Third District Court of Appeal

State of Florida 

Opinion filed November 10, 2021.

Not final until disposition of timely filed motion for rehearing.

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No. 3D21-114

Lower Tribunal Nos. 12-1585SP, 20-107AP

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United Automobile Insurance Company,

Appellant,

vs.

ISOT Medical Center Corp., a/a/o Joseph Rodriguez,

Appellee.

An Appeal from the County Court for Miami-Dade County, Lawrence 

D. King, Judge.

Michael J. Neimand, for appellant.

Law Office of Chad A. Barr, P.A., and Chad A. Barr and Dalton L. 

Gray (Altamonte Springs), for appellee.

Before LOGUE, LINDSEY and HENDON, JJ. 

HENDON, J.
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United Automobile Insurance Company (“UAIC”) appeals from a final 

judgment in favor of ISOT Medical Center Corporation, a/a/o Joseph 

Rodriguez (“ISOT”). We affirm. 

In March 2009, Joseph Rodriguez was injured in an auto accident. 

Rodriguez was insured by UAIC, with a $1,000 policy deductible. He 

assigned his UAIC benefits to ISOT, which provided medical treatments 

and timely submitted its bills to UAIC. UAIC initially denied all charges. 

Upon receipt of ISOT’s demand letter, UAIC allowed ISOT’s bills, reduced 

each bill to the schedule of maximum charges,1 applied the first $1,000 of 

the reduced charges to the $1,000 policy deductible, and then reimbursed 

the remaining charges at 80% of the schedule of maximum charges.

ISOT subsequently filed suit against UAIC for breach of contract to 

recover further benefits owed for the medical services it rendered, alleging 

1 The Florida No–Fault (“PIP”) Statute, section 627.736, Florida Statutes, 

(2012 to date), sets forth a basic coverage mandate which requires every 

PIP insurer to reimburse 80% of reasonable expenses for medical services. 

There are two different methodologies permitted under the statute for 

calculating reimbursements to satisfy the PIP mandate: (1) the 

“reasonableness is a fact dependent inquiry” methodology prescribed 

under section 627.726(5)(a), Florida Statutes; and (2) the “schedule of 

maximum charges” provided under section 627.736(5)(a)1., Florida 

Statutes. The “schedule of maximum charges” limits payment to “200 

percent of the allowable amount under” the “participating physicians fee 

schedule of Medicare Part B.” See § 627.736(5)(a)1.f.(I) (2021). In turn, 

the Medicare Part B Physicians Fee Schedule prescribes the 

reimbursement rate for over 7,000 services performed by medical 

professionals. 
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the underpayment of PIP benefits and seeking further reimbursement of 

PIP benefits and statutory interest. UAIC answered the complaint but did 

not assert any affirmative defenses. ISOT then filed a motion for summary 

judgment as to the reasonableness of its charges for dates of service 

March 19, 2009 to May 28, 2009. Both parties filed competing affidavits to 

support their motions, and the court denied ISOT’s motion. 

During the litigation, the Florida Supreme Court ruled that that an 

insurer cannot reduce a medical provider’s bills to a fee schedule before 

applying a policy deductible. Progressive Select Ins. Co. v. Fla. Hosp. Med. 

Ctr., 260 So. 3d 219, 226 (Fla. 2018) (holding the deductible must be 

applied to 100% of the charges, only afterwards reduced to the schedule of 

maximum charges; the insurance company does not get to reduce the 

charges before applying the deductible). ISOT then filed another motion 

for summary judgment asserting that when UAIC applied the deductible, it 

reduced ISOT’s charges from the billed amounts to the fee schedule 

amounts before applying the deductible, contrary to the holding in 

Progressive. In so doing, ISOT argued that UAIC improperly applied the 

policy deductible to several charges that fell outside of the first $1,000 of 

charges. Thus, once the deductible was re-calculated to be properly 

applied to the first $1,000 of charges billed, a group of unpaid charges 
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remained to which UAIC improperly applied the deductible but were not 

supposed to be reduced by the deductible. The summary judgment was 

specific to the four identified codes that are not disputed by either party as 

reasonable, related, or necessary and for which no prior reimbursement 

was previously made.

UAIC argued that ISOT was improperly seeking summary judgment 

as the money due ISOT for the four identified services would not then be 

utilized in a set-off. ISOT argued that, while UAIC previously issued the 

disputed reimbursements, it nevertheless failed to plead a payment 

defense and, furthermore, misinterpreted the rights of a set-off, specifically, 

that set-offs are for correcting codes or claims on an individual basis rather 

“mov[ing] money around from one code to another code after they reapply 

the deductible.” 

At the summary judgment hearing, ISOT contended that by accepting 

the amount UAIC paid for what it at the time believed were medically 

necessary services, ISOT was entitled to summary judgment. In other 

words, ISOT argued that upon proper recalculation of the deductible the 

four contested treatment codes should have been reimbursed by UAIC and 

argued its entitlement to summary judgment on this basis. UAIC responded 

that this failed to include the treatment that UAIC paid for, but was now 
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contesting, that occurred after March 31, 2009. UAIC agreed that it 

misapplied the deductible but argued at summary judgment that it is 

entitled to a setoff for the amount it overpaid for those treatments after 

March 31, 2009, relying on its expert’s uncontested affidavit that those 

additional charges were not medically necessary or reasonable. UAIC 

argued that because ISOT did not state at summary judgment that it was 

still relying on its own expert’s affidavit, which asserted that the disputed 

treatments were reasonable, related and necessary, UAIC’s expert’s

testimony was unchallenged. The trial court denied UAIC’s argument for 

set off and rendered final judgment for ISOT in the amount of $196.00 in 

benefits and $168.61 in interest. UAIC appeals. 

We apply a de novo standard of review to the lower court's order 

granting summary judgment. Volusia Cnty. v. Aberdeen at Ormond Beach, 

L.P., 760 So. 2d 126 (Fla. 2000); Sierra v. Shevin, 767 So. 2d 524 (Fla. 3d 

DCA 2000). 

UAIC relies on Hamm v. City of Milton, 358 So. 2d 121 (Fla. 1st DCA 

1978), to argue it is entitled to a set-off of the amount awarded to ISOT for 

the treatments to which UAIC misapplied the deductible. In Hamm, a tort 

case, the defendant city's insurer made a pretrial $2,686.64 advance 

payment to Hamm. Prior to entry of judgment, the trial court reduced the 
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verdict amount by the amount previously advanced by the city's insurer. On 

appeal, the Court found that the set-off was appropriate, observing that it 

would be inequitable to allow plaintiffs to receive double recovery at the 

expense of the defendant.

We conclude that Hamm, as a tort action, is inapplicable to this 

insurance contract case. In a contract action, set-off is an affirmative 

defense that must be pleaded or it is waived. Fla. R. Civ. P. 1.110(d); 

Heartwood 2, LLC v. Dori, 208 So. 3d 817, 821 (Fla. 3d DCA 2017); S. 

Mgmt. & Dev., L.P. v. Gardner, 992 So. 2d 919, 920 (Fla. 4th DCA 2008); 

see also Felgenhauer v. Bonds, 891 So. 2d 1043, 1045 (Fla. 2d DCA 2004) 

(noting that in contrast to a contract action, in tort actions set-off is not an 

affirmative defense to be considered by the jury but is a determination 

regarding damages to be made by the court after the verdict is rendered); 

Jojo's Clubhouse, Inc. v. DBR Asset Mgmt., Inc., 860 So. 2d 503, 504 (Fla. 

4th DCA 2003) (citations omitted). UAIC did not assert any affirmative 

defenses in its answer to the complaint. Because UAIC did not assert the 

affirmative defense of set-off before trial and no evidence regarding the 

disputed benefits was presented to the finder of fact other than that both 

parties’ experts agreed the treatments were medically necessary, the trial 

court appropriately denied set-off.
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Affirmed.