LIBERTY MUTUAL INSURANCE COMPANY v. PAN AM DIAGNOSTIC SERVICES, INC. d/b/a PAN AM DIAGNOSTIC OF ORLANDO a/a/o CLAUDINE JEAN ( 2022 )

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
LIBERTY MUTUAL INSURANCE COMPANY,
Appellant,
v.
PAN AM DIAGNOSTIC SERVICES, INC. d/b/a
PAN AM DIAGNOSTIC OF ORLANDO a/a/o CLAUDINE JEAN,
Appellee.
No. 4D21-2156
[August 17, 2022]
Appeal from the County Court for the Seventeenth Judicial Circuit,
Broward County; John D. Fry, Judge; L.T. Case No. CONO-19-012705.
Hinda Klein of Conroy Simberg, Hollywood, for appellant.
Douglas H. Stein of Douglas H. Stein, P.A., Coral Gables, for appellee.
CONNER, J.
Appellant, Liberty Mutual Insurance Company (“the Insurance
Company”), appeals the trial court’s order awarding attorney’s fees and
costs together with interest to Appellee, Pan Am Diagnostic Services, Inc.
d/b/a Pan Am Diagnostic of Orlando a/a/o Claudine Jean (“the Provider”).
Remarkably, suit was filed because 14 cents of statutory interest was not
paid when the Insurance Company paid an overdue personal injury
protection (“PIP”) benefit. The pennies worth of unpaid interest eventually
resulted in an award of attorney’s fees and costs to the Provider in the
amount of $24,028.27. Because we determine that statutory interest
payable pursuant to section 627.736(4)(d), Florida Statutes (2019), is not
an insurance policy or PIP benefit which entitles an insured or an insured’s
assignee to attorney’s fees under sections 627.428(1) or 627.736(8),
Florida Statutes (2019), we reverse.
Background
The Provider, as the insured’s assignee, sued the Insurance Company
for failure to pay the correct amount of statutory interest due under
section 627.736(4)(d), Florida Statutes (2019), when the Insurance
Company issued the overdue payment for the Provider’s medical services
rendered to the insured. The alleged amount of additional interest owed
was 14 cents. The complaint also sought attorneys’ fees under section
627.428, Florida Statutes (2019).
The Insurance Company answered that all benefits and interest due
and owing were paid presuit. The Insurance Company also raised the
affirmative defense of failure to satisfy the condition precedent of providing
a presuit demand. The Insurance Company asserted that no attorney’s
fees or costs were owed because no benefits, interest, penalties, or postage
were due at the time the complaint was filed.
The Provider moved for partial summary judgment, asserting that
because the Insurance Company failed to pay the correct interest amount
on the overdue PIP benefit as required by section 627.736(4)(d), and suit
was filed to enforce payment of the correct interest amount, the Provider
was entitled to attorney’s fees in addition to the 14 cents owed for interest.
The Insurance Company also moved for summary judgment, raising
alternative arguments, one of which was that entitlement to attorney’s fees
under section 627.428 is limited to prosecution of suits which result in
recovery of insurance “benefits,” and here, the only issue before the trial
court was whether the PIP interest constituted a PIP “benefit.” The
Insurance Company argued that if the interest is deemed a PIP benefit,
then a presuit demand letter was a required condition precedent to the
filing of the complaint. However, if unpaid interest is not deemed be a PIP
benefit, then no PIP benefits were at issue in this suit and the Provider was
required to bear its own attorney’s fees.
The Provider responded to the Insurance Company’s motion, asserting
that the statutory requirement to serve a presuit demand letter applied to
suits for benefits payment, and not to interest payment. The Provider
again maintained its entitlement to attorney’s fees, in that a judgment
entered in favor of the insured or its assignee in a dispute against the
insurer entitles the insured or the assignee to attorney’s fees.
The trial court granted the Provider’s motion for summary judgment
and entered final judgment in the Provider’s favor for the 14 cents owed
for interest, reserving jurisdiction to determine entitlement to attorney’s
fees. The Provider moved for attorney’s fees pursuant to sections
627.736(8) and 627.428, Florida Statutes (2019). The trial court awarded
the Provider $24,028.27 in attorney’s fees, clerical fees, taxable costs, and
an expert witness fee. After the Insurance Company’s motion for
reconsideration was denied, the Insurance Company gave notice of appeal.
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Appellate Analysis
The standard of review of a trial court’s ruling on a party’s entitlement
to attorneys’ fees based on the interpretation of a statute is de novo. S.
Fla. Pain & Rehab. of W. Dade v. Infinity Auto Ins. Co., 318 So. 3d 6, 8 (Fla.
4th DCA 2021).
Our analysis begins with section 627.428(1), Florida Statutes (2019),
which governs entitlement to attorney’s fees for insurance litigation
regarding policy provisions. Section 627.428(1) provides:
Upon the rendition of a judgment or decree by any of the courts
of this state against an insurer and in favor of any named or
omnibus insured or the named beneficiary under a policy or
contract executed by the insurer, the trial court or, in the event
of an appeal in which the insured or beneficiary prevails, the
appellate court shall adjudge or decree against the insurer and
in favor of the insured or beneficiary a reasonable sum as fees
or compensation for the insured’s or beneficiary’s attorney
prosecuting the suit in which the recovery is had.
§ 627.428(1), Fla. Stat. (2019) (emphasis added). Under the statute’splain
wording, the threshold requirement for an award of fees under section
627.428(1) is “a judgment or decree . . . under a policy or contract executed
by the insurer.” Id.
However, the Provider has not shown that its entitlement to interest on
the late payment of PIP benefits is grounded upon any policy or contractual
provision.
For PIP litigation, section 627.736(8), Florida Statutes (2019),
addresses entitlement to attorney’s fees:
Applicability of provision regulating attorney fees.--With
respect to any dispute under the provisions of ss. 627.730-
627.7405 between the insured and the insurer, or between an
assignee of an insured’s rights and the insurer, the provisions
of ss. 627.428 and 768.79 apply, except as provided in
subsections (10) and (15) . . . .
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§ 627.736(8), Fla. Stat. (2019) (emphasis added). 1 Thus, to determine
entitlement to fees pursuant to section 627.736(8), we are confronted with
the meaning of the statutory language, “[w]ith respect to any dispute under
the provisions of ss. 627.730-627.7405.” Id.
In the first statute in the designated series, the legislature has made it
clear that “[s]ections 627.730-627.7405 may be cited and known as the
‘Florida Motor Vehicle No-Fault Law.’” § 627.730, Fla. Stat. (2019). In the
second statute in the series, the legislature has defined the purpose of the
Florida Motor Vehicle No-Fault Law:
The purpose of ss. 627.730-627.7405 is to provide for medical,
surgical, funeral, and disability insurance benefits without
regard to fault, and to require motor vehicle insurance
securing such benefits, for motor vehicles required to be
registered in this state and, with respect to motor vehicle
accidents, a limitation on the right to claim damages for pain,
suffering, mental anguish, and inconvenience.
§ 627.731, Fla. Stat. (2019) (emphasis added).
The other key statutory sections in the series for our analysis are
sections 627.736(1), (4)(b) and (d), Florida Statutes (2019). Section
627.736(1) requires that PIP policies afford three types of benefits: (1)
medical benefits; (2) disability benefits; and (3) death benefits. §
627.736(1), Fla. Stat. (2019). Section 627.736(4) provides that benefits
due from an insurer under sections 627.730-627.7405 are primary, except
benefits received under any workers’ compensation law. § 627.736(4), Fla.
Stat. (2019). Subsection (4)(b) states that benefits are overdue if payment
is not made within thirty days after the insurer is furnished written notice
of the covered loss and the amount. § 627.736(4)(b), Fla. Stat. (2019).
Subsection (4)(d) provides that those overdue payments accrue interest,
explains the manner for calculating the amount of interest owed, and
requires the payment of interest at the time payment of the overdue claim
is made. § 627.736(4)(d), Fla. Stat. (2019).
“When the language of the statute is clear and unambiguous and
conveys a clear and definite meaning, there is no occasion for resorting to
the rules of statutory interpretation and construction; the statute must be
1 Sections 768.79 (imposing fees pursuant to offer of judgment), 627.736(10)
(imposing requirements for presuit demand letter for PIP benefits) and
627.736(15) (disallowing attorney’s fees that should have been sought in an
earlier action by provider), are not applicable to our analysis.
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given its plain and obvious meaning.” Precision Diagnostic, Inc. v.
Progressive Am. Ins. Co., 330 So. 3d 32, 34 (Fla. 4th DCA 2021) (quoting
A.R. Douglass, Inc. v. McRainey, 102 Fla. 1141, 137 So. 157, 159 (1931)).
Moreover, “[t]he doctrine of in pari materia is a principle of statutory
construction that requires that statutes relating to the same subject or
object be construed together to harmonize the statutes and to give effect
to the Legislature’s intent.” Id. (quoting Fla. Dep’t of State, Div. of Elections
v. Martin, 916 So. 2d 763, 768 (Fla. 2005)).
Applying the plain language and in para materia principles to sections
627.730, 627.731, and 627.736(1), (4)(b), (4)(d), and (8), we conclude that
the statutory entitlement to interest on overdue PIP benefits is not in and
of itself a PIP benefit for which attorney’s fees are payable under section
627.736(8). In other words, a dispute over whether interest is due or paid
in the correct amount is not a dispute as to benefits payable for medical,
surgical, funeral, and disability insurance benefits. Thus, litigation over
the payment of interest due on PIP benefits does not trigger entitlement to
attorney’s fees for the claimant.
Our decision in this case is consistent with our decision in South Florida
Pain:
[T]he insurer’s alleged obligation to pay penalty and postage
was not a covered “benefit” under either the statute or the
insured’s policy. Section 627.731 states that the covered PIP
benefits are “medical, surgical, funeral, and disability
insurance benefits.” The statute’s language does not expand
that definition to include penalty and postage.
318 So. 3d at 11. As we said in South Florida Pain, “[i]f the Legislature had
intended for attorney’s fees to be otherwise recoverable under the statute,
it would have said so.” Id. at 10 (citation omitted).
The concurring opinion makes very cogent arguments in support of
reversal, which we would have adopted as additional grounds for
reversing, except that the arguments and authorities were not sufficiently
raised in the trial court or on appeal. See Coleman v. State, 126 So. 3d
1199, 1202 (Fla. 4th DCA 2012) (recognizing an issue but explaining that
“we are constrained by the fact that appellant did not raise this argument
below or on appeal and therefore it is waived”).
Conclusion
Applying section 627.428(1)’s plain language, the trial court erred in
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awarding the Provider’s attorney’s fees because no contractual or policy
provision supports the award for enforcing the payment of interest.
Applying the plain language and in para materia principles to the pertinent
provisions of the Florida Motor Vehicle No-Fault Law discussed above, the
trial court erred in awarding the Provider’s attorney’s fees because interest
owed on a late PIP benefit payment is not in and of itself a PIP benefit.
Having determined the trial court erred in awarding the Provider’s
attorney’s fees, we reverse and remand with instructions for the trial court
to vacate the final judgment awarding the Provider’s attorney’s fees
rendered on June 18, 2021. Our reversal is without prejudice to the entry
of a judgment imposing taxable costs.
Reversed and remanded with instructions.
WARNER J., concurs.
KLINGENSMITH, C.J., concurs specially with opinion.
KLINGENSMITH, C.J., concurring specially.
I concur with the majority opinion but write to address a separate but
important issue raised by the facts of this case.
In United Auto. Ins. Co. v. Alfonso, 17 Fla. L. Weekly Supp. 887a (Fla.
11th Cir. Ct. July 1, 2010), Judge Leban wondered how low an amount
could be for which an insured or medical provider would “repair to the
court for redress: $1.23? [Twenty-five cents]? A nickel?” We now have
an answer to that rhetorical question—fourteen cents.
If someone were to describe this case as a complete waste of judicial
resources, would they be wrong? In this case, it is the elephant in the
room. For an amount in controversy of fourteen cents, the provider here
filed a lawsuit, engaged in discovery, and hired experts, thus requiring the
lower court to expend significant resources and time—in court and out—
reviewing court filings and testimony. Judicial resources were also
consumed here at the appellate level, causing the expenditure of untold
hours while considering this claim. This, of course, does not include the
time spent and expense incurred by the insurance company to respond in
kind to those actions. All this over fourteen cents.
In Alfonso, the circuit court, sitting in its appellate capacity, disposed
of a similar trivial claim by applying “de minimis non curat lex” to a claim
of $2.53. 17 Fla. L. Weekly Supp. 887a. This legal maxim means “the law
does not care for small things.” Loeffler v. Roe, 69 So. 2d 331, 338 (Fla.
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1953). In doing so, the Alfonso court adopted the dissenting opinion of
Judge Barton in Peachtree Cas. Ins. Co. v. Spine & Rehab. Medicine, P.A.,
16 Fla. L. Weekly Supp. 622a (Fla. 13th Cir. Ct. May 1, 2009), who stated
that he “would go a step further . . . and dismiss this case based on the
doctrine of de minimis non curat lex.” (citing Milton v. Blackshear, 8 Fla.
161, 169–70 (Fla. 1858)). Like the court in Alfonso, I fully agree with Judge
Barton’s analysis and repeat it here:
Appellee filed this lawsuit to recover an alleged unpaid penalty
payment in the amount of $0.89. The attorneys for the parties
and the trial court have expended considerable energy in
resolving the procedural and substantive issues raised by the
pleadings. Now, the appellate court has devoted comparable
effort in reviewing the briefs and records on appeal.
In my view, the time has come to say, “Enough!” The ancient
legal maxim “de minimis non curat lex” (literally, “the law does
not care about small things”) has been used, mainly in
equitable actions involving real property, to distinguish
between substantial and trivial matters. (citation omitted).
As long ago as 1858, the Florida Supreme Court refused to
remand a cause to the trial court for further proceedings,
when considering an excessive award of interest totaling
between $9.00 and $11.00, a sum too small, according to the
Court to subject the parties to further litigation. Milton v.
Blackshear, 8 Fla. 161, 169–170 (Fla. 1858). See also, Florida
Nat’l Bank v. Bisson, 240 So. 2d 870 (Fla. 1st DCA 1970)
(Judgment affirmed, in part, based on de minimis non curate
lex).
In more recent times, the legal doctrine discussed above has
been applied to justify the denial of an otherwise mandatory
award of appellate attorney’s fees. Sanchez v. State Farm Ins.
Co., 997 So. 2d 1209 (Fla. 3d DCA 2008). (emphasis added).
Peachtree, 16 Fla. L. Weekly Supp. 622a (Barton, J., dissenting)).
Other Florida courts have applied this doctrine in a variety of
situations. In one case, the Florida Supreme Court invoked de minimis
non curat lex while addressing a “miscalculation” made by an assessor;
the Court deemed it to be “obviously a mistake, error, oversight, which
cannot be prejudicial to the taxpayer,” and pointedly remarked that
“[j]ustice may be ‘blind’ but it is not stupid.” Korash v. Mills, 263 So. 2d
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579, 581–82 (Fla. 1972) (emphasis added); see also Eureka Corp. v.
Guardian Tr. Co., 139 So. 198, 199 (Fla. 1932) (deeming a final decree
allowing $5.00 de minimis); Winter Garden Citrus v. Parrish, 438 So. 2d
472, 473–74 (Fla. 1st DCA 1983) (finding a loss of five days of
supplemental workers comp benefits was “de minimis”); L.H. v. State, 803
So. 2d 862, 863 n.1 (Fla. 4th DCA 2002) (stating $4.00 discrepancy in
restitution was de minimis); Wilkerson v. Wilkerson, 717 So. 2d 1118, 1119
(Fla. 1st DCA 1998) (affirming child support obligation that exceeded
support guidelines by $1.50, finding that the “negligible amount . . . does
not warrant remand for justification, recalculation or other proceedings”).
Florida courts have seen a number of these cases in personal injury
protection litigation where litigants go at it, hammer and tongs, over
trifling amounts. Our recent case of Precision Diag., Inc. v. Progressive Am.
Ins. Co., 330 So. 3d 32, 33 (Fla. 4th DCA 2021), involved litigation over an
alleged underpayment of $4.17 in interest. Alfonso was a clash over $2.53.
Lawyers tussled over eighty-nine cents in Peachtree. Here, the bar has
been lowered even further to fourteen cents.
Had this matter simply been about obtaining full payment of an amount
owed, I have no doubt that someone with a modicum of common sense
and practicality would have been willing to hand over fourteen cents to
satisfy appellee’s purported claim and put an end to this petty dispute.
Yet that was not the point of this litigation; appellee would never have
accepted the tender of a single dime and four pennies to resolve the case,
as the litigation below was never about the appellee being shorted pocket
change. As Judge Levine noted in Progressive, cases like this (including
Alfonso) are “brought painfully for no other justification than the award of
attorney’s fees.” 330 So. 3d at 35 (quoting Eureka Corp. v. Guardian Tr.
Co., 139 So. 198, 199 (1932)).
The majority correctly points out this case did not involve an insurer’s
underpayment of benefits due and payable to an insured under their
policy. Likewise, this case cannot be analogized to cases such as civil
rights actions, where courts have said attorney’s fees may be awarded for
public policy reasons despite the recovery of nominal or no damages. See
e.g., Coconut Key Homeowner’s Ass’n v. Gonzalez, 246 So. 3d 428, 433 n.3
(Fla. 4th DCA 2018) (noting appellee was prevailing party entitled to fees
despite a “no damages” award). Such cases demonstrate situations
different than the one presented here. Even if some fee amount could be
properly awarded under these circumstances, which it cannot, the fees
and costs judgment in this case was more than 171,000 times higher than
the claimed amount due and grossly disproportional to the amount in
controversy.
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The issue of proportionality was the subject of a recent case in the U.S.
Eleventh Circuit. Batista v. S. Fla. Woman’s Health Assocs., 844 F. App’x
146 (11th Cir. 2021). In an unpublished opinion, the court held that a
prevailing plaintiff under the federal Fair Labor Standards Act may be
denied an award of attorney fees when the conduct of counsel, particularly
in a so-called nuisance case, has the appearance of fee-churning that
needlessly results in the initiation or prolonging of litigation. Id. at 147.
The Batista court addressed what the magistrate judge called the
“prototypical ‘nuisance suit’” involving nothing more than a minor snafu
that Batista’s attorney “could have resolved by placing a brief phone call
to Defendants.” Id. at 151. The appeals court agreed that the fee demand
was “excessive relative to the minimal work [i.e., a brief phone call]
necessary to resolve the matter and make his client whole.” Id.[Counsel’s] conduct was part of a strategy to churn the file
and create unnecessary attorney’s fees. Further, the
requested amount of fees is grossly lopsided when compared
to both the amount in controversy and the final settlement.
***
[Counsel’s] sole intent [in rejecting a settlement] . . . was to
run up his bill.
Id. at 154–155 (citations omitted) (internal quotation marks omitted).
Where a case involves a needless waste of judicial resources, a rejection
of an attorney’s fees award is squarely within the court’s inherent powers
to keep in proper condition the legal community and the legal system, of
which the courts are a leading part. I agree with the reasons contained in
the majority opinion justifying reversal of the lower court’s attorney’s fee
award, and had the issue of de minimis been raised in the lower court and
on appeal, I would have reversed on that ground as well.
* * *
Not final until disposition of timely filed motion for rehearing.
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