Category Archives: Fla. Stat. 627.736 (2012)

3rd DCA Denies Millennium Petition for Writ of Certiorari in Legal Title Dispute

State Farm issued a policy to Hery Alvarez, whose mother, Josefa Alvarez, was in an accident while a passenger in her son’s car. Hery Alvarez and Josefa Alvarez lived in the same household, and Josefa Alvarez sought treatment at Millennium Diagnostic under her son’s PIP policy. She assigned her benefits to Millennium. She did not have vehicle insurance or her own PIP policy.

State Farm denied payment to Millennium. State Farm argued that the mother was the registered owner of a Ford Expedition and therefore should have had PIP through her own policy. She did not have insurance coverage on the Expedition, which was operable. She had leased the vehicle for her daughter, who had bad credit.

In the trial court, Millennium argued that Josefa Alvarez’s daughter, Ana Alvarez, was actually the beneficial owner of the Expedition. The trial court agreed and entered Summary Judgment, finding that the daughter was the beneficial owner of the Expedition. State Farm appealed the decision to the 11th Circuit Court of Appeals.

Florida §627.733, requires that every owner or registrant of a motor vehicle in FL is required to maintain motor vehicle insurance securing PIP benefits. An owner is a person who holds legal title to a motor vehicle. An owner of a registered, operable motor vehicle who fails to have PIP security in effect at the time of an accident shall have no immunity from tort liability, but shall be personally liable. Thus, if Josefa Alvarez is not the legal owner of the vehicle—beneficial ownership having passed to her daughter—she would not be required to have PIP coverage on the Expedition and could seek treatment under her son’s policy.

The trial court found that Ana Alvarez was the beneficial owner of the vehicle. Relying on State Farm v. Hartzog, 917 So. 2d 363, 364-65 (Fla. 1st DCA 2005), the court concluded that the name on the title is not the “litmus test” for determining ownership for insurance purposes. In Hartzog, Barbara Hartzog agreed to purchase a vehicle from Donnie Welch. Welch kept title in his name and maintained the insurance policy on the vehicle. When Hartzog was involved in an accident shortly after the purchase agreement was entered into, the 1st District Appellate Court concluded that Hartzog was the beneficial owner because Welch no longer owned the vehicle, pursuant to the purchase agreement, and Hartzog continued to make payments to Welch. The “overt acts” of Hartzog—having exclusive possession and control of the vehicle—were said to be key factors in determining beneficial ownership of a vehicle.

The appellate court in this case distinguished Hartzog. Here, no purchase agreement existed between Josefa Alvarez and her daughter, Ana Alvarez. In fact, there could not be because the lessor, not Josefa Alvarez, owned the Expedition, and Josefa did not have the right to transfer the title. Additionally, the court found that Josefa’s subjective intent to gift the vehicle to her daughter was insufficient to contradict her legal interest in the vehicle.

Thus concluding that Ana did not have beneficial ownership of the vehicle and that Josefa held legal title, the Appellate Court ordered that summary judgment be reversed, and the case remanded to the trial court. On December 5, 2013, the 3rd DCA denied a petition for writ of certiorari by Millennium.

Millennium Diagnostic v. State Farm, No. 3D13-0423 (3rd DCA 2013).
State Farm v. Millennium Diagnostic, No. 11-102 (Fla. 11th Cir. Ct. App. Div.).

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

Court Grants State Farm Motion in Terlep Chiropractic Case

Defendant State Farm’s insured, Mark Kundrat, was allegedly involved in a car accident on July 9, 2009.  Kundrat sought treatment for injuries sustained in the accident from Plaintiff Terlep Chiropractic. On November 22, 2010, Terlep filed a cause of action against State Farm, alleging failure to pay PIP benefits.  As an affirmative defense, State Farm argued that Terlep Chiropractic lacked standing to bring the cause of action.  Terlep argued that a “Financial Policy & Consent Form” signed by Kundrat as a condition of receiving treatment conveyed to Terlep the right to bring any and all causes of action against State Farm.

The document signed by Kundrat, and upon which Terlep relies, contains a paragraph entitled “Assignment of Benefits.”  In that paragraph, Kundrat assigned payment directly to Terlep Chiropractic and agreed that he is financially responsible for charges not covered by the assignment or which the insurer declines to pay.  The court found that this language unambiguously serves only to direct payment by the insurance company to the medical provider and that there is no language conveying any and all rights, including the right to bring any and all causes of action.  Because the language in the instant case does not convey a full assignment of any and all benefits and rights under the policy, the Plaintiff does not have standing to bring this cause of action against Defendant.

Terlep, in turn, argues that State Farm lacks standing to challenge the assignment of benefits because it lacks privity of contract.  The court points out, however, that State Farm is not challenging the contract between Terlep and Kundrat.  Rather, State Farm is raising the issue of the interpretation of the “assignment of benefits” part of the agreement.

Terlep further argues that it has standing to bring the cause of action based on equitable assignment.   The court concludes that the cases upon which Terlep relies for this argument should be distinguished because they involved situations in which the documents contained ambiguities and inconsistencies.  In this case, the document at issue is “clear and unambiguous,” and therefore equitable principles do not apply.

Plaintiff’s final argument is that it is the real party in interest and that entry of final judgment against it would deny it a remedy at law.  The document provides, however, that the insured is financially responsible for any payments not made to Plaintiff, and any cause of action is therefore between Kundrat and State Farm.

The court granted Defendant State Farm’s motion for full and final summary judgment.

The case is Terlep Chiropractic v. State Farm, Circuit Court, 6th Judicial Circuit in and for Pinellas County. Case No. 10-006194-SC. December 5, 2013.

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

11th Circuit Court Grants State Farm’s Request to Depose Imaging Center Owner

Petitioner State Farm sought to depose Respondent YH Imaging’s owner, Yamir Hernandez, as well as other individuals who allegedly performed portable x-rays in this case.  Respondent YH sought to have State Farm’s motion for discovery dismissed.

State Farm made their Motion for Discovery pursuant to Florida’s PIP Statute.  That statute provides, in  relevant part, that in “the event of a dispute regarding an insurer’s right to discovery of facts under this section, the insurer may petition a court of competent jurisdiction to enter an order permitting such discovery. The order may be made only on motion for good cause shown  . . . .”  §627.736(6)(c) Fla. Stat. (2013) (emphasis added).

In this case, the Court concluded that State Farm had established, through its motion and supporting affidavit, the necessary good cause to bring the discovery action.  The Court cited favorably two cases  holding that PIP insurers should be able to obtain informal discovery upon simple request and that court-ordered discovery is available upon a showing of good cause.  See Kaminester v. State Farm, 775 So. 2d 981 (Fla. 4th DCA 2000); State Farm v. Goldstein, 798 So. 2d 807 (Fla. 4th DCA 2001).  The Court also found persuasive orders granting similar actions for discovery entered by other judges in the 11th Judicial Circuit.

The Court granted petitioner’s Motion for Discovery and denied Respondent’s Motion to Dismiss.  State Farm was thereby granted leave to conduct the depositions at issue.

The case is State Farm Mutual Automobile Insurance Company, et al. v. YH Imaging, Inc., In Re OM, MM, et al., Circuit Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 11 28263 CA 05 (24).  December, 3, 2013. Click on the link to read the court order.

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

Motion for Rehearing of Florida PIP Injunction is Denied

On November 26, 2013, the First District Court of Appeals dismissed a motion for rehearing on its October ruling to reverse an injunction placed on reforms to Florida’s PIP system. The reforms, contained within HB 119 and signed into law by Gov. Rick Scott in 2012, ban PIP payments to acupuncturists and massage therapists. The reforms also require that claimants seek treatment from a physician or hospital within 14 days of an accident.

A group of acupuncturists, massage therapists, and chiropractors filed for an injunction, which was ultimately granted. The Court of Appeals ruled in October that the injunction should be reversed. It upheld this decision by denying a motion for rehearing on its ruling.

We wrote in September about reservations expressed by a three-judge panel from the 1st District Court of Appeals regarding the challenge made by acupuncturists, massage therapists and chiropractors to key parts of Florida’s 2012 landmark reform of the personal-injury protection (PIP) auto insurance law, in a blog post titled “Judges Question Challenges Brought to Florida’s No Fault Insurance Law.”

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

Six Arrested in Fort Myers and Port Charlotte PIP Fraud Ring

Fort Myers and Port Charlotte Accident Clinics Busted for Fraud

A tip from insurance company investigators and a cooperating witness helped bring down a PIP insurance fraud ring that was operating out of Evans Rehab Center in Fort Myers and Charlotte Wellness and Rehab in Port Charlotte.

According to Lt. Mark Fritz of the Florida Department of Financial Service’s Fraud Division, Nationwide Insurance lost more than $33,000 as a result of the two clinics’ fraudulent practices.

Insurance company investigators, who were suspicious that Evans Rehab was allegedly billing for services that were not provided as well as recruiting patients, alerted authorities who worked with a cooperating witness.

“We had a traffic accident report with their names on it and that’s what got us in the doors,” Lt. Fritz explained in a WINK news update.

That witness was apparently paid to sign documents, but did not get treatment even though the insurance company was still billed for it. That led investigators to Charlotte Wellness and Rehab where illegal insurance billing was also found, in addition to the facility operating without the proper license.

According to Today – Ft. Myers, the following suspects were arrested as a result:

  • Receptionist Gloria Feliz, 31, on seven counts of insurance fraud and one count of fraud
  • Massage therapist Andres Bravo, 52, on a charge of grand theft
  • Facilitator Joe Gevans, 51, on criminal solicitation and patient brokering
  • Clinic owner Gerard Jean Stephen Valere, 51, for patient brokering and attempt to solicit, conspire
  • Chiropractor Ronald Woodley, 63, for filing a false health clinic application
  • Jordany Estimond, 44, on charges of patient brokering and attempt to solicit, conspire

Woodley, Gevans and Valere were booked into the Charlotte County jail, while Feliz, Estimond and Bravo were detained in Lee County. If convicted, each faces up to five years in prison.

Authorities are looking for additional conspirators in this case.

The Department of Financial Services will reward tipsters up to $25,000 for information that directly leads to an arrest and conviction in an insurance fraud scheme. The department has already awarded almost $342,000 to more than 50 citizens as part of its Anti-Fraud Reward Program.

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Filed under Fla. Stat. 627.736 (2012), Insurance Fraud

Florida First DCA Issues Long Awaited PIP Ruling

Appellees lack standing to bring the “access-to-courts” challenge on Florida’s recently amended No-Fault (PIP) law, according to an opinion filed today in the Florida District Court of Appeal First District, which reversed an order from the Leon County Circuit Court.

This appeal arose out of a trial court order temporarily enjoining Appellant, Kevin M. McCarty, in his official capacity as Commissioner of the Florida Office of Insurance Regulation (“OIR”), from enforcing certain portions of Chapter 2012-197, Laws of Florida (the “2012 PIP Act”), specifically involving reimbursement for massage therapy and acupuncture as well as the new statute’s “Emergency Medical Condition” requirement.

The First District Court of Appeal, in reversing the trial court’s order, found these provisions insufficient to constitute a violation of the plaintiff medical provider’s, and “Jane Doe” plaintiffs, constitutional right of access to courts. Art. I, § 21, Fla. Const.

The matter is Kevin M. McCarty v. Robin A. Myers, A.P., et. al., Case No. 1D13-1355.

Click on the link to read the Opinion.

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

Defective Pre-Suit Demand Letter Leads to Defense Ruling

The double billing of $450 for one date of service with multiple CPT codes ultimately led to the granting of defendant’s Motion for Final Summary Judgment.

Earlier this year the Palm Beach County Court addressed the case of Foundation Chiropractic Clinic, Inc. v. State Farm Mutual, involving PIP benefits.

The undisputed facts involved a motor vehicle accident on November 1, 2010. Foundation Chiropractic Clinic, the plaintiff, sent a May 23, 2011 pre-suit demand letter to defendant State Farm, which was received on May 25, 2011. Plaintiff requested $7,310, with various discounts, for allegedly overdue PIP benefits in accordance with Florida Statute §627.736(10). Medical treatment was rendered between January 3, 2011 and March 9, 2011.

The real trouble began during a deposition of Dr. Charles Mitzelfeld on September 10, 2012. During his testimony, Dr. Mitzelfeld acknowledged that a $450 service rendered on January 6, 2011, was incorrectly double-billed as $900.

Initial Court hearings took place on February 19, 2013, at which time the court ordered an abatement until March 21, 2013 to grant plaintiff time to comply with the Statute.

Key facts emphasized by the Court included but were not limited to the following:

1)    The pre-suit demand letter was defective, since:
a)    Demand letters must strictly adhere to Florida Statute §627.736(10)
b)    PIP claims require medical billing precision
c)    The $450 double-billing means the amount was never due and payable
2)    Dismissal, not abatement, was the appropriate remedy for the facts of the case

Accordingly, the Court granted defendant’s Motion for Final Summary Judgment.

Case Details

The case is Foundation Chiropractic Clinic, Inc. v. State Farm Mutual, Case No. 502011SC006973XXXXMB(RJ), Claim No. 59-A670-488, heard in Palm Beach County Court. John M. Gioannetti was the lead attorney for Roig Lawyers. The case initially began as a small claim. Click on the link to read the Amended Final Judgment for the Defendant.

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Filed under Case Law, Demand Letter, Fla. Stat. 627.736 (2008), Fla. Stat. 627.736 (2012)

Staged Car Crash + Bogus Car Accident = Fraud Charges for Deerfield Man

Suspicious circumstances surrounding car accident claims that were filed with multiple insurance companies for staged car crashes have led to the arrest of Jonathan Gualberto, 24, of Deerfield Beach, by Palm Beach County Sheriff’s Office deputies on Tuesday.

According to a report by the Florida Division of Insurance Fraud, detectives discovered more than $200,000 in insurance claims for car accidents that resulted in no injuries.  Gualberto, the architect behind the phony claims, now faces two fraud charges for bogus accidents in Boca Raton and Delray Beach.

The first accident occurred October 22, 2009, when Gualberto turned over the keys to his car to another man, who then hit a car transporting two of Gualberto’s acquaintances. An additional three people, including Gualberto, were in his car, detectives found.

No one reported any injuries when Boca Raton police responded; however, the six received medical treatment at two clinics, both of which had been linked to an organized staged-accident ring, according to investigators.

Fraudulent claims totaling $127,739 for medical treatment, bodily injury, property damage and attorney fees were then submitted to four insurance companies, according to the investigation report.

The second incident, which transpired a month later in Delray Beach, involved a woman who got her perhaps unsuspecting boyfriend, sister and another woman to travel with her, while a man in a car rented by Gualberto rear-ended them. Again, no injuries were reported, according to Delray Beach Police, but the group still filed four insurance claims for $78,191. Investigators say signatures on clinic billing forms appeared to have been forged.

According to a story in the Sun-Sentinel, it’s unclear whether other suspected participants in the fraud were arrested.

Gualberto’s driving record shows five speeding tickets with his latest for going 91 in a 45 mph zone in July 2012, according to the newspaper report.

Gualberto was booked into Palm Beach County Jail and released on $15,000 bail the next day.

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Filed under Fla. Stat. 627.736 (2008), Fla. Stat. 627.736 (2012), Insurance Fraud

Judges Question Challenges Brought to Florida’s No Fault Insurance Law

A three-judge panel from the 1st District Court of Appeals expressed their reservations Tuesday about a challenge made by acupuncturists, massage therapists and chiropractors to key parts of Florida’s 2012 landmark reform of the personal-injury protection (PIP) auto insurance law, The News Service of Florida reports.

In the hearing, the three judges questioned how the modifications to the longstanding no-fault insurance system have diminished individual medical coverage or court access, as the Florida PIP Defense Fund and its representatives contend.

In the hearing, the three judges questioned the Florida PIP Defense Fund’s assertions that modifications to the longstanding no-fault insurance system have diminished individual medical coverage or court access.

The FL PIP Defense Fund named acupuncturist Robin Myers, chiropractor Gregory Zwirn and massage therapists Sherry Smith and Carrie Damaska as plaintiffs in the suit, as well as “Jane Doe,” which is being seen as a tactic by The Fund to qualify for standing in the case and represent individuals injured by motor-vehicle collisions.

According to Judge T. Kent Wetherell, this is not a real lawsuit, but a situation where an individual makes a claim against their own insurance company because many accidents conclude with no driver being found ‘at fault.’

The judges expressed a desire to expedite a ruling, but no timeline was given for a decision on the state’s request to overturn a temporary injunction that was imposed on certain parts of the law in March.

The 2012 reform law signed by Gov. Rick Scott requires those involved in motor vehicle crashes to seek treatment within 14 days, allows up to $10,000 in benefits for emergency medical conditions and $2,500 for non-emergency conditions. Scott and state Chief Financial Officer Jeff Atwater championed the 2012 reforms to reduce fraud in auto insurance, which they say costs motorists almost $1 billion a year through the increased costs of coverage.

The alternative is to replace the system with bodily-injury insurance, which could put more questions of medical coverage into the courts as injured parties seek to recoup expenses from at-fault motorists.

A bodily-injury insurance system is the most likely PIP alternative if further change is sought. This would push more medical coverage questions into the courts, since injured parties would seek to establish fault for expense reimbursement purposes.

If PIP is eliminated, Wetherell notes, challengers to the law would face a similar economic impact and future.

In March, Leon County Circuit Judge Terry Lewis sided with the challenge to sections of the law, criticizing it for depriving individuals of getting the medical care that they need.

Adam Levine, an attorney representing the FL PIP Defense Fund, praised Lewis for considering issues bigger than economic impacts, but Florida Solicitor General Allen Winsor said Lewis failed to determine that the law is unconstitutional.

The insurance industry has generally supported the changes to the law.

Reform efforts are being delayed as a result of the injunction, according to Donovan Brown, state government relations counsel for the Property Casualty Insurers Association of America.

“In order to address fraud and abuse within Florida’s no-fault auto insurance system and provide Floridians relief from being the number one state in the nation for questionable auto claims, it is imperative that consumers receive the benefit of the PIP reforms becoming fully effective,” Brown said in The News Service of Florida article.

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Filed under Case Law, Fla. Stat. 627.736 (2008), Fla. Stat. 627.736 (2012)

Motion for Summary Judgment Granted in Two Pinellas PIP Cases

The Pinellas County Court ruled in favor of Direct General Insurance in two recent PIP cases heard in the Small Claims Division.

In both cases, the plaintiff alleged breach of contract for failure to pay 80% of reasonable and necessary medical expenses. Direct General responded with a Motion for Summary Judgment, claiming that it paid the medical expenses in accordance with the policy language.

The policy in question stipulated that the insurer will pay 80% of qualifying expenses. The court noted the presence of additional policy language that clearly stated the potential for further reductions in reimbursement, as follows:

“… in determining whether charges for medical expenses under this Part are reasonable, we may reduce payments for amounts that are billed to any lesser amount that results from the application of any schedule of charges or alternative reimbursement method that is expressly reference or authorized for use by the insurers under the No Fault Law.”

The court determined that Fla. Statute §627.736(5)(a)2 is the governing clause, even if it may not have been specifically referenced. The court cited Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So. 3d 63, 68 (Fla. 4th DCA 2011) in its decision.

The cases are Wood Health, Inc. vs. Direct General Insurance (Ref. 12-4904SC-SPC), and Spinal Corrections Centers vs. Direct General Insurance (Ref. 12-49088SC-SPC). Click on the case titles to view the court documents.

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Filed under Case Law, Fla. Stat. 627.736 (2008), Fla. Stat. 627.736 (2012)