8 Fla. L. Weekly Supp. 568a
Insurance — Personal injury protection — Action for balance of partially paid bill where policy limits have been exhausted by payment of subsequent claims — Where insured made a valid assignment of benefits to medical provider, insurer received assignment and acted on it by paying reduced amount to provider although it had more than enough PIP benefits to pay disputed amount when it paid reduced bill, provider notified insurer that it contested the reduction and requested that the disputed amount be placed in reserve so that the policy limits not be exhausted prior to resolution of the dispute, insurer did not place disputed amount in reserve but paid other providers for bills received after the disputed billing, thereby exhausting benefits, and insurer does not contest reasonableness of bill in action by provider for disputed amount, insurer is ordered to pay disputed amount despite exhaustion of PIP benefits — Attorney’s fees and costs awarded to provider — Prejudgment interest — Insurer to pay interest on claim from time that check for reduced amount was sent to provider — Question certified whether an insurer providing a policy of PIP insurance with a finite amount of coverage can be held liable for extra-contractual damages once benefits being paid on the insured’s behalf exhaust the available policy limits — Question certified: Does interest pursuant to Fla. Stat. Section 627.736 continue to accrue once benefits have been exhausted under the insured’s policy
VTC TESTING CENTER OF ORLANDO NORTH, INC. d/b/a NATIONAL TESTING CENTERS, ATTORNEY IN FACT AND ASSIGNEE FOR BRENDA BUNTE, Plaintiff, vs. ALLSTATE INSURANCE COMPANY, Defendant. County Court, 9th Judicial Circuit in and for Orange County. Case No. SCO 00-3964. June 26, 2001. C. Jeffery Arnold, Judge. Counsel: Rutledge Bradford, Ocoee. Peter A. Shapiro, Law Offices of Peter A. Shapiro, P.A., Orlando.
JUDGMENT ON PLAINTIFF AND DEFENDANT’SMOTIONS FOR SUMMARY JUDGMENT
This matter having come before the Court upon Plaintiff’s Motion for Summary Judgment and Defendant’s Motion for Summary Judgment, and the Court having considered argument of the counsel, having reviewed the court file and being otherwise duly advised, the Court finds and the parties agree that no issues of material fact exist; therefore, this case is appropriate for summary judgment in favor of one of the parties. This Court must apply the facts below to the law and reach a decision.
The Court finds that the Plaintiff and the Defendant were, at all material times, duly licensed by the State of Florida and actually doing business in the State of Florida with offices in Orange/Seminole County. The Court, therefore, finds that it has jurisdiction over the case.
On December 6, 1999, Brenda Bunte was involved in an automobile accident in Orange County, Florida, wherein she sustained personal injuries. As a result of the accident, Brenda Bunte incurred expenses for necessary medical services, which services were performed by the Plaintiff on January 28, 2000. Wymore Wellness was the treating physician and ordered the test in this suit which is described as electrical testing — nerve conduction studies and evoked potential studies performed by Plaintiff.
At the time of the accident, at the time these services were provided to Brenda Bunte, and at all times relevant, the Defendant issued an insurance contract in Orange County Florida, Policy No. 08104276, which provided $10,000.00 of personal injury protection benefits as required by Florida Statute 627.736.
Brenda Bunte executed a power of attorney appointing the Plaintiff as attorney in fact with the power to bring all rights, claims and causes of action against the Defendant arising out of the medical services Brenda Bunte had received from the Plaintiff. Brenda Bunte also assigned to the Plaintiff additional rights, claims and causes of action against the Defendant arising out of the medical services Brenda Bunte received from the Plaintiff.
VTC Testing Center of Orlando North, Inc., which is the proper name of the Plaintiff, referred to as VTC, performs electrical-type testing, including nerve conduction studies and evoked potential studies on patients referred to it by doctors of the Central Florida community.
The Plaintiff submitted the required HCFA forms to the Defendant in the amount of $2,600.00, pursuant to an assignment of benefits signed by Ms. Bunte. Plaintiff sought payment from the Defendant of 80 percent of the amount billed, or $2,080.00. On February 11, 2000, the Defendant received the HCFA forms along with other medical records relating to the testing. The Defendant, after receiving the records, chose to reduce the bill. On February 17, 2000, six days later, the Defendant paid to the Plaintiff the sum of $1,251.20 (80% of $1,564.00 the reduced amount). This reduction left $828.80 (an 80% figure) not paid under the PIP policy issued by the Defendant.
The Defendant issued a check, recognizing the assignment of benefits, directly to the Plaintiff, without adding the name of Brenda Bunte to the check. The check was mailed directly to the Plaintiffs’ office. Plaintiff received the check in the amount of $1,251.20 and deposited it to its account. At no time, did the Plaintiff indicate to the Defendant, either in writing or orally, that it accepted the reduction, or that the check in the amount of $1,251.20 would constitute full and final payment for the medical services rendered to Brenda Bunte on January 28, 2000.
After receipt of the check, Mr. Anthony Lash, President of VTC Testing, on or about February 22, 2000 contacted the adjuster working for the Defendant on Ms. Bunte’s PIP claim and indicated that the check was in the wrong amount, and that the Plaintiff objected or was contesting the reduction or the reduced payment. He also requested that the payment not made (i.e. the $828.80) be “reserved” or placed aside and that the policy not be exhausted in its benefits prior to resolution of the dispute. He also told the adjuster that he would file a PIP suit if he did not get paid.
At the time the Defendant issued the $1,251.20 check on February 17, 2000, the Defendant had paid $4,997.60, against the PIP policy, between January 12, 2000 and February 14, 2000, towards 24 bills. Therefore, at the time that the check was issued to Plaintiff, there was sufficient PIP benefits ($5,002.40 remaining) available to cover the entire VTC Testing bill.
The Defendant did not place the contested $828.80 in reserve or hold them aside. On February 17, 2000, the date that Defendant paid the Plaintiff its check in the amount of $1,251.20, the Defendant issued 5 other checks to providers that totaled $682.40. Between February 21, 2000 and May 15, 2001, Defendant issued another 13 checks in the total amount of $3,068.80, well above the contested amount of $828.80 that the Plaintiff sought. All 13 of the bills that were paid, were received by the Defendant after the Defendant received the Plaintiff’s HCFA.
In the meantime, the Plaintiff, unhappy with the bill’s reduction, forwarded its claim to Plaintiff’s counsel to file a suit as had been indicated to the Defendant’s adjuster. The Plaintiff filed suit on May 15, 2000, coincidently, the same day as the last billing was paid by the Defendant under the policy which exhausted the PIP benefits available on the policy.
The Defendant never notified the Plaintiff at any time prior to suit that benefits were being paid to others, that the benefits were being exhausted, or that they had been exhausted, or that they had even been escrowed or held back for benefit of resolution of the dispute. After suit was filed, the Defendant notified the Plaintiff that benefits had been exhausted. The Defendant never reserved any of the benefits for the disputed bill, nor deposited any of the funds representing this dispute into the registry of the court.
Although the Defendant reduced the Plaintiff’s original billing, then exhausted the benefits, the Defendant now (by admission/concession) does not contest that the testing provided to Miss Bunte was “medically necessary,” that the injuries of Miss Bunte and the services performed or rendered to her were “related” to the accident, and does not challenge the “reasonableness” of the VTC Testing billing for services of January 28, 2000.
The Defendant acknowledged that it did not have a paper review or an IMEevaluation within 30 days prior to making the decision to reducing the bill or for that matter at any time up to the present.
The legal issues before the Court are: (1) was there a valid assignment of benefits from Miss Bunte to VTC? (2) whether the assignment was timely submitted to the Defendant for consideration and prior to the exhausting of the policy benefits, and (3) whether the Defendant should have to pay any amount (the $828.80) over and above the $10,000.00 PIP policy limits given that the benefits have been exhausted.
The Florida Supreme Court in Boulevard National Bank of Miami v. Air Metal Industries, Inc., 176 So.2d 94 (Fla. 1965) adopted the English rule establishing priorities of assignees as to claims asserted the rule provides essentially first come, first pay. The English rule applies to assignees of PIP benefits, according to the Fifth District Court of Appeal, which is binding upon this Court. State Farm Fire and Casualty vs. Ray, 556 So. 2d. 811 (Fla. 5th DCA 1990).
The 17th Circuit has entered an order in Town Health Center vs. Lyndon Property Insurance Company, 7 FLW Supp. 627 (Fla. 17th Circuit Broward 2000). It did not deal with the same issues that are involved in this case, and is distinguishable, but it is true that the English rule was considered and seems to be the appropriate decision for that particular case.
The Court believes that the Defendant should not be able to contend that a bill was unreasonable in amount, reduce it, receive notice from Plaintiff that the amount is in dispute, and that the disputed amount should be reserved or set aside, then failto reserve the benefits as requested, or deposit the contested funds into the registry of the court, exhaust all the benefits without advising, paying or notifying the Plaintiff, and then when suit is filed by the Plaintiff, contest the reasonableness of the bill, and then later, not contest the reasonableness of the bill, and then indicate to the Plaintiff, it will not pay because the PIP benefits have been exhausted.
The Court would therefore GRANT the Plaintiff’s Motion for Summary Judgment and Deny Defendant’s Motion for Summary Judgment. The Court finds that a valid assignment of benefits was in place. The Defendant received it timely and acted and relied upon it. The assignment was accepted, checks were issued off of that assignment for the reduced amounts, were made payable to the Plaintiff and were mailed directly to the Plaintiffs’ address. The Defendant had on hand when the check was prepared and mailed to the Plaintiff, more than enough PIP benefits to pay the disputed amount. The Defendant did not place the disputed funds in reserve, but rather paid more than 28 bills to other medical care providers on bills received subsequent to the Plaintiff’s billing and thereby exhausted benefits. The Defendant, despite paying the PIP policy benefits, should have to pay Plaintiff the $828.80, plus interest from the date of the reduction, plus costs and reasonable attorney’s fees.
Plaintiff asserts that the reduced claim should bear interest at the rate of 10% per annum interest. The Court finds that it begins at the time that the reduction was taken, i.e. the date that the Plaintiff was paid -2/17/00- and would continue up to and including today. This is true because the Court finds that despite the fact that the Defendant exhausted the $10,000.00 policy limits, Defendant inappropriately deducted the $828.80 and therefore should be responsible for having to pay it, even though that constitutes an amount over and above the policy limits of PIP in the policy. Therefore, Defendant must pay Plaintiff $828.80, plus interest of $99.69 (10% per annum starting on 2/17/00, the date of issuance of the check to Plaintiff).
This is a difficult case. The Court is not sure that there exists any cases like this. Counsel for the parties looked for them. The Court did too. None could be found. Therefore, the Court believes this may very well, truly, be a case of first impression.
The Court is impressed with the professional skills of counsel involved in this case, Ms. Rutledge Bradford, Esquire and Mr. Peter A. Shapiro, Esquire. Both are relatively young lawyers and did an excellent job in arguing and presenting these difficult issues to the Court. The Court’s job is made easier with good lawyers.
The Court certifies that it is not a relative, employee, or counsel of any of the parties’ attorneys or counsel connected with the action, nor is the Court financially interested in the action.
It is therefore ordered and adjudged:
1. The Court certifies the following questions to the Fifth District Court of Appeal as matters of Great Public Importance:
Whether an insurer providing a policy of PIP insurance with a finite amount of coverage can be held liable for extra-contractual damages once benefits being paid on the insured’s behalf exhaust the available policy limits,
Does interest pursuant to Fla. Stat. Section 627.736 continue to accrue once benefits have been exhausted under the insured’s policy.
2. Final Judgment is entered in favor of Plaintiff, VTC Testing Center of Orlando North, Inc. d/b/a National Testing Centers, 1015 E. Semoran Blvd., Suite 213, Casselberry, FL 32707 against Defendant Allstate Insurance Company, 485 North Keller Road, Suite # 200, Maitland, FL 32751 for $828.80 principal and pre-judgment interest in the amount of $99.69, for a total of $928.49, for which let execution issue. This obligation shall bear interest at the rate of 11% per annum. The Court reserves jurisdiction to consider Plaintiffs claim or request for reasonable attorneys fees and court costs.
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