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Progressive Select Insurance Co. v. Florida Hospital Medical Center

Florida Court of Appeals, Fifth District

November 17, 2017

PROGRESSIVE SELECT INSURANCE COMPANY, Petitioner,
v.
FLORIDA HOSPITAL MEDICAL CENTER A/A/O JONATHAN PARENT, Respondent.

         NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED

         Petition for Certiorari Review of Decision from the Circuit Court for Orange County Acting in its Appellate Capacity.

          Douglas H. Stein, of Bowman and Brooke, LLP, Coral Gables, for Petitioner.

          Chad A. Barr, of Law Office of Chad A. Barr, P.A., Altamonte Springs, for Respondent.

          Lawrence M. Kopelman, of Lawrence M. Kopelman, P.A., Fort Lauderdale and Mac S. Phillips and Chris Tadros, of Phillips Tadros, P.A., Fort Lauderdale, as Amicus Curiae Floridians for Fair Insurance, Inc.

          SAWAYA, J.

         This certiorari proceeding concerns the proper methodology to determine the application of the deductible authorized under section 627.739(2), Florida Statutes (2014), when personal injury protection ("PIP") benefits are sought by an insured. The decision we review (rendered by the circuit court in its appellate capacity) provides that, when calculating the amount of PIP benefits due to the insured, section 627.739(2) requires the deductible to be subtracted from the total medical care charges before applying the statutory reimbursement limitations provided in section 627.736(5)(a)1.b., Florida Statutes (2014). The respondent, Florida Hospital Medical Center, contends that the court applied the correct law in utilizing this methodology. The petitioner, Progressive Select Insurance Company, argues that the statutory limitations must be applied first and the deductible subtracted from that amount. The issue is thus framed, and we must decide whether the circuit court properly interpreted the pertinent statutory provisions and applied the correct methodology. This issue has generated numerous conflicting decisions by the county and circuit courts, [1] so we issue this opinion to provide precedent and a basis of continuity for future trial court rulings. See Fla. Med. & Injury Ctr., Inc. v. Progressive Express Ins., 29 So.3d 329, 331 (Fla. 5th DCA), review denied, 46 So.3d 567 (Fla. 2010) (footnote omitted).

         Factual and Procedural Background

         A discussion of the circumstances surrounding the accident that led to the insured's claim for PIP benefits is not particularly helpful to resolve the issue before us, so we will not dwell on that aspect of the underlying case. It is enough to say that after the insured, Jonathan Parent, was involved in an automobile accident, he incurred bills for the medical care he received from Florida Hospital. Those bills exceeded the deductible amount of $1000 provided in the insurance policy issued by Progressive. As is typical in these cases, Parent assigned his PIP benefits under the policy to Florida Hospital (hence the designation "a/a/o" in the caption, which means "as assignee of"). The bill Florida Hospital sent to Progressive for Parent's treatment calculated the amount owed as follows:

$2, 781.00

Total hospital charge

-$1, 000.00

Parent's PIP deductible

$1, 781.00

X 75%

Applying section 627.736(5)(a)1.b.

$1, 335.75

X 80%

Applying section 627.736(5)(a)1.

$1, 068.60

Amount Due

         Progressive remitted payment, but it used a different payment methodology when applying section 627.736(5)(a)1.b.'s reimbursement limitation provision:

$2, 781.00

Total hospital charge

X 75%

Applying section 627.736(5)(a)1.b.

$2, 085.75

-$1, 000.00

Parent's PIP deductible

$1, 085.75

X 80%

Applying section 627.736(5)(a)1.

$ 868.60

Amount Due

         Florida Hospital thereafter filed suit against Progressive in the county court seeking the $200 difference between what it calculated the PIP benefit amount to be and what Progressive paid. After Progressive filed an answer denying liability and asserting affirmative defenses, both parties filed motions for summary judgment.

         The county court entered a final summary judgment in favor of Florida Hospital in the amount of $200, plus interest, thus adopting Florida Hospital's argument that the plain language of section 627.739(2) required Progressive to subtract Parent's deductible from Florida Hospital's total charges before applying section 627.736(5)(a)1.b.'s reimbursement limitation. Progressive appealed, and the circuit court affirmed the county court's judgment. This certiorari proceeding followed.

         Before continuing further, it is necessary to note the limitations of our review. Second-tier certiorari review is limited to determining whether the circuit court: (1) accorded procedural due process and (2) applied the correct law. Dep't of High. Saf. & Motor Veh. v. Alliston, 813 So.2d 141, 144 (Fla. 2d DCA 2002). Here, the pertinent inquiry is whether the circuit court applied the correct law when interpreting sections 627.736(5)(a)1.b. and 627.739(2) to determine whether the county court utilized the correct methodology to apply the deductible. Certiorari relief can be granted only if Progressive demonstrates that there has been a violation of a clearly established principle of law resulting in a miscarriage of justice. Futch v. Fla. Dep't of High. Saf. & Motor Veh., 189 So.3d 131, 132 (Fla. 2016). Clearly established law derives from a variety of legal sources, including the interpretation of statutes. Allstate Ins. v. Kaklamanos, 843 So.2d 885, 890 (Fla. 2003).

         Statutory Analysis

         In order to determine whether the circuit court applied the correct law, we must analyze the statutory provisions at issue, which are an integral part of the Florida Motor Vehicle No-Fault Law.[2] Florida's No-Fault Law has historically been a complicated body of legislation, and the constant revisions and amendments since its inception[3] have contributed to its complexity. See Fla. Med., 29 So.3d at 337. As will be seen a little later, however, instances may arise when the historical development of the law reveals clear legislative intent. When interpreting the provisions of the No-Fault Law, the Florida Supreme Court has explained that the statutes "must be liberally construed in order to effect the legislative purpose of providing broad PIP coverage for Florida motorists." Blish v. Atlanta Cas. Co., 736 So.2d 1151, 1155 (Fla. 1999); see also Vasques v. Mercury Cas. Co., 947 So.2d 1265, 1269 (Fla. 5th DCA 2007) ("[B]oth this court and the Florida supreme court have held the provisions of Florida's No-Fault Act must be construed liberally in favor of the insured.").

We begin our analysis with section 627.739, which states in pertinent part:
Insurers shall offer to each applicant and to each policyholder, upon the renewal of an existing policy, deductibles, in amounts of $250, $500, and $1, 000. The deductible amount must be applied to 100 percent of the expenses and losses described in s. 627.736. After the deductible is met, each insured is eligible to receive up to $10, 000 in total benefits described in s. 627.736(1). However, this subsection shall not be applied to reduce the amount of any benefits received in accordance with s. 627.736(1)(c).

§ 627.739(2), Fla. Stat. (2014) (emphasis added). This statute distinguishes between "expenses and losses" and "benefits." The second sentence states that the deductible "must be applied to 100 percent of the expenses and losses." In the very next sentence, the statute provides that "[a]fter the deductible is met, each insured is eligible to receive up to $10, 000 in total benefits." Thus, the statute indicates that the deductible applies to "100 percent of the expenses and losses" whereas "benefits" refers to the calculated amount after the deductible has been applied to the total expenses and losses and after application of the statutory reimbursement limitations found in section 627.736.

         "Expenses and losses" are not defined in the statute, but they are described in section 627.736(1). Section 627.736(1)(a) specifically provides that the insured may be entitled to "[e]ighty percent of all reasonable expenses for medically necessary medical, surgical, X-ray, dental, and rehabilitative services." § 627.736(1)(a), Fla. Stat. (2014) (emphasis added). Similarly, section 627.736(1)(b) refers to "[s]ixty percent of any loss of gross income and loss of earning capacity" and "all expenses reasonably incurred in obtaining from others ordinary and necessary services" associated with the disability of an insured. § 627.736(1)(b), Fla. Stat. (2014) (emphasis added).

         In addition to describing expenses and losses, section 627.736(1) also describes benefits and establishes separate methodologies (80% reimbursement limitation for medical expenses and 60% reimbursement limitation for disability expenses and losses) for calculating how much of the expenses and losses will be paid as benefits. On the other hand, section 627.739 requires that the deductible must be applied to "100 percent of the expenses and losses." In other words, the 80% and 60% methodologies in section 627.736(1) are intended to limit reimbursements in order to establish benefits. They are not intended to describe the application of the deductible under the 100% methodology provided in section 627.739(2).

          Specifically, Progressive contends that the reimbursement limitations contained in section 627.736(5)(a)1.b. should be applied to reduce the expenses and losses and that the deductible should be subtracted from that reduced amount to arrive at the benefit amount owed to the insured. We disagree because, using that methodology, the deductible is not being applied toward 100% of the expenses and losses as required by section 627.739(2). Section 627.736(5)(a)1. provides the insurer with an option to determine benefits pursuant to a ...


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