Exceptional Children's Home & Nursery, Inc. v. Fortuna, AF-175

• Decision Date: 08 June 1982
• Docket Number: No. AF-175,AF-175
• Citation: 414 So.2d 1130
• Court: Florida District Court of Appeals
• Parties: The EXCEPTIONAL CHILDREN'S HOME & NURSERY, INC., and Insurance Company of North America, Appellants, v. Madeline FORTUNA, Appellee.

Page 1130

414 So.2d 1130

The EXCEPTIONAL CHILDREN'S HOME & NURSERY, INC., and Insurance Company of North America, Appellants, v.Madeline FORTUNA, Appellee.

No. AF-175.

District Court of Appeal of Florida First District.

June 8, 1982.

H. George Kagan, Miller, Hodges & Kagan, Miami, for appellants.

Mark J. Feldman, Miami, for appellee.

LARRY G. SMITH, Judge.

The employer/carrier appeal an order awarding claimant attorney's fees pursuant to Section 440.34(2), Florida Statutes(1979).The deputy commissioner determined that the carrier's handling of the claim was improper in four separate instances: (1) the carrier delayed too long the payment of claimant's hospital bill in the amount of $19,569.76; (2) the carrier delayed too long the payment of attendant care services performed by the claimant's mother on her behalf; (3) the carrier delayed too long the authorization for claimant's admission to a pain clinic; and (4) the carrier was guilty of bad faith in adjusting downward the claimant's compensation rate by a total of $2.66 per week for an eight week period from November 6, 1979, through January 3, 1980.The carrier urges on appeal that the purported delays were not unreasonable under the circumstances and that the adjustment of the compensation rate, accomplished only after the carrier had made an independent investigation, was the result of an honest error based upon documentary evidence capable of disparate interpretations.We agree and reverse.

Initially, we would point out that the deputy's order does not indicate under which provision of Section 440.34(2) the attorney's fees were awarded in the first three instances.Clearly they were not awarded under Section 440.34(2)(c) since the carrier admitted compensability and paid some benefits.Four Quarters Habitat, Inc. v. Miller, 405 So.2d 475(Fla. 1st DCA1981).Claimant's lawyer argued below that fees were awardable under either Section 440.34(2)(a) or (b).However, on appeal he appears to have retreated from the position that the award of fees with respect to items (2) and (3) above was based on the bad faith provision, Section 440.34(2)(b), and insists that Section 440.34(2)(a) is the basis for the award in these instances.This position is untenable.

Under Section 440.34(2)(a), a claimant can recover a reasonable attorney's fee from a carrier or employer against whom he has successfully asserted a claim for medical benefits only, if the claimant has not filed or is not entitled to file a claim for disability or certain other benefits.Here, in the claim for the hospital bill filed with the Division on October 30, 1979, and the amended claim filed November 9, 1979, claimant claimed temporary total disability benefits were due from September 4, 1979 to date.Although the record indicates these benefits were paid, this claim was never withdrawn.Thus, claimant is not entitled to an attorney's fee under Section 440.34(2)(a).Bailey v. Hawes Chrysler-Plymouth, 410 So.2d 986(Fla. 1st DCA1982).

Although there is some confusion as to the extent of the claimant's reliance upon the bad faith provision, the carrier argued on appeal that the deputy's order impliedly found the carrier guilty of bad faith in each of the four instances outlined above.In this posture of the case, if we agreed with the carrier's contention and found the evidence sufficient to support a finding of bad faith across the board, we would be compelled to affirm the order appealed.We have therefore undertaken a review of the evidence adduced at the hearing below (which was confined to the attorney's fees issue) and, in considering the evidence in the light most favorable to the claimant, we have considered each of the instances of alleged improper handling in isolation, as well as in relation to each other, to determine whether the record justifies a finding of bad faith.We conclude that it does not.

We first revert briefly to this court's view of the bad faith provision, Section 440.34(2)(b), as explicated in Florida Erection Services, Inc. v. McDonald, 395 So.2d 203(Fla. 1st DCA1981).In that case, this court recognized an employee's right to receive benefits with reasonable promptness.However, balanced against that right, is the employer/carrier's right to make a reasonable investigation regarding liability, and to have a reasonable opportunity to comply with the demands made, depending upon the exigencies of the particular request and the statutory duties and obligations pertinent to it.Based upon our review of the four episodes of alleged mishandling outlined in the deputy's order, in the light of the discussion contained in Florida Erection Services, we are compelled to hold that the carrier's conduct here, although perhaps not a model for the industry, is lacking in the display of unreasonableness required for a showing of malice, oppression, or willful, wanton, or reckless disregard of the rights of the claimant.

With respect to payment of the hospital bill, claimant was injured on September 4, 1979 and was hospitalized for approximately one month.Sometime thereafter, the hospital sent the itemized bill and a summary of the bill to the claimant's attorney at his behest.On October 22, claimant's attorney mailed a copy of the summary of the bill to the carrier.He did not forward to the carrier a copy of the itemized bill.On October 25, 1979, claimant's attorney mailed a claim for payment of the hospital bill which was filed with the Division on October 30, 1979.The carrier delayed the payment of this bill, and instead, asked the hospital to furnish an itemized statement.At the same time, the carrier wrote claimant's attorney acknowledging receipt of the summary and advising that an itemized bill was being requested.On November 9, the carrier received a response from the hospital indicating that it was in the process of preparing and would shortly forward to the carrier a copy of the itemized bill.On November 26, the carrier received from the hospital the same summary bill that had been previously furnished to the carrier by claimant's counsel.Rather than delay payment any longer, the carrier paid the hospital bill on December 5, 1979.

The deputy reasoned that since the carrier paid the second summary bill, although it contained the same information as the first bill, the carrier had delayed unreasonably long in waiting thirty-six days after the claim had been filed to pay the bill and thus claimant's counsel was entitled to a fee based on the entire amount of the bill.With this, we must respectfully disagree.The carrier demonstrated at the hearing before the deputy that it routinely, as a cautionary measure, requested itemized bills, particularly large ones (this one amounted to nearly $20,000.00), based upon its experience that such bills often contain error (a fact recognized by the deputy).It was the carrier's practice to submit such bills to a computer service for analysis.Thus, instead of being a "delaying tactic," the procedure followed here was consistent with sound business practice.Notwithstanding this, the fact that the carrier ultimately paid the hospital bill based on the summary, without waiting for the itemization, may tend to cast doubt on the good faith of the carrier's actions in the first instance.However there are other factors involved in this controversy which would preclude a finding of bad faith.

Section 440.13(1) requires that hospital bills be forwarded to the employer or carrier within ten days.Board of County Commissioners of Dade County v. Southern Florida Sanitary and Hospital Corporation, 173 So.2d 131(Fla.1965).This was not done here because claimant's counsel had the bill sent to him, which in itself tended to frustrate the self-executing design of the worker's compensation law, and contributed to the delay he claimed to be so unreasonable.It was not unreasonable for the carrier to request a copy of the itemized bill, and at the time the carrier requested the itemized bill from the hospital, the claimant's attorney...