Category Archives: Case Law

Allstate battles in Appellate courts

Allstate is under fire in various courts addressing the language of its policy following the Florida Supreme Court’s ruling in Geico Gen. Ins. Co. v. Virtual Imaging Services, Inc., 141 So.3d 147 (Fla.2013). In Virtual Imaging, the Court ruled in favor of Virtual Imaging finding that GEICO had not made the election in the policy that they would use the Medicare fee schedules of Florida’s PIP statute to reimburse the medical providers.

Multiple appellate courts have been asked to address the issue of the language in Allstate Insurance Co.’s policy regarding its election to use the Medicare fee schedules to limit benefit reimbursements. The various Appellate courts are addressing the following question: “Did Allstate provide the requisite notice that it would use the fee schedule payment limitations authorized by Subsection 5(a)(2)?”

The following cases are under review throughout Florida’s Appellate courts:

Allstate v. Stand-Up MRI

Case No. 1D-14-1213

First District Court of Appeal

This case includes several consolidated county court appeals. Allstate is the Appellant, and former Judge Gary Farmer represents the Plaintiffs. The First DCA ruled in favor of Allstate in March (see earlier post titled, 1st DCA Upholds Allstate Use of Medical Fee Schedules). On April 24, the First DCA denied Appellee’s April 2nd motion for rehearing, rehearing en banc and certification.

Allstate v. Markley Chiro.

Case No. 2D-14-3818 in the Second District Court of Appeal on cert. question of great public importance

Allstate is Appellant

The case was fully briefed in February, 2015 and argument is requested.

Fla. Wellness v. Allstate

Case No. 3D-15-0151

Third District Court of Appeal

There are five consolidated county court appeals. Allstate is the Appellee. Marlene Reiss represents the Plaintiffs/Appellants. The briefing has not yet begun.

Ortho. Specialists v. Allstate

Case No. 4D-14-0287

Fourth District Court of Appeal

There are several consolidated county court appeals. Allstate is the Appellee. Former Judge Gary Farmer represents the Plaintiffs. The appeal was argued on April 14th.

Florida Wellness v. Allstate

Case No. 15-11590

The U.S. Court of Appeals for the Eleventh Circuit

The federal district court’s summary judgment order is being appealed by Plaintiff South Florida Wellness. Allstate is the Appellee. The briefing has not yet begun.

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Filed under Case Law, Fla. Stat. 627.736 (2008)

GEICO Prevails on Appeal in Case Involving $50K Typo

Bernadette Ryan was involved in a car accident in 2013 and sued her insurer, GEICO, based on the uninsured/underinsured motorist portion of her insurance policy. A rejected, pre-trial Proposal for Settlement for the $50,000 policy maximum stated that Ryan wanted:

“One Hundred Thousand Dollars ($50,000) inclusive of all costs and fees and in full and final settlement of all pending claims. The total amount of this settlement shall not exceed $50,000.”

The case proceeded to trial and the jury awarded Ryan $195,739.81. Because her damages award was more than 25% greater than the offer in the rejected Proposal for Settlement, Ryan filed a motion to tax costs and a motion to tax attorney’s fees pursuant to Florida Statute 768.79.

Noting the inconsistent dollar amounts in Ryan’s settlement document, GEICO argued at the hearing that the document was patently ambiguous. Ryan, on the other hand, insisted that GEICO knew “exactly what the proposal was for.”

Circuit Judge Dale Ross, while agreeing that confusion existed, nonetheless sided with Ryan and ruled that the “shall not exceed” clause cleared up the confusion. The judge then entered an order granting Ryan’s motions for attorney’s fees and to tax costs. GEICO appealed that order.

The Fourth District Court of Appeal agreed with GEICO that the Proposal for Settlement was ambiguous and unenforceable and the trial court erred in enforcing it. The court therefore reversed the trial judge’s decision, saying, “The trial judge had no basis in law or fact to conclude otherwise.”

Click on the link to read the ruling of the Fourth District Court of Appeal.

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Filed under Case Law

Court Order Issued in PIP Case Alleging Exorbitant Hospital Fees

On February 20, 2015, Judge James S. Moody, Jr., of the U.S. District Court, Middle District of Florida, issued a ruling in the case Herrera, et al. v. JFK Medical Center, et al. That suit, brought in 2014 by four Florida drivers, alleges that the defendant hospitals are exhausting Personal Injury Protection (PIP) benefits by grossly overcharging for services—at up to 65 times what Medicare pays. The lawsuit names JFK Medical Center in Atlantis, Memorial Hospital Jacksonville, North Florida Regional Medical Center in Gainesville, and HCA Holdings, Inc. as defendants.

The plaintiffs, injured in separate motor vehicle accidents, received emergency radiological services at the named HCA-operated defendant hospitals. The services were covered by the plaintiffs’ PIP insurance. The plaintiffs allege that they were charged an “exorbitant” rate for these services, thereby prematurely exhausting their PIP benefits and leaving them with medical expenses in excess of what they would otherwise have to pay.

Plaintiffs allege causes of action for violation of the Florida Deceptive Unfair Trade Practices Act (“FDUTPA”), breach of contract, and breach of the implied covenant of good faith and fair dealing. Plaintiffs sought to have the case certified as a class action.

At a February 17, 2015 hearing, the defendants made motions to dismiss the plaintiffs’ complaint and motions to strike the class allegations. Judge Moody granted the motions in part and denied them in part, as discussed below.

First, HCA argued in its motion to dismiss that, since it is the ultimate parent company of the hospitals, it has no direct liability for the hospitals’ actions. The court, however, held that plaintiffs’ had sufficiently pled a cause of action when they pled that HCA is directly involved in setting and enforcing hospital guidelines and that the hospitals acted as agents of HCA.

Second, the defendants argued that plaintiffs FDUTPA claims fail because plaintiffs cannot allege that HCA was engaged in “trade or commerce” as required by the statute. Recognizing that other courts have held that the types of allegations the plaintiffs are making support a FDUTPA claim, the court held that plaintiffs may proceed to attempt to prove their case.

Third, plaintiffs allege breach of contract based on incorporation of the PIP statute into plaintiffs’ contracts with the hospitals. Because the PIP statute requires that only “reasonable” amounts may be charged, plaintiffs allege that defendants breached the contracts by charging unreasonable rates. The court concluded that plaintiffs may incorporate the PIP statute’s reasonable requirement into the contracts and therefore proceed with the breach of contract claim.

Third, in Count III of their amended complaint, plaintiffs allege that the defendant hospitals breached their duty of good faith and fair dealing by charging them unreasonable rates for medical services. Because plaintiffs failed to allege that an express term of the contract had been breached, the court granted the defendants’ motion to dismiss for failure to state a claim.

Finally, defendants moved to strike the class allegations because individual issues predominate. The court agreed that, given the nature of the claims and individual factual inquiries required, the individualized issues are predominant and the suit cannot proceed as a class action. As a result of that ruling, only one of the plaintiffs—Marisela Herrera—may proceed with the action. The remaining plaintiffs were dismissed without prejudiced to file separate, individual actions.

Click on the link to view the court order in Marisela Herrera et al., v. JFK Medical Center Limited Partnership, et al., Case No. 8:14-cv-2327-T-30TBM in U.S. District Court for the Middle District of Florida.

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Filed under Case Law, Fla. Stat. 627.736 (2012)

11th Circuit Appellate Division Rules Insurer’s Adjuster Notes not Discoverable

On January 5, 2015, the Appellate Division of the Eleventh Judicial Circuit in and for Miami-Dade County issued a ruling reversing the lower court’s order compelling production of the insurer’s pre-litigation documents.  The court held that such documents are not discoverable in a first-party coverage lawsuit between the insured and the insurer.

In 2011, respondent Yesenia Romero sued State Farm for PIP benefits, alleging State Farm breached the insurance contract and violated the Florida PIP statute in not paying for claims resulting from a 2009 motor vehicle accident. Romero filed a request for State Farm’s “entire claims file concerning the case,” including all of the adjuster’s notes made prior to the pre-suit demand letter.  State Farm objected to the production, asserting work-product privilege.

A hearing on the issue was held in the trial court.  Following an in camera inspection of the adjuster’s notes, the judge determined that they were not protected under the work-product doctrine because they were not prepared in anticipation of litigation.  The court ordered State Farm to produce all the adjuster’s notes.  State Farm sought to have the appellate division quash the order.

In its analysis, the appellate division noted that all three levels of Florida’s judiciary, including its own court, have said that an insurance company’s claims file documents are not discoverable in a first-party coverage and damages lawsuit between an insurer and the insured. The court cited a Third District case, Castle Key v. Benitez, in concluding that “where the insured is not seeking a bad faith claim, but rather seeks relief for breach of contract,” the insurer’s claims file documents are not discoverable.

In this case, where the plaintiff was alleging breach of contract and not bad faith, the appellate division determined that the trial court erred in ordering State Farm to produce the documents and therefore quashed the trials court’s order.

State Farm v. Yesenia Romero, Case No. 13-48 AP (Fla. 11th Circuit January 5, 2015).

Castle Key Ins. Co. v. Benitez, 124 So. 3d 379 (Fla. 3d DCA 2013).

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Filed under Case Law, Fla. Stat. 627.736 (2012)

Appellate Court Rules that Two Providers Not “Prevailing Insureds”

A trial court ruling awarding attorney’s fees to two medical treatment providers was reversed by the Appellate Division of the Eleventh Judicial Circuit in and for Miami-Dade County in an opinion filed January 9, 2015. The court concluded that the providers did not constitute “prevailing insureds” and therefore were not entitled to the statutory award of attorney’s fees.

Fritznel Leconte was allegedly injured in an automobile accident on July 22, 2006, while insured by a PIP insurance policy issued by United Automobile Insurance Co. He received treatment from two providers—A Rehab Associates and Med Plus Centers—and assigned his PIP claims to them. The cases were tried separately and consolidated on appeal.

In response to a pre-suit statutory Demand Letter, United determined it was responsible only for the cost of the pre-IME (Independent Medical Exam) treatments and offered A Rehab $595.20 and Med Plus $1,324.80. At trial, verdicts were returned in favor of the providers for the exact amounts offered earlier by United.

The providers filed motions for attorney’s fees as “prevailing insureds” pursuant to Florida Statutes section 627.428. That statute grants an insured the right to recover attorney’s fees when the insured obtains a judgment or decree against the insurer, i.e., is a “prevailing insured.” The question before the court was whether an insured is a “prevailing insured” when it obtains a judgment no better than the amount offered by the insurer pre-suit.

The court held that the “prevailing insured” referred to in the statute is “one who has obtained a judgment greater than any offer of settlement tendered by the insurer.” Put another way, “insureds who rejects settlement offers that would make them whole cannot seek attorney’s fees under section 627.428.”

In this case, the judgments received were not greater than the amount offered by the insurer prior to the suit, so the insureds do not qualify as “prevailing insureds” and are not entitled to attorney’s fees pursuant to section 627.428.

United Automobile Ins. Co. v. A Rehab Assoc. and United Automobile Ins. Co. v. Med Plus Centers, Case Nos. 12-413 AP, 13-148 AP, 12-381 AP, 13-147 AP (Fla. 11th Cir. January 9, 2015).

Click on the link to access the court ruling.

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Filed under Case Law, Fla. Stat. 627.736 (2008)

Florida Needs 35 More Judges, Says Florida Supreme Court

The texting while driving law that took effect in October, 2013 is one of several reasons why the Florida judicial system needs 32 additional county court judges and three new circuit court judges, according to an annual Certification of Need for Additional Judges published December 22 by the Florida Supreme Court.

The recent news that Florida has surpassed New York to become the third largest state in the nation, while not cited by the Court, coincides with increasing pressure on the state’s judicial system.

The Florida Supreme Court analysis breaks down judicial needs by county, with the greatest number of county court certified judicial position recommendations as follows:

  • Three judges in the Fourth Circuit of Duval County (Jacksonville area)
  • Eight judges in the Eleventh Circuit of Miami-Dade County
  • Eight judges in the Thirteenth Circuit of Hillsborough County (Tampa area)
  • Five judges in the Fifteenth Circuit of Palm Beach County

A total of three circuit court judges are also suggested. One circuit court certified judicial position is requested for the First Judicial Circuit, which serves Escambia, Santa Rosa, Okaloosa, and Walton counties in northwest Florida. This circuit experiences a heavy criminal workload and a steady number of tobacco cases, according to the court analysis.

Two circuit court judicial positions are recommended for the Fifth Judicial Circuit, which encompasses Citrus, Hernando, Lake, Marion, and Sumter Counties. The Fifth circuit is the ninth most populous circuit with 5.5% of Florida’s population, according to the court.

There is no request for new judges in the District Courts of Appeal at this time

In its analysis, the Court cites recent trends in the volume and type of cases:

  • Six percent increase in probate filings
  • Nine percent increase in dependency filings
  • One percent increase in circuit civil filings (excluding real property)

The Court also reported declines in domestic relations filings (three percent), felony and juvenile delinquency filings (seven percent each).

The Florida Supreme Court request notes that judges across the state continue to bear the burden of increasing workloads after the number of support staff – including case managers, law clerks and magistrates – was reduced in earlier budget cut backs.

Click on the link to read the full annual Certification of Need for Additional Judges published December 22 by the Florida Supreme Court.

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Filed under Case Law, Fla. Stat. 627.736 (2008)

Third DCA Rules for Insurer in GEICO v. Gables Insurance Recovery

In an opinion issued December 10, 2014 in the case of GEICO v. Gables Insurance Recovery (a/a/o Rita M. Lauzan), the Third District Court of Appeal quashed a Circuit Court Appellate Division’s decision affirming final judgment in favor of Gables Insurance.

Lauzan, who was insured by GEICO, was injured in an automobile accident in 2008. After obtaining medical treatment, she assigned her GEICO policy benefits to All X-Ray Diagnostic Services, which subsequently assigned the benefits to Gables Insurance.

GEICO paid less than the amount it had been billed, and Gables Insurance filed a breach of contract action against GEICO. GEICO argued that Lauzan’s $10,000 PIP benefits had been exhausted and that it therefore had no further liability to Gables.

Deciding in GEICO’s favor, the Third District Court of Appeal held that the PIP statute does not require an insurer to pay more than the $10,000 limit in PIP coverage. Further, it does not require an insurer to “set aside” funds in anticipation of litigation. The Court noted that two other District Courts of Appeal have addressed the issue, holding that a showing of bad faith or impropriety on the part of the insurer is required before it can be held liable for benefits above the statutory limit.

Quoting a recent Fourth District Court of Appeal case, Northwoods v. State Farm, the Court concluded that once PIP benefits are exhausted, “an insurer has no further liability on unresolved, pending claims, absent bad faith in the handling of the claim by the insurance company.”

The case is GEICO Indemnity Co. v. Gables Insurance Recovery (a/a/o Rita M. Lauzan), Case No. 3D13-2264 (Fla. 3rd DCA, December 10, 2014). Click on the link to read the court opinion.

The case cited is Northwoods Sports Medicine v. State Farm, 137 So. 3d 1049 (Fla. 4th DCA 2014).

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Filed under Case Law, Fla. Stat. 627.736 (2008)