Menendez v. Progressive Express Insurance Co., Inc., No. SC08-789 (Fla. 2/4/2010), SC08-789.

CourtUnited States State Supreme Court of Florida
Writing for the CourtPariente
PartiesLOUIS R. MENENDEZ, JR., et al., Petitioners, v. PROGRESSIVE EXPRESS INSURANCE CO., INC., Respondent.
Docket NumberNo. SC08-789.,SC08-789.
Decision Date04 February 2010

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LOUIS R. MENENDEZ, JR., et al., Petitioners,
No. SC08-789.
Supreme Court of Florida.
February 4, 2010.

Application for Review of the Decision of the District Court of Appeal — Direct Conflict of Decisions, Third District — Case No. 3D06-2570 (Monroe County).

Robert C. Tilghman, P.A., Miami, Florida, and Nathan E. Eden of Eden and Cates, P.L., Key West, Florida, for Petitioners.

Douglas H. Stein and Stephanie Martinez of Anania, Bandklayder, Baumgarten, Torricella and Stein, Miami, Florida, for Respondent.


This case arose from the failure of Progressive Express Insurance Company (Progressive) to pay personal injury protection (PIP) benefits to its insured, Cathy Menendez, after she was injured in an automobile accident in June 2001. Because Progressive did not pay the benefits, the insured sued for overdue benefits. She was successful in her claim in the trial court, which eventually entered a judgment in her favor. On appeal, the Third District Court of Appeal reversed the judgment on multiple grounds, including the insured's failure to comply with a statute enacted after the date of the automobile accident (referred to as the statutory

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presuit provision)1 that placed additional requirements on an injured person seeking to recover PIP benefits before filing suit. See Progressive Express Ins. Co. v. Menendez, 979 So. 2d 324 (Fla. 3d DCA 2008).

In holding that the statutory presuit notice provision could be applied retroactively to the insured's claim because it was "merely procedural" and did not unconstitutionally alter any existing rights, the decision of the Third District expressly and directly conflicts with the decisions of this Court in State Farm Mutual Automobile Insurance Co. v. Laforet, 658 So. 2d 55 (Fla. 1995), and Young v. Altenhaus, 472 So. 2d 1152 (Fla. 1985), and the decisions of the First District Court of Appeal in Walker v. Cash Register Auto Insurance of Leon County, Inc., 946 So. 2d 66 (Fla. 1st DCA 2006), and Stolzer v. Magic Tilt Trailer, Inc., 878 So. 2d 437 (Fla. 1st DCA 2004). Because we conclude that the 2001 amendment creating the statutory presuit notice provisions constitutes a substantive change to the statute, we hold that it cannot be retroactively applied to insurance policies issued before the effective date of the amendment and quash the decision of the Third District in Menendez.

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As set forth in the district court opinion:

On June 14, 2001, Cathy Menendez ("Menendez") was injured in an automobile accident while traveling to work. Menendez was covered by a policy issued by Progressive affording personal injury protection ("PIP") benefits with effective dates of April 1, 2001, to October 1, 2001. In addition, Menendez was eligible for workers' compensation benefits, and her employer paid for nine weeks of her lost income. While most of Menendez's medical bills were paid through workers' compensation, Progressive paid a total of $2,131.22 to four different medical care providers.

Menendez, 979 So. 2d at 327.

After having settled the claims arising out of the automobile accident with the other motorist, Menendez paid $2,000 from that settlement to satisfy a lien filed by Menendez's employer. In December 2001, her attorney began to pursue a PIP benefits claim on behalf of Menendez. After a series of letters to and from Progressive, almost a year later on November 26, 2002, Menendez and her husband2 (hereinafter referred to as the insureds) filed suit against Progressive for overdue benefits.

The litigation in the trial court, which spanned a period of several years, eventually focused not on whether Progressive owed the benefits, but on whether the statutory presuit notice was required. The trial court ultimately concluded that

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the statute was not applicable to the insureds' claim. Further, the court ruled that even if the statute applied, presuit notice was not required because "Progressive effectively denied [Petitioners'] claim." Id. at 327. A partial summary judgment was granted in favor of the insureds and a stipulated final judgment was entered in the full amount due and owing to the insureds.

Progressive appealed the summary judgment ruling to the Third District Court of Appeal. The issues on appeal also revolved around the statutory presuit notice requirement. The Third District found against the insureds on each issue raised. Specifically pertinent to the primary issue in this case, the Third District rejected the insureds' assertion that the presuit notice requirements of the statute impaired the obligation of contracts in violation of article I, section 10, of the Florida Constitution. Menendez, 979 So. 2d at 330-31.3 Accordingly, the Third District reversed the summary judgment entered in favor of the insureds, leaving as the only issue to be litigated whether Progressive's letters constituted a denial of

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the claim, which would obviate the need to comply with the presuit notice provisions. See § 627.736(11)(a), Fla. Stat. (2001).


The dispositive issue before this Court is whether section 627.736(11), Florida Statutes (2001), can be applied retroactively to an insurance policy issued prior to the enactment of the statute. In our analysis, we look at the date the insurance policy was issued and not the date that the suit was filed or the accident occurred, because "the statute in effect at the time an insurance contract is executed governs substantive issues arising in connection with that contract." Hassen v. State Farm Mut. Auto. Ins. Co., 674 So. 2d 106, 108 (Fla. 1996); see also Lumbermens Mut. Cas. Co. v. Ceballos, 440 So. 2d 612, 613 (Fla. 3d DCA 1983) (holding that a liability policy is governed by the law in effect at the time the policy is issued, not the law in effect at the time a claim arises); Hausler v. State Farm Mut. Auto. Ins. Co., 374 So. 2d 1037, 1038 (Fla. 2d DCA 1979) (holding that the date of the accident does not determine the law that is applicable to a dispute).

The crux of the statutory presuit notice provision is the requirement of filing a notice of intent to litigate, originally located in subsection (11)(a) and now contained in subsection (10)(a). The subsection states:

As a condition precedent to filing any action for an overdue claim for benefits under paragraph (4)(b), the insurer must be provided with written notice of an intent to initiate litigation; provided, however, that, except with regard to a claim or amended

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claim or judgment for interest only which was not paid or was incorrectly calculated, such notice is not required for an overdue claim that the insurer has denied or reduced, nor is such notice required if the insurer has been provided documentation or information at the insurer's request pursuant to subsection (6). Such notice may not be sent until the claim is overdue, including any additional time the insurer has to pay the claim pursuant to paragraph (4)(b).

§ 627.736(11)(a), Fla. Stat. (2001).

In order to resolve the issue of retroactive application of the statutory presuit notice provision, we first explore the broader statutory scheme of Florida's Motor Vehicle No-Fault Law. Next, we discuss the standard applicable to determining whether a statute should be applied retroactively. We then apply this standard and hold that the Third District improperly concluded that the statutory presuit notice provision could apply retroactively to the existing policy and claim for benefits in this case.

Florida's Motor Vehicle No-Fault Law was enacted by the Legislature in 1971. In Allstate Insurance Co. v. Holy Cross Hospital, Inc., 961 So. 2d 328, 3313-2 (Fla. 2007), we explained in detail the history and purpose of the statute:

The No-Fault Law is a comprehensive statutory scheme, the purpose of which is to "provide for medical, surgical, funeral, and disability insurance benefits without regard to fault, and to require motor vehicle insurance securing such benefits." § 627.731, Fla. Stat. (2006); accord United Auto. Ins. Co. v. Rodriguez, 808 So. 2d 82, 85 (Fla. 2001) (stating that the intent of the No-Fault Law is "to provide a minimum level of insurance benefits without regard to fault"). The No-Fault Law mandates security that can be established by alternative means, one of which is PIP insurance. See § 627.733, Fla. Stat. (2006).

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The "Required Personal Injury Protection" provision, or the PIP statute, is codified at section...

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