24 Fla. L. Weekly Supp. 297c
Online Reference: FLWSUPP 2404NBROInsurance — Personal injury protection — Standing — Assignment — No merit to argument that medical billing company that sent demand letter on behalf of plaintiff medical provider is consumer collection agency to whom provider’s assignment from insured was transferred by operation of Florida Consumer Collection Practices Act — Insurer’s motion for summary judgment on issue of provider’s standing is denied — Insurer’s motion for sanctions under section 57.105 is denied
NEUROLOGY ASSOCIATES OF NORTH FLORIDA, INC., (as assignee of Nikki Brown), Plaintiff, v. SOUTHERN-OWNERS INSURANCE COMPANY, a foreign corporation, Defendant. County Court, 4th Judicial Circuit in and for Duval County. Case No. 2014-SC-3402. Division F. May 31, 2016. James A. Ruth, Judge. Counsel: Vincent P. Gallagher, BeachLifeLaw, Neptune Beach, for Plaintiff. Rhamen Love-Lane, Ft. Lauderdale, for Defendant.
ORDER DENYING DEFENDANT’S MOTION
FOR FINAL SUMMARY JUDGMENT
This matter came before the Court on Defendant’s Motion for Final Summary Judgment. Defendant alleges that Plaintiff, Neurology Associates of North Florida, Inc., did not have standing to file the instant lawsuit and thus, without standing, the matter must be dismissed.
Defendant’s insured, Nikki Brown was involved in a motor vehicle accident on September 27, 2012. Brown sought treatment for back discomfort and came under Plaintiff’s care on January 16, 2014. Defendant scheduled a compulsory medical evaluation, “CME”, which was performed on March 24, 2014 by Dr. Gerling, whose opinion was that Brown had not suffered any “neurological” injury and that Plaintiff’s treatment was not reasonable, necessary or related to the September 27, 2012 accident. Defendant declined to make payment to Plaintiff for three dates of service.
Plaintiff, like many medical providers, utilized a medical billing company to properly prepare the health insurance claim forms required by most insurance companies. Medical Billing Services, “MBS”, timely billed Defendant for all dates of service provided by Plaintiff. Defendant, relying upon the CME opinion, refused to make payment to Plaintiff.
Plaintiff’s billing company, MBS, then prepared and sent a “demand letter” pursuant to F.S. 627.736. Attached to the demand letter was the assignment of benefits executed by the insured, Brown, assigning her rights under the policy to Neurology Associates of North Florida. There is no dispute that the assignment was a valid assignment and gave Plaintiff standing to file suit. However, Defendant avers that Plaintiff transferred the valid assignment of benefits to MBS, and therefore Plaintiff did not have standing to file suit, and also lacked legal capacity to send a valid demand letter prior to suit.
As a condition precedent to filing suit against an insurer for overdue PIP benefits, F. S. 627.736(10) requires an insured or their assignee to send a statutorily compliant “demand letter” to the insurer.
(10) DEMAND LETTER. —
(a) As a condition precedent to filing any action for benefits under this section, written notice of an intent to initiate litigation must be provided to the insurer. 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).
(b) The notice must state that it is a “demand letter under s. 627.736” and state with specificity:
1. The name of the insured upon which such benefits are being sought, including a copy of the assignment giving rights to the claimant if the claimant is not the insured.
2. The claim number or policy number upon which such claim was originally submitted to the insurer.
3. To the extent applicable, the name of any medical provider who rendered to an insured the treatment, services, accommodations, or supplies that form the basis of such claim; and an itemized statement specifying each exact amount, the date of treatment, service, or accommodation, and the type of benefit claimed to be due. A completed form satisfying the requirements of paragraph (5)(d) or the lost-wage statement previously submitted may be used as the itemized statement
The demand letter sent by MBS on MBS letterhead stated that “. . . it is a demand letter under 627.736(10)”, stated the name of the insured as Nikki Brown, referenced the Defendant’s claim number, listed the name of the medical provider as Neurology Associates of North Florida and provided an itemized listing of the treatment dates, the CPT codes, the amount charged, and the amount claimed.
The demand letter requested $1,795.00 plus interest be paid to Neurology Associates of North Florida. The demand letter further requested the $5.75 postage and 10% statutory penalty be made payable to Medical Billing Services, Inc. Thus, the insurer was put on notice that to avoid litigation, it needed to pay $1,795.00 plus interest to Neurology Associates of North Florida and also pay $5.75 plus 10% penalty to MBS.
The insurer relied upon the CME and declined payment of the demand letter, and Plaintiff filed suit. Defendant filed several affirmative defenses, including the assertion that “. . . Plaintiff does not have standing to maintain the subject cause of action.” Defendant’s Motion for Summary Judgment is based on that affirmative defense.
Defendant’s affirmative defense relies upon the language of F.S. 559.715 to operate as a statutory reassignment from Plaintiff to MBS. Defendant’s Motion for Summary Judgment alleges: “At the time Plaintiff filed the subject cause of action, Plaintiff had assigned the right to pursue this alleged debt to Medical Billing Services, Inc. and, therefore, lacked standing to bring the present cause of action before this Court.”
Florida Statutes 559.55-559.785 regulate consumer collection practices. Defendant avers that F.S. §559.715 operates as a statutory reassignment from Plaintiff to MBS. Florida Statute §559.715 reads:
Assignment of consumer debts. — This part does not prohibit the assignment, by a creditor, of the right to bill and collect a consumer debt. However the assignee must give the debtor written notice of such assignment as soon as practical after the assignment is made, but at least 30 days before any action to collect the debt. The assignee is a real party in interest and may bring an action to collect a debt that been assigned to the assignee and is in default. (Emphasis added).
Defendant argues that applying F.S.§559.715 to the facts of this case means that MBS is, in fact, a bill collector and therefore strips the assignment from Neurology Associates of North Florida. Even assuming that MBS met the statutory definition of “bill collector”, which has not been established, Defendant’s argument rests on F.S. §559.715 operating as a statutory reassignment without any intent or written evidence by the current assignee, Neurology Associates. Defendant argues that Plaintiff, by operation of statute (559.715) assigned the cause of action to MBS in order for MBS to submit a F.S. § 627.736(10) demand letter regarding the unpaid insurance benefits. Defendant asks this Court to conclude that MBS, by sending a statutorily required “demand letter” requesting payment to Neurology Associates for PIP benefits, is engaging in the collection of consumer debts and, solely by operation of section §559.715, became Nikki Brown’s assignee.
Plaintiff correctly responds that F.S. §§559.55-559.785 have absolutely no application to a medical billing company acting on behalf of a medical provider to obtain PIP benefits. F.S. §559.55(3) defines “Consumer collection agency” as “. . . any debt collector or business entity engaged in the business of soliciting consumer debts for collection or of collecting consumer debts . . . ”
MBS is a medical billing company that bills insurance companies for medical providers. Plaintiff and MBS both filed affidavits which stated:
“The duties of MBS include receipt of super bills and medical records from NANF. MBS uses those records to generate health insurance claims forms, which are mailed to the proper payors on the accounts. MBS only provides medical billing services to NANF, and is not a debt collection agency. Further MBS does not collect debts for NANF.”
There was absolutely no evidence that MBS collects consumer debts. Further, F.S. §559.55(8) defines “Debtor” or “consumer” as “. . . any natural person obligated or allegedly obligated to pay any debt”. Both parties to this case, as well as MBS, fail to qualify as a “debtor” or “consumer” as none are “natural persons” but solely exist as corporate entities who are not “natural persons.”
As there is absolutely no evidence that Plaintiff transferred the valid assignment to any other entity, then Plaintiff is the only party that has a cause of action based on the PIP benefits allegedly owed by Defendant. Defendant’s Motion for Summary Judgment is denied.
The Court also notes that Defendant improvidently filed a §57.105 Motion for Sanctions against Plaintiff. F. S. §57.105 is intended for cases where:
. . . a claim or defense when initially presented to the court or at any time before trial:
(a) Was not supported by the material facts necessary to establish the claim or defense; or
(b) Would not be supported by the application of then-existing law to those material facts.
Plaintiff, at all times possessed the valid assignment of benefits. Defendant’s Affirmative Defense was based on a legal theory that, to date, has no published judicial opinions either in support or defense. It is clear to this Court that Plaintiff’s assignment of benefits was supported by the necessary material facts and was supported by the application of the law to those facts. Conversely, it is Defendant which lacked the material facts necessary to establish a defense and failed to provide this Court with any existing law that was on point. Neither party could provide any case law that stated if a medical billing company sent out a demand on behalf of a medical provider, then the previously valid assignment was statutorily transferred to the billing company by operation of F.S. 559.715. While novel legal theories help advance the law’s development, the misapplied use of potential sanctions should not exist. F.S. 57.105 is intended to punish a party and their attorney for pursuing frivolous claims or defenses. It should not be used as a “bullying tactic”. F.S. §57.105 should only be used in those rare instances where one party completely lacks the facts and law to remain in court.