obligation on the Department of Insurance to furnish forms intended to facilitate to such coordination. The absence of any such statutory obligation with respect to PIP carriers contrasts with the obligation among group health carriers under Section 627.4235, Florida Statutes, to coordinate and maximize benefits.
The legislature appears to have specifically intended to refrain from imposing any such obligation on PIP insurers.3 The plaintiff’s furnishing of a request to the carrier to reserve the benefits for a developing wage loss claim does not authorize the judicial imposition of such obligation which may tend to impair the insurer in fulfillment of its duty to make prompt payment of legitimate claims for medical expenses.
The Court is cognizant of the case of Howell-Demarest v. State Farm Mut. Auto. Ins. Co., 673 So.2d 526 (Fla. App. 4th Dist., 1996), which held that a cause of action may be predicated on a general business practice of failing to maximize the PIP and med pay benefits where an insured has both coverage with the same insurer. Howell-Demarest cited Holloway v. State Farm Mutual Automobile Insurance Co., 370 So.2d 452 (Fla. 4th DCA 1979) for the proposition that in such cases, “an insured has the right to have benefits so allocated upon request.”
Neither Howell-Demarest nor Holloway nor any other appellate decision of this State has ever held that the carrier has a duty to withhold PIP benefits from a hospital lienor submitting a legitimate claim and coordinate benefits with another insurer’s health policy in order to pay a potential wage loss claim that may be submitted later. Such a doctrine would involve an obligation on the insurer to determine the existence and extent of the coverage of another company’s policy and to construe potentially conflicting provisions between the policies.
The cases cited by the plaintiff do not purport to impose such a duty. Margiotta v. State Farm Mutual Automobile Insurance Company, 622 So.2d 135 (Fla. App. 4th Dist. 1993) and Government Employees Insurance Company v. Gonzales, 512 So.2d 269 (Fla. App. 3rd Dist. 1987) are distinguishable and do not apply in the instant case.
As indicated in the previous Order granting summary judgment, it was unnecessary for the Court in Margiotta to ever reach the issue of whether the payment to the hospital rather than to the insured was proper as, “There was no hospital lien nor any evidence that the hospital had made a claim for PIP benefits.” 622 So.2d at 135. This limitation appeared significant to the Court in Margiotta, whose opinion may have less application where there is a claim by the hospital and an apparent hospital lien, as in the present case.
In both Margiotta and Gonzales, the insurer, confronted by what it asserted were conflicting claims, omitted to pay any before suit was filed. The Gonzales Court there stressed the need for insurers not merely to sit on their hands and urged them to take action by dual payee check or interpleader, if uncertain as to which should be paid.
Particularly — but not only — in the field of PIP benefits, in which the foundation of the legislative scheme is to provide swift and virtually autmoatic payment so that the injured insured may get on with his life without undue financial interruption [citation omitted] an insurance company cannot be permitted simply to stonewall its insured by retaining — and drawing interest upon — payments to which it is admittedly not entitled. 512 So.2d at 270.
The instant case does not present a situation where the insurer was paralyzed into inaction by conflicting claims. The message of Margiotta and Gonzales is that, if the insurer is uncertain as to which claim to pay, the PIP carrier must fulfill its prime directive through issuance of dual payee checks or interpleading the funds. Those measures are required not as a result of any obligation to coordinate benefits, but in order to prevent evasion of their primary duty to promptly pay legitimate claims.
There has been more than twenty-five years of litigation over the Florida No-Fault Insurance Statute. If there is to be judicially imposed duty to withhold payment to a hospital lienor in order to coordinate benefits, contrary to the prime directive, one would expect more explicit appellate guidance. In the absence of such direction and in light of the legislative silence on this issue, this Court looked to the reasoning of the County and Circuit Courts and found Allstate Indemnity Company v. Miriam Lemon and Pacificare of Florida, Inc., 6 Fla.L.Weekly Supp. 675a (Fla. 11th Judicial Circuit 1999) persuasive and in agreement with this analysis.4
The plaintiff also cites Logue v. Clarendon National Insurance Company, [26 Fla. L. Weekly D335] 20001 WL 76955 (Fla. App. 4th Dist. 2001) as imposing a duty to coordinate benefits.5 In Logue the tender by dual payee check was found to be insufficient to preclude a claim for attorney’s fees because the insurer, “should have determined that the competing claims were illusory.” The applicability of Logue seems be questionable as the instant case does not involve either the sufficiency of a tender or a dual payee check — the principal issues in Logue.6 Logue suggests that the insurer may not circumvent its duty by issuing a dual payee check to a payee with an “illusory” claim. That, too, would have the effect of withholding prompt payment from medical service providers with legitimate claims.
The plaintiff claims that the CCH lien was invalid. Regardless of whether the lien was technically deficient, this Court cannot say that the insurer should have identified, within the time provided by the by the Florida No-Fault Insurance Law,7 that the CCH lien claim was “illusory”, as found to be the case in Logue. Indeed, the deficiency, if any, as argued on rehearing, was substantially disputed.
In the event that the carrier should have recognized that the CCH lien was facially invalid, that circumstance would not appear to completely eliminate CCH’s entitlement to the PIP benefits. It would appear to have the effect of causing CCH to lose their priority. See, Fernandez v. South Carolina Ins. Co., 408 So.2d 753 (Fla.App. 3 Dist., 1982) establishing the effect and priority of hospital liens.
However, rather than deciding between competing existing claims of varying priorities, the plaintiff’s position is that the defendant should withhold payment of legitimate hospital expenses to await the plaintiff incurring future lost wages. The Court observes that even were Logue or the other cases cited by the plaintiff construed to impose a duty to coordinate benefits, it is a duty to coordinate among existing claims. If the insurer is able to identify properly payable claims, payment to them is consistent with its primary duty, where the other claims are not yet ripe. If the carrier is able to discern the proper payee despite competing claims, delaying payment of a legitimate claim on the PIP proceeds to await the possible submission of other expenses may appear to arbitrarily favor the later claimants.
Even if the CCH lien was technically invalid, and the absence of a lien would alter neither the defendant’s primary duty nor the undisputed fact that the CCH expenses were reasonable, medically necessary and related to the accident. Moreover, regardless of the CCH claim, the ORMC lien still appears valid and would appear to make ORMC eligible to receive the benefits. Under these circumstances the plaintiff cannot complain that the PIP insurer fulfilled its duty to pay legitimately payable hospital expenses.
It is therefore hereby ORDERED and ADJUDGED, as follows
The said Motion to Strike Plaintiff’s Motion for Rehearing is and the same shall be denied.
The said Motion for Rehearing is and the same shall be denied.
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1See, Hazera v. Allstate Ins. Co., 638 So.2d 177 (Fla.App. 3 Dist., 1994) seems to suggest a good faith standard precluding the PIP and med-pay insurer from arbitrarily selecting which medical provider to pay.
2The plaintiff’s health insurance policy was with Aetna.
3Section 627.736(4), Florida Statutes, makes PIP coverage “primary,” suggesting the legislative intent.
4The Court is constrained to apply the law as it currently stands, however, legislative action appears appropriate to outline the duty of a PIP carrier where the insured represents that it has other health coverage and requests the PIP benefits be reserved for a lost wage claim. With respect to the prerogative of the Courts to recommend changes while following the law, this Court echoes the sentiments of Judge Harris, dissenting in Watkins v. State, 705 So.2d 938, 942 (Fla.App. 5th Dist., 1998), where he stated,
Even though we must apply the law as it is, we are free to test and examine existing law, and if we disagree with it, to imagine the law as it should be and to urge acceptance of law as we envision it. Precedent is like a barbed-wire fence in that it restrains our actions while permitting us to look through the enclosure in search of a better solution and, if we believe we have found one, to recommend its consideration by the supreme court. And it does not matter whether we are always right; it is the process that is important. The supreme court is always free to reject, and most often does, our recommendations.
5The precedential value of Logue is limited by the Westlaw qualification that, “NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION IN THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL.”
6Logue characterized Crotts v Bankers and Shippers Insurance Company of New York, 476 So.2d 1357 (Fla. App. 2nd Dist. 1985), also cited by the plaintiff, as standing for the proposition that, rather than withholding payment from a medical services provider, an insurer, “may withhold direct payment of PIP benefits to the insured when it cannot be reasonably expected to resolve the validity of a competing claim for the benefits on its own.”
7Payment within 30 days is required and failure to pay, without a basis for denial, has been held to preclude the insurer from contesting the validity of the claim. See, Perez v. State Farm Fire and Cas. Co., 746 So.2d 1123, 24 Fla. L. Weekly D2355, 24 Fla. L. Weekly D2439 (Fla.App. 3 Dist. Oct 13, 1999) (NO. 99-1481, 99-1348), rehearing denied (Dec 22, 1999) review granted by United Auto. Ins. Co. v. Rodriguez, 767 So.2d 464 (Fla. May 18, 2000) (TABLE, NO. SC00-111, SC00-112).
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