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Case Law Alerts

Information Regarding Payments Made to Third Parties in the Course of Exhausting PIP Benefits is Discoverable - Such Payments Do Form the Basis of a Litigious Issue That is Not Frivolous

Access Medical Svcs, Inc., a/a/o Renee Dukes v. Progressive American Ins. Co., County Court, 9th Judicial Circuit in and for Orange County. Case No. 2022-SC-005831-O

January 1, 2023

This suit involved a medical provider seeking payment on treatment rendered to the plaintiff on dates of service June 11, 2018 through July 30, 2018. The defendant asserted exhaustion of benefits as its affirmative defense. Following the filing of its answer and affirmative defense, the defendant served the plaintiff with a Safe Harbor Letter and a Proposed Motion for Sanctions pursuant to Fla. Stat. 57.105 on March 22, 2022. The proposed motion for sanctions included unverified copies of the defendant’s PIP Log, Explanations of Benefits, and Declaration page. However, as the court pointed out, the defendant failed to include its policy of insurance, Health Insurance Claim Forms (HCFA), medical records, proofs of mailing, or any other documents which would attest to the accuracy of those documents. The court noted that on April 8, 2022, 17 days after the defendant served their proposed motion for sanctions and safe harbor letter, the defendant responded to the plaintiff’s request for production. The proposed motion was then filed on April 14, 2022, and the plaintiff dismissed its suit on May 26, 2022, after which, the defendant sought its fees pursuant to the 57.105 motion for sanctions. 

In analyzing the defendant’s entitlement to fees, the court noted that Florida appellate courts have consistently ruled that: “[w]hen assessing attorney’s fees against a losing party’s attorney, the trial court must find that there were no justiciable issues of law or fact and that the losing party’s attorney did not act in good faith based on the representations of his or her client.” Citing Siegel v. Rowe, 71 So. 3d 205, 211 (Fla. 2d DCA 2011). In determining whether the instant suit was frivolous, the court turned to the 4th DCA decision in Progressive Select Inc. Co. v. Dr. Rahat Faderani, DO, MPH, P.A., 330 So. 3d 928, 929 (Fla. Dist. Ct. App. 2021, in which the 4th DCA held that “[b]ecause the use of NCCI edits comports with the statute, Progressive did not make improper payments or act in bad faith in using the edits to reduce the bill of the third-party provider.” The court used this ruling to conclude that Faderani demonstrates that the discovery of improper payments will preclude the findings on proper exhaustion, thus, plaintiffs are allowed to conduct discovery before determining whether benefits were properly exhausted. 

When applying this principle to the instant case, the court made the following finding: “Thus, it is very clear that Defendant’s payments to other providers, along with their failure to provide the required supporting documentation requested by Plaintiff to verify that said payments were properly made, permitted Plaintiff the opportunity to discern whether any overpayments and/or gratuitous payments resulting in a premature/errant exhaustion of the PIP benefits at issue under the policy had taken place.” Because this documentation was not provided in its demand response, nor in the proposed motion for sanctions, and said documents were provided in discovery responses 17 days after the safe harbor letter and proposed motion for sanctions were served, the court found that the use of a 57.105/safe harbor letter was nothing more than an improper intimidation tactic.

Ultimately, the court found that information regarding payments made to third parties in the course of an exhaustion of PIP benefits is discoverable and such payments do form the basis of a litigious issue that is not frivolous. The implications of this order are that if a carrier wishes to seek sanctions on an exhaustion suit, their best practice would be to provide the PIP Log, Explanations of Benefits, Policy, HCFA’s, medical records, and proof of mailing in its demand response. Having said that, if these documents are not provided in the pre-suit demand response, they should be provided to the plaintiff prior to serving a proposed motion for sanctions pursuant to Fla. Stat. 57.105, as the plaintiff must be given an opportunity to analyze these documents to confirm whether or not their suit is indeed frivolous.
 

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.

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Thought Leadership

The Search-Incident-to-Arrest Doctrine Does Not License Strip Searches

In Beatty v. Gardner, No. 25-2860 (3d Cir. Sept. 16, 2026), Kyle Beatty sued police officers Clinton Gardner and Calvin Irvin under 42 U.S.C. § 1983 after they stopped, arrested, and searched him three times during a drug investigation in Williamsport, Pennsylvania. The officers initially smelled marijuana coming from the car in which Beatty was sitting and observed marijuana residue, giving them probable cause to arrest him. Beatty consented to the first pat-down, and the second search was conducted incident to his lawful arrest; neither search uncovered weapons or contraband. The officers then transported Beatty to the police station solely to strip-search him, but the strip search also revealed nothing. The District Court granted the officers summary judgment, concluding that the initial stop, arrest, and first two searches were reasonable and that qualified immunity protected the officers from liability for the strip search. The Third Circuit affirmed, but held that the strip search itself violated the Fourth Amendment. The court concluded that the search-incident-to-arrest doctrine does not automatically permit officers to strip-search an arrestee outside the jail or prison setting. Because strip searches are highly intrusive and the traditional justifications for searches incident to arrest (officer safety and preservation of evidence) did not justify the search of Beatty, the officers generally needed either the arrestee’s consent, exigent circumstances, or a warrant supported by probable cause to believe that a search beneath the clothing would reveal weapons, contraband, or evidence. Here, the officers had none of those justifications. Nevertheless, the court held that qualified immunity barred damages liability because, at the time of the search, the right against a warrantless strip search of an arrestee outside the institutional setting was not clearly established by Supreme Court or Third Circuit precedent. The court likewise upheld qualified immunity on Beatty’s First Amendment retaliation claim and affirmed summary judgment for the officers.

Thought Leadership

Pennsylvania Supreme Court to Review Whether Legal Malpractice Claims May Be Recast as Breach of Contract Claims

The Pennsylvania Supreme Court recently granted allowance of appeal to consider whether a plaintiff may pursue a breach of contract claim against an attorney based on allegations that the attorney failed to provide competent legal services. The issue is significant in professional liability litigation because it concerns whether a plaintiff may avoid the statute of limitations applicable to professional negligence claims by characterizing the alleged misconduct as a breach of contract. Antoine Poteat retained attorneys Gary Asteak and Nino V. Tinari to represent him in a criminal matter. After his conviction was subsequently overturned through a Post Conviction Relief Act proceeding, Poteat filed suit against his former attorneys alleging that they breached their retainer agreements by failing to provide competent legal services. The attorneys argued that the claims sounded in professional negligence, rather than breach of contract, and were therefore time-barred. The trial court dismissed Poteat’s complaint, but the Superior Court, sitting en banc, reversed. The Superior Court held that the gist-of-the-action doctrine did not bar Poteat’s breach of contract claim because the alleged failure to provide competent legal services could constitute a breach of the parties’ agreement. The Court further held that a legal-services agreement contains an implied duty requiring an attorney to provide competent legal services, even where the agreement does not contain an express provision requiring such services. The Pennsylvania Supreme Court granted review in July 2026 and will consider whether the Superior Court’s decision conflicts with Pennsylvania precedent distinguishing contract and tort claims, including Bruno v. Erie Insurance Co. The Supreme Court will also address whether a plaintiff may maintain a breach of contract claim based on an implied duty to provide competent legal services without identifying a specific contractual provision that was breached. The Supreme Court’s decision could have significant implications for professional liability litigation in Pennsylvania, particularly where plaintiffs seek to characterize claims arising from alleged professional negligence as contractual claims.

Thought Leadership

Two Tracks, No Preclusion: Ohio Supreme Court Preserves Separate Damages Claims After Chapter 2506 Appeals

The Supreme Court of Ohio has clarified that an administrative appeal under Ohio Revised Code Chapter 2506 does not bar a separate action for damages and declaratory relief that could not have been pursued in the administrative appeal. The Ohio Supreme Court considered Sheetz, Inc. v. Centerville (2026-Ohio-3531) as a result of a certified question from the Southern District of Ohio. The question was whether Sheetz, the gas station/convenience store brand, was barred from seeking damages in a separate action since damages were not sought in their administrative appeal. Ultimately, the Ohio Supreme Court ruled that res judicata does not bar a separate action for damages after ruling on an administrative appeal because R.C. Chapter 2506 is limited to judicial review and cannot grant affirmative relief. The case arose after Centerville’s city council rejected a site plan proposed by Sheetz, Inc. that had received unanimous approval from the City’s planning commission. Sheetz filed an administrative appeal pursuant to R.C. 2506 in the Montgomery County Court of Common Pleas, and two months later filed a complaint for damages and declaratory relief under 42 USC § 1983 as a takings action with the city, city council, and other objectors as improper takings and a violation of due process, as well as interference with business and contractual relationship. The city and city council removed the § 1983 action for damages to federal court. Montgomery County Court of Common Pleas reversed the city council’s denial, and allowed the Sheetz project to move forward. Upon that ruling, the federal court issued a show-cause order questioning whether the § 1983 action was barred by the doctrine of res judicata via claim preclusion (which includes all theories of recovery).  Sheetz argued that Ohio courts of common pleas do not have authority to award damages or declaratory relief as party of the R.C. Ch. 2506 appeal, therefore res judicata could not be triggered to apply to the § 1983 action. Additionally, Sheetz moved to certify the issue to the Ohio Supreme Court, citing differing results between the second and sixth districts on this same issue. Centerville approached the question, not from a claim preclusion standpoint, but from the holding in Grava v. Parkman, Twp which states that a final judgment rendered on the merits bars all subsequent action based on the same transaction or occurrence.  In yet another approach, an objector argued that claim preclusion was satisfied because Sheetz could have raised its damages claims in the administrative appeal – Sheetz disagrees. In their analysis, the Supreme Court of Ohio broke down the elements of a claim preclusion analysis: 1) a prior final, valid decision on the merits by a court of competent jurisdiction; (2) a second action involving the same parties, or their privies, as the first; (3) a second action raising claims that were or could have been litigated in the first action; and (4) a second action arising out of the transaction or occurrence that was the subject matter of the previous action. The Court held that R.C. Ch. 2506 does not permit a party to argue damages as R.C. Ch. 2506 limits the common pleas jurisdiction as if it were sitting on appeal, and therefore can only affirm, reverse, vacate, or modify the appealed order, or can remand the case to the administrative body. Further, the Court held that Grava’s conclusion that a final judgment precludes additional litigation for different relief is inapplicable under this fact pattern because it was meant only to apply to those matters in which the plaintiff brings the exact same case twice, but for new relief. The Court found Grava was inapplicable because Sheetz could have requested damages or declaratory relief in the R.C. 2506 appeal. Therefore, Grava would be nothing more than dicta if it even did apply. Going further, the Ohio Supreme Court disavowed Sixth Circuit precedent which, in reliance on Grava and other district court decisions, permitted an owner to seeking relief under 42 U.S.C. § 1983 alongside an administrative appeal. See Moore v Hiram Twp., 988 F.3d 353 (6th Cir.2021). The Ohio Supreme Court found that the Sixth Circuit had disregarded a critical decision in Community Concerned Citizens, Inc. v. Union Twp. Bd. of Zoning Appeals, 1993-Ohio-115, which clearly held that a R.C. Ch. 2506 appeal cannot be combined with a complaint seeking other claims for relief. Id. at ¶ 11. To that end, the Ohio Supreme Court has determined that the decisions Moore relied on (outside of Grava) are no longer good law, and that Moore was wrongly decided. The decision draws a clear procedural boundary: Chapter 2506 provides judicial review of an administrative decision, not a forum for independent claims seeking affirmative relief. Although Grava may place claims arising from a single transaction within the potential scope of claim preclusion, those claims are not barred unless the complete claim-preclusion test is satisfied. Because Sheetz could not have pursued damages or declaratory relief in its Chapter 2506 appeal, the separate action was not precluded. The remaining question for practitioners looking to apply or defend against this exception is when does the statute of limitations begin to run on damages and declaratory relief claims related to an administrative decision on appeal? A takings action in federal court has a 2-year statute of limitations, or as a state claim, 4 years (like the other tortious claims raised therein). Correlating this case with others, an administrative appeal will not likely toll the statute of limitations on claims based on a final decision by a municipal authority. Therefore, practitioners should look for these cases to be brought simultaneously.