9 Fla. L. Weekly Supp. 156a

Insurance — Personal injury protection — Because trial court lost jurisdiction to grant a directed verdict when it denied insured’s first motion for rehearing and lost jurisdiction to grant a new trial when it denied insured’s first motion for a new trial, all other motions for rehearing and new trial were unauthorized and all orders issued thereon invalid, and trial court did not have jurisdiction to grant directed verdict in insured’s favor — Jury verdict is reinstated and case is remanded for determination of attorney’s fees and costs to which insurer is entitled — Trial court erred as a matter of law in vacating jury verdict finding that insured’s injuries were not related to automobile accident at issue on ground that insurer did not obtain reasonable proof that insured’s treatment was unreasonable, unrelated or unnecessary within thirty days of billing — Attorney’s fees — Offer of judgment — Insurer which made offer of judgment rejected by insured is entitled to trial court attorney’s fees pursuant to section 768.79 — Appellate attorney’s fees — Insurer is entitled to appellate fees and costs pursuant to rule 9.400

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a Foreign Corporation, Appellant, v. CAROLINE REIF, Appellee. Circuit Court, 9th Judicial Circuit (Appellate) in and for Orange County. Case No. CVA199-93. L.C. Case No. CCO-98-2266. October 31, 2001. Appeal from the County Court for Orange County, Jerry L. Brewer, Judge. Counsel: Hans Kennon, for Appellant. V. Rand Saltsgaver, for Appellee.

(Before Grincewicz, White, and Cohen, JJ.)

ORDER VACATING LOWER COURT’S ORDERS,REMANDING FOR REINSTATEMENT OF JURY VERDICT,FOR DETERMINATION OF TRIAL COURT ATTORNEY’SFEES, AND ORDER GRANTING MOTION FORAPPELLATE ATTORNEY’S FEES AND COSTS

(PER CURIAM.) State Farm Mutual Automobile Insurance Company (State Farm or Appellant), Defendant in the lower court, timely appeals the following trial court orders:

1. Order Granting Plaintiff’s Motion for Reconsideration of Rehearing rendered on October 28, 1999;

2. Final Judgment rendered on November 17, 1999; and

3. Order on Defendant’s Motion to Determine Entitlement of Attorney’s Fees rendered on October 26, 1999.

This Court has jurisdiction pursuant to Florida Rule of Appellate Procedure 9.030(c)(1)(A). Appellant’s request for oral argument, being discretionary with the Court, is dispensed with pursuant to Florida Rule of Appellate Procedure 9.320.Factual and Procedural Background

On November 7, 1996, Caroline Reif (Reif or Appellee) was injured in an automobile collision when Ali Kashfi’s vehicle struck the vehicle behind Reif’s 1992 Saturn, causing that vehicle to collide with Reif’s. At the time of the accident, Reif was insured by State Farm and her policy included all coverage required by the Florida Motor Vehicle No-Fault Law, sections 627.730-.7405, Florida Statutes, (Florida No-Fault Law) including personal injury protection (PIP). Reif received treatment from several medical services providers for injuries to her back and neck.

Thereafter, Reif sought to have State Farm pay for the medical services she received. On March 2, 1998, Reif filed suit against State Farm, wherein she alleged that State Farm had wrongfully denied payment for more than thirty days in violation of section 627.736, Florida Statutes. In its answer and affirmative defenses, State Farm alleged that the medical treatment was not necessary, was unreasonably priced, and was not related to injuries received in the motor vehicle accident. State Farm further alleged that Reif had failed to comply with all necessary conditions precedent to bringing her action pursuant to both section 627.736 and the agreement between herself and State Farm.

On August 5, 1998, State Farm made an offer of judgment to Reif and stated that the offer was pursuant to section 768.79, Florida Statutes.¹ Reif then filed a motion to have the offer stricken on the grounds that section 768.79, which deals with civil actions for damages in general, did not apply in cases filed pursuant to the Florida No-Fault Law. Reif’s motion and accompanying memorandum stated that under the provisions of section 768.79, she would be liable for attorney’s fees and costs, should she not accept State Farm’s offer and later receive a judgment which was 25% less than the offered amount. Reif argued that section 627.736(8) of the Florida No-Fault Law directs that in PIP suits, the provisions of section 627.428, Florida Statutes,² shall apply. Reif further argued that pursuant to section 627.428, an insured who fails to prevail is not liable for the insurer’s attorney’s fees, and that State Farm could not circumvent the Florida No-Fault Law by resorting to other statutes. State Farm countered by filing its opposition to Reif’s motion to strike and a memorandum stating that the two statutes were not incompatible. On February 22, 1999, the trial court issued its Order Setting the Case for Jury Trial without having ruled on Reif’s motion to strike.

On May 28, 1999, Reif filed a Motion for Summary Judgment, which stated that in August of 1997, she had undergone back surgery performed by Dr. Mark Beckner of Matthews Orthopedic Clinic at Florida Hospital. She further alleged that State Farm had failed to pay the hospital expenses within thirty days of receipt and that State Farm did not have in its possession, within thirty days, any physician’s report stating that the medical services she had received were unrelated to the motor vehicle accident of November 7, 1996. In its memorandum in opposition, State Farm admitted that on August 28, 1997, it had received the hospital bill for Reif’s lumbar surgery and that it did not have a report in its possession until September 29, 1997, thirty-two days after the bill was submitted. However, State Farm maintained that there was no requirement that it have a report in its possession within thirty days of receipt of the hospital/medical bill.

The pertinent portion of the statute at issue here provides:

An insurer may not withdraw payment of a treating physician without the consent of the injured person covered by the personal injury protection, unless the insurer first obtains a report by a physician licensed under the same chapter as the treating physician whose treatment authorization is sought to be withdrawn, stating that treatment was not reasonable, related, or necessary.

§ 627.736(7)(a), Fla. Stat. (2000) (statute unamended since the time the above dispute arose between the parties).

On June 21, 1999, the court held a hearing on Reif’s Motion for Summary Judgment, which was denied, and on July 12, 1999, the parties proceeded to trial. The verdict form contained the following question: “Was the lumbar surgery performed on Plaintiff, Caroline Reif, by Dr. Mark Beckner on August 14, 1997, related to the car accident of November 7, 1996?” Answering in the negative, the jury returned a verdict in favor of State Farm. On July 19, 1999, final judgment was rendered, which included the award of costs to State Farm and which reserved jurisdiction to determine the amount of taxable costs and attorney’s fees. On July 22, 1999, Reif filed a motion for rehearing of her motion for a directed verdict. Therein she detailed two issues: first, that State Farm owed both her medical bills and her attorney’s fees and costs, because it had not paid those bills within thirty days of receipt; and second, that State Farm owed interest on one bill, plus attorney’s fees and costs for litigating the issue of interest. Reif also filed a motion for a new trial.

On August 2, 1999, the trial court rendered its final order denying Reif’s motion for a directed verdict without specifically addressing the issue of State Farm’s failure to pay Reif’s medical bills within 30 days of receipt, thereby allowing the judgment to stand on that issue. On the issue of her request for interest on medical bills owed, the court’s order found that no such interest had been charged by the medical services provider and, therefore, was not recoverable by Reif. The court also denied her entitlement to attorney’s fees for representation on that issue.

Thereafter, State Farm moved to have the court determine its entitlement to attorney’s fees. On October 11, 1999, the court held a hearing on Reif’s motion for a new trial and on State Farm’s motion for attorney’s fees. The court first denied Reif’s motion. Second, the court reserved ruling on State Farm’s motion for attorney’s fees, but also later denied that motion by written order, wherein it found section 768.79, Florida Statutes, to be in conflict with section 627.428, Florida Statutes, and further found that section 627.428 was the applicable statute.

On October 22, 1999, Reif filed a “Motion for Reconsideration of Plaintiff’s Motion for New Trial and Motion for Rehearing,” attaching a copy of the then newly decided case of Perez v. State Farm, 746 So. 2d 1123 (Fla. 3d DCA 1999).³ The court held a hearing on the motion on October 28, 1999. The record contains two orders issued on October 28, 1999. The first is the court’s written version of its previous oral order of October 11, 1999, which denied Reif’s motion for a new trial and again denies her motion for rehearing. However, it appears that service never took place on that order. The second order granted Reif’s motion for reconsideration, vacated the October 11, 1999 order denying her motions, vacated the jury verdict, entered judgment for Reif based upon the holding in Perez, “reserve[d] ruling as to the amount of benefits and interest due and owing to . . . Reif,” and reserved ruling on the award of Reif’s attorney’s fees and costs.

On November 17, 1999 final judgment was entered in Reif’s favor in the amount of $14,413, plus interest at the rate of 10% per annum from September 26, 1997. The court again reserved ruling on attorney’s fees and costs. Reif then filed a motion for attorney’s fees and costs with attachments.

Consequently, State Farm timely filed this appeal of the three trial court orders detailed above. On February 2, 2000, Appellant State Farm filed its Initial Brief. On February 7, 2000, State Farm also filed a Motion to Tax Appellate Attorney’s Fees and Costs and a Request for Oral Argument. However, it appears that the Clerk’s office inadvertently made the motion for fees and the request for oral argument a part of the record on appeal instead of filing them in the appellate court file. Likewise, the Clerk’s office misfiled Reif’s response to State Farm’s motion for fees and costs. Therefore, since these documents were timely filed and are properly before this Court, copies are attached to this Order, thereby making them a part of the appellate file.Standard of Review

State Farm seeks to have this Court determine whether the trial court erred as a matter of law. Therefore, the standard of review on appeal is de novo review. See Armstrong v. Harris, 773 So. 2d 7, 11-12 (Fla. 2000); Rittman v. Allstate Insurance Co., 727 So. 2d 391, 393 (Fla. 1st DCA 1999).Discussion

For the reasons detailed below, this case could be dismissed solely on procedural grounds. However, since the outcome in the particular situation presented here is the same whether grounded in procedure or in substance, the substantive issues raised by the parties are also addressed. Moreover, the procedural defects were not asserted by either party until State Farm raised the issue in its appellate reply brief. Since the issue was not argued in either State Farm’s initial brief or Reif’s answer brief, upon motion by Reif, it was struck from State Farm’s reply by this Court.

Nevertheless, because the procedure involved here concerns subject matter jurisdiction, this Court has a duty to address it. See 84 Lumber Co. v. Cooper, 656 So. 2d 1297 (Fla. 2d DCA 1994) (observing that the appellate court has an independent duty to take notice of a jurisdictional defect even if neither party has raised the issue); see also Fla. R. Civ. P. 1.140(h)(2) (“The defense of lack of jurisdiction of the subject matter may be raised at any time.”).

Procedure: On July 22, 1999, Reif filed in the trial court a motion for rehearing of her motion for a directed verdict. On the same date, she filed her original motion for a new trial. On August 2, 1999, the trial court rendered its final order denying Reif’s motion for a directed verdict.⁴ Hence, the only motion remaining, upon which the court had not ruled, was Reif’s motion for a new trial.

Meanwhile, without awaiting the court’s written order denying a new trial, on October 22, 1999, Reif filed a motion for reconsideration of her motion for a new trial and also filed a motion for rehearing (i.e. of her motion for directed verdict). The motion for rehearing/directed verdict was unauthorized. Reif’s proper course would have been to appeal within thirty days the trial court’s order of August 2, 1999, denying her first motion for a rehearing/directed verdict.

Under similar circumstances, the court in Markevitch v. Van Harren, 429 So. 2d 1255 (Fla. 3d DCA 1983) held that the trial court lost jurisdiction when it entered its order denying the original motion for rehearing. The Third District Court found that only a timely appeal from the original order would vest jurisdiction in the appellate court and, further, that the second motion could not be an amendment to the first, where a final order had been issued. Id. at 1256. Moreover, since the second motion, as is the case here, was not an amendment to the first, but had a life of its own, it was untimely as being made more than ten days after the final judgment. Id. While Florida Rule of Civil Procedure 1.090 allows the court discretion to enlarge a period of time, it also provides that the court

may not extend the time for making a motion for new trial, for rehearing, or to alter or amend a judgment; making a motion for relief from a judgment under rule 1.540(b); taking an appeal or filing a petition for certiorari; or making a motion for a directed verdict.

Fla. R. Civ. P. 1.090(b).

Therefore, at the beginning of the October 28, 1999 hearing, Reif’s only timely filed and authorized motion still validly before the court was her original motion for a new trial. Nevertheless, the court entered a written order denying Reif’s motion for a new trial and also denying her motion for rehearing. The court’s order states that it is denying both motions of October 11, 1999. (The certificate of service is not dated or signed and it is unclear whether copies of this order were provided to the attorneys at the hearing, although subsequent proceedings would suggest that this was the case.)

First, there was no motion for rehearing/directed verdict filed on October 11, 1999. It had been filed on October 22, 1999. Second, as stated, the original motion for rehearing/directed verdict had already been denied on August 2, 1999. Third, once the motion for new trial was denied by written order, the trial court lost jurisdiction completely. “[T]he overwhelming weight of authority in Florida has long adhered to the rule that a new-trial order is not subject to a motion for rehearing absent fraud or clerical error, and the district courts have uniformly adhered to this rule.” Frazier v. Seaboard System Railroad, Inc., 508 So. 2d 345, 346 (Fla. 1987) (citations omitted); see Arleo v. Garcia, 695 So. 2d 862 (Fla. 4th DCA 1997) (granting a writ of prohibition; holding that the trial court lost jurisdiction to rule on a second motion for rehearing and to consider the merits of the case upon its entry of an order denying the first motion for rehearing; vacating all orders entered thereafter).

Next, also on October 28, 1999, the court in the instant case entered a second order, wherein it (1) granted Reif’s October 22, 1999 unauthorized motion for rehearing, (2) vacated the order it had just entered denying the motion for new trial and the motion for rehearing/directed verdict, (3) vacated the jury verdict and entered judgment for Reif (i.e., granted the motion for directed verdict), (4) reserved ruling as to benefits and interest due and owing to Reif, and (5) reserved ruling on attorney’s fees and costs.⁵

The court based its ruling on Perez v. State Farm Fire and Casualty Co., 746 So. 2d 1123 (Fla. 3d DCA 1999), which Reif’s attorney had attached to its second motion for rehearing/directed verdict and which he had argued to the court during the October 28, 1999 hearing. At the time of the hearing, Perez was not yet final, having just been decided on October 13, 1999. Rehearing in Perez was not denied until December 22, 1999. More importantly, as explained below, at the time the jury reached its verdict in July of 1999, the case law of the Fifth District was in opposition to the holding in Perez. See Jones v. State Farm Mutual Automobile Insurance Co., 694 So. 2d 165 (Fla. 5th DCA 1997).

Finally, the trial court reserved ruling as to the amount of benefits and interest owing to Reif and later by written order of November 17, 1999, awarded her $14,413, plus interest at the rate of 10% per annum from September 26, 1997, reserving jurisdiction to award attorney’s fees and costs.

Based on the foregoing, the trial court lost jurisdiction to grant a directed verdict on August 2, 1999, when it issued its order denying Reif’s first motion for rehearing. It lost jurisdiction to grant a new trial when it entered its written order on October 28, 1999, denying Reif’s first motion for a new trial. All other motions were unauthorized and all orders issued thereon are invalid. The jury’s verdict must be reinstated and the case remanded for determination of the amount of fees and costs to which State Farm is entitled, as explained more fully below.

Substance: State Farm maintains that the insurer does not lose the right to contest a claim even if the insurer does not have a report within thirty days of receipt of the claim at issue. State Farm also raises other issues, such as: (1) it received the doctor’s report on the thirty-second day, because the thirtieth day fell on a weekend; (2) reasonable proof under section 627.736(4)(b) is not required to be a medical report under section 627.736(7)(a); and (3) the plain language of section 627.736 does not allow for strict liability against the insurer if it does not have a report in its possession within thirty days of receipt of the claim at issue.

Reif’s argument, which was initially based upon United Automobile Insurance Co. v. Viles, 726 So. 2d 320 (Fla. 3d DCA 1999), (as amended on denial of rehearing, en banc), is that since State Farm did not have in hand, within thirty days of billing, a physician’s report stating that her treatment was unreasonable, unrelated, or unnecessary, State Farm was obligated to pay her medical expenses.⁶ See § 627.736(7)(a), Fla. Stat. (2000) (statute quoted above). Furthermore, Reif argues that State Farm, without such a report, has no right to defend based upon those grounds. Therefore, because State Farm did not receive the report until the thirty-second day after billing, Reif claims that her motion for summary judgment should have been granted and the case should never have gone to trial.

Ultimately, based upon Perez, the trial court agreed with Reif. See 746 So. 2d 1123-24 (holding that within thirty days of receipt of the insured’s medical bills, insurers are required to obtain medical reports providing reasonable proof that they are not responsible for payment in order to defend on the basis that treatment was not related, not reasonable, and/or not necessary).

The Fifth District Court of Appeal has recently answered the question posed by this case. That question was certified by the Orange County Court as being an issue of great public importance. See Nationwide Mutual Insurance Co. v. Nu-Best Diagnostic Labs, Inc., 26 Fla. L. Weekly D1886 (Fla. 5th DCA August 3, 2001) (holding that an insurer may defend against personal injury protection claims where it did not timely obtain reasonable proof that the medical procedures were unreasonable, unnecessary, or unrelated to the motor vehicle accident, and further that the trial court should have followed Jones and not Perez); Gurney v. State Farm Mutual Automobile Insurance Co., 26 Fla. L. Weekly D1658 (Fla. 5th DCA July 16, 2001) (holding that the insurer’s failure to pay the insured’s medical bills within thirty days of receipt did not deprive the insurer of the right to contest payment; cited by the court in Nationwide) [Editor’s note: Subsequent opinion on Motion for Certification at 26 Fla. L. Weekly D2408a.].

Since the above holdings are dispositive of the instant case, it is not necessary to address Appellant State Farm’s related issues. Based on the foregoing, the trial court erred as a matter of law in vacating the jury’s verdict which found that Reif’s injuries were not related to the automobile accident at issue.Trial Court Attorney’s Fees

State Farm also argues that the trial court departed from the essential requirements of law in striking its proposal for settlement and denying its entitlement to attorney’s fees pursuant to Florida Rule of Civil Procedure 1.442, due to a perceived conflict between section 627.428, Florida Statutes, and section 768.79, Florida Statutes. (See nn. 1, 2.)

Reif counters that sections 627.428 and 768.79 are in conflict and that PIP cases are governed by the terms of section 627.428, which provides for an award of attorney’s fees to the prevailing insured, but not to the insurer. Reif further maintains that section 768.79, which provides for an award of attorney’s fees to the prevailing party when certain conditions are met, does not apply in PIP cases.

First, even a nominal offer of judgment can be a “good faith” offer entitling a prevailing insurer to an award of attorney’s fees. See Weesner v. United Services Automobile Ass’n, 711 So. 2d 1192 (Fla. 5th DCA 1998) (finding that an offer of judgment in a nominal amount, such as $100, can be a statement by the insurer that it did not believe it had any liability in the case). Second, Weesner held that such an offer was a “good faith offer” entitling a prevailing insurer to an award of attorney’s fees pursuant to the offer of judgment statute, section 768.79. See Nants v. Griffin, 783 So. 2d 363 (Fla. 5th DCA 2001) (holding that $101 offer of judgment was made in good faith and was sufficient to support a section 768.79 award of attorney’s fees to the insured); U.S. Security Insurance Co. v. Cahuasqui, 760 So. 2d 1101 (Fla. 3d DCA 2000) (holding that section 768.79, the offer of judgment statute applied in PIP cases).

Based on the foregoing, State Farm is entitled to an award of its trial court attorney’s fees pursuant to section 768.79, Florida Statutes.Appellate Attorney’s Fees

Both parties have timely filed motions seeking an award of appellate attorney’s fees. Pursuant to Florida Rule of Appellate Procedure 9.400, State Farm is entitled to an award of its appellate attorney’s fees and the assessment of those fees is remanded to the lower tribunal. Additionally, State Farm is entitled to have costs taxed in its favor by the lower tribunal upon motion served within thirty days after the issuance of the mandate in this case.

Accordingly, it is hereby ORDERED AND ADJUDGED that the lower court orders appealed from are VACATED and the case is REMANDED for reinstatement of the jury’s verdict and for assessment of trial court attorney’s fees.

It is FURTHER ORDERED AND ADJUDGED that the Motion for Appellate Attorney’s Fees filed by State Farm Mutual Automobile Insurance Company is GRANTED, the assessment of which is REMANDED to the lower court.

It is also FURTHER ORDERED AND ADJUDGED that State Farm 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.

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¹Chapter 768, Florida Statutes, is titled “Negligence” and section 768.79(1), in pertinent part, provides:

In any civil action for damages filed in the courts of this state, if a defendant files an offer of judgment which is not accepted by the plaintiff within 30 days, the defendant shall be entitled to recover reasonable costs and attorney’s fees incurred by her or him or on the defendant’s behalf pursuant to a policy of liability insurance or other contract from the date of filing of the offer if the judgment is one of no liability or the judgment obtained by the plaintiff is a least 25 percent less than such offer, and the court shall set off such costs and attorney’s fees against the award. Where such costs and attorney’s fees total more than the judgment, the court shall enter judgment for the defendant against the plaintiff for the amount of the costs and fees, less the amount of the plaintiff’s award.

²Chapter 627, Florida Statutes, is titled “Insurance Rates and Contracts” and section 627.428(1) provides:

Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of any named or omnibus insured or the named beneficiary under a policy or contract executed by the insurer, the trial court or, in the event of an appeal in which the insured or beneficiary prevails, the appellate court shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured’s or beneficiary’s attorney prosecuting the suit in which the recovery is had.

³Perez held that within thirty days of receipt of the insured’s medical bills, insurers were required to obtain medical reports providing reasonable proof that they were not responsible for payment in order to defend on the basis that treatment was not related, not reasonable, and/or not necessary. 746 So. 2d at 1123-24.

⁴In Reif’s various filings, she at times refers to her motion for a directed verdict simply as a motion for rehearing, and at other times, as a motion for directed verdict.

⁵The trial court did inquire of Reif’s attorney, Charles Parker, Jr., whether he knew of any procedural impediments to this action, but Mr. Parker thought that since the order denying the first motion for a new trial had not been entered, (although it was entered during this hearing) there was no problem. However, this completely ignores the fact that the motion for a directed verdict had been entered. The court was not granting a new trial, it was directing a verdict. Additionally, Hans Kennon, attorney for State Farm, did argue against the court’s ruling, but did so on substantive, not procedural, grounds.

⁶The court in Jones reasoned that since the statute provides that payment cannot be denied without a report and since payment is to be made within thirty days, the insurer must have a report within thirty days in order to have valid grounds for denial. 694 So. 2d 165.

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