Palm Beach Post: FPCA Member Fights Back On PIP-Related Medical Clinic Fee Lawsuits
May 5, 2010
United Automobile Insurance Company (“UAIC”), a Florida Property and Casualty Association member, was featured in a May 3, 2010 Palm Beach Post story on the multiplicity of Personal Injury Protection-related lawsuits recently filed by the law firm of LaBovick & LaBovick.
The article is reprinted below.
Should you have any questions or comments, please contact Katie Webb (kwebb@cftlaw.com) at Colodny Fass.
Palm Beach Gardens firm accused of filing lawsuits just to collect legal fees
Since starting own collection agency, LaBovick & LaBovick has filed more than 1,200 suits in Broward court – almost all of which seek less than $50 in damages
By Jane Musgrave, The Palm Beach Post
May 3, 2010
WEST PALM BEACH
A Palm Beach Gardens law firm stepped into the limelight at SunFest when it sponsored one of three stages at the event, pairing its name with the likes of Smash Mouth, Sean Kingston and Flogging Molly.
But while the exposure to thousands of music fans could put LaBovick & LaBovick on the map on its home turf, the firm is already notorious in Broward County, particularly among insurance companies and their attorneys.
Since forming its own collection agency in July, the firm has filed more than 1,200 lawsuits against insurers in the Fort Lauderdale-based court. On one day alone, it filed more than 200 lawsuits, accusing insurance companies of short-changing medical clinics that treat people injured in auto accidents.
Angry insurers say their beef with LaBovick isn’t about the number of lawsuits it’s filed. It’s about the amount of money they seek.
Some of the lawsuits ask for as little as $3.89 in damages. A $16.99 lawsuit isn’t uncommon. Many are in the $38 range. Few crack $50.
“It’s outrageous,” said attorney Douglas Brehm, who is representing Allstate in 150 – and growing daily – lawsuits that have been filed by the LaBovick firm.
“We’ve been sued for $2.56, $1.89, $3.42. It’s a disgrace,” said Richard Parrillo Sr., founder and CEO of United Automobile Insurance Co.
LaBovick isn’t after such small change, critics claim: “They’re looking to shake us down for legal fees,” said Parrillo, who has been hit with 38 LaBovick suits. “It’s all about the fees.”
It can parlay even a $1 settlement into thousands of dollars in legal fees, said Jill Carabotta, litigation manager for Parrillo’s company. If an insurer refuses to settle and pay the hefty legal fees, it can drag out the litigation, forcing the company to spend thousands to defend itself.
“This is the worst kind of litigation – the kind that gives lawyers a bad reputation,” Brehm said.
Brian LaBovick, manager of the firm he runs with his wife, scoffs at those who accuse him of avarice. It’s particularly disingenuous coming from insurance companies, which are known for dragging out or shaving reimbursements doctors and their injured patients need, he said.
He makes no apologies for suing for such small amounts. Let’s say that insurers only shaved $1 off a claim. If they did that in 1 million cases, significant cash is at stake, he said.
“The thought that a low amount is an improper amount to bring a lawsuit is the same as saying that the government shouldn’t file criminal charges over petty theft,” he said.
He said he formed Gulfstream MediGroup last year to help medical clinics clear bad debts off their books. Gulfstream bought old claims from the clinics and tries to recover amounts insurers didn’t pay. If the insurer refuses, his law firm files suit. Gulfstream gets whatever is recovered. His law firm gets whatever attorney fees are awarded for the work.
“He created his own client,” Brehm fumed. In most cases, the medical clinics themselves, not collection agencies, sue insurance companies.
Further, insurers say, LaBovick’s claims aren’t bad debts in the traditional sense.
All of the cases involve injuries that are covered by state-mandated, no-fault auto insurance. The state requires all drivers to carry a minimum of $10,000 worth of personal injury protection (PIP) insurance. PIP covers injuries and lost wages no matter who causes an accident.
To combat escalating fraud in the PIP program, the legislature established reimbursement rates for certain types of procedures. In his lawsuits, LaBovick accuses the companies of miscalculating the rates set by the state.
That is why the lawsuits are for small amounts. In most cases, the insurance companies have already paid the lion’s share of the claims.
If insurers think he is clogging the court system with frivolous cases just to mine attorneys fees, LaBovick said they can stop him.
“I cannot play that game without the insurance companies giving me permission to play,” he said. If they don’t believe they owe the money, he said, they shouldn’t pay.
Parrillo, who once automatically paid such claims, chalking it up to the cost of doing business, said he is fighting back.
Already, Brehm said, Broward County Court Judge Robert Lee has thrown out six cases LaBovick filed, ruling that Allstate calculated reimbursement rates correctly. LaBovick vowed to appeal. Brehm predicted he wouldn’t get far.
Lee’s decision was based largely on a ruling the Fourth District Court of Appeal made in a nearly identical case, Brehm said, adding that he doubted the Supreme Court would consider the case.
Confident he has the law on his side, Brehm said he plans to turn the tables on LaBovick: He will ask a judge to order LaBovick to pay Allstate’s attorney’s fees.
Copyright © 2010, South Florida Sun-Sentinel
