NU Online News Service, Nov. 13, 11:05 a.m. EST
A plaintiff who is not entitled to medical payments after an auto accident cannot recover from an insurer because the reasons the claim was denied were not properly spelled out, a Florida appeals court ruled.
The decision, which according to the attorney who defended against the claim would bar many lawsuits, was made Nov. 4 by a three-judge panel of the 3rd District Court of Appeal in Miami.
Under their ruling a person cannot sue their auto insurance company for failing to provide an explanation of benefits on a personal injury protection claim when it is determined no payment is required.
In deciding in favor of United Auto, the court reversed a lower court award of $19,530 in legal fees.
"The result of the court's opinion will likely be a decrease in frivolous lawsuits filed solely for the purpose of obtaining attorney's fees from the insurance company," Thomas Hunker, a United Auto attorney, said in a statement.
Thomas Plante, the auto injury victim in the case, was given medical care in February 2004 by A 1st Choice Healthcare Systems, which sued United Auto for payment.
Thirteen months after A 1st Choice requested payment for services, United Auto responded by checking off an explanation of benefits (EOB) form box that said the bill was not submitted according to law, and another saying, "See peer review attached," but without an attachment.
A 1st Choice filed a two-count complaint seeking damages for nonpayment of benefits and damages for late filing of the EOB form. The benefits payment charge was dropped when it turned out the amount requested was within Mr. Plante's uncovered deductible amount of insurance, but a breach of payment claim was pursued for a late response (over 30 days) to the request for payment.
For the late response the judge awarded $1. The appeals court said he should not have awarded attorney fees because the law only allows a cause of action for personal injury benefits and there were none.
Mr. Hunker said the ruling will "simplify the personal injury protection litigation process and get the focus back on whether the bills were due and owing."
The attorney charged that lawsuits that go beyond that "are a legal tactic by plaintiffs' attorneys to turn court claims for personal injury benefits into a lawsuit for bad faith."
Mr. Hunker asserted, "The effect of adding these extra counts to a lawsuit is to take the focus off of the failure of the insured and medical provider to fulfill their obligations and cast the insurance company in a bad light."
He noted that in the unanimous opinion Judge Frank A. Sheperd wrote, "It is clear there is neither a requirement nor a deadline for a personal injury protection insurer to respond to a request for payment." The court added that a response is required only at the time of payment or rejection of a claim.
"Personal injury plaintiffs can still sue insurance companies for bad faith under the bad faith statute," Mr. Hunker said, "but they will have to give the insurer notice and a fair chance to cure any alleged defect."
A call to Russel Lazega, attorney for A 1st Choice, was not immediately returned.
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