18 Fla. L. Weekly Supp. 682a
Online Reference: FLWSUPP 1808DOR
Insurance — Personal injury protection — Attorney’s fees — Proposal for settlement — Nominal $250 proposal for settlement was not made in good faith where at time offer was made, insurer did not have reasonable basis for concluding that its exposure was nominal in light of attorney’s fees and costs already incurred in years-long litigation, fact that medical provider had prevailed on all of insurer’s affirmative defenses, impossibility of predicting whether jury would believe insurer’s expert or treating physician regarding necessity of MRI, and insurer’s reliance on peer review which was unsupported by physical examination at a time when the law regarding whether insurer could rely on such reviews was in flux — Insurer’s motion for attorney’s fees and costs is denied
WIDE OPEN MRI, INC. a/a/o Charles Dor, Plaintiffs, vs. NATIONAL SPECIALTY INSURANCE COMPANY, Defendant. County Court, 17th Judicial Circuit in and for Broward County. Case No. 06-10556 COCE 51. May 17, 2011. Fred Berman, Judge. Counsel: Cris Evan Boyar, Boyar & Freeman, P.A., Margate, for Plaintiff. Jose Font, for Defendant.
AFFIRMED. (National Specialty Ins. Co. v. Wide open MRI, CACE11-004733 (AP), 2-11-2016)
CORRECTED ORDER DENYING DEFENDANT’SMOTION FOR ENTITLEMENT TO ATTORNEY’SFEES AND COSTS
This cause came before the Court on April 25, 2011 for hearing on Defendant’s Motion for Entitlement to Attorney’s fees and costs, and the Court having reviewed the Motion and the Entire Court file, heard argument, reviewed the relevant legal authorities and been sufficiently advised in the premises, the Court finds as follows:
Background
1. The Plaintiff’s assignor, Charles Dor, reported being in a car crash on 6/18/05.
2. Mr. Dor went for care and treatment with a chiropractor that ordered an MRI of his lumbar spine. The Plaintiff provided Mr. Dor with an MRI on 7/25/05.
3. The Plaintiff timely billed the Defendant PIP insurer for payment. The Defendant refused to issue payment alleging Mr. Dor qualified for PIP insurance from the insurer of a resident relative that owned a motor vehicle.
4. The Plaintiff submitted a statutory pre-suit demand letter. Again, the Defendant refused to issue payment claiming Mr. Dor was entitled to PIP coverage through a resident relative.
5. In May of 2006, the Plaintiff filed suit for payment of the MRI it performed on Mr. Dor.
6. After significant discovery between the parties and numerous depositions, the Defendant served the Plaintiff with a proposal for settlement pursuant to Fla. R. Civ. Plaintiff. 1.442 and Fla. Stat. §768.79 on October 1, 2008.
7. The offer was for $250 inclusive of attorney’s fees and costs.
8. Plaintiff did not accept the Defendant’s Proposal for Settlement.
9. In November of 2010, this case was tried to verdict by this court. (The first trial ended in a mistrial).
10. After the close of evidence the court granted the Plaintiff’s Motion for directed verdict relative to the affirmative defenses of fraud. The Defendant withdrew the misrepresentation defenses and ultimately the jury found the ordering of the MRI was related to the car crash but not medically necessary.
11. On January 24, 2011, this Court entered a final judgment in favor of the Defendant.
12. Thereafter, the Defendant served a timely Motion for fees and costs as the Defendant’s proposal for settlement expired.
13. The Plaintiff disputed the Defendant’s entitlement to fees and costs claiming the offer of judgment was not made in good faith.
14. There is no dispute that the Plaintiff received the proposal for settlement and failed to accept it within 30 days of receipt.
Conclusions of law
15. The spirit of the offer of judgment is to encourage the parties to settle early. Eagleman v. Eagleman, 673 So.2d 946 (Fla. 4th DCA 1996) [21 Fla. L. Weekly D1192a]. It is the carrot held out by the statute to encourage early settlement. Levine v. Harris, 791 So.2d 1175, 1177 (Fla. 4th DCA 2001) [26 Fla. L. Weekly D1824a].
16. The award of attorney’s fees and costs serves as a penalty to those that do not act reasonably and in good faith in settling lawsuits. Eagleman at 947.
17. There is no question the Defendant’s offer qualifies as a “nominal” as the cost of the MRI and the fact the case was actively litigated for years where the Plaintiff’s counsel would be entitled to reasonable fees and costs pursuant to F.S. Section 627.428 makes the total amount in controversy thousands of dollars.
18. There is no dispute Florida allows insurers to file offers of judgment in PIP cases. State Farm v. Nichols, 932 So.2d 1067 (Fla. 2008) [31 Fla. L. Weekly S358a].
19. There is also no dispute nominal offers of judgment may be valid depending on the facts and circumstances of the case as more fully explained below.
20. A trial court may decline to award attorney’s fees if the Court finds the offeror did not make its offer of judgment in good faith. See §768.79(7)(a).
21. In the context of a nominal offer of judgment, where the offer has a reasonable basis to believe that exposure to liability is minimal, a nominal offer is appropriate. Arrowood Indemnity v. Acosta, 36 Fla. Law Weekly D355a (Fla. 1st DCA 2011).
22. Offers are not suspect merely because they are nominal. State Farm v. Sharkey, 928 So.2d 1263 (Fla. 4th DCA 2006) [31 Fla. L. Weekly D1445a]. In Sharkey, the Court opined
Offers, nominal or otherwise must bear a reasonable relationship to the amount of damages or a realistic assessment of liability. The rule is that a minimal offer can be made in good faith if the evidence demonstrates that, at the time it was made, the offeror had a reasonable basis to conclude that its exposure was nominal. The offer need not equate with the total amount of damages that might be at issue.
23. In Event Services v. Ragusa, 917 So.2d 882 (Fla. 3d DCA 2005) [30 Fla. L. Weekly D1913a] the Court found the trial Court did not abuse its discretion in striking a nominal offer of judgment finding the offer was not made in good faith where the Defendant could reasonably face liability even were many facts were disputed. The Court found “[a] reasonable basis for a nominal offer exists only where the undisputed record strongly indicated that the Defendant had no exposure in the case” relying on People’s Gas v. Acme Gas, 689 So.2d 292, 300 (Fla. 3d DCA 1997) [22 Fla. L. Weekly D205d].
24. The Court does not only consider the subjective belief of the offeror. Instead, the Court also looks to the reasonable relationship to the amount of damages AND a realistic assessment of liability. Land & Sea Petroleum v. Business Specialists, Inc. 53 So.3d 348 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D136d]. In Sharaby v. KLV Gems Co., 45 So.3d 560 (Fla. 4th DCA 2010) [35 Fla. L. Weekly D2300a] the Court reversed the denial of fees and costs pursuant to a nominal offer judgment where there existed no basis for finding the Defendant personally or individually liable to the Plaintiff. In State Farm v. Sharkey, 928 So.2d 1263 (Fla. 4th DCA 2006) [31 Fla. L. Weekly D1445a] the Court affirmed a nominal offer of judgment where State Farm, based on the totality of the circumstances, had a reasonable basis for believing that its exposure to liability was minimal. The appellate Court went on to rule that settlement offers, nominal or otherwise, must bear a reasonable relation to the amount of damages or a realistic assessment of liability in order to entitle the offeror to an award of attorney fees and costs. In Sharkey, the Court relied on Fox v. McCaw Cellular, 745 So.2d 330 (Fla. 4th DCA 1998) [23 Fla. L. Weekly D2687a] for the proposition that “the trial Court will have to consider all the surrounding circumstances when the offer was made.” See also Pembroke Pines MRI v. USAA, Case number 08-9857 COCE 53 (Fla. Broward Cty Court 2011) [17 Fla. L. Weekly Supp. 479a] where Judge Lee rejected a nominal offer of judgment stating:
While the fact that the offer is nominal is not decisive in determining whether an offer of judgment is justifiable, in such a situation, the Court is to look at all the known or reasonably believed facts, circumstances and the law to determine if the offer was made in good faith and whether the offeror could have reasonably concluded that exposure to liability was minimal.
25. In Fox v McCaw Cellular, 745 So.2d 330 (Fla. 4th DCA 1998) [23 Fla. L. Weekly D2687a] the Court explained that when a nominal offer is not based on an evaluation of potential liability and damages, the offer raises a question as to the intentions of the offeror. The Court also explained the trial Judge will have to consider the entire record of the case as each case requires its own analysis and must be considered on its own facts.
26. In Ryan v. Lobo, 841 So.2d 510 (Fla. 4th DCA 2003) [28 Fla. L. Weekly D573a] the Court found a $100 offer was made in good faith where the Defendant believed they Plaintiff’s claim was barred by the statute of limitations where the Defendant ultimately prevailed on this defense via Summary Judgment. The Lobo Court again relied on the Fox v. McCaw Cellular, 745 So.2d 330 (Fla. 4th DCA 1998) [23 Fla. L. Weekly D2687a] for the proposition the trial Judge will have to consider all the surrounding circumstances when the offer was made based on the entire records as each case requires its own analysis and must be considered on its own facts. See also Levine v. Harris, 791 So.2d 1175, 1177 (Fla. 4th DCA 2001) [26 Fla. L. Weekly D1824a] where the Court opined the trial Judge will have to consider all the surrounding circumstances when the offer was made in evaluating a nominal offer.
27. Therefore, as stated above, the Court must determine whether the defendant’s nominal offer of judgment, after considering not only the Defendant’s subjective beliefs but also the reasonable relationship to the amount of damages, the Defendant’s realistic assessment of liability based on the entire record, facts and all surrounding circumstances as well as whether the Defendant had a reasonable basis to believe that exposure to liability was minimal in this case.
28. After engaging in this analysis, this Court finds the Defendant’s $250 was not made in good faith to settle the case.
29. The evidence in this case demonstrates that, at the time the offer was made, the Defendant did not have a reasonable basis to conclude its exposure was nominal.
30. At the time the proposal was made, the Plaintiff’s attorney had actively litigated this case for years and if the Plaintiff prevailed the Plaintiff would have been entitled to thousands of dollars in reasonable attorney’s fees pursuant to F.S. §627.428. The Plaintiff also incurred hundreds of dollars in taxable costs. Consideration must be given to the amount of fees awardable at the time the proposal for settlement is made, especially in a statutory fee shifting case. Millennium Diagnostic v. State Farm, Case Number 05-04768 SP-25 (Fla. Dade Cty Court 2009, Judge King) citing White v. Steak and Ale of Fla., Inc., 816 So.2d 546 (Fla. 2002) [27 Fla. L. Weekly S331a].
31. The facts of the case are relatively simple. The Plaintiff provided an MRI to Mr. Dor. Mr. Dor was involved in a car crash where there was in excess of $1300 worth of property damage. Mr. Dor had no prior injuries to his low back, no prior MRIs of his low back, and the MRI was positive for injuries. At the time of the offer, the Defendant did not have a radiologist review the MRI scans to dispute the injuries. The Defendant did not have Mr. Dor physically examined by a doctor of its choosing as Florida law would have allowed. The Defendant had only a paper review conducted by a doctor of its choosing stating the MRI was not medically necessary or related to the car crash. The paper review was done months after the accident. This paper review was not based on a physical examination conducted by a defense doctor. The defense doctor did not have any of the transcripts of the patient or the treating doctor. The defense doctor was under the mistaken belief the MRI was a week after the crash as opposed to the reality the MRI was performed about one month after the accident. The Plaintiff, on the other hand, had the testimony of the patient who stated he was hurt in the crash. The testimony of the passengers that stated Mr. Dor was in the car. The Plaintiff also had the testimony of the chiropractor that ordered the MRI and the testimony of the patient’s medical doctor both stating the MRI was medically necessary. Ultimately, the case came down to whether the jury believed the Plaintiff’s doctors or the Defendant’s doctor. There is no way the Defendant could have reasonably predicted with certainty the jury would have believed its doctor and disregarded the treating doctors under the facts of this case.
32. Therefore, there was certainly a legitimate dispute as to whether the ordering of the MRI was medically necessary based on the facts of this case.
33. It cannot be found, under a reasonable interpretation of all the facts and circumstances of this case, that the nominal offer bore a reasonable relationship to any realistic assessment of liability as it cannot be found the Defendant’s realistic assessment of liability was minimal in this case.
34. Furthermore, to support this opinion, the Plaintiff prevailed on all of the Defendant’s affirmative defenses at the time of the offer which included:
a. the Plaintiff and the patient failed to fully comply with and/or satisfy conditions or requirements set forth in the policy;
b. The patient made misrepresentations that were material to the coverage and the claim was barred pursuant to the policy of insurance and Florida law;
c. the Plaintiff did not provide proof of claim as required by Florida law;
d. the Plaintiff did not have standing;
e. The Plaintiff’s services did not meet the requirements of the CPT code charged and the Plaintiff’s claim should be barred since the Defendant was not provided with valid written notice of a covered loss.
f. Under Florida Statute §627.736(5)(a) the Plaintiff was not entitled to PIP benefits since the Plaintiff did not render medical services.
g. The Plaintiff is not entitled to PIP benefits under Florida Statute §627.736(5)(a) since the service placed at issue in the complaint were not lawfully rendered.
h. The Plaintiff failed to satisfy condition precedent to filing suit for PIP benefits by not serving upon the Defendant prior to suit a demand letter that satisfied the material requirements of Fla. Stat. §627.736(11).
i. Charles Dor committed insurance fraud by intentionally stating he was involved in an accident on June 18, 2006 when he was not, that he received medical treatment for injuries when in fact he had not suffered any injuries as a result of the accident; and made false statements about the treatment he received.
j. Charles Dor knowingly submitted false or misleading statements when he stated he was involved in an accident on June 18, 2006 when he was not, that he received medical treatment for injuries when in fact he had not suffered any injuries as a result of the accident; and made false statements about the treatment he received.
k. Charles Dor failed to comply with the duties/conditions set forth under the policy by failing to provide requested records that were pertinent in establishing coverage.
l. Charles Dor failed to comply with the Defendant’s reasonable requests for an examination under oath at the time when the Defendant had a reasonable basis to deny the claim.
35. These affirmative defense were not valid and the Defendant knew our should have known these defenses were not valid.
36. Additional, the jury found the ordering of the MRI was related to the car crash and rejected the defense Mr. Dor was not in the car and there was no actual impact involving the car where Mr. Dor was a passenger.
37. Lastly, as it relates to the paper review conducted by the Defendant’s expert, the law was in flux at this time as to whether a PIP insurer can rely on a paper review, without a physical examination to justify a denial. Many judges found, as a matter of law, an insurer could not rely on a paper review without a physical examination. In fact, this issue is currently before the Florida Supreme Court. At the time the offer was made, the Defendant could not have possibly known how the court’s would ultimately resolve this issue.
38. Accordingly, this Court finds the Plaintiff has met its burden as the Defendant had legitimate exposure and the Plaintiff has established Defendant’s proposal was not made in good faith.
ORDERED AND ADJUDGED that the Defendant’s Motion for Entitlement to Attorney’s Fees and costs is hereby denied.
