8 Fla. L. Weekly Supp. 731b
Attorney’s fees — Justiciable issues — Insurance — Personal injury protection — Voluntary dismissal — Record does not support finding that plaintiff’s counsel continued to prosecute meritless suit on behalf of medical provider whose owner was arrested for insurance fraud during pendency of suit — There was ample merit to warrant filing of suit and maintenance of prosecution up to and including the time of voluntary dismissal, regardless of provider’s arrest or other irrelevant factors
PRESTIGE MEDICAL CENTER, INC., Plaintiff, v. PROGRESSIVE EXPRESS INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County, Civil Division. Case No. 00-7646-SP26 (02). August 20, 2001. Lawrence D. King, Judge. Counsel: Leo Bueno, Miami. Dora Beatty, Miami. Sharon Shade, Miami Beach.
ORDER ON DEFENDANT’S MOTION TOTAX COSTS AND ATTORNEY’S FEES
THIS MATTER came before the court for hearing on May 15, 2001 and July 30, 2001 on Defendant’s Motion to Tax Cost and Attorney’s Fees against Plaintiff, Prestige Medical Center, Inc., and plaintiff’s attorney Dora Beatty. The defendant seeks recovery of attorney’s fees pursuant to Section 57.105, Fla. Stat. (1999).
The court hereby denies defendant’s motion and finds that there is no reasonable factual or legal basis for the entry of an award of attorney’s fees in favor of the defendant.
A. FINDINGS OF FACT
The complaint, first set of interrogatories and request for production were filed on October 20, 2000. The complaint sought recovery of personal injury protection benefits claimed by plaintiff, Prestige Medical Center, Inc. on behalf of their patient, Geraldo Robaina, pursuant to a valid irrevocable assignment of benefits and policy of auto insurance issued by defendant, Progressive Express Insurance Company. This action proceeded for five (5) months until March 15, 2001 when plaintiff, Prestige Medical Center, Inc. filed a voluntary dismissal of the case.
The parties exchanged written discovery, conducted depositions and plaintiff produced medical billing documents concerning the automobile accident claim of Geraldo Robaina. Throughout the pendency of the litigation, there were numerous hearings regarding alleged discovery abuses filed by both parties citing specific delays in producing documents or witnesses for deposition. The court ultimately found that there had been no willful effort by either counsel to obstruct the timely prosecution of the case.
The court notes that although there were some unfortunate and/or unexpected scheduling delays in completing discovery pursuant to court order, the attorneys in question handled their respective client’s interest with professionalism, amounting to nothing more than zealous advocacy. After the voluntary dismissal, Progressive Express Insurance Company by and through attorney, Sharon A. Shade, sought taxable fees and costs.1
It is the contention of defendant that Dora Beatty, Esq., and her client, Prestige Medical Center, Inc., sought to prolong litigation, harass, delay or otherwise intentionally continue to maintain a frivolous lawsuit without merit. It is alleged by the defendant that several factors point to conduct exhibiting known fraud committed by Frank Gato, owner of Prestige Medical Center, Inc., in the filing of this suit, which is based upon health care service charges and bills submitted to defendant that were not performed as to the insured/patient, Geraldo Robaina. The defendant further alleged, that after the filing of the suit, the owner of Prestige Medical Center, Inc., Frank Gato, was arrested and charged with eleven (11) counts of insurance fraud, eleven (11) counts of grand theft and one (1) count of practicing medicine without a license (Plaintiff’s Ex. 5). It is also argued by defendant that on or about February 26, 2001, after discovery of Gato’s arrest, Sharon Shade, Esq. notified Dora Beatty, Esq. of this arrest via U.S. mail (Plaintiff’s Ex. 30). At no time was it ever confirmed that the initial criminal arrest was related to the case sub judice, nor that health care treatment rendered to Mr. Robaina was not legitimately performed by plaintiff.
During the attorney’s fee hearing(s), Sharon Shade, Esq. sought to support her contentions that it was incumbent upon plaintiff’s counsel, Dora Beatty, Esq., to advise her clients, Frank Gato and Prestige Medical Center, Inc., that dismissal of the complaint was necessary in light of Gato’s arrest. This coupled with the alleged surveillance of the insured, Geraldo Robaina, who was believed to have missed one or two of his therapy treatment session(s). It was the testimony of defendant’s private investigator, Mr. Hernandez, that he followed Mr. Robaina on one specific day where services were billed, and yet Mr. Hernandez did not actually see Mr. Robaina enter the Prestige Medical Center, Inc. for treatment.
Plaintiff called rebuttal expert witnesses, Alvin Weinstein, Esq., whose testimony was found to be credible. Mr. Weinstein established several key points that were highly persuasive and factually undisputed by defendant. He opined that throughout the pendency of the case Dora Beatty, Esq., by way of written interrogatories continued to investigate the allegations of fraud by Prestige relate to its billing practices. Further, he found Ms. Beatty exercised due diligence with respect to evaluation of the assigned claims of Geraldo Robaina and the treatment rendered. Mr. Weinstein also determined that the evidence provided by defendant to Ms. Beatty or obtained though discovery were wholly insufficient to establish that there was a meritless, fraudulent insurance claim for payment underpinning the prosecution of the case by plaintiff and/or plaintiff’s counsel. The expert testimony, which was subjected to cross-examination by defendant went unrebutted, which made a powerful statement on behalf of plaintiff for denial of the fees requested herein pursuant to Sec. 57.105, Fla. Stat. (1999).2
It was the testimony of Dora Beatty, Esq. at trial, that she conferred with her client regarding these allegations of fraud and felt comfortable in her continued prosecution of the matter based on the information obtained through her client and evidence obtained through independent investigation. Moreover, Ms. Beatty made significant good faith efforts to confirm the dates and times of Geraldo Robaina’s visits with the facility itself, mindful of the assertions made by counsel for defendant. It should be noted that at no time did the defendant provide to the plaintiff or plaintiff’s counsel the surveillance tape taken by investigator, Mr. Hernandez.
The court prohibited the production of the actual surveillance tape until certain depositions of plaintiff’s employees were completed. However, nothing precluded the defendant from revealing by interrogatory response the specific contents of the tape to plaintiff. Indeed, the tape was never shown to plaintiff’s counsel, Dora Beatty, Esq. who was striving to confirm the validity or falsity of the fraud claims suggested by Sharon Shade, Esq. concerning the Geraldo Robaina claim. Invariably, the voluntary dismissal was taken by the plaintiff, with this information never being shown to plaintiff’s counsel.
Defendant also argued that the voluntary dismissal was taken as a direct result of the overwhelming evidence of fraud discovered by defendant, Progressive Express Insurance Company, its attorney Sharon Shade, Esq. and their investigative sources. However, the court finds that there could be many legitimate reasons for a plaintiff electing to take a voluntary dismissal. However, it is highly speculative and begs credulity to assume that simply because a person is arrested for, or charged with a criminal violation of insurance fraud that they are implicitly guilty of said fraud, and/or this should mandate an abandonment of a viable complaint. Defense counsel relies solely on the arrest of Frank Gato, and the failure of the surveillance investigator to notice the comings and goings of Geraldo Robaina to the medical facility on two (2) separate dates (July 31, 2000 and August 4, 2000), in support of her postulation that Dora Beatty, Esq. and her client were knowingly attempting to further a meritless claim.3
The court simply does not agree with defendant’s position and recognizes that nothing more than a questionable smoke and mirror defense was raised by these assertions. There exists no credible evidence which might warrant some heightened awareness or requirement that plaintiff’s counsel take action to look any further into the claimed legitimacy of the alleged allegations made by defense counsel. The facts as presented by defendant did not evidence a meritless suit. Therefore, the court finds that for whatever reason the plaintiff chose to voluntarily dismiss its case, this was done in good faith based upon the evidence presented.
The court also specifically finds that the facts presented during the hearing, along with the evidence and testimony of the parties reveal that there was ample merit in Plaintiff, Prestige Medical Center, Inc’s., lawsuit to warrant not only the filing of the suit, but the maintenance of the prosecution up to and including the time of the voluntary dismissal.
B. CONCLUSIONS OF LAW
This court has discretion in this matter to consider and award attorney’s fees even after the voluntary dismissal of a claim. Westwood Community Two Association, Inc. v. Lewis, 662 So.2d 1011, 1012 (Fla. 4th DCA 1995).
Section 57.105, Fla. Stat. (1999), requires the following elements be met to warrant a reasonable finding by the court that attorney’s fees are appropriately awarded in favor of one party or the other. Section 57.105, Fla. Stat. (1999) states in pertinent part:
(1) Upon the court’s initiative or motion of any party, the court shall award a reasonable attorney’s fee to be paid to the prevailing party in equal amounts by the losing party and the losing party’s attorney on any claim or defense at any time during a civil proceeding or action in which the court finds that the losing party’s attorney knew or should have known that a claim or defense when initially presented to the court or at any time before trial:
(a) Was not supported by the material facts necessary to establish the claim or defense; or
(b) Would not be supported by the application of then-existing law to those material facts.
However, the losing party’s attorney is not personally responsible if he or she has acted in good faith, based on the representations of his or her client as to the existence of those material facts. If the court awards attorney’s fees to a claimant pursuant to this subsection, the court shall also award prejudgment interest.
After careful review of the pleading file, the testimony of the witnesses in question, and the documents introduced into evidence at hearing the court finds no legal basis pursuant to Sec. 57.105, Fla. Stat. (1999), for the entry of attorney’s fees in favor of Progressive Express Insurance Company, as they have failed to meet their burden to show a bad faith maintenance of a factually meritless suit. The court finds that contrary to the perception of defense counsel, as stated in the Motion to Tax Costs and Attorney’s Fees, neither plaintiff or plaintiff’s counsel knew or should have known that the claim, when initially presented to the court or at any time thereafter prior to trial was not supported by the material facts necessary to establish a claim or defense, or would not be supported by the application of then existing law to those material facts.
Indeed, it was quite clear to the court after the final presentation and closing oral arguments of the parties that the bills for Geraldo Robaina remained unpaid by defendant, and there was insufficient evidence produced to support defendant’s contention that insurance fraud had been committed at any time by either the patient, Geraldo Robaina, or the plaintiff. Moreover, it is clear that Dora Beatty, Esq. acted in good faith in reliance on the representations of her client, Frank Gato, as to the existence of those material facts regarding the breach of contract action.
The court notes that there was a large degree of failed cooperation between plaintiff’s counsel and defense counsel during the discovery phase. This was unfortunate, and with more of a concerted effort, might have alleviated some of the concerns of the defense and helped the plaintiff reasonably evaluate the strength and weaknesses of the claim. However, at no time was it shown that plaintiff knew that there was a problem with the bill that amounted to fraud or that there was a bad faith attempt by plaintiff’s counsel to blindly “damn the torpedoes” in prosecuting the case. There may remain at this time a viable PIP claim on behalf of defendant’s insured Geraldo Robaina which goes unreasonably unpaid as to defendant, Progressive Express Insurance Company.
The court is aware that the voluntary dismissal was taken in close proximity to the court’s ruling that Mr. Frank Gato and staff employees of Prestige Medical Center would be required to complete their depositions, even if it became necessary to exercise their Fifth Amendment right to remain silent, which might ultimately limit the viability of the claim. However, this may or may not have been the reason for the voluntary dismissal. Defendant encourages the court to embrace the argument that Gato’s arrest is the sole reason for plaintiff’s voluntary dismissal of the case. To do so would force the court to disregard the procedural and substantive tenets applicable in this action. Therefore, having failed to meet the elements necessary for award of the attorney’s fees pursuant to Sec. 57.105, Fla. Stat. (1999), the court hereby rejects the misplaced argument and denies defendant’s request. The court further finds that the decision of Vistula vs. Securiy Pacific Credit Corp., 768 So.2nd 482 (Fla. 3d DCA 2000), is not factually applicable in this action and is distinguishable from the facts presented herein. At no time were the plaintiff’s medical bills provided to defendant for payment found to be fraudulent. At best, the defendant was able to show a scriveners error in the date of treatment on one treatment occasion only, supported only by less than credible testimony from its private investigator. Therefore, all other cases set forth in defendant’s memorandum of law supporting its contention and entitlement for attorney’s fees including Thornberg vs. City of Fort Walton Beach, 568 So.2d 914 (Fla. 1990) and Key West Polo Club Developers Inc. vs. Towers Construction Company of Panama City Inc., 589 So.2nd 917 (Fla. 3d DCA 1991) and its progeny are not factually applicable. These cases required knowledge by the litigant that certain false documentation was being sued upon and that there must be a finding of per se frivolousness to the suit itself.
The court finds that factually, Dora Beatty, Esq. did not know, nor could she have known, prior to the filing of this suit or thereafter that the claim of plaintiff, Prestige Medical Center, Inc., and its owner, Frank Gato, may have been not supported by material facts necessary to establish the claim. The court finds that the claim of plaintiff was supported by ample evidence sufficient to be deemed as a viable PIP insurance contract dispute before this court, regardless of Frank Gato’s arrest and other irrelevant factors, which when scrutinized, were nothing more than innuendos, lacking any real substance relevant to the valid defense of this action.
As previously stated, the court noticed that at times, the discovery methods utilized by counsel in this case were similar to the conduct of counsel described in the case of Beekie vs. Morgan, 751 So.2nd 694 (Fla. 5th DCA, 2000). However, the court finds no overt intent by counsel to abuse the discovery process or dignity of our trial court justice system. See generally, Froman v. Boca Burger, Inc., 26 Fla. L. Weekly D1250 (Fla. 4th DCA 2001) (candor to the tribunal). The court retains jurisdiction for an award of reasonable costs in favor of defendant upon timely motion.
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1The court has reserved jurisdiction for a pending hearing regarding taxable costs, if any, upon proper presentation by defendant of those costs reasonably related to the defense of this case. Therefore the pending cost award will not be addressed nor ruled upon in this order.
2Defendant called no expert witnesses at the hearing(s) of this matter other than the private investigator, Hernandez.
3Investigator Hernandez testified he did not maintain direct contact with Robaina at all times during the surveillance.
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