9 Fla. L. Weekly Supp. 217a
Insurance — Personal injury protection — Arbitration — Attorney’s fees — Appeals — Issue of whether a medical provider as the PIP insured’s assignee may receive attorney’s fees when the insurer pays the full amount of the outstanding bill after receiving a demand for arbitration but before suit is filed involves pure legal determination of entitlement to fees that is subject to de novo standard of review — Error to award attorney’s fees to medical providers where demands for arbitration were made after section 627.736(5) was declared unconstitutional by Fifth District Court of Appeal, and insurer paid full amount of claim plus interest before suit was filed — Appellate fees awarded to insurer as prevailing party
INFINITY INSURANCE COMPANY, Appellant, v. FIRST CHIROPRACTIC CLINIC, INC., as assignee of Charllmagne Ilienis, Appellee. Circuit Court, 9th Judicial Circuit (Appellate) in and for Orange County. Case No. CVA 199-103. L.C. Case No. CC 99-7221. Consolidated Case. INFINITY INSURANCE COMPANY, Appellant, v. ADVANCED PAIN CLINIC, P.A., as assignee of Jean Normil, Appellee. Case No. CVA 199-104. L.C. Case No. CC 99-7224. INFINITY INSURANCE COMPANY, Appellant, v. FIRST CHIROPRACTIC CLINIC, INC., as assignee of James Breedwell, Appellee. Case No. CVA 199-105. L.C. Case No. CC 99-7215. Opinion filed December 18, 2001. Appeal from the County Court for Orange County, Jerry L. Brewer, Judge. Counsel: Michael F. Cunningham, for Appellant. Marc R. Williams, for Appellee.
(Before MACKINNON, PERRY, and STRICKLAND, JJ.)
FINAL ORDER AND OPINION REVERSING TRIAL COURT
(PER CURIAM.) Infinity Insurance Company (“Appellant”) filed this appeal of the Summary Final Judgment, which ordered that Appellees are entitled to attorney fees. We have jurisdiction pursuant to Florida Rule of Appellate Procedure 9.030(c)(1)(A). We dispense with oral argument. Fla. R. App. P. 9.320.
Factual and Procedural Background
Appellant was the Personal Injury Protection (“PIP”) insurer for three drivers: Charllmagne Ilienis, Jean Normil, and James Breedwell. These drivers received medical services for injuries related to car accidents from Appellees, who are medical providers. The drivers assigned their PIP benefits to Appellees. First Chiropractic Clinic, Inc., and Advanced Pain Clinic, P.A., sent Appellant demands for arbitration regarding nonpayment for the medical services in January and March of 1999.
Appellant paid the full amount of Appellees’ outstanding bills plus interest. Appellant did not, however, pay Appellees’ attorney fees, based upon the Fifth District Court of Appeal’s ruling that Section 627.736(5), Florida Statutes, requiring that medical providers submit to arbitration and that the prevailing party may recover attorney fees, is unconstitutional. Appellees then filed petitions in the county court to recover attorney fees. Appellees never filed suit to recover payment of the outstanding bills because Appellant paid the bills in full plus interest.
On November 23, 1999, the trial court entered Summary Final Judgment, ordering consolidation of the three county court cases and that Appellees are entitled to attorney fees. The Summary Final Judgment states that the requests for arbitration were made after October 1, 1998, and that Appellant paid the outstanding amount claimed plus interest after Appellees made their demands for arbitration.
Standard of Review
In general, the “standard of review in reviewing an award of attorney’s fees is whether the trial court abused its discretion.” Jones & Granger v. Johnson, 788 So. 2d 381, 382 (Fla. 1st DCA 2001). See also Elliot v. Pallotti, 654 So. 2d 1300, 1302 (Fla. 5th DCA 1995) and First Fed. Sav. & Loan Ass’n of Palm Beaches v. Bezotte, 740 So. 2d 589, 590 (Fla. 4th DCA 1999), review denied, 753 So. 2d 563 (Fla. 2000). “If reasonable men could differ as to the propriety of the action taken by the trial court, then the action is not unreasonable and there can be no finding of an abuse of discretion.” First Fed. Sav. & Loan Ass’n of Palm Beaches, 740 So. 2d at 590.
A different standard of review applies to this consolidated case, however, because the issue here involves a strictly legal determination. “The standard of review of a trial court ruling on a pure issue of law is de novo, i.e., an appellate court need not defer to the trial court on matters of law.” Rittman v. Allstate Ins. Co., 727 So. 2d 391, 393 (Fla. 1st DCA 1999) (discussing standard of review in reviewing order on motion to dismiss). “To the extent that a trial court has discretion, appellate courts apply an abuse of discretion standard in reviewing a trial court’s award of attorney’s fees, most often in regard to the amount of an award rather than the actual entitlement to an award.” Gibbs Constr. Co. v. S.L. Page Corp., 755 So. 2d 787, 790 (Fla. 2d DCA 2000). In Gibbs, the entitlement to attorney fees was based upon contract provisions. Id. at 790. Because the award of attorney fees involved the “construction of two unambiguous contractual provisions as a pure matter of law[,]” the court used an abuse of discretion standard when evaluating the amount of the attorney fees awarded and a de novo standard when evaluating the contractual provisions entitling the party to attorney fees. Id. at 790-91.
The issue here requires an evaluation of entitlement to attorney fees. This appeal involves a pure legal determination (whether a medical provider as the PIP insured’s assignee may recover attorney fees when the insurer pays the full amount of the outstanding bill after receiving a demand for arbitration, but before suit is filed), and therefore, pursuant to Gibbs Construction, this Court will apply a de novo standard of review.
Discussion
In Delta Casualty Co. v. Pinnacle Medical, Inc., 721 So. 2d 321 (Fla. 5th DCA 1998), the Fifth District Court of Appeal held Section 627.736(5), Florida Statutes, unconstitutional. Section 627.736(5) basically decreed that all medical providers who were assignees of insureds’ PIP benefits must submit to binding arbitration in disputes with the insurers regarding PIP benefits. Id. at 322. In addition, Section 627.736(5) provided a prevailing party standard for the recovery of attorney fees in the arbitration proceedings. Id. at 326. The court held that the compulsory arbitration clause violated the medical providers’ due process rights, and the attorney fees clause arbitrarily discriminated against the medical providers. Id. This opinion was issued on October 2, 1998. Id. at 321.
The Supreme Court of Florida affirmed the Fifth District’s decision in Nationwide Mut. Fire Ins. Co. v. Pinnacle Medical, Inc., 753 So. 2d 55 (Fla. 2000). The Supreme Court specifically held that the prevailing party standard for an award of attorney fees, which defined prevailing party as one of two specific definitions, was unconstitutional because it “arbitrarily distinguishes between medical providers and insureds, violating medical providers’ due process rights, and is unconstitutional under article I, section 9 of Florida’s constitution.” Id. at 59.
In an insured versus insurer case, the insured is entitled to attorney fees if the insurer agrees to settle the suit. See Wollard v. Lloyd’s & Companies of Lloyd’s, 439 So. 2d 217 (Fla. 1983). This rule does not apply, however, if the insurer pays the full amount of the policy before a lawsuit is filed against it. See Florida Life Ins. Co. v. Fickes, 613 So. 2d 501 (Fla. 5th DCA 1993).
Appellees rely on Central Magnetic Imaging v. State Farm Mut. Auto. Ins. Co., 745 So. 2d 405 (Fla. 3d DCA 1999), review denied, 766 So. 2d 223 (Fla. 2000), which was decided before the Florida Supreme Court ruled Section 627.736(5) unconstitutional. In Central Magnetic, the trial court certified the following question to the Third District Court of Appeal:
Is a medical provider who has accepted assignment of PIP insurance benefits entitled to an award of statutory attorneys fees as a prevailing party at arbitration pursuant to Section 627.736(5) Florida Statutes, where the medical provider, through its attorney, serves a demand for arbitration by way of certified mail upon the insurer and where the insurer thereafter tenders full payment of benefits together with statutory interest subsequent to receipt of the demand for arbitration?
Id. at 406 (emphasis added). The court answered the certified question affirmatively. Id. In Central Magnetic, the insurer paid PIP benefits after it received the arbitration demand, but before the medical provider filed suit, and did not include attorney fees in the amount. Id. at 406-7. The court stated, “The medical provider’s arbitration demand letter commenced this action. The insurer’s subsequent payment is equivalent to a confession of judgment, and the medical provider is the prevailing party under section 627.736(5), Florida Statutes.” Id. at 407 (emphasis added).
Even though the Florida Supreme Court declared Section 627.736(5) unconstitutional, medical providers may still be awarded their attorney fees from insurers. In Superior Ins. Co. v. Libert, 776 So. 2d 360, 362 (Fla. 5th DCA 2001), the PIP insured signed a power of attorney so that her medical provider could act as the insured’s agent in recovering payment of her medical bills. The medical provider filed suit against the insurer for services rendered, interest, and attorney fees. Id. at 363. The Orange County trial court certified the following question to the Fifth District:
Whether a provider of medical services who has accepted an assignment of benefits from an insured is entitled to attorney’s fees and costs under Florida Statute 627.736 and 627.428(1) in an action against the insurer, when the insurer has made payment subsequent to the filing of the lawsuit, in light of the decision in Delta Casualty Co. v. Pinnacle Medical, Inc., wherein the arbitration provision of 627.736(5) was held unconstitutional?
Id. at 362 (emphasis added). The court, in an opinion authored by Judge Peterson, answered the certified question in the affirmative. Id. at 362, 366. Regarding the medical provider’s entitlement to attorney fees, and assuming arguendo that the medical provider was actually an assignee of the insured rather than her agent, the court held that the medical provider’s entitlement to attorney fees is supported by case law. Id. at 365. “[T]hird parties who claim policy coverage by assignment from the insured are entitled to recover fees.” Id.
Insurers have not been ordered to pay fees in every situation, however. In Nationwide Property & Cas. Ins. v. Bobinski, 776 So. 2d 1047 (Fla. 5th DCA 2001), review denied, 791 So. 2d 1094 (Fla. 2001), also written by Judge Peterson and released on the same day as Libert, the plaintiffs’ office building was damaged by fire. The defendant insurance company and the plaintiff entered into appraisal proceedings to determine the amount of benefits the plaintiffs would receive. Id. at 1048. The final appraisal proceeding was conducted pursuant to Florida’s Arbitration Code. Id. “The arbitration resulted in another $42,470.45 for lost rents due by Nationwide which it paid on June 9, 1998.” Id. After the insurance company paid this final amount, the plaintiffs filed suit for, inter alia, attorney fees. Id.
The Fifth District Court of Appeal noted, “No reported decision has specifically addressed an insured’s right to attorney’s fees for services to a client during an appraisal or arbitration to determine the amount of loss under an insurance contract when the insurer pays the award in full prior to the insured having filed suit.” Id. The plaintiffs sought an award of attorney fees under Section 627.428, Florida Statutes, which requires a judgment against an insurer and in favor of an insured or the insured’s assignee in order for the insurer to be liable for attorney fees. Id. The court stated that this case does not have the elements of the cases where attorney fees were awarded when suit was filed prior to payment of the “full award or to compel an insurer to participate in an appraisal.” Id. Apart from these cases, “section 627.428(1) is clear that attorney’s fees are only recoverable upon the rendition of a final judgment against an insurer in favor of an insured.” Id. at 1049. In stating its holding, the court asserted the following:
We find that no final judgment has been rendered for the purposes of section 627.428(1), Florida Statutes, against Nationwide in the instant case. Thus, we are obliged to follow the clear directions of section 627.428(1). We also find that it maintains the better policy of this state to encourage insurance companies to resolve conflicts and claims quickly and efficiently without judicial intervention.
Id. The Fifth District Court of Appeal thus reversed the trial court’s final judgment awarding attorney fees to the plaintiffs. Id.
The case at bar is more like Bobinski than Central Magnetic and Libert, especially because the demands for arbitration were made after Section 627.736(5) was held unconstitutional in our district. In Central Magnetic, attorney fees were awarded to the medical provider under Section 627.736(5), and the Third District Court of Appeal specifically found that the medical provider was entitled to attorney fees because it was the prevailing party. Central Magnetic, 745 So. 2d at 407. Central Magnetic, however, was decided before the Florida Supreme Court affirmed the Fifth District’s decision holding Section 627.736(5) unconstitutional.
This case is also distinguishable from Libert, which was decided on the same day and written by the same judge who wrote the Bobinski opinion, in that in Libert, the insurer did not pay the full amount of the claim until after suit was filed. Libert, 776 So. 2d at 362. In contrast, the insurer in Bobinski paid the full amount of the award before suit was filed, just as in the case at bar. Bobinski, 776 So. 2d at 1048. The Bobinski court specifically found that the insureds were not entitled to attorney fees under Section 627.428(1) where suit was filed after the insurer paid the full amount awarded against it in a dispute resolution proceeding. Id. at 1048-49.
In the case at bar, the demands for arbitration were made after Section 627.736(5) was declared unconstitutional in our district. After receiving the demands, Appellant paid the full amount of the claims plus interest. It was only after Appellant paid the full amount that Appellees filed suit, and just as in Bobinski, “There can be no doubt that [the plaintiffs] filed suit solely in order to obtain attorney’s fees . . . .” Bobinski, 776 So. 2d at 1048. As Bobinski is the most factually similar case to the case at bar that was decided after the Florida Supreme Court held Section 627.736(5) unconstitutional, this Court reverses the Final Summary Judgment ordering that Appellees are entitled to an award of attorney fees from Appellant.
Appellate Costs and Attorney Fees
Appellant and Appellees moved for an award of appellate attorney fees and costs. Appellees are not the prevailing parties, and therefore their motions for attorney fees are denied.
Appellant, however, is the prevailing party, and finding no reason that costs should not be taxed, Appellant is entitled to have costs taxed in its favor, if it timely files a motion with the lower tribunal within thirty days of the issuance of the mandate in this matter. Fla. R. App. P. 9.400(a). Appellant also requests attorney fees pursuant to Rule 9.400, however, this “rule is a vehicle for requesting appellate fees, but does not provide independent authority for granting attorney’s fees.” Lewis v. Lewis, 689 So. 2d 1271, 1273 (Fla. 1st DCA 1997). Appellant cited no other basis for an award of attorney fees, and finding none, Appellant’s motion is denied.
REVERSED and REMANDED.
It is FURTHER ORDERED and ADJUDGED that Appellant shall have costs taxed in its favor, if it files a proper motion pursuant to Florida Rule of Appellate Procedure 9.400(a) with the lower tribunal within thirty days of the issuance of the mandate in this matter.
It is FURTHER ORDERED and ADJUDGED that this Order shall be placed in the court file for appellate case number CVA 199-103 and certified copies of this Order shall be placed in the court files for CVA 199-104 and CVA 199-105.
* * *
