Personal Injury Protection (PIP) Litigation

Key Points:

• Florida’s Fourth District Court of Appeal has recently taken up two separate cases relating to the PIP litigation ancillary issues of interest and penalty and postage. 
• In South Florida Pain & Rehabilitation of West Dade v. Infinity Auto Ins. Co., the court examined the question of whether a provider is entitled to attorney’s fees under § 627.736(8), Florida Statutes (2018), after having recovered a judgment solely on the statutory penalty and postage costs authorized by § 627.736(10). 
• In Precision Diagnostic, Inc. v. Progressive Am. Ins. Co., the court answered whether the interest rate owed on a PIP claim should fluctuate quarterly or be paid based on the fixed quarter date the amount became overdue, and whether the doctrine of de minimis non curat lex is applicable to interest within the no-fault context.

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It is promulgated that the purpose of Florida’s no-fault personal injury protection (PIP) statute is to ensure the “swift and virtually automatic payment” to the insured. Nunez v. Geico Gen. Ins. Co., 117 So.3d 388, 391 (Fla. 2013). However, PIP litigation has evolved over the years, and ancillary issues, such as the payment of penalty and postage reimbursement and various theories of interest calculation, began to develop, even in circumstances without no-fault benefits at issue. The result of a judgment for interest, penalty or postage alone in these instances would commonly result in an award of attorney’s fees and costs for plaintiffs. 

These ancillary issues involving interest, penalty and postage often evaded higher-level review until the January 1, 2021, statutory change to Florida’s appellate court jurisdiction, when most small claims and county court cases could be appealed directly to Florida’s District Courts of Appeal. Palmetto Physical Therapy Inc. v. Progressive Select Ins. Co., 320 So.3d 213 (Fla. 3d DCA 2021). As a result of the appellate jurisdiction change, within the last year, Florida’s Fourth District Court of Appeal has taken up two separate cases on the issues of interest and penalty and postage. Both decisions have focused on the purpose of Florida’s no-fault statute, which is to reimburse a claimant’s insurance benefits as a result of a motor vehicle accident. 

Penalty and postage reimbursements are essentially financial incentives for an insurer to pay PIP benefits correctly to avoid the pre-suit litigation phase entirely. Section 627.736(10)(d) reads: “[i]f, within 30 days after receipt of notice by the insurer, the overdue claim specified in the notice is paid by the insurer together with applicable interest and a penalty of 10 percent of the overdue amount paid by the insurer, subject to a maximum penalty of $250, no action may be brought against the insurer.” See also United Auto Ins. Co. v. 5-Star Rehabilitation Center, Inc., 2020 WL 6304285 (Fla. 11th Jud. Cir. App. 2020). The requirement for postal cost reimbursements is actually found separately in Section 627.736(10)(c).

In April 2021, the Fourth District Court of Appeal, in South Florida Pain & Rehabilitation of West Dade v. Infinity Auto Ins. Co., 318 So.3d 6 (Fla. 4th DCA 2021), took up the question of “whether [a] provider is entitled to attorney’s fees under section 627.736(8), Florida Statutes (2018), after it recovered a judgment solely on the statutory penalty and postage costs authorized by section 627.736(10)[.]” 

The court answered the question in the negative, citing to a plain language interpretation of the PIP statute. The court noted that an exception to section 627.736(8)’s entitlement to attorney’s fees occurs under “section 627.736(10)(d) [where] an insurer is not obligated to pay any attorney fees if it pays the insured’s PIP claim within thirty days after receipt of the pre-suit demand letter.” The Fourth District held that the absence of penalty and postage within the statute’s language controlled, finding: “[i]f the Legislature had intended for attorney’s fees to be otherwise recoverable under the statute, it would have said so.” 

Upon review of the totality of the opinion, it is evident that the importance of no-fault insurance is not ancillary issues or technicalities but the recovery of medical benefits to the actual plaintiffs. The court went on to clarify “[t]he Legislature’s intent when enacting the no-fault statute was to ensure the swift payment of ‘medical, surgical, funeral, and disability insurance benefits.’” 

While this particular opinion was limited to scenarios only involving penalty and postage, it appeared from the court’s judicial history concerning the recovery of attorney fees and costs that the same line of reasoning could potentially apply to the recovery of interest payments alone when no actual PIP benefits were at issue. To date, this has not occurred, but further opinions on interest have recently shaped the issue’s jurisprudence in the no-fault context. 

Later in the year, on October 20, 2021, the Fourth District Court of Appeal also issued two front opinions concerning interest. Interest as a legal issue in PIP has been well on its way to developing multiple legal theories, bolstering it as a matter almost as prevalent as recovering actual PIP benefits. Certain theories of recovery against interest stem from whether it was subject to the pre-suit demand requirement, if it must be specifically pled in a complaint, if the interest rate should change quarterly, or whether the doctrine of de minimis non curat lex to interest alone applied to the no-fault statute. 

Fla. Stat. Section 627.736(4)(d) provides the context for no-fault interest payments: 

All overdue payments bear simple interest at the rate established under s. 55.03 or the rate established in the insurance contract, whichever is greater for the quarter in which the payment became overdue, calculated from the date the insurer was furnished with written notice of the amount of covered loss. Interest is due at the time payment of the overdue claim is made.

The Fourth District Court of Appeal in Precision Diagnostic Inc. v. Progressive American Ins. Co., 330 So.3d 32 (Fla. 4th DCA 2021) took on two of the above issues in its interest decision. First, whether the interest rate owed on a PIP claim should fluctuate quarterly or be paid based on the fixed quarter date the amount became overdue, and second, whether the doctrine of de minimis non curat lex is applicable to interest within the no-fault context. 

As for the fluctuating interest issue, the court clarified a recently brewing interest argument by opining that interest should not be adjusted quarterly or left as to the specific quarter date that interest is due. Rather, interest should adjust based on the annually set rate. The court reasoned that, even though “the Chief Financial Officer sets the interest rate quarterly, section 55.03 [where PIP interest rates are taken from] only provides for an already established interest rate to adjust annually, not quarterly.” 

While the fluctuating interest decision will have far-reaching consequences much beyond the scope of this article, there will be an equally significant effect from the court’s recognition of the de minimis non curat lex doctrine to interest amounts in the no-fault context.

Black’s Law Dictionary defines the doctrine of de minimis non curat lex as “the law does not concern itself with trifles.” The Florida Supreme Court has described the legal maxim to mean that “the law does not care for small things.” Loeffler v. Roe, 69 So.2d 331, 338 (Fla. 1953). 

De minimis non curat lex “is a hallowed, long established and long recognized principle of law, and a party is entitled to call it in aid.” Precision Diagnostic, Inc., 330 So.3d at 35 (quoting Alec Samuels, De Minimis Non Curat Lex, 1985 Statute L. Rev. 167, 167 (1985)). Without the doctrine, litigation over trifling amounts will be a “waste of the time and money, and impair[] the dignity of the court and judge.” Id. (quoting Alec Samuels, De Minimis Non Curat Lex, 1985 Statute L. Rev. 167, 168 (1985)).  

In Precision Diagnostic, the provider sued over an interest difference of $4.17 based on the fluctuating interest argument above. When the trial court ruled in favor of the insurer’s de minimis argument, that the interest alone amount was too little to recover, the plaintiff’s appeal followed. The Fourth District Court of Appeal agreed with the insurer’s argument and noted the long history of the de minimis doctrine applying to a wide range of legal fields, including criminal, workers’ compensation and attorney fee awards for de minimis recoveries. However, the Precision Diagnostic decision is the first statewide binding appellate opinion explicitly recognizing the doctrine of de minimis non curat lex in the no-fault PIP context, although it is limited to interest-alone recoveries. 

A cause for concern for the Fourth District was the appearance that the case at issue was not brought for a genuine desire to recover $4.17 in miscalculated interest, “but rather for the award of attorney’s fees.” 

Time will tell the lasting effects of the above opinions. However, one common theme seems clear, the objective of Florida’s no-fault statute centers on the speedy reimbursement of medical, surgical, funeral and disability insurance benefits, not ancillary matters outside the core of the statute.

*Sean is an associate in our Tampa, Florida office. He may be reached at 813.989.1814 or spgreenwalt@mdwcg.com. 

 

_{Defense Digest, Vol. 28, No. 1, April 2022 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal 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. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2022 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.}