12 Fla. L. Weekly Supp. 1077a
Insurance — Personal injury protection — Notice of loss — No merit to defense of failure to provide written notice of accident where insured provided notice of claim as soon as practicable — There was no prejudice to insurer from any alleged late notice, as insurer delayed in scheduling independent medical examination and examination under oath — Fraud — Insurer failed to specifically plead claim for fraud where insurer failed to state that it relied on representation in billings and was damaged by expenses incurred in investigating fraudulent claim — Insurer, which did not pay any bills, has not sustained any damages or relied to its detriment on claims for payment — Coverage — Medical expenses — Reasonable, related and necessary treatment — Peer review report is not considered for purposes of ruling on motion for summary judgment where insurer did not furnish report until hearing on motion — IME report and peer review report prepared for purposes of litigation are not admissible under business records exception to hearsay rule — Affidavit and deposition testimony of adjuster concerning IME physician’s report is not competent to create genuine issue of material fact regarding reasonableness, relatedness or necessity of treatment — Where insurer failed to either substantially impeach medical expert testimony of treating physician or present countervailing evidence from licensed physician to dispute reasonable, related and necessary medical services and expenses, and insurer failed to establish that medical providers have not complied with any conditions precedent to suit, providers are entitled to summary judgment
CLINIC CENTER, INC., A.J. DIAGNOSTIC CENTER, INC., AIM X-RAY AND DIAGNOSTIC CENTER, INC., assignees of Maritza Ortiz, MARITZA ORTIZ, individually, and GARY LUSTGARTEN NEUROSURGICAL ASSOCIATES, INC., a/a/o Maritza Ortiz, Plaintiffs, vs. UNITED AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 02-5333 CC 25 (1). September 29, 2004. Mark King Leban, Judge. Counsel: Kevin W. Whitehead, Downs, Brill, Whitehead, P.A., Coral Gables. Lissette De La Rosa.
ORDER GRANTING IN PART PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
THIS CAUSE having come to be heard on 8/12/04, after due notice to the parties, on Plaintiffs, CLINIC CENTER, INC., A.J. DIAGNOSTIC CENTER, INC., and AIM X-RAY AND DIAGNOSTIC CENTER, INC., assignees of Maritza Ortiz, Motion for Summary Judgment, the Court having heard argument of counsel and having been otherwise fully advised in the premises, it is,
ORDERED AND ADJUDGED:
1. The Plaintiffs, CLINIC CENTER, INC., A.J. DIAGNOSTIC CENTER, INC., AIM X-RAY AND DIAGNOSTIC CENTER, INC.’s, assignees of Maritza Ortiz, Motion for Final Summary Judgment is GRANTED. After reviewing the court file, including deposition transcripts, pleadings, and filed affidavits, and hearing argument of counsel, there does not appear to exist any genuine issues of material facts, thereby entitling these Plaintiffs to Partial Summary Judgment as a matter of law.
FINDINGS OF FACT
2. In the Amended Complaint, the Plaintiffs sued for the following amounts:
a. CLINIC CENTER, INC. in the amount of $4,190.00, for services provided December 27, 2001 through March 12, 2002.
b. A.J. DIAGNOSTIC CENTER, INC. in the amount of $315.00, for services provided December 27, 2001.
c. AIM X-RAY AND DIAGNOSTIC CENTER, INC., in the amount of $715.00, for services provided December 27, 2001.
3. The following bills were alleged in the Amended Complaint, but not addressed in Plaintiff’s Motion for Summary Judgment:
a. GARY LUSTGARTEN NEUROSURGICAL ASSOCIATES, INC., in the amount of $550.00 for services provided on March 14, 2002.
b. MARITZA ORTIZ, individually, in the amount of $8,507.89. Amount is calculated by adding the outstanding bills from ORTIZ’s other providers as listed in the Amended Complaint. Specifically:
1. EIBER RADIOLOGY, in the amount of $1,650.00 for services provided on January 25, 2002.
2. THE GABLES SURGICAL CENTER, in the amount of $5,687.89 for services provided on March 23, 2002.
3. MERIDIAN PAIN AND DIAGNOSTICS, INC., in the amount of $1,170.00 for services provided from March 26, 2002 through April 23, 2002.
4. On or about 3/30/04, the Defendant filed its Answer and Affirmative Defenses to Plaintiff’s Amended Complaint.
5. As the Defendant’s first affirmative defense, the Defendant alleges it considered payments pursuant to Fla. Stat. 627.736 and Defendant’s policy of insurance for all reasonable expenses for necessary medical, surgical, x-ray, dental and rehabilitative services related to the subject accident. Defendant denied payment according to the Independent Medical Examination for medical expenses incurred as not being reasonable and/or necessary based on the opinion of Dr. Peter J. Millheiser.
6. The Defendant’s Second Affirmative Defense alleges that Plaintiff failed to provide written notice of the accident as soon as practicable. This failure and/or refusal constitutes a failure of a condition precedent and is a breach of the insurance contract. This failure of a condition precedent by Plaintiff prohibits, prevents, voids and/or obviates coverage for the alleged loss. This furthermore is a violation of Fla. Stat. 627.736 and the terms of the insurance policy.
7. The Defendant alleges in its third affirmative defense it has reasonable proof the Plaintiff and/or Plaintiff’s provider submitted fraudulent medical bills for treatment and services that were never rendered, or the Plaintiff/insured treated for injuries that are non-existent or are unrelated to the accident in question, or Plaintiff and/or Plaintiff’s provider billed the Defendant using CPT codes which were not applicable to the services provided, to the medical equipment actually used, or to the alleged injuries. As such, Defendant is not responsible for payment of any fraudulent bills.
8. The Plaintiff filed the deposition transcript of the insured/claimant, Maritza Ortiz, who testified she was in the subject motor vehicle accident on 12/16/01, described the accident, that she was driving her insured vehicle at the time of the accident, that her vehicle was insured by United Automobile, testified that she was injured as a result of the accident, described her injuries, testified that she sought medical care and attention for her injuries at CLINIC CENTER, that she was examined by Jose Martin, M.D., had x-rays taken at a nearby location, underwent an MRI, received therapy at CLINIC CENTER, described the therapy. She also testified she was examined by “Dr. Lusgarden” and underwent injections at his request. (See Deposition transcript of Maritza Ortiz taken on 8/15/03 and filed with this Court).
9. The Defendant filed the deposition transcript of the Defendant’s litigation adjuster, Carlos Plana.
10. The Plaintiff deposed Carlos Plana on 7/12/04. He is the person with the most knowledge of the subject PIP claim at UNITED AUTOMOBILE.
11. Mr. Plana confirmed the Defendant received bills from Eiber Radiology on 2/7/02 for date of service 1/25/02 in the amount of $1,650.00. Nothing was paid.
12. Mr. Plana stated the Defendant received bills from AIM X-RAY on 2/12/02 for date of service 12/27/01 in the amount of $250.00. Nothing was paid.
13. Mr. Plana stated the Defendant received bills from A.J. Diagnostic on 2/13/02 for date of service 12/27/01 in the amount of $315.00. Nothing was paid.
14. Mr. Plana stated the Defendant received bills from CLINIC CENTER on 2/14/02 for dates of service 12/27/01 through 2/6/02 in the amount of $4,190.00. Nothing was paid.
15. Mr. Plana stated the Defendant received bills from CLINIC CENTER on 3/18/02 for dates of service 2/5/02 through 3/5/02 in the amount of $1,610.00. Nothing was paid.
16. Mr. Plana testified the Defendant received bills from LUSTGARTEN on 4/4/02 for date of service 3/14/02 in the amount of $350.00. Nothing was paid.
17. Mr. Plana testified the Defendant received bills from CLINIC CENTER on 4/19/02 for dates of service 3/8/02 through 3/21/02 in the amount of $855.00. Nothing was paid.
18. Mr. Plana testified the benefits were suspended as of 3/14/02 pursuant to an IME report by Peter Millheiser, M.D.
19. The Plaintiffs’ medical expenses are reasonable, related and necessary. The Plaintiff filed affidavits of the treating physician and person with the most knowledge of the billing and records from CLINIC CENTER, AIM X-RAY, and A.J. DIAGNOSTIC, which establish that all of the persons who treated the insured/patient were properly licensed, the clinic had all proper licenses, and all of the treatment was related to the subject accident, reasonable and necessary.
20. In opposition to the Plaintiff’s Motion for Summary Judgment, the Defendant filed the affidavit of Carlos Plana, litigation adjuster, the deposition of Mr. Plana, and the examination under oath statement of Maritza Ortiz, taken on 4/22/02.
21. In Mr. Plana’s affidavit he references comments made in a peer review performed by Peter Millheiser, M.D. Specifically, Mr. Plana states, “Further, Defendant conducted independent medical examinations as well as a peer review by Dr. Peter Millheiser, M.D. Whom determined that no further treatment was reasonable, related or necessary at the time of the IME and determined that the medical bills that were reasonable, related or necessary would be less than the amount of deductible.”
22. Defendant failed to furnish the peer review until the hearing on Plaintiff’s Motion for Summary Judgment.
23. The Court does not consider the peer review for purposes of this summary judgment.
24. At the hearing on Plaintiff’s Motion for Summary Judgment, Plaintiff, CLINIC CENTER, withdrew its bill for CPT code 97110 in the amount of $45.00.
25. In the instant case, it remains undisputed the Defendant received medical bills from the Plaintiffs in the following amounts: CLINIC CENTER in the amount of $4,145.00 for dates of service 12/27/01 through 3/12/02 (this amount reflects the withdrawal of CPT code 97110), AIM X-RAY in the amount of $715.00 for date of service 12/27/01, A.J. DIAGNOSTIC in the amount of $315.00 for date of service 12/27/01. These amounts remain due and owing times 80% which equals $3,316.00 (CLINIC CENTER), $572.00 (AIM X-RAY), and $252.00 (A.J. DIAGNOSTIC) plus statutory interest that UNITED AUTOMOBILE has not paid as of this date.
26. The Defendant failed to either substantially impeach the medical expert testimony of the treating physician, or present countervailing evidence from a licensed physician to dispute the reasonable, related and necessary medical services and expenses.
27. As evidenced by affidavit testimony and the deposition testimony of the adjuster, the Plaintiff timely submitted its bills in compliance with Florida Statutes § 627.736 to UNITED AUTOMOBILE along with the medical records, HCFA billing forms and assignment of benefits, and otherwise complied with all conditions precedent.
ISSUES OF LAW
28. Pursuant to the policy of insurance and Florida Statutes §627.736(1)(a), the Defendant remains responsible for payment of 80% of the related, reasonable and medically necessary bills incurred by the subject medical care providers as a result of the subject accident.
29. Further, pursuant to §627.736(4)(b) and (c), the Defendant has thirty (30) days to establish reasonable proof it is not responsible for payment of the medical bills, otherwise the medical bills are overdue if not paid within thirty (30) days from receipt, plus interest.
30. In order for the insurer to suspend PIP medical benefits, it must comply with §627.736(7). If the insurer fails to obtain a report from a physician in the same licensing chapter as the treating physician, it cannot suspend or withdraw benefits pursuant to Florida Statutes § 627.736(7).
31. The Defendant failed to establish it had reasonable proof it was not responsible for payment of the subject medical bills received by the Defendant within thirty (30) days pursuant to Florida Statutes § 627.736(4)(b), and failed to obtain a report from a physician in the same licensing chapter as the treating physicians stating that no further treatment was medically necessary as required by § 627.736(7), and all outstanding medical expenses remain due and owing plus interest from 30 days after receipt of each bill up to the present.
32. The Defendant suspended benefits as of 3/14/02 per its letter dated 3/7/02. Therefore, medical services rendered before 3/14/02 are payable.
33. The Court determines as a matter of law the claimant provided notice of this claim as soon as practicable.
34. Further, there is no prejudice to Defendant of any alleged late notice as it failed to set an IME until 2/20/02. In addition, the Defendant waited to schedule an examination under oath until 4/22/02.
35. The Defendant failed to properly plead fraud or prove as of this date and the Plaintiff is granted Summary Judgment on this issue.
36. Florida Rule of Civil Procedure 1.120(b) states in pertinent part, “[I]n all averments of fraud or mistake, the circumstances constituting fraud or mistake should be stated with such particularity as the circumstances may permit” Fla.R.Civ.Pro. 1.120(b).
37. As long has been the rule in Florida that whenever fraud is relied on, allegations relating thereto should be specific, and facts constituting fraud should be clearly stated, and that position has not been abandoned by the adoption of the Florida Rules of Civil Procedure. Kutner v. Kalish, 173 So. 2d 763 (Fla. 3rd DCA 1965). The Defendant has failed to comply with these requirements in this case.
38. Defendant fails to state it relied on the representations on the billings submitted and in doing so was damaged by the expenses incurred in investigating a fraudulent claim. In addition, the defendant did not pay any of plaintiff’s bills, therefore, it has not sustained any damage nor relied to its detriment on plaintiffs claims for payment. Moreover, the defendant has not shown nor specified that plaintiff had knowledge that the alleged misrepresentation is false and that it intended that the defendant rely upon it. As such, the Defendant has failed to specifically state a claim for fraud.
39. The long established Florida rule that fraud must be alleged specifically and that the facts alleged to constitute the fraud must be clearly stated, has not been changed by the adoption of the Florida Rules of Civil Procedure. Kutner v. Kalish, 173 So.2d 763 (Fla. 3rd DCA 1965). Failure to allege fraud with particularity is grounds for dismissal of the claim. General Dynamics Corp. v. Hewitt, 225 So.2d 561 (Fla. 3rd DCA 1979). Elements of fraud are misrepresentation of material fact, knowledge that misrepresentation is false, intention that the other party rely, justifiable reliance and resulting injury or damage. See Eastern Cement v. Halliburton Co., 600 So.2d 469 (Fla. 4th DCA 1992); Arnold v. Weck, 388 So.2d 269 (Fla. 4th DCA 1980).
40. Fraud must be pleaded with specificity, and all essential elements must be stated, whether on complaint or defense. Peninsular Florida Dist. Council of Assemblies of God v. Pan American Inv. & Dev. Corp., 450 So.2d 1231 (Fla. 4th DCA 1984). Pleading fraud without particularity in an affirmative defense did not raise fraud issue for trial. Cady v. Chevy Case S. & L. Assoc., 528 So. 2d 136 (Fla. 4th DCA 1988). Elements not pled may not be inferred from context. Myers v. Myers, 652 So. 2d 1214 (Fla. 5th DCA 1995). The Defendant has failed to properly plead or prove fraud in its Second affirmative defenses, and therefore, this Court should grant the Plaintiff’s motion on this issue.
41. The recent appellate case of United Automobile Insurance Co. v. Neurology Assoc. Group Two, Inc., a/a/o Nicholas Cabello, 11 Fla. L. Weekly Supp. 204 (11th Judicial Circuit 2004) further supports the Plaintiff’s position for a Summary Judgment. In Cabello, the injured insured obtained treatment from the appellee-plaintiff who submitted claims to United Automobile. The trial court granted summary judgment in favor of the plaintiff on the issues of countersignature and whether the treatment was reasonable, related and necessary. The plaintiff submitted the affidavit of the treating physician to establish the benefits sought were reasonable, related and necessary. United Automobile submitted a letter from a claims adjuster stating the IME physician felt the treatment was not reasonable, related or necessary. The appellate court affirmed the entry of summary judgment and stated, “the testimony of a claims adjuster can hardly address whether medical treatment was reasonable, related to the accident or medically necessary.”
42. Also, United Automobile Insurance Co. v. Mendoza, 11 Fla. L. Weekly Supp. 299a (11th Judicial Circuit 2004), supports the Plaintiff’s position. In Mendoza, the insured sustained injuries in an automobile accident on 3/25/01. Thereafter he obtained treatment from various providers who submitted claims to United Automobile. The plaintiff sued to recover the PIP benefits and moved for summary judgment. The plaintiff filed an affidavit of a medical doctor who concluded treatment provided to the insured was reasonable, related and necessary to injuries sustained as a result of the subject accident. The trial court granted summary judgment in favor of the plaintiff.
43. The defendant appealed claiming the trial court abused its discretion in granting summary judgment. The appellate court affirmed the entry of summary judgment finding once the plaintiff successfully met its burden of establishing the non-existence of an issue of material fact, the burden switched to the defendant to demonstrate the existence of such an issue. The appellate court determined the defendant failed to meet its burden. The defendant did not file an affidavit or any other countervailing evidence to refute the medical treatments as being reasonable, related and necessary. The appellate court also found the deposition testimony of the defendant’s adjuster concerning the IME physician’s report failed to create a genuine issue of material fact.
44. In order to create any genuine issue of a material fact regarding whether the subject medical expenses were reasonable, related or necessary, the Defendant is required to either substantially impeach the medical expert testimony of the treating physicians, or present countervailing evidence from a licensed physician. See Williamson v. Superior Insurance Co., 746 So.2d 483 (Fla. 2d DCA 1999), Holmes v. State Farm Mutual Automobile Insurance, 624 So.2d 824 (Fla. 2d DCA 1993), Jarrell v. Churm, 611 So.2d 69 (Fla. 4th DCA 1992).
45. In Williamson, the plaintiffs challenged a final judgment in favor of the defendant-insurance company in a personal injury action. The issue on appeal dealt with whether the trial court erred in denying the plaintiffs’ motion for a directed verdict on the issue of permanent injury. The injured plaintiff stated at trial he sustained a back injury several years prior to the subject automobile accident. Those injuries resolved shortly after the injury, but resurfaced following the subject crash. The plaintiffs offered testimony of three physicians on the issue of permanency of the plaintiff’s injuries and that these injuries resulted from the subject accident. The defendant presented two physicians who failed to refute the plaintiff’s experts’ findings. The trial court denied the plaintiffs’ motion for directed verdict on the issue of permanency and the jury found the plaintiff did not sustain a permanent injury. A motion for retrial was denied.
46. The appellate court’s opinion discussed the standard for surviving a motion for directed verdict when faced with uncontroverted medical testimony. The appellate court stated a party opposing a motion for directed verdict must come forward with either countervailing evidence of the permanency issue or must severely impeach the proponent’s expert. The court further determined a jury is not free to reject the uncontroverted medical testimony indicating a permanent injury. Vega v. Travelers Indemnity Co., 520 So.2d 73 (Fla. 3d DCA 1988).
47. An IME report and/or peer review report prepared for the purpose of litigation lacks the trustworthiness business records are presumed to have, and therefore, is not admissible under the business records exception to the hearsay rule. McElroy v. Perry, 753 So.2d 121 (Fla. 2d DCA 2000).
48. The Defendant has no basis under its contract or §627.736(4) or (7) to establish it is not responsible for the medical expenses in the following amounts: CLINIC CENTER in the amount of $4,190.00 for dates of service 12/27/01 through 3/12/02, AIM X-RAY in the amount of $715.00 for date of service 12/27/01, A.J. DIAGNOSTIC in the amount of $315.00 for date of service 12/27/01. These amounts remain due and owing times 80% which equals $3,316.00 (CLINIC CENTER), $572.00 (AIM X-RAY), and $252.00 (A.J. DIAGNOSTIC) plus statutory interest that UNITED AUTOMOBILE has not paid as of this date.
49. The Defendant failed to establish the subject charges are not reasonable, related or necessary or that the Plaintiffs have not complied with any conditions precedent.
50. Because there does not exist any questions of material fact regarding the related, reasonable and necessary medical expenses incurred by the claimant, Maritza Ortiz, and submitted to UNITED AUTOMOBILE by the subject providers, CLINIC CENTER, AIM X-RAY, and A.J. DIAGNOSTIC, and the Defendant’s failure to pay the Plaintiff’s medical bills at full 80% pursuant to the terms of the policy and § 627.736, the Plaintiffs are entitled to Summary Judgment.
51. The Plaintiffs complied with all conditions precedent prior to instituting this lawsuit, and are entitled to Judgment as a Matter of Law regarding payment of the subject bills at 80% plus interest from 30 days after receipt of each bill up to and including the present.
52. The Plaintiffs are entitled to Final Summary Judgment in the amount following amounts: CLINIC CENTER in the amount of $4,145.00 for dates of service 12/27/01 through 3/12/02 (this amount reflects the withdrawal of CPT code 97110), AIM X-RAY in the amount of $715.00 for date of service 12/27/01, A.J. DIAGNOSTIC in the amount of $315.00 for date of service 12/27/01. These amounts remain due and owing times 80% which equals $3,316.00 (CLINIC CENTER), $572.00 (AIM X-RAY), and $252.00 (A.J. DIAGNOSTIC) plus statutory interest that UNITED AUTOMOBILE has not paid as of this date.
53. This Court finds the Plaintiffs are entitled to attorney’s fees and costs pursuant to § § 627.736 and 627.428 as the prevailing party, and reserves jurisdiction to enter a Final Judgment on attorney’s fees and costs according. [See 12 Fla. L. Weekly Supp. 1079a.]
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