Daily Business Review: On Appeal 3rd DCA ruling should help car insurance companies

The Daily Business Review published this article on October 8, 2009

By Susannah A. Nesmith

October 08, 2009

The 3rd District Court of Appeal overturned more than a decade of case law Wednesday and made it easier for auto insurance companies to deny claims as unreasonable, unrelated to an accident or simply unnecessary.

The decision was immediately hailed by insurance company attorneys as an important clarification of a confusing law and a blow to consumer rights by attorneys who represent injured people and doctors.

A basic problem is the language of the state law governing personal injury protection, or PIP, coverage, which attorneys on both sides agreed was unclear.

“This straightens out one more knotty problem in the statute,” said Nancy Gregoire, an attorney for State Farm Insurance. “The litigation alone is costing millions of dollars, and the litigation is fueled by the lack of clarity of the statutory language.”

Attorney Kevin Whitehead, who represents doctors trying to get payment, dismissed the opinion as “totally anti-consumer.”

“It flies in the face of the legislative intent, and it rewards an insurance company for doing nothing,” said the partner with Downs Brill Whitehead in Coral Gables. “The gap is opening up wider and wider and wider for them to denigrate the legislative intent, which was swift and virtually automatic payment. … You can wait for years.”

Miami-Dade circuit and county judges were routinely ruling in favor of patients and health care providers on personal injury claims if the insurer didn’t get an independent doctor to examine the patient within 30 days of a claim filing. In May, the appellate court ruled a “valid report” required by law did not necessarily mean a report by a doctor who personally examined the patient but also could mean a report based on a review of medical records.

On Wednesday, the court reiterated its logic in that decision and further eroded the rights of patients and doctors by ruling the medical report didn’t have to meet the 30-day deadline.

The unanimous appellate court ruled after an en banc hearing that Miami-Dade judges had been misinterpreting a pair of key insurance company actions – withdrawal and denial. State law on PIP coverage in auto insurance policies requires insurers to present a doctor’s opinion when they decide to stop paying for medical treatment that they had been covering. The same law requires insurers to pay claims within 30 days if they aren’t going to deny them.

Writing for the full court, Judge Leslie B. Rothenberg said Miami-Dade judges were improperly merging the two requirements. Attorneys who represent patients and doctors said the decision combined with the earlier ruling violate the Legislature’s intent when passing Florida’s no-fault insurance law in 1972.

The court reversed a decision by a panel of Miami-Dade circuit judges: Cindy S. Lederman, Valerie R. Manno Schurr and Marisa Tinkler Mendez.

Swift Payment

“These cases are basically eroding the court’s position that they held for so long regarding the swift and automatic payment of PIP claims and the imposition of due diligence requirements on the insurance companies to dot their I’s and cross their T’s before they deny claims,” said Miami plaintiff attorney Carlos Lopez-Albear.

But Gregoire of Kirschbaum Birnbaum Lippman & Gregoire in Fort Lauderdale said the decision makes sense because refusing to pay a claim in the first place and stopping payments are two distinct situations.

“If at some point the company maybe believes that no more treatment is necessary, the company has to get a medical report saying that no more treatment is necessary. That makes perfect sense,” she explained. “On the other hand, if a doctor treats me for 10 minutes and charges 10K, I have no medical degree, but I’m in a position to say that’s unreasonable.”

Michael Neimand, in-house lead appellate counsel for United Automobile Insurance in Miami Gardens, which won Wednesday’s case, said the ruling simply gives auto insurers the same rights as other litigants. He said the way judges were applying the time limit meant insurance carriers couldn’t present evidence that would have been allowed in other cases.

“A lot of cases were summarily decided without the ability of the insurer to present their evidence,” he said. “It doesn’t mean we’re going to win in court. It just means we get to start with an even playing field.”

He disputed the idea that the ruling would affect consumers, noting United’s policies include a clause saying the company will pay to defend a consumer who is sued by a doctor trying to get payment for bills United didn’t cover.

“The real effect is on the medical doctor to make sure they are providing reasonable medical treatment and not excessive or medically unnecessary treatment,” he said.

He said his office is handling about 200 cases that will be affected by the ruling.

Lopez & Best attorney Virginia Best represented Santa Fe Medical Center, which lost the case. She did not return a phone call seeking comment by deadline. Santa Fe submitted bills on behalf of a patient insured by United.