County Civil Court: INSURANCE – Exhaustion of Benefits – English Rule for
establishing priorities of assignees – an insured cannot maintain a cause of
action against the insurer once benefits are exhausted unless certain criteria
are met – in cases where bad faith is not alleged, insured must promptly notify
the insurer that an amended claim will be forthcoming when insurer tenders
partial payment of claim – insured must also refuse partial payment or escrow
such funds until claim has been fully adjudicated – Summary Judgment affirmed. Nucci v. Progressive Express Ins. Co.,
No. 03-5049AP-88A (Fla. 6th Cir. App. Ct. May 18, 2006).
IN THE CIRCUIT COURT FOR THE SIXTH
JUDICIAL CIRCUIT
IN AND FOR PINELLAS COUNTY, FLORIDA
APPELLATE DIVISION
ROBERT C. NUCCI, M.D., P.A.,
on behalf of Carl Kalinsky,
Appellant,
vs.
Appeal No.03-5049AP-88A
UCN522003AP005049XXXXCV
PROGRESSIVE EXPRESS
INSURANCE COMPANY,
Appellee.
____________________________________/
Appeal
from Summary Judgment
Pinellas County Court
Judge Karl B. Grube
Scott F. Zimmer, Esquire
Attorney for Appellant
Lisa S. Delvecchio, Esquire
Heather C. Goodis, Esquire
Attorneys for Appellee
ORDER AND OPINION
THIS
CAUSE came before the Court on appeal, filed by the Appellant, Robert C.
Nucci, M.D., P.A., on behalf of Carl Kalinsky (Nucci), from the Order Granting
Summary Judgment,[1]
entered on August 18, 2003, in favor of the Appellee, Progressive Express
Insurance Company (Progressive). Upon
review of the briefs, the record and being otherwise fully advised, the Court affirms
the trial court’s ruling as set forth below.
The
undisputed facts are that the insured, Carl Kalinsky, received treatment and
services from Nucci as a result of injuries sustained in a motor vehicle
accident. Kalinsky was covered under a
policy of insurance issued by Progressive which provided for $10,000.00 in PIP
benefits with no medical payments coverage and no deductible. Pursuant to an assignment of benefits, Nucci
submitted its bills to Progressive for payment.
Progressive reduced some of the bills and remitted payment to Nucci
based on the reduction.
On December 3, 2002, Nucci filed suit
against Progressive generally alleging that he was owed reasonable charges for
treatment and services provided. The
complaint did not set forth specific dates of service or bills for which
payment was sought, nor did the complaint allege bad faith. At the time Nucci filed suit, there were
sufficient PIP benefits left to cover the entire bills. On February 25, 2003, Progressive exhausted
the remaining benefits by paying bills submitted by Kalinsky’s other medical
providers. Based on the exhaustion of benefits,
Progressive moved for summary judgment arguing that it owed no further
benefits.
After a hearing on the matter, the
trial court found that there was no evidence that Nucci instructed Progressive
not to pay other medical benefits, nor specified in its complaint those
benefits Nucci sought payment for. The
trial court found that there was no evidence that Progressive’s exhaustion of
benefits was undertaken in bad faith and found that “the Defendant was
obligated by law to pay benefits in a timely fashion and did so, thereby
exhausting the insured’s benefits pursuant to the policy of insurance and
Florida law.” The trial court determined
that the “English Rule” did not apply as Nucci never gave Progressive notice as
to what particular bills were in dispute and accepted reduced payment. The trial court concluded, as a matter of
law, that Nucci could not maintain his cause of action since the benefits had
been exhausted.
Before this Court, Nucci argues that summary judgment was improper as Progressive was on notice that Nucci was seeking reimbursement for reduced benefits when it filed suit, that the trial court did not correctly apply the English Rule for establishing priorities of assignees, and that a genuine issue remains regarding whether Progressive was justified in reducing Nucci’s bills prior to exhaustion. In addressing these issues, the Court reiterates the well-settled law that summary judgment can only be granted when the moving party irrefutably establishes that the nonmoving party cannot prevail; even the slightest doubt must be resolved against the moving party. See Hervey v. Alfonso, 650 So.2d 644, 645-46 (Fla. 2d DCA 1995).
The Court finds that there has been a
split among trial and circuit appellate courts on the application of the
English Rule and whether an insured can maintain a cause of action against an
insurer once benefits are exhausted.
Several courts have found that even though the insured cannot recover
any more PIP benefits since such benefits have been exhausted, the insured can
still maintain a cause of action against the insured for statutory damages,
including attorney’s fees, for the insurer’s late payment. See e.g. Sanders v. State
Farm Mutual Automobile Insurance Company, 10 Fla. L. Weekly Supp. 789 (Fla.
17th Cir. App. Ct. June 5, 2003); First Choice Medical Center v. Progressive
Express Insurance Company, 12 Fla. L. Weekly Supp. 994 (Fla. Seminole Cty.
Ct. June 27, 2005); Occupational and Rehabilitation Center v. Progressive
Express Insurance Company, 12 Fla. L. Weekly Supp. 75 (Fla. Duval Cty. Ct.
Nov. 2, 2004). Other courts have gone even
further, holding that an insurer must pay overdue claims, even when benefits
have been exhausted, if there is a determination that the insurer unlawfully
withheld, or misapplied, benefits. See
e.g. Physicians First Choice
Interpretation, Inc. v. Allstate Insurance Company, 10 Fla. L. Weekly Supp.
675 (Fla. 11th Cir. App. Ct. July 15, 2003);
Ocean Ridge Chiropractic, Inc. v. Progressive Express Insurance
Company, 11 Fla. L. Weekly Supp. 578 (Fla. Broward Cty. Ct. April 1, 2004).
On the other end of the spectrum,
some courts have held that the insured cannot maintain a cause of action to
recover PIP benefits when the insured’s benefits are exhausted after the
medical provider filed suit against the insurer, the insured/medical provider
did not provide notice to the insurer to set aside the disputed amount, and
there was no evidence that insurer acted in bad faith in exhausting
benefits. See e.g. Premier
Open MRI, LLC v. Progressive Express Insurance Company, 11 Fla. L. Weekly
Supp. 839 (Fla. Hillsborough Cty. Ct. May 26, 2004), appeal dismissed, 911
So.2d 1243 (Fla. 2d DCA 2005);[2]
Vincent DiCarlo, M.D. & Associates v. American Home Assurance Co.,
11 Fla. L. Weekly Supp. 305 (Fla. 13th Cir. App. Ct. Jan. 20, 2004); Orthopaedic
Specialties of Tampa Bay, P.A. v. Progressive Express Insurance Company, 10
Fla. L. Weekly 1018 (Fla. Pinellas Cty. Ct. Oct. 8, 2003); Neuroscience DX,
Inc. v. Deerbrook Insurance Company, 10 Fla. L. Weekly Supp. 827 (Fla.
Pinellas Cty. Ct. Aug. 11, 2003); Neuro-Imaging Associates, P.A. v.
Nationwide Insurance Company of Florida, 10 Fla. L. Weekly Supp. 738 (Fla.
Palm Beach Cty. Ct. Jan. 7, 2002).
The Court finds that the only binding
decision on this Court is Simon v. Progressive Express Insurance Company,
904 So.2d 449 (Fla. 4th DCA 2005), which follows the aforementioned line of
cases that an insured cannot maintain a cause of action against the insurer
once benefits are exhausted unless certain criteria are met. In Simon, the medical provider, a
physician, Robert Simon, accepted a reduced payment from the insurer, Progressive
Express Insurance Company, for services rendered to the insured following an
automobile accident. See id. at
449. Before paying Simon, Progressive
informed him and other medical providers that it would reconsider denied or
reduced claims if the provider resubmitted the claims with new information. See id. Simon resubmitted his claim, but was informed
by Progressive that the funds had already been committed to another provider because
Simon accepted partial payment and had failed to advise Progressive that he
would be resubmitting his claim. See
id. Simon filed suit against
Progressive claiming that Progressive was under an obligation to hold the funds
indefinitely to cover the partially denied claims. See id. Simon argued that the “English Rule” applied
and that Progressive should not have paid other providers when Simon filed his
claim before actual disbursement of committed funds, even when Progressive
dispersed such funds to other providers whose treatment commenced earlier than
Simon’s. See id.
In affirming the county court’s
decision to grant summary judgment in favor of Progressive, the Fourth District
held that Simon did not have a priority claim against the funds that remained
undisbursed as he had accepted partial payment without notifying the insurance
company that he would be resubmitting his claim. See id. at 450. The Fourth District held:
If
we were to accept Simon’s theory that a “reserve” or “hold” provision must be
automatically applied to any available funds at the time a claim is submitted,
it would result in unreasonable exposure of the insurance company and would be
to the detriment of the insured and other providers with properly submitted
claims. Under such a theory, all
potential payments to a service provider that were denied, or were subject to a
reduction, would have to be held in reserve until the statute of limitations
period expired or a suit was filed and concluded. This would delay and reduce availability of
funds for the payment of claims to other providers and would be inconsistent
with the PIP statute’s “prompt pay” provisions.
Id.
Although there are some factual
differences between Simon and the present case,
the Court finds that the Simon analysis still
applies. Pursuant to Simon, the
Court finds that in cases where bad faith is not alleged, in order to avoid
summary judgment and to secure the right to litigate reduced claims, an insured/medical
provider must, at a minimum, promptly notify the insurance company that an
amended claim will be forthcoming. Further,
in addition to notifying the insurer that the medical provider will be seeking
the outstanding balance, the Simon analysis puts the burden on the
medical provider to either refuse partial payment or at least escrow such funds
until the claim has been fully adjudicated.
Hence, under the undisputed facts
presented in this case, summary judgment in favor of Progressive must be
affirmed. Nucci accepted partial payment
and never notified Progressive that an amended claim would be forthcoming. Indeed, the complaint filed by Nucci, the
first notice to Progressive that it would be seeking unpaid PIP benefits, is
silent as to what funds were outstanding and were being sought by Nucci. Even resolving all doubts against Progressive,
the Court finds that, as a matter of law, the trial court’s decision must be
affirmed. See Hervey, 650
So.2d at 646.
Therefore, it is,
ORDERED AND ADJUDGED that the Order Granting Summary
Judgment is affirmed. It is further
ORDERED
AND ADJUDGED that the Appellant’s Motion for Attorney’s Fee is denied.
DONE AND
ORDERED in Chambers, at Clearwater, Pinellas County, Florida this ______ of
May 2006.
______________________________
JOHN A. SCHAEFER
Circuit Judge, Appellate Division
Copies furnished to:
Judge Henry J. Andringa
County Court Administrative Judge
Scott E. Zimmer, Esquire
1234 9th Street North
St. Petersburg, FL
33705
Lisa S. Delvecchio, Esquire
Heather C. Goodis, Esquire
6464 First Avenue North
St. Petersburg, FL
33710
[1] Neither party disputes that this order is final for purposes of appeal.
[2] The Court notes that the above-styled appeal was stayed pending the outcome of Premier Open MRI, LLC. In dismissing the appeal, the Second District declined to answer two questions certified by the county court, to wit: (1) “ Is an insured’s properly noticed and filed lawsuit for no-fault benefits, including claims for interest, costs and attorney’s fees, completely extinguished by subsequent payments by the insurer which exhaust the remaining no-fault policy benefits?”, and; (2) “Absent statutory or contractual authority, to prevent an extinguishment of his lawsuit due to subsequent exhaustion of no-fault benefits, may an insured or his assigns, request the insurer to escrow funds which are in dispute, as addressed in Vincent DiCarlo, M.D. & Assoc.’s v. American Home Assur. Co., 11 Fla. L. Weekly Supp. 305b (Fla. 13th Jud. Cir. Jan. 20, 2004) and MTM Diagnostics, Inc. v. State Farm Mut. Auto. Ins. Co., 9 Fla. L. Weekly Supp. 581e (Fla. 13th Jud. Cir., Nov. 20, 2000) and, if requested, what are the obligations of the insurer, if any, to the insured and the various providers with or without assignments of benefits and with or without requests to escrow funds executed before and after the escrow request relied on in suits?”