Florida Insurance Law Blog : Florida Insurance Lawyer & Attorney : Mark Nation Law Firm : Orlando, Longwood, Gainesville

In Geico Indemnity Company v. Physicians Group, LLC, a/a/o Paul Androski, ____ So.3d ____ (Fla. 2nd DCA August 13, 2010), the 2nd DCA ruled that the PIP fee schedules which went into effect on January 1, 2008, do not apply to any accidents that occurred before that date. 

The opinion was fairly short and straightforward.  Specifically, the Court held that:

the 2008 version of section 627.736(a)(2)(f) does not retroactively apply to an insurance policy that was in effect and that expired before the statute's effective date of January 1, 2008. 

A copy of the 2nd DCA's opinion can be downloaded by clicking here. 

We should all expect that this decision will be appealed to the Florida Supreme Court.

My good friend Attorney Tom Player successfully handled the appeal for Physicians Group.  Great job Tom!  

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My client is a truck driver.  He was asked to deliver a load to North Carolina.  When he tried to attach the trailer to his own truck, the trailer would not properly attach.  The company which asked him to deliver the load then provided him with a truck to deliver the load.  Unfortunately, my client was injured when he was hit by another vehicle while in North Carolina. 

He carries full insurance coverage on his own truck, but that policy does not apply to accidents that occur out of state if he is in a vehicle he does not own.  However, the truck he was using to deliver the load was insured with a policy that provided coverage for personal injury protection (PIP), and medical payments coverage (Med Pay).  That insurance company denied all claims regarding the accident.  The insurer claimed there was no PIP because my client carried PIP on his own vehicle (PIP which does not apply to out of state accidents which occur in a non-owned vehicle).  The insurer claimed there was no Med Pay because the Med Pay coverage has an exclusion for any "employees" of the company for which he was working.  

I do not believe that either exclusion applies.  Under Florida Statute Section 627.736, a PIP policy can only have a few "authorized exclusions."  The exclusion being applied by the insurance company in this case is not one of those authorized exclusions.  I do not believe that the Med Pay exclusion applies because my client is not an "employee" of the delivery company.  He was an independent contractor.  

Because the insurance company has denied coverage, I filed a declaratory judgment action to have a court determine whether the exclusions actually apply.  As with all exclusion in insurance policies, the burden of proof will be on the insurance company to prove that the exclusions apply.  

As with most of my insurance cases, there are no fees or costs to my client.  If I win, the insurance company must pay my attorney's fees and costs, and if I lose, I'll work for free.   

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In Central Magnetic Imaging Open MRI of Plantation, Ltd a/a/o v. State Farm Fire and Casualty Insurance Company, ____ So.3d ____ (Fla. 4th DCA November 18, 2009), State Farm received an MRI bill on one of its PIP insureds.  State Farm sent the MRI bill and its PIP insured's medical records to be reviewed by its own physician to determine if the MRI  was reasonable, necessary and related to a motor vehicle accident.  State Farm did not have its PIP insured physically examined by its physician. 

Based on the report for the reviewing physician, State Farm denied payment for the bill.  The MRI facility, as assignee of the insured, filed suit against State Farm for breach of the insurance contract.  On summary judgment in the county court, the MRI facility argued that State Farm was required by 627.736(7)(a) to obtain a "valid report" prior to denying the MRI bill.  The MRI facility argued that an essential element of a "valid report" was that State Farm had to obtain a physical exam of its insured prior to denying the bill.  The county court agreed, but the circuit court reversed finding that no physical examination was necessary. 

The 4th DCA denied the petition for certiorari, finding that the circuit court applied the correct law.  According to the 4th

We conclude, in line with the Third District Court of Appeal, that the 'valid report' required by the statute does not require an insurer to order an IME before denying a claim for PIP benefits.

In a footnote, the 4th did note that

Although the issue was not raised in this case, we note that other districts have held that the valid report requirement of section 627.736(7)(a) does not apply at all in a case such as this....  [However, in this case, t]he insurer conceded that the valid report requirements applied to the claim in this case.

As previously noted in this blog, numerous cases have held that 627.736(7)(a) only applies to the withdrawal of future benefits, and section (4)(b) applies to the denial of a past bill.  Section (4)(b) does not require a report at all.  Section (4)(b) merely requires an insurer to provide "reasonable proof" that the bill is not owed, and such "reasonable proof" can be produced at any time. 

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Today, in Massie v. Progressive Express Insurance Company, ____ So.3d ____ (Fla. 1st DCA November 17, 2009), the Circuit Court sitting in its appellate capacity reversed the trial judge's order awarding a multiplier.  The Circuit Court reversed because the insured did not testify that she had difficulty securing counsel to represent her in the cause without a multiplier.   

The 1st DCA reversed and reinstated the multiplier.  The Court held that

expert testimony that a party would have difficulty securing counsel without the opportunity for a multiplier supposts a multiplier's imposition.  Here, Petitioner presented such testimony, and the Circuit Court departed from the essential requirements of law by failing to apply a principle of law previously enunciated by this Court rather than that of our sister Fifth Disctrict Court of Appeal. 

The 5th DCA decision which the Court was referring to is Progressive Express Insurance Co. v. Schultz, 948 So.2d 1027 (Fla. 5th DCA 2007).  I was actually the fee expert in Schultz and have been regretting this holding for about 2 years now.  Hopefully, now that there is conflict between Schultz and Massie the Supreme Court will rule on this issue. 

A copy of the Massie decision can be downloaded by clicking here.

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In United Automobile Insurance Co. v. Garrido, a/a/o Rodriguez, ____ So.3d ____ (Fla. 3d DCA October 28, 2009), the 3rd once spoke on the circumstances under which a PIP insurer can withdraw future PIP benefits.  According to the 3rd,

a 'valid report,' even where appropriately required under section 627.736(7)(a) [i.e. when withdrawing future benefits - as opposed to denying past bills], need not be predicated on either a physical examination conducted by the reporting physician or on a physical examination conducted on behalf of the insurance company. 

The Court also confirmed once again, that a "valid report" is only necessary when a PIP insurer is withdrawing future PIP benefits, and is not needed where the PIP insurer is denying past bills.

[I]n cases such as this, where no payments have been made resulting in a total rejection of a provider's bills, section 627.736(4) of the Florida Statutes applies.  This provision permits an insurer to deny a PIP claim at any time, either before or after that claim becomes 'overdue [because not paid within thirty days]' provided is has 'reasonable proof' that it is not responsible for payment.  And, while such proof may come in the form of a report described in section 627.736(7)(a), such a report is not necessary to deny a claim under section 627.736(4)(b). 

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In United Automobile Insurance Company v. Garrido, a/a/o Alarcon, ____ So.3d ____ (Fla. 3rd DCA October 28, 2009), United Auto - a PIP insurer - denied payment for past services rendered by Dr. Garrido to the insured.  United Auto did not first obtain a written report from a physician saying that the denied charges were not reasonable, necessary or related to the crash. 

The 3rd held:

In United Automobile Insurance Co. v. Millennium Diagnostic Imaging Center, Inc., 12 So.3d 242, 246-47 (Fla. 3d DCA 2009), we held that an insurer may at any time challenge whether treatment is RRN, and is permitted to rely on a report obtained pursuant to section 627.736(7)(a) even when the report is obtained more than thirty days after the claim was submitted.  Building on this conclusion, we explained in United Automobile Insurance Co. v. Santa Fe Medical Center, No. 3D08-547, 2009 WL 3188957 (Fla. 3d DCA October 7, 2009), that an insurer's obligation, pursuant to section 627.736(7)(a), to first obtain a medical report, applied only to withdrawal - as opposed to denial - of payment to a treating physician.  Here, United denied payment.  Accordingly, the 'first obtained' language of section 627.736(7)(a) is not controlling and the court erred in finding otherwise.

What does it all mean...For a PIP insurer to deny past bills, it can obtain a report/expert/opinion that the bills are not RRN at any time - presumably up until the insured files for summary judgment at which time the PIP insurer probably needs to come up with some evidence.  For a PIP insurer to withdraw future treatment, the insurer must first obtain a written report from a physician pursuant to 627.736(7)(a).  (Does that report need to based on a physical examination performed by the insurance company physician?  Stay tuned, I'm blogging on that in exactly 1 minute). 

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In United Automobile Insurance Company v. Santa Fe Medical Center, ____ So.3d ____ (Fla. 3d DCA October 7, 2009), the medical provider took an assignment of PIP benefits from its patient.  Santa Fe submitted bills to United Auto for treatment rendered, and United Auto denied payment claiming that the treatment was not reasonable, necessary or related to the subject accident. 

United Auto did not obtain a written report from a physician prior to denying the claim.  Much later, in response to Santa Fe's motion for summary judgment, United Auto did obtain an affidavit from a physician supporting its denial of the claim.  The trial court rejected United Auto's affidavit because: (1) it was based upon his review of the patient's treatment records, rather than a physical examination of Mr. Lopez, and (2) United Auto's physician did not conduct his review or submit his affidavit within thirty days of United Auto's receipt of the claim.  United Auto appealed to the Circuit Court which affirmed the trial court on these two issues.  United Auto sought certiorari review from the 3rd DCA.  

The 3rd DCA reversed.  The Court noted a clear distinction between the denial of a past bill which is controlled by subsection (4)(b) of the PIP statute; and the withdrawal of future benefits which is controlled by subsection (7)(a).  According to the 3rd,

[b]ecause this is a denial case, subsection (4)(b) applies.  Subsection (4)(b) provides that the insurer must pay benefits that are reasonable, related, and necessary within thirty days after receiving written notice, and the failure to do so could subject the insurer to penalties.  However, if the insurer believes that the claim is not reasonable, related, and necessary and denies the claim, it may obtain and offer reasonable proof at any time to establish that the insurer is not responsible for payment of the claim....  'Reasonable proof' is not defined, but it is clear that subsection (4)(b) does not require that a 'valid report' be obtained to protect an insurer from being assessed statutory penalties when denying a claim.  It is important to note that the statute does not require the insurer to obtain a report or proof under subsection (4)(b) before denying a claim. 

In conclusion, the Court stated:

If the insurer believes the claim is not reasonable, related, and necessary, it may: (1) deny the claim; or (2) pay the claim until it obtains a valid medical report under subsection (7)(a) and withdraw further payment.  'Reasonable proof' when defending an insurer's decision to deny payment of a claim under subsection (4)(b) does not require that the insurer obtain a valid report pursuant to subsection (7)(a), and the insurer may contest its responsibility to pay a claim at any time, and present evidence obtained after the thirty-day period has expired.  Subsection (7)(a), which requires that the insurer obtain a valid medical report, only applies to instances where the insurer withdraws the payment of further PIP benefits, not to the denial or reduction of benefits claimed. 

Be aware, that in its opinion, the Court also noted that in withdrawal cases under subsection (7)(a), that an insurer's "valid report" "may be based on the reporting physician's review of another physician's examination," or the reviewing physicians own physical examination. 

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In United Automobile Insurance Company v. Metro Injury & Rehab Center, ___ So.3d ___ (Fla. 3rd DCA July 29, 2009), the PIP insurer withdrew PIP benefits based on a peer review of the treating doctor's records.  Those records contained information concerning physical examination(s) which the treating physician performed on the insured.  The county court granted summary judgment against the PIP insurer, and the circuit court, sitting in its appellate capacity, affirmed, holding that "[a] report based only upon a review of the records of the insured's treating physician is not a valid report within the meaning of section 627.736(7)(a)."  The court reasoned that the statute required the reviewing physician to perform a physical examination of the insured.   

The 3rd agreed that a physical examination of the patient was a necessary ingredient of "valid report," but held that

the physician preparing the report does not have to personally examine the insured.  He or she may base the report on another physician's examination whether an IME or an examination conducted by the treating physician.

It is unclear whether other DCA's will follow this reasoning.  Other DCA's may require that the examiantion be performed by the CME physician, or someone at his direction.  We shall see. 

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Pursuant to Florida Statute Section 627.409, an insurer can retroactively rescind a policy if it later finds a material misrepresentation in the application for insurance.  A misrepresentation is "material" if the misrepresentation was material to the acceptance of the risk by the insurer, or, if the insurer in good faith would not have issued the policy under the same terms and premium. 

In United Automobile Insurance Company v. Salgado, _____ So.3d. _____ (Fla. 3rd DCA August 5, 2009), the PIP insurer discovered a material misrepresentation after its insured presented it with a PIP claim.  The PIP insurer then rescinded the policy, pursuant to 627.409.  The County Court held that a PIP insurer was not entitled to retroactively rescind a PIP policy pursuant to 627.409.  In essence, the County Court reasoned that PIP is a statutorily mandated coverage and pursuant to the PIP statute claims can only be denied prospectively, not retroactively.  The Circuit Court, sitting in its appellate capacity, affirmed. 

The 3rd DCA reversed, holding that, pursuant to 627.409, a PIP insurer can retroactively rescind a PIP policy if it meets the requirements of 627.409. 

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Recently, Florida's Fourth District Court of Appeals reversed a First Party Bad Faith verdict and judgment. In United Automobile Insurance Company v. Colon, Ms. Colon sued her PIP insurer for bad faith claims handling in failing to pay her doctors under her PIP policy. Although she disclaimed any non-economic damages for emotional distress, the insured claimed that the carrier's failure to pay PIP benefits caused her problems with doctors who refused to compromise the amount of her bills or render further medical services. However, the insured offered no particular amount of damages related to the problems she had with her providers. The jury returned a general verdict for bad faith damages of $60,000.

The 4th DCA noted that "[i]t has long been accepted in Florida that a party claiming economic losses must produce evidence justifying a definite amount.... Economic damages may not be founded on jury speculation or guesswork and must rest on some reasonable factual basis." The DCA then held that: "As the background shows, plaintiff offered no evidence on which to justify any amount of economic damages resulting from the carrier's bad faith conduct. Because of the lack of such evidence, the carrier is entitled to judgment in its favor on plaintiff's claim for bad faith damages."

While I don't know from the facts of this case whether the plaintiff could have done so, this case points out the necessity to prove up economic damages in a first party bad faith case. Economic damages in a case such as Colon might include impairment of credit which can be proved up by expert testimony. A plaintiff in a first party bad faith action may also be entitled to non-economic damages, even in the absence of economic damages. 

The insurance company's agent is a fiduciary to the insured.  An insured pursuing a first party bad faith claim should always evaluate the propriety of adding a claim for the agent's breach of fiduciary duty.  The elements of a claim for breach of fiduciary duty are: the existence of a fiduciary duty, and the breach of that duty such that it is the proximate cause of the plaintiff's damages.  In Gracey v. Eaker, 837 So. 2d 348, 353 (Fla. 2002)., the Florida Supreme Court held that the victim of a breach of fiduciary duty is entitled to non-economic damages, even in the absence of economic damages.
 

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In Flaxman v. Government Employees Ins. Co.,  993 So.2d 597 (Fla. 4th DCA 2008), the insured had PIP with GEICO which paid statutorily mandated benefits of 80% of medical expenses as well as 60% of lost wages up to a total of $10,000. The insured also had available under the same policy "Additional" PIP or APIP which increased the amount of PIP benefits up to 100% of medical expenses and 85% of lost wages.

The insured incurred $17,000 of medical expenses as a direct result of a covered automobile accident. GEICO argued that the most that they were required to pay under the policy, including both PIP and APIP, was $10,000. The insured argued that GEICO was required to pay $10,000 under the PIP portion of the policy, and $2,500 under the APIP portion of the policy. Suit ensued, and the issue eventually worked its way up to the 4th DCA.

The 4th DCA ruled in favor of GEICO, and held that the APIP did not increase the aggregate benefits available under the policy. The aggregate available benefits under the policy remained $10,000. The APIP merely increased the percentage which GEICO had to pay for covered expenses, i.e., instead of paying 80% of covered medical expenses, GEICO had to pay 100% of covered medical expenses up to $10,000.

In reaching its decision, the court relied heavily on the "limit of liability" section of the policy which limited GEICO's total exposure to an aggregate of $10,000. From the decision it does not appear that GEICO's "Additional" PIP carried a separate limit of liability. In other words, the APIP did not have a limit of say $2,000, or $5,000. Instead, the APIP merely paid the additional percentages for covered expenses. The outcome would likely be different if the Additional PIP had a separately stated limit amount.

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While our client was stopped at a traffic light, another driver got out of his car and attacked our client in a random road rage incident.  Our injured client submitted her medical bills to her PIP No-Fault insurer, Nationwide, for reimbursement.  PIP insurers in Florida are required to pay for all medical expenses that are "related" to the "use, operation or maintenance" of a motor vehicle. The PIP insurer alleged that this incident was not "related" to the use of the motor vehicle, but instead was an intentional criminal assault which it believes is not covered by the insurance policy.

In Blish v. Atlanta Casualty Company, 736 So. 2d 1151 (Fla. 1999), the Florida Supreme Court noted:

Acts of violence are an ageless and foreseeable hazard associated with the use of a vehicle-for once a person sets out in a vehicle, he or she is vulnerable. The highwaymen and desperados of bygone times preyed on the wayfarer, and these villains are with us still. Each Floridian today, when he or she gets behind the wheel, faces a variety of dangers: a car-jacking at a stoplight, or a strong-arm robbery at a deliberately staged rear-end collision, or a road rage assault in rush hour traffic, or even a random shooting by an anonymous sniper from an overpass. The danger is particularly acute when the motorist is stranded as the result of a disabled vehicle.

The scenario in the present case is every motorist's nightmare. Losses resulting from a violent encounter with this ageless road hazard-i.e., the highwayman or opportunistic thug-might reasonably be said to be very much in the contemplation of Florida consumers when they are contracting to purchase auto insurance. The motivation of the assailant-whether it be to “possess or use” the vehicle, or to steal the victim's wallet or purse, or simply to harm the victim-is a nonissue to the consumer. We note that insurance companies were placed on notice at the time of enactment of section 627.736(1)... that the statute contemplates broad coverage.

The supreme court held that the driver's injuries were a reasonably foreseeable consequence of-- and that the injuries arose out of--the "ownership, maintenance, or use of a motor vehicle” and were therefore covered under the PIP portion of his auto insurance policy.

Nation Law Firm Attorney Paul Perkins filed a lawsuit against Nationwide for failing to pay the PIP benefits under the clear pronouncement from the Supreme Court that road rage incidents are covered by PIP. In the past, we have successfully handled several cases where PIP insurers have refused to pay medical expenses incurred in these types of road-rage incidents.

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The Nation Law Firm was recently successful in a suit against Progressive Select Insurance Company for Personal Injury Protection benefits.

Our client was injured in a car accident and sought PIP benefits from Progressive, which insured the car he was riding in at the time of the accident.  Progressive denied the claim and said that our client should file for PIP with Allstate (which insured his grandmother's automobile). It was Progressive's position that our client was a "resident relative" with his grandmother at the time of the crash and, since his grandmother carried PIP with Allstate, he should seek PIP benefits from Allstate. Allstate denied the claim because his grandmother gave a recorded statement to Allstate and claimed that he was not a resident relative at the time of the crash.

The law in Florida is clear on which PIP carrier must provide coverage. The first place to look for PIP is the injured person's own insurance company if he owns a car. If he has his own PIP, then that insurer will provide coverage. If he owns a car and does not carry PIP, then no PIP will be afforded. (One is not required to carry PIP on an "inoperable" car). The next place to look for PIP is from the auto insurer of a "resident relative." If a resident relative has PIP, then that insurer will provide coverage. Finally, if there is no other PIP available from the first two sources, then the last place to look for PIP is from the insurer of the car in which the injured person was riding at the time of the crash.

At the time of the crash, our client owed a car, but it was inoperable. He did not carry PIP on that car. Thus, PIP had to come from either his grandmother's PIP as a resident relative; or from Progressive as the insurer for the car in which he was injured. The battle lines were drawn - the case turned on the factual issue of whether our client was, or was not, a resident relative with his grandmother at the time of the crash.

Two days before the accident which injured him, our client had moved out of his grandmother's house after a fight. At the time of the crash, and for some time after, he moved from place to place, but did not return to sleep at his grandmother's. At the time of the crash, his driver's license still had grandmother's address, he still got mail at his grandmother's house, he still had his belongings at his grandmother's house. But, he never slept at her house after leaving two days before the accident. This was still all true some two years after the accident also. Our client testified that at the time of the accident, he had no intent to move back to his grandmother's house.

We filed a declaratory judgment action against Progressive seeking a judicial determination that he was not a resident relative of his grandmother at the time of the crash. Just last week, after much discovery, Progressive agreed to pay the PIP claim in full, and to pay all of our attorney's fees and costs incurred in prosecuting the case.
 

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