Baker Family Chiropractic, LLC v. Liberty Mut. Ins. Co.
| Decision Date | 06 February 2023 |
| Docket Number | 5D21-3137 |
| Parties | BAKER FAMILY CHIROPRACTIC, LLC A/A/O HAHN DINH, Appellant, v. LIBERTY MUTUAL INSURANCE COMPANY, Appellee. |
| Court | Florida District Court of Appeals |
NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED
Appeal from the County Court for Volusia County No. 2019-37344-COCI Belle B. Schumann, Judge.
Chad A. Barr, Dalton Gray and William S. England, of Chad Barr Law, Altamonte Springs, for Appellant.
Hinda Klein, of Conroy Simberg, Hollywood, for Appellee.
The underlying litigation and this second appeal to the Court began as a dispute over how to calculate the amount of interest owed by an insurer for failing to timely pay a health care provider who treated an insured pursuant to a Personal Injury Protection ("PIP") policy issued by Appellee, Liberty Mutual Insurance. The net difference between the interest calculated and paid by Liberty Mutual and the amount claimed by the health care provider, Baker Family Chiropractic, LLC ("Baker Chiro"), Appellant, was $1.48. Liberty Mutual was insistent that its method of calculating interest was correct under the relevant PIP statutes, while Baker Chiro was adamant that a different methodology was compelled.
Baker Chiro won that dispute at trial, phase one of the litigation. Liberty Mutual appealed, hoping that this Court would agree with its position and reverse the $1.48 judgment. However Liberty Mutual dismissed its appeal shortly after Baker Chiro's answer brief was filed, effectively conceding that it had lost the dispute. This Court conditionally granted Baker Chiro's motion for appellate attorney's fees and remanded the case to county court.
On remand, the parties litigated over Baker Chiro's entitlement to fees and the amount of fees that might be awarded. In this second phase of litigation, the trial court ruled that Baker Chiro was not entitled to any attorney's fees at all. This appeal timely follows. For the reasons explained below, we hold that the trial court erred. We remand this case for the award of reasonable attorney's fees to which Baker Chiro may be entitled under the circumstances and based on the applicable criteria.
PIP insurance, required by Florida's No-Fault statutes, is intended to "provide swift, virtually automatic payment" of benefits to those injured in auto accidents. Ivey v. Allstate Ins., 774 So.2d 679, 683 (Fla. 2000) (internal quotations omitted). When the No-Fault and PIP statutes were initially enacted, the hope was that replacing the system of fault-based auto accident injury litigation would "obviate the necessity to bring a cause of action in many cases, thereby reducing court congestion and delay." Lasky v. State Farm Ins., 296 So.2d 9, 17 (Fla. 1974).
As a quick search on any legal research platform will reveal, over the years, there have been numerous PIP disputes litigated and appealed regarding a wide variety of issues between insurers, on the one side, and their insureds, or assignees who have provided health care to the insureds, on the other side. [1] Many of those lawsuits, including some class actions, involved some aspect of seeking or calculating interest on overdue medical benefit payments. [2] Over the years, the legislature has modified the No-Fault statutes, often leading to additional litigation as the new provisions were implemented, became the subject of disputes, and then were judicially interpreted. State Farm v. Nichols, 932 So.2d 1067, 1076 (Fla. 2006). The Florida Legislature's dissatisfaction with the overall scheme was evident in 2021 when SB-54, which essentially eliminated No-Fault and PIP with a return to fault-based tort cases, passed both houses; however, it was vetoed by the governor. Veto of Fla. SB 54 (2021) (), https://www.flgov.com/wp-content/uploads/2021/06/SB-54-Transmittal-Letter.pdf.
"Florida courts have seen a number of these cases in personal injury protection litigation where litigants go at it, hammer and tongs, over trifling amounts." Pan Am Diagnostic Servs., 347 So.3d at 12 (Klingensmith, J., concurring). One might wonder why parties would sue or defend over de minimis amounts. Could it be that given the pervasiveness of PIP insurance and the repetitive nature of some PIP issues, the small amounts of money in individual claims collectively become large enough for insurance companies to make the business judgment to litigate and appeal should they lose?[3] It is clear that insureds or assignees of insureds are willing to engage insurers in litigation over small amounts of money because of the statutes providing for payment of attorney's fees if they prevail. Precision Diagnostic, Inc., 330 So.3d at 35. Those fee awards are often substantial and frequently disproportionate to the underlying amount in controversy.
Liberty Mutual's insured was injured in an auto accident in late March 2017. He sought and received health care for those injuries from Baker Chiro in early April 2017. As payment for treatment rendered, Baker Chiro accepted an assignment from the insured of his benefits provided by his Liberty Mutual policy. In May 2017, Baker Chiro submitted the assigned claim for PIP benefits to Liberty Mutual which timely and properly paid most of the amounts due under the policy. However, Liberty Mutual admittedly underpaid the PIP benefit amount due to Baker Chiro by $168.00.
The $168.00 became overdue under the terms of the PIP policy and section 627.736(4)(b), Florida Statutes (2017), when it had not been paid within 30 days after the initial submission. As provided by section 627.736(10)(a), Baker Chiro sent a statutorily compliant demand letter to Liberty Mutual on March 12, 2019, seeking payment of that overdue claim together with interest, postage, and penalty. Under the governing PIP statute, the insurer had 30 days from receipt of the demand letter within which to pay the overdue claim together with interest and a ten percent penalty. § 627.736(10)(d), Fla. Stat. (2019).
Liberty Mutual waited until day 41, i.e., April 22, 2019, to pay the overdue claim of $168.00 plus the amount it calculated to be due as interest, $16.60. According to the calculation method used by Baker Chiro, the interest should have been $18.08.
Nearly six months later, Baker Chiro filed suit in small claims court seeking the $1.48 in interest and an award of attorney's fees pursuant to sections 627.428, Florida Statutes (2019), and 627.736. Liberty Mutual answered, denying any underpayment of benefits or interest. The parties stipulated during the first phase of litigation in small claims court that the sole issue for the court to resolve was whether the interest due and paid by Liberty Mutual on April 22, 2019 "was correct and proper under the policy of insurance and Florida Law." There was no dispute about the existence of PIP coverage, the assignment of the insured's contract rights to Baker Chiro, or the reasonableness and necessity of Baker Chiro's treatment.
The parties filed competing motions for summary judgment. In the first phase of this litigation, the trial court granted summary judgment for Baker Chiro and against Liberty Mutual. In its eight-page order, the court agreed with Baker Chiro that the interest rate on overdue claims would be adjusted annually, rejecting Liberty Mutual's lower-paying methodology to calculate interest on a flat rate. It found that Baker Chiro was "owed the $1.48 in prejudgment interest pursuant to 627.736(4)(d), 55.03, 687.01, and the policy of insurance." The trial court also ruled that Baker Chiro was entitled to recover reasonable attorney's fees, and reserved jurisdiction to set the amount at a later date. The amount of fees had not been determined when Liberty Mutual took the first appeal, seeking reversal of the $1.48 judgment .[4]
In the first appeal of this case, Liberty Mutual, as appellant, argued in its initial brief that its interpretation of the PIP statutes dictated the methodology of calculating interest that it had employed, at a fixed rate, in paying $16.60 rather than $18.08 on the overdue claim. Its calculation and payment of only $16.60 was intentional. Liberty argued in its initial appellate brief that the judgment for $1.48 should be reversed. Baker Chiro filed its answer brief urging that the trial court's statutory construction calling for an annual adjustment was correct and requesting that the $1.48 judgment be affirmed on appeal.
Shortly after the answer brief was filed, Liberty Mutual filed a notice of voluntary dismissal of its appeal, without sharing its reason for doing so with this Court. On April 21, 2021, this Court accepted the voluntary dismissal and ordered that Baker Chiro's motion for appellate attorney's fees was granted, "contingent upon the lower tribunal determining that Appellee [Baker Chiro] is entitled to attorney's fees pursuant to section 627.428." The case was remanded to the county court for the second phase of litigation.
The remand from this Court was for a determination of Baker Chiro's entitlement to appellate attorney's fees. That portion of the original summary judgment finding Baker Chiro entitled to trial-level fees but not setting an amount was non-final and not appealable at the time of the first appeal. Orange Cnty. v. Ferguson, 290 So.3d 1031, 1033 (Fla. 5th DCA 2020); Mills v. Martinez 909 So.2d 340, 342 (Fla. 5th DCA 2005). Thus, it was subject to being revisited. Accordingly, the county court heard argument on entitlement and took evidence regarding the amount of attorney's...
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