.

Case Law Alerts

Defendant’s Motion for Summary Disposition/Judgment Granted Because Demand Letter Did Not Comply with Statute Where Ledger Attached to Demand Letter Reflected a Zero Dollar Balance

Integrity Medical Group, LLC, a/a/o Maria Herrada v. Depositors Ins. Co., County Court, 7th Judicial Circuit in and for Volusia County, Case No: 2018-16478-CODL

January 1, 2023

The instant suit involved a plaintiff’s contention that a physician’s assistant reduction in a bill balance was improper. The bill in question was for date of service May 26, 2016, and involved CPT code 99204. The defendant had paid $225.43 by applying the physician assistant’s payment methodology to the 200% of Medicare fee schedule amount. The plaintiff alleged that this was improper and, therefore, an additional $40.59 was due and owing. The court previously heard the plaintiff’s argument as to that issue and ruled in favor of the plaintiff. 

However, the defendant had also pled a demand letter defense, which was outstanding. The court ended up ruling in favor of the defendant on the demand letter issue because the plaintiff’s demand letter included a ledger showing a zero dollar balance owed. The court found that the $40.59 alleged to be owed was never alleged in its pre-suit demand letter. The court further analyzed the ledger, which stated: “Maria has 1 claims (SIC) totaling $662.12 with an outstanding balance of $0.00.” 

The court then analyzed the purpose of Fla. Stat. 627.736(10) and found that the purpose of the pre-suit demand letter provision of the statute is to give the insurer notice of what its potential liability would be and to give the insurer one last chance to cure the claim at issue. The court concluded that in this case, the medical provider clearly notified the insurer that there was no money owed by submitting a ledger attached to the demand letter showing a $0 balance. The court went on to state: “Any reasonable person that receives a bill or statement stating there is no money owed would not make a payment on that bill or statement.” When analyzing the Statute, the court found that Section 627.736(4)(b) provides that no payment shall be overdue, notwithstanding written notice, “when the insurer has reasonable proof to establish that the insurer is not responsible for payment,” which in the instant suit is surely the case when the provider does not know what “payment” is due. 

The court then analyzed other DCA decisions on the issue and cited MRI Associates of America, LLC v. State Farm Fire & Casualty Co., 61 So. 3d 462, 465 (Fla. 4th DCA 2011) in which the 4th DCA held that the pre-suit demand letter of section 627.736(10) requires precision in a demand letter by the requirement that it must include an itemized statement specifying each exact amount owed. The court also analyzed a recent 3rd DCA decision in Rivera v. State Farm Mut. Auto. Ins. Co., 317 So. 3d 197, 204-205 (Fla. 3d DCA 2021), in which the court also held that section 627.736(10) requires precision, which includes the provider putting the insurer on notice of “the exact amount for which it will be sued if the insurer does not pay the claim.” Finally, the court analyzed other County Court decisions that have ruled that when a demand letter states that $0.00 is owed, it fails to comply with Fla. Stat. 627.736(10). Florida Injury Longwood, LLC a/a/o Aaron Clements v. USAA Case. Ins. Co., 25 Fla. L. Weekly Supp. 970b (Fla. Cty. Ct. 9th Cir. 2017); Injury Centers of St. Pete., Inc. a/a/o Stetson Estes v. Garrison Property and Cas. Ins. Co., 25 Fla. L. Weekly Supp. 192a (Fla. Cty. Ct. 13th Cir. 2017). 

This ruling is significant because it further codifies the requirements of Fla. Stat. 627.736(10) that a demand letter must identify the exact amount being demanded. As such, each and every single PIP suit should have an affirmative defense for failure to comply with Fla. Stat. 627.736(10) due to the ever-evolving nature of the case law regarding demand letters. Also of note is how the plaintiff technically prevailed on its improper reduction argument, but because of the demand letter issue, the carrier won the day.
 

Case Law Alerts, 1st Quarter, January 2023 is prepared by Marshall Dennehey to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2032 Marshall Dennehey, all rights reserved. This article may not be reprinted without the express written permission of our firm.

Firm Highlights

Result

Summary Judgment Secured, Preserving $750,000 in Coverage for Insured in Major Trucking Liability Dispute

Ray Freudiger and Michael A. Roberts (both of Cincinnati) successfully obtained summary judgment on behalf of their client in a coverage dispute arising from a May 19, 2022, motor vehicle accident. A permissive driver operated a box truck for an interstate trucking company and caused severe injuries to two tort victims. Prior to the accident, the insured had procured a commercial auto policy for the trucking company with stated limits of $1,000,000. Following the accident, the insurer initiated a declaratory judgment action asserting that only reduced bodily injury limits of $25,000/$50,000 applied and later counterclaimed, alleging it would not have insured the driver had he been properly submitted for approval under the policy. After extensive discovery, briefing, and oral argument, the court rejected the insurer’s attempt to shift responsibility for the $750,000 in coverage it was legally required to provide for permissive drivers under Ohio law, granting summary judgment in favor of the insured and preserving $750,000 in liability exposure.

Result

No-Cause Jury Verdict Secured in Wrongful Death Trial

We successfully obtained a no-cause jury verdict in a 13-day wrongful death trial. The decedent, a 59-year-old man, was admitted to the emergency room on February 15, 2019, with complaints of abdominal pain, decreased appetite, and constipation, despite the use of laxatives. The patient did not complain of any nausea, vomiting, or diarrhea. He had a significant medical history including diabetes, hypertension, prior coronary artery stenting, morbid obesity (with past gastric bypass surgery), longstanding ventral hernia, and back pain. A CT scan revealed multiple hernias and a potential closed-loop bowel obstruction, leading to a surgery consultation. Our client, an emergency general surgeon, interpreted that the patient did not have a closed loop or any significant obstruction and recommended non-surgical management. The patient was approved to have clear liquids, and had a vomiting incident shortly after, but our client was not notified. The patient was returned to NPO status, and after improving overnight, he was returned to “clears” and additional medical and renal consults were ordered. Our client did not receive any communications from the residents/nurses of any changes in the patient’s condition. On February 18, 2019, two rapid responses were called due to increased heart rate and vomiting. It is believed that the vomiting resulted in aspiration, causing sepsis, ultimately leading to the patient’s death. During the trial, the plaintiff’s sole medical expert highlighted imaging on the wrong hernia, which called into question all of his opinions in the case. We made key objections related to the expert testimony, limiting what the allegations were, and preventing new allegations from being made. After approximately two and a half hours of deliberating, the jury returned a no-cause verdict. 

Marshall Dennehey Announces 2026 Ohio Super Lawyers and Rising Stars

News

Marshall Dennehey Announces 2026 Ohio Super Lawyers and Rising Stars

empty courtroom photo

Result

Summary Judgment Secured for Life Insurance Agent

Thought Leadership

Ohio Supreme Court Holds That a Binding Appraisal Award May Not Be Set Aside Absent Specific Evidence of Manifest Mistake or Fraud

On July 23, 2026, the Ohio Supreme Court issued a rare opinion on the binding effect of an appraisal award in a property insurance policy.  The Court in One Church held: A binding appraisal award will not be set aside unless an error is so palpably wrong that it undermines the intent of the agreement, such as corruption or gross mistake, not a mere error of judgment—To plead a claim of mistake with particularity as required by Civ.R. 9(B), facts alleged in a complaint must constitute the elements of mistake—Allegation that additional, hidden damage was discovered after appraisal award failed to state a claim of mistake that could justify setting aside binding appraisal.  The case arose out of a claim brought by One Church against its insurer, Brotherhood Mutual Insurance Company for roof damage from a storm. Pursuant to the terms of the insurance policy, the parties agreed to submit the matter to appraisal. The two appraisers inspected the building, and both appraisers agreed that the damages were $313,271.98. The insurer paid the agreed appraised amount.  Thereafter, the insured submitted a claim for an additional $206,663.09 in damages. The insured argued that these additional damages were not discovered until after the repairs began, and that they should be permitted to submit an additional claim, even though there had already been a binding appraisal of damages. The insurer refused to pay the additional damages, and the insured sued for breach of contract and bad faith.  In the trial court, the insurer moved to dismiss for failure to state a claim, arguing that the binding appraisal award barred any further claims. The insured took the position that additional hidden damages could not be discovered until after the repairs began, and therefore there was a mutual mistake. The trial court dismissed the case on the insurer’s motion, because there was no “evidence of fraud, misfeasance, or mistake”. The Court of Appeals agreed that appraisal awards are generally binding, but noted that an appraisal award can be set aside for fraud or manifest mistake. The Court of Appeals reversed and remanded the case to the trial court, finding that the insured had pled mistake with sufficient particularity. The insurer appealed to the Ohio Supreme Court. On appeal, the Ohio Supreme Court reversed the Court of Appeals, and reinstated the trial court decision dismissing the case for failure to state a claim upon which relief can be granted. The Supreme Court found that since the insured had already demanded appraisal, and the appraisal award was binding, “something more than error of judgement, such as corruption in the arbitrator, or gross mistake” must be pled with particularity, and proven for the insured to override the appraisal award. Since the complaint did not allege fraud or manifest mistake with sufficient particularity, something more than a mere error of judgment, the complaint was insufficient to state a claim.  The complaint in this case did not challenge the appraisal award. It pled that additional damages were discovered that were not apparent when the appraisal was done. It did not specify “who discovered the damages, how they were discovered, where they were found, why they were previously hidden, or why they rise to the level of a manifest mistake that the “appraiser would have corrected...had it been called to his attention”. Id at ¶22 citing Lakewood Mfg. Co. v. Home Ins. Co. of New York, 422 F.2d 796, 798 (6th Cir. 1970). Cases deciding the effect of appraisal awards are unusual. The Ohio Supreme Court’s decision in One Church relies primarily on 19th century case law for its conclusion. This emphasizes the fact that there is minimal case law deciding the effect of binding appraisal clauses in property insurance policies, and makes this case all the more significant. A lengthy dissent was written by Justice Fisher, who would have affirmed the Court of Appeals decision reversing and remanding the case for a decision on the merits. Of course, the decision works both ways, and an insurer dissatisfied with a binding appraisal award will likewise be without further recourse absent evidence of corruption, fraud, misfeasance, or manifest mistake, which must be pled with particularity. To constitute manifest mistake, “the mistake must be of such character that the arbitrator or appraiser would have corrected it had it been called to his attention.”  Lakewood Mfg. Co. v. Home Ins. Co. of New York, 422 F.2d 796, 798 (6th Cir. 1970).  The majority opinion does not specifically identify what would have been sufficient to plead mistake with particularity, or if the insured could have amended the complaint to overcome the deficiencies. The dissent argues that this was not really a case alleging mistake, but rather a question of contract interpretation. The insured did not challenge the appraisal, but argued that the hidden damage was not part of the appraisal, and the appraisal only covered the known damages.  However, this argument did not carry the day with the majority.  *Thomas F. Glassman, a shareholder in Marshall Dennehey’s Cincinnati office, filed a brief in the Ohio Supreme Court on behalf of the Ohio Association of Civil Trial Attorneys, in support of the insurer’s position.

blue facade of a hospital sign against blue sky

Result

Defense Verdict in Complex Medical Malpractice Trial

Jason Banonis Holds PDI Attorney of the Year Award with the PDI President

News

Jason Banonis Named Attorney of the Year by the Pennsylvania Defense Institute

Thought Leadership

The Best Defense is Already in the File: Documentation in Civil Rights Litigation

Thought Leadership

State of Insurance: Q2 Notes From Pennsylvania

Portrait of Carolyn Schweizer, with text below: Philadelphia Office Managing Attorney

News

Marshall Dennehey Names Carolyn Schweizer New Philadelphia Office Managing Attorney