Court Opinion

ID: 4126680
Source: CourtListenerOpinion
Date Created: 2017-02-16 16:06:37.699041+00
Date Added: 2024-06-11T07:46:25.977839
License: Public Domain

Supreme Court of Florida
                                   ____________

                                  No. SC15-1257
                                  ____________

   STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
                       Petitioner,

                                         vs.

           SHANDS JACKSONVILLE MEDICAL CENTER, INC.,
                          Respondent.

                                [February 16, 2017]

LABARGA, C.J.

      This case is before the Court for review of the decision of the First District

Court of Appeal in Shands Jacksonville Medical Center, Inc. v. State Farm Mutual

Automobile Insurance Co., 40 Fla. L. Weekly D1447 (Fla. 1st DCA June 22,

2015), certifying conflict with the decision of the Fourth District Court of Appeal

in Kaminester v. State Farm Mutual Automobile Insurance Co., 775 So. 2d 981

(Fla. 4th DCA 2000). We have jurisdiction. See art. V, § 3(b)(4), Fla. Const.

      The certified conflict issue in this case concerns the extent of permissible

discovery under section 627.736(6)(c), Florida Statutes (2015), and requires us to

examine additional provisions of section 627.736, the statute that governs personal
injury protection (PIP) benefits. Relevant to this case, section 627.736(5)

addresses the reasonableness of charges for treatment, providing:

          (5) CHARGES FOR TREATMENT OF INJURED
      PERSONS.—
             (a) A physician, hospital, clinic, or other person or institution
      lawfully rendering treatment to an injured person for a bodily injury
      covered by personal injury protection insurance may charge the
      insurer and injured party only a reasonable amount pursuant to this
      section for the services and supplies rendered . . . In determining
      whether a charge for a particular service, treatment, or otherwise is
      reasonable, consideration may be given to evidence of usual and
      customary charges and payments accepted by the provider involved in
      the dispute, reimbursement levels in the community and various
      federal and state medical fee schedules applicable to motor vehicle
      and other insurance coverages, and other information relevant to the
      reasonableness of the reimbursement for the service, treatment, or
      supply.

§ 627.736(5)(a), Fla. Stat. Additionally, section 627.736(6), addresses discovery

of facts about an injured person, providing:

          (6) DISCOVERY OF FACTS ABOUT AN INJURED
      PERSON; DISPUTES.—
             (b) Every physician, hospital, clinic, or other medical
      institution providing, before or after bodily injury upon which a claim
      for personal injury protection insurance benefits is based, any
      products, services, or accommodations in relation to that or any other
      injury, or in relation to a condition claimed to be connected with that
      or any other injury, shall, if requested by the insurer against whom the
      claim has been made, furnish a written report of the history, condition,
      treatment, dates, and costs of such treatment of the injured person and
      why the items identified by the insurer were reasonable in amount and
      medically necessary, together with a sworn statement that the
      treatment or services rendered were reasonable and necessary with
      respect to the bodily injury sustained and identifying which portion of
      the expenses for such treatment or services was incurred as a result of

                                        -2-
      such bodily injury, and produce, and allow the inspection and copying
      of, his or her or its records regarding such history, condition,
      treatment, dates, and costs of treatment if this does not limit the
      introduction of evidence at trial. . . .
             (c) In the event of a dispute regarding an insurer’s right to
      discovery of facts under this section, the insurer may petition a court
      of competent jurisdiction to enter an order permitting such discovery.
      The order may be made only on motion for good cause shown . . . . In
      order to protect against annoyance, embarrassment, or oppression, as
      justice requires, the court may enter an order refusing discovery or
      specifying conditions of discovery . . . .

§ 627.736(6)(b)-(c), Fla. Stat.

      In the decision under review, the First District held that discovery of facts

under section 627.736(6)(c) is limited to the production of the documents

described in section 627.736(6)(b). After reaching this conclusion, the First

District certified conflict with the Fourth District’s holding in Kaminester that “the

‘discovery of facts’ referred to in section 627.736(6)(c), Florida Statutes, means

that the discovery methods provided for in the Florida Rules of Civil Procedure are

available to insurers that institute proceedings pursuant to that statute.” Shands, 40

Fla. L. Weekly at D1449. We recognize that while the parties before this Court

disagree about the scope of information available to insurers under section

627.736(6)(c), both the First and the Fourth District Courts of Appeal agree that

the reference to discovery under section 627.736(6)(c) applies “only to the types of

information a healthcare provider is required to provide as delineated in section

627.736(6).” Shands, 40 Fla. L. Weekly at D1448; see also State Farm Mut. Auto.

                                         -3-
Ins. Co. v. Delray Med. Ctr., Inc., 178 So. 3d 511, 515-17 (Fla. 4th DCA 2015)

(distinguishing Kaminester, and holding that State Farm’s discovery requests

exceeded the permissible scope of discovery under the applicable statute).

Accordingly, the conflict issue we address is limited to the methods by which an

insurer may obtain discovery.

      For the reasons discussed below, we approve the First District’s

interpretation in Shands of the scope of discovery under section 627.736(6)(c), and

disapprove the interpretation of the Fourth District in Kaminester.

                   FACTS AND PROCEDURAL HISTORY

      Shands Jacksonville Medical Center (Shands) provided medical services to

twenty-nine State Farm Mutual Automobile Insurance Company (State Farm)

insureds who were injured in motor vehicle accidents. After paying Shands, State

Farm requested certain documentation relating to the reasonableness of the charges

pursuant to section 627.736(6)(b), which requires a healthcare provider to furnish a

PIP insurer, upon request, with specified documents and information related to the

treatment of an injured person and associated costs. In response, Shands provided

State Farm with medical records, documents related to the treatments and charges

for services rendered, its most recent Medicare Cost Report, its cost information,

and comparative cost information obtained from the Agency for Health Care

Administration (AHCA) demonstrating what other hospitals charge for the same

                                        -4-
procedures. However, Shands refused to furnish copies of third-party contracts,

which contain negotiated discount rates between Shands and other insurers and

payers, contending that such information was not covered by subsection (6)(b).

State Farm then filed a petition pursuant to section 627.736(6)(c), asking the trial

court to compel discovery of the information withheld and order Shands to make a

corporate representative available for deposition.

      The trial court found that the language of section 627.736(6)(c) allows for

discovery under the entirety of section 627.736, including evidence of the

reasonableness of charges addressed in subsections (5)(a) and (6)(b). Furthermore,

the trial court adopted the reasoning of the Fourth District in Kaminester, finding

that the phrase “discovery of facts” in section 627.736(6)(c) was not limited to

document production, but included “deposition testimony and other means of

obtaining information authorized by the Florida Rules of Civil Procedure.”

Ultimately, the trial court ordered Shands to produce the requested discovery and

granted State Farm’s request to depose a corporate representative about documents

and information.

      On appeal, the First District reversed the trial court’s order in its entirety on

the basis that it exceeded the scope of discovery permissible under sections

627.736(6)(b) and (c), declaring:

      [W]e disagree with the trial court’s conclusion that the “discovery of
      facts” referred to in section 627.736(6)(c), Florida Statutes[,] allows

                                         -5-
      discovery under the entirety of section 627.736, including the types of
      evidence that may be considered when determining the reasonable
      reimbursement rate for medical bills presented for treatment referred
      to in section 627.736(5)(a).

Shands, 40 Fla. L. Weekly at D1448. The district court concluded that the

discovery to which State Farm was entitled was limited to the types of documents

specifically delineated by subsection (6)(b). Id. Moreover, the district court

disagreed with the trial court’s adoption of the reasoning in Kaminester, and

determined that “the phrase ‘discovery of facts’ in subsection (6)(c) is limited to

the production of the documents described in subsection (6).” Id. at D1449.

      In Kaminester, the Fourth District examined the nature and extent of

discovery permitted under section 627.736(6)(b) after a healthcare provider refused

to produce the invoice for an MRI upon the insurer’s request, claiming that no

invoice existed because the equipment used was leased. The district court affirmed

the trial court’s order for the healthcare provider to furnish the invoice,

determining that the lease was “well within the meaning of the statutory discovery

provision ‘the costs of such treatment.’ ” Kaminester, 775 So. 2d at 985.

      Relevant to the conflict issue here, the Fourth District affirmed the trial

court’s order requiring the healthcare provider’s corporate president to submit to a

deposition duces tecum pursuant to subsection (6)(c). Id. at 984. The district court

reasoned that when the Legislature used the legal term of art “discovery of facts”

in subsection (6)(c), it borrowed the term “discovery” from the Florida Rules of

                                         -6-
Civil Procedure, which provide, “Parties may obtain discovery by one or more of

the following methods: depositions upon oral examination or written questions;

written interrogatories; production of documents or things or permission to enter

upon land or other property for inspection and other purposes; physical and mental

examinations; and requests for admission.” Id. at 985 (quoting Fla. R. Civ. P.

1.280(a)). The court interpreted “discovery” consistent with its legal meaning and

emphasized that section 627.736(6) authorizes discovery of “facts,” not merely

discovery of documents. Id. Consequently, the district court concluded that the

healthcare provider’s refusal to supply any of the requested information established

good cause for the trial court’s order compelling the corporate president to submit

to a deposition in order to verify the amount due under the PIP policy. Id. at 986.

                                    ANALYSIS

      This case concerns the certified conflict between the First District’s holding

in Shands and the Fourth District’s holding in Kaminester regarding the extent of

permissible discovery pursuant to section 627.736(6)(c). “Because the conflict

issue requires this Court to interpret provisions of the Florida Motor Vehicle No-

Fault Law (No-Fault Law), the standard of review is de novo.” Allstate Ins. Co. v.

Holy Cross Hosp., Inc., 961 So. 2d 328, 331 (Fla. 2007) (footnote omitted).

      “As always, legislative intent is the polestar that guides a court’s inquiry

under the No-Fault Law,” including the PIP statute. Id. at 334. “Such intent is

                                        -7-
derived primarily from the language of the statute.” Id. “Where the wording of

the Law is clear and amenable to a logical and reasonable interpretation, a court is

without power to diverge from the intent of the Legislature as expressed in the

plain language of the Law.” Geico Gen. Ins. Co. v. Virtual Imaging Servs., Inc.,

141 So. 3d 147, 154 (Fla. 2013) (quoting United Auto. Ins. Co. v. Rodriguez, 808
So. 2d 82, 85 (Fla. 2001)).

      However, as we examine the plain language of section 627.736(6), we

observe that the First District in Shands and the Fourth District in Kaminester

reached irreconcilable interpretations of the “discovery of facts” language in

subsection (6)(c). The First District held that the phrase “discovery of facts” is

limited to the production of the documents described in section 627.736(6)(b), in

direct contrast to the Fourth District’s construction that “discovery of facts”

includes all methods of discovery available under the Florida Rules of Civil

Procedure. Thus, because the phrase “discovery of facts,” in section

627.736(6)(c), is susceptible to more than one interpretation, it is necessary to

utilize principles of statutory construction to ascertain legislative intent. See

Rollins v. Pizzarelli, 761 So. 2d 294, 297-98 (Fla. 2000) (quoting Forsythe v.

Longboat Key Beach Erosion Control Dist., 604 So. 2d 452, 455 (Fla. 1992)

(“Ambiguity suggests that reasonable persons can find different meanings in the

same language.”)). Consequently, we “must consider the statute as a whole,

                                         -8-
including the evil to be corrected, the language, the title, and history of its

enactment, and the state of law already in existence on the statute.” Fla. Dep’t of

Envtl. Prot. v. ContractPoint Fla. Parks, LLC, 986 So. 2d 1260, 1266 (Fla. 2008)

(quoting Bautista v. State, 863 So. 2d 1180, 1185 (Fla. 2003)).

      We have recognized that “the purpose of the no-fault statutory scheme is to

‘provide swift and virtually automatic payment. . . .’ ” Nunez v. Geico Gen. Ins.

Co., 117 So. 3d 388, 393 (Fla. 2013) (quoting Ivey v. Allstate Ins. Co., 774 So. 2d
679, 683-84 (Fla. 2000)). Consistent with this purpose, subsection (6) of the PIP

statute allows an insurer to verify the legitimacy of a claim by seeking discovery of

facts regarding an injured insured before it pays PIP benefits. Subsection (6)(b)

delineates the mandatory disclosures to which an insurer is entitled upon request,

and subsection (6)(c) provides an enforcement mechanism by which an insurer

may obtain the discovery to which it is entitled in the event of a dispute.

      We agree with the First District that “[t]he process encompassed by

subsections (6)(b) and (c) is meant to be a limited pre-litigation procedure for a PIP

insurer to obtain specified information about the treatment provided to its insured

and the charges for that treatment.” Shands, 40 Fla. L. Weekly at D1449.

Additionally, we agree with both the First District in Shands and the Fourth

District in Delray that the disclosures enumerated in subsection (6)(b) are limited

to what is discoverable in the context of a pre-litigation inquiry into the treatment

                                          -9-
provided by the healthcare provider and the charges for that treatment, and that

“discovery of facts” under subsection (6)(c) is limited to the specific facts of

treatment and to the related billing of the injured person.

      In considering how the language and title of subsection (6) further reveal the

intent of the Legislature, we turn to the Fourth District’s recent decision in Delray,

which involved facts that are strikingly similar to the present case. In Delray, the

district court considered “whether section 627.736 permits State Farm to request

discovery about the reasonableness of charges by [the healthcare provider],

including discovery regarding the amount others paid . . . for the same services and

treatments.” 178 So. 3d at 512. The Fourth District affirmed the trial court’s

denial of State Farm’s petition for discovery as “overbroad” and “extremely far-

reaching,” holding that “discovery is limited under section 627.736(6)(b) to the

facts of the treatment and to the related billing of the injured person,” and that

“section 627.736(5) is inapplicable to discovery sought under section

627.736(6)(b).” Id. at 512-13.

      While addressing the extent of permissible discovery, the Fourth District in

Delray did not have occasion to address the discovery of depositions, which is at

issue here. Judge Levine, writing for the majority, aptly observed the distinction

between Delray and Kaminester as follows: “the documentation sought in

Kaminester was directly related to treatments and services provided to the injured

                                         - 10 -
party, unlike here where State Farm sought information regarding amounts paid by

others.” 178 So. 3d at 515. Nonetheless, the Fourth District’s reasoning in Delray

regarding the intent of the Legislature is insightful. The district court declared,

“[b]ased on the plain language of this subsection, as well as the title of the

subsection, it is clear that the focus of this provision is the discovery of documents

regarding the treatment and related billing of the individual injured person.” Id.

The court adopted the First District’s interpretation of section 627.736(6) in

Shands, which provided:

             It seems clear to us, [] that the “section” referred to in
      subsection (6)(c) is in fact a reference to subsection (6), not the
      entirety of section 627.736. Subsection (6), unlike subsection (5)(a),
      specifically provides that a PIP insurer is entitled to “Discovery of
      Facts About an Injured Person,” and subsection (6)(b) delineates the
      specific types of information (facts) and documentation to which a
      PIP insurer is entitled to receive from medical providers in analyzing
      the payment of claims. Furthermore, the title to subsection (6) also
      indicates that it addresses “Disputes.” Accordingly, subsection (6)(c)
      begins with the phrase: “In the event of a dispute regarding an
      insurer’s right to discovery of facts under this section . . . ,” which
      clearly applies to disputes related to an insurer’s attempt to obtain the
      information and documentation relating to the treatment and
      associated costs of treatment to an injured insured specified in
      subsection (6).
             Thus, subsection (6)(b) concerns the types of facts and
      documents to which a PIP insurer is entitled to assist it in ascertaining
      the reasonableness of the treatment provided to its insured and the
      amount the medical provider charged for that care. Subsection (5)(a),
      on the other hand, addresses the factors, or “types of evidence,”
      relevant to the reasonableness of a medical provider’s charges. These
      factors, however, are implicated when there is a dispute as to the
      reasonableness of charges for treatment, not when there is a dispute

                                         - 11 -
      concerning an insurer’s attempt to obtain the information it is entitled
      to so that it can assess the reasonableness of those charges.

Shands, 40 Fla. L. Weekly at D1448.

      We agree with the First District’s reasoning and its interpretation that the

“discovery of facts” in subsection (6)(c) applies to disputes regarding an insurer’s

attempt to obtain information and documentation specified in subsection (6)(b).

The title to subsection (6), “Discovery of Facts About an Injured Person;

Disputes,” reflects that the Legislature intended the provisions of subsection (6) to

allow insurers to discover facts about an injured insured before paying claims.

Moreover, subsection (6)(c) employs the same “discovery of facts” language as the

title, creating a direct link to the discovery provisions set forth within section

627.736(6). Thus, we conclude that discovery is limited to the production of “a

written report of the history, condition, treatment, dates, and costs of such

treatment of the injured person and why the items identified by the insurer were

reasonable in amount and medically necessary, together with a sworn

statement . . . ” as well as the production, inspection and copying of “records

regarding such history, condition, treatment, dates, and costs of treatment . . . .”

§ 627.736(6)(b), Fla. Stat.

      Furthermore, we agree that subsection (6) provides limited pre-litigation

discovery into specified information about the treatment and charges for treatment

provided to an injured party, and that “[t]he discovery tools found in the rules of

                                         - 12 -
civil procedure, . . . are not triggered until litigation over the reasonableness of

those charges has ensued (i.e., commenced pursuant to subsection (5)(a)).”

Shands, 40 Fla. L. Weekly at D1449. Therefore, we approve the First District’s

holding that “nothing in subsections (6)(b) or (c) contemplates requiring a PIP

medical provider to submit any of its representatives to deposition, and the trial

court erred by ordering Shands to make a designated corporate representative

available for deposition.” Id.

                                   CONCLUSION

      For these reasons, we hold that the scope of permissible discovery under

section 627.736(6)(c) is limited to the production of documents described in

subsection (6)(b). Accordingly, we approve the reasoning of the First District in

Shands and disapprove of Kaminester to the extent that it permits discovery under

the Florida Rules of Civil Procedure.

      It is so ordered.

PARIENTE, LEWIS, and QUINCE, JJ., concur.
CANADY and POLSTON, JJ., concur in result.
LAWSON, J., did not participate.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND
IF FILED, DETERMINED.

Application for Review of the Decision of the District Court of Appeal – Certified
Direct Conflict of Decisions

                                         - 13 -
      First District - Case No. 1D14-2001

      (Duval County)

Anthony John Russo and Alan Jeffrey Nisberg of Butler Weihmuller Katz Craig
LLP, Tampa, Florida,

      for Petitioner

John Andrew Tucker, IV of Foley & Lardner LLP, Jacksonville, Florida; and
James Andrew McKee and Benjamin James Grossman of Foley & Lardner LLP,
Tallahassee, Florida,

      for Respondent

                                     - 14 -