The Third District has held that personal injury protection (PIP) benefits should only be setoff against those categories of damages actually paid for by PIP. This decision could impact whether PIP benefits should be requested for, and allocated to, medical bills or lost wages.
The Third District issued its opinion in
Benites v. Almeida today (12/12/07). The court reviewed a post-verdict setoff for personal injury protection (PIP) benefits, where the verdict attributed a certain specific sum for past medical expenses, and a certain sum for past lost wages. Since the injured party exhausted all his PIP benefits for payment of medical expenses and allocated/accepted no benefits for lost wages, the court held PIP should only be set off against that portion of the verdict awarding past medical expenses. The court held the jury award of past wages was unaffected by the setoff.
After being injured in an auto collision, the PIP insured submitted medical bills of $18,702 to his PIP insurance company. The PIP printout showed the insured exhausted his $10,000 in PIP benefits, and all PIP benefits were applied to medical expenses.
The insured then brought suit against the defendants, contending that he had suffered a permanent injury. The jury, however, returned a verdict finding "no permanency." Significantly, the jury awarded $5,000 for past medical expenses and $2,500 for lost earnings, for a total verdict of $7,500.
The question of the PIP setoff against the jury's verdict was submitted to the trial court post-trial.
The parties agreed the entire $10,000 PIP insurance coverage was expended for medical bills and agreed none was paid for lost wages. The PIP insured argued that since the PIP benefits were paid for medical bills only, the PIP setoff only applied to the $5,000 for past medical expenses, leaving the jury's past lost wage award untouched. The defendants disagreed, and argued that the $10,000 PIP amount should be aggregated and applied to the total verdict of $7,500, which would result in a "zero" recovery for the PIP insured.
Under the no-fault law, a PIP insured has "no right to recover any damages for which personal injury protection benefits are paid or payable." ยง 627.736(3), Fla. Stat. (2003). The Florida Supreme Court's decision in
Rollins v. Pizzarelli, 761 So. 2d 294 (Fla. 2000), interpreted the phrase "paid or payable" narrowly, and said "the proper interpretation of the term 'payable' is that only PIP benefits 'currently payable' or owed by the PIP carrier as a result of expenses incurred by the plaintiff should be set off from a verdict that includes an award of future medical expenses."
Id. at 301.
The Third District held it was undisputed that the entire $10,000 in PIP was "paid" for medical benefit to the PIP insured. This payment exhausted the PIP benefits and left nothing "payable." The Court further held that because all of the PIP benefits were applied to medical expenses, the setoff could only be made against the jury's $5,000 line item for past medical expenses, leaving the $2,500 verdict for lost wages untouched.
The opinion makes sense, and presumably would support an argument for proportional allocation of the PIP setoff. When an insurance company has paid out all the PIP benefits, whatever portion of PIP was allocated to medical bills should be set off against a jury award of medical bills, not lost wages. Similarly, whatever portion of PIP was allocated to lost wages should not be set off against medical bills. In many cases, this division would become moot. However, in cases where no permanency is found or where small proposals for settlement are involved, the allocation may be the difference between "something" and "nothing" for the injured party as it was in this case.
