9 Fla. L. Weekly Supp. 556a
Insurance — Personal injury protection — Attorney’s fees — Insurer’s admitted late payment of PIP claims that were neither pled nor identified as the basis for pending lawsuit constitutes settlement of a “disputed claim” that entitles insured to recover attorney’s fees — Fact that insurer corrected its mistake and fully paid claims, albeit belatedly, does not change fact that claims were improperly denied and paid by insurer after insured filed suit alleging improper denial of claims
ELIZABETH CHUSKO, Plaintiff, vs. METROPOLITAN PROPERTY AND CASUALTY INSURANCE CO., Defendant. County Court, 7th Judicial Circuit in and for Volusia County. Case No. 2001-35342-COCI. July 3, 2002. Peter F. Marshall, Judge. Counsel: Kimberly P. Simoes, Susan W. Tolbert, P.L., Daytona Beach. Michael M. Bell, Orlando.
ORDER GRANTING PARTIAL SUMMARYJUDGMENT FOR PLAINTIFF
This cause having come to be heard pursuant to the Plaintiff’s Motion for Partial Summary Judgment and the Defendant’s Motion for Partial Summary Judgment and the Court having taken notice of the court file, having listened to the arguments of counsel and otherwise being fully advised of the premises; the Court makes the following finding upon which it enters this Order granting the Plaintiff’s Motion and denying the Defendant’s Motion.
The following facts are undisputed. The Plaintiff was involved in a motor vehicle accident on March 6, 2001. At this time she was covered under a policy issued by the Defendant that provided Personal Injury Protection. The Plaintiff received medical treatment from several providers for injuries sustained in the motor vehicle accident. Claims were submitted to the Defendant to pay for the services rendered to the Plaintiff. Initially the Defendant paid the claims. On October 3, 2001, the Plaintiff submitted to an IME scheduled by the Defendant. As a result of the IME report, the Defendant cut off all further charges for chiropractic treatment after October 19, 2001. The Plaintiff continued to receive chiropractic treatment after the IME cut-off.
On December 12, 2001, the Plaintiff filed a Complaint against the Defendant seeking to recover on claims submitted for medical services rendered to the plaintiff and denied by the Defendant. The Complaint is somewhat “generic” in its allegations as no specific dates of service nor any specific claims denied by the Defendant are identified. On January 25, 2002, the Defendant served the Plaintiff with PIP Interrogatories that asked which charges did Plaintiff claim were not paid by the Defendant in a timely manner. On February 11, 2002, the Plaintiff answered the interrogatories and responded that the charges not paid were related to the IME cut-off. The Plaintiff reserved in her answer the right to amend the interrogatory response.
On March 20, 2002, the Plaintiff took the deposition of Deborah Tahse. The Defendant employs Ms. Tahse as a PIP litigation adjuster. At this time the Plaintiff learned of four claims that had been submitted for payment months prior to the IME cut-off, but were not paid in full until March 9, 2002. These claims involve “discounts taken in error” by the Defendant and are the subject of the Counter Motions for Partial Summary Judgment.
It is well established that when an insurer agrees to settle a law suit by paying the disputed claim that this serves as the functional equivalent of confession of judgment and provides the basis for the award of attorney’s fees to the insured, Wollard v. Lloyd’s and Companies of Lloyd’s, 439 So.2d 217 (Fla. 1983). This principal has been observed in cases involving a partial settlement of a disputed claim, Allstate Insurance Company v. Chaple, 774 So.2d 742 (Fla. App. 3 Dist. 2000).
The Defendant argues that the facts before this Court are distinguishable from Wollard and Chaple because in those situations the disputed claims were specifically identified in the course of the litigation and therefore a settlement of those claims would constitute a confession of judgment. In the case before the Court, as has been previously described, the Plaintiff’s Complaint was “generic” in nature and did not specify any disputed claims. Further, as part of the discovery process, the Plaintiff identified the disputed claims as those arising out of the IME cut-off. This distinguishing fact certainly supports the Defendant’s position.
The issue for resolution by this Court then is whether the admitted late payment by an insurer of a claim for PIP benefits that has neither been pled nor identified as the basis for a pending law suit constitutes the settlement of a “disputed claim” that would entitle the insured to recover attorney’s fees. There appears to be no authority directly on point, so this Court is required to consider other cases interpreting the legislative intent of the “no fault” statute.
Recently, the Supreme Court of Florida in Ivey v. Allstate Insurance Co., 774 So.2d 679 (Fla. 2000), dealt with a similar situation involving the payment of an insured’s attorney’s fees. In reaching its decision the Ivey Court closely examined the legislative intent behind the “no fault” statute. At page 684 the Court states:
“If a dispute arises between an insurer and an insured, and judgment is entered in favor of the insured, he or she is entitled to attorney’s fees. It is the incorrect denial of benefits, not the presence of some sinister concept of “wrongness”, that generates the basic entitlement to the fees if such denial is incorrect. It is clear to us that the purpose of this provision is to level the playing field so that the economic power of insurance companies is not so overwhelming that injustice may be encouraged because people will not have the necessary means to seek redress in the courts.”
In Ivey the insurer’s reason for incorrectly denying the claim was premised on an honest error made by the insurance company in evaluating the claim. In United Automobile Insurance Company v. Zulma, 661 So.2d 947 (Fla. App. 4 Dist. 1995) the insurer acted in good faith in denying the claim when the insured failed to attend two scheduled IME’s. Upon learning that the insured did not speak or read English, the insurer settled the claim. It is clear from these decisions that an insurer is liable for incorrectly denying a claim even when acting in error or in good faith.
In the case before this Court, the Defendant corrected its mistakes and fully paid the four claims, albeit belatedly. But, it does not change the fact that claims were improperly denied, and paid by the Defendant after the Plaintiff filed suit alleging an improper denial of claims. Simple logic suggests that but for the Plaintiff’s law suit the Defendant would have had no motive to ever pay these late claims. Although it is correct that the Plaintiff had not yet identified these claims specifically in her pleadings, to allow the Defendant to rush in and “clean-up” the file by paying improperly denied claims before they could be included in the law suit leads to a result that is contrary to the intent of the legislature when it enacted the “no fault” statute and contrary to recent court decisions that make insurer’s liable even when they are acting out of error or in good faith. This Court is not unmindful of the fact that the Defendant has done the “right thing” by paying these claims, however, it doesn’t change the fact that the Defendant was wrong when it improperly denied the claims. The Defendant should take solace in the fact that in taking this belated action it has limited its liability. If this Court were to grant the Defendant’s Motion it would merely encourage insurers to deny valid claims with the assurance that no penalty would be assessed if they paid the improperly denied claims before the insured is able to identify them through discovery. It is therefore,
ORDERED and ADJUDGED that the Plaintiff’s Motion for Partial Summary Judgment is GRANTED and the Defendant’s Motion for Partial Summary Judgment is DENIED. It is further ordered that Partial Summary Judgment is entered for the Plaintiff, Elizabeth Chusko, against the Defendant, Metropolitan Property and Casualty Insurance Company, and that she is entitled to recover her attorney’s fees, late penalties, and associated costs up to March 9, 2002.
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