Court Opinion

ID: 2688383
Source: CourtListenerOpinion
Date Created: 2014-07-31 22:02:10.84774+00
Date Added: 2024-06-11T13:17:39.418574
License: Public Domain

IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                              FIFTH DISTRICT

                                                   NOT FINAL UNTIL TIME EXPIRES TO
                                                   FILE MOTION FOR REHEARING AND
                                                   DISPOSITION THEREOF IF FILED
TAMPA CHIROPRACTIC CENTER, INC.,

              Appellant,

 v.                                                       Case No. 5D13-854

STATE FARM MUTUAL AUTOMOBILE
INSURANCE CO.,

           Appellee.
________________________________/

Opinion filed July 11, 2014

 Appeal from the Circuit Court
 for Orange County,
 Walter J. Komanski, Judge.

 Chad A. Barr of Eiffert & Associates, P.A.,
 Orlando, for Appellant.

 Kenneth P. Hazouri of deBeaubien,
 Knight, Simmons, Mantzaris & Neal, LLP,
 Orlando, for Appellee.

COHEN, J.

       Tampa Chiropractic Center, Inc. (“Tampa Chiropractic”) appeals from the final

summary judgment entered in favor of State Farm Mutual Automobile Insurance

Company (“State Farm”). Tampa Chiropractic raises two issues on appeal, only one of

which merits discussion. It argues that the trial court erred in ruling that it lost subject-

matter jurisdiction over the case after State Farm paid the disputed claims. We agree

and reverse as to that issue.
       In 2010, nine individuals who were insured by State Farm received medical

treatment at Tampa Chiropractic for injuries they sustained in automobile accidents and,

in turn, assigned their policy benefits to Tampa Chiropractic. Tampa Chiropractic later

submitted medical bills to State Farm for reimbursement pursuant to the insureds’

policies. In response to those bills, State Farm sent document requests to Tampa

Chiropractic, requesting, among other things, documents relating to the ownership and

management of the clinic, tax information, and copies of the clinic’s leases. State Farm

claimed that its request for such documents was authorized by section 627.736(6)(b),

Florida Statutes (2010). 1 The document request went on to state, in essence, that State

Farm would not pay the claims until Tampa Chiropractic complied with the document

requests. Another document request advised Tampa Chiropractic that “[f]ailure to comply

with this request may place you in violation of [section 627.736(6)(b)] and we may choose

to seek an order from the court to allow the release of such information to us, and seek

       1  In pertinent part, section 627.736(6)(b) provides that a physician or medical
institution that treats an insured after bodily injury upon which a claim for PIP benefits is
claimed

              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 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.

§ 627.736(6)(b), Fla. Stat. (2010).

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reimbursement of our cost in attorney fees as permitted by law.” Soon thereafter, Tampa

Chiropractic’s attorneys responded to State Farm, maintaining that the requests were

outside the scope of documents that were required to be furnished under section

627.736(6)(b), because they did not seek information regarding the insureds’ medical

treatment.

       State Farm instituted a declaratory judgment action on a matter not relevant to the

issue addressed in this opinion. Tampa Chiropractic later filed an amended counterclaim

seeking a declaratory judgment stating that State Farm’s document requests were outside

the scope of section 627.736(6)(b), and that State Farm could not predicate payment of

the subject claims on Tampa Chiropractic’s response to such requests. In its answer to

the amended counterclaim, State Farm requested a declaration that its document

requests were proper under section 627.736(6)(b) and asked the trial court to order

Tampa Chiropractic to produce the documents.

       Tampa Chiropractic moved for summary judgment. A few months later, State

Farm filed a competing summary judgment motion in which it argued that the trial court

lacked subject-matter jurisdiction over the case because State Farm had paid the subject

medical bills and was no longer seeking the documents that it had previously requested.

In support of the motion, State Farm attached the sworn affidavit of its Claim

Representative, William Talley, who stated that State Farm had paid Tampa Chiropractic

for “all of the bills and charges that are the subject of, or related to, State Farm’s requests

for documents.” Talley’s affidavit did not identify the date on which the medical bills were

paid by State Farm. Talley’s affidavit further stated that State Farm was no longer seeking

production of the documents previously requested.

                                              3
       During the hearing on the competing motions for summary judgment, State Farm

reiterated that it was “not withholding payment based on the (6)(b) request anymore.”

Tampa Chiropractic countered that, by changing its position regarding its entitlement to

the requested documents, State Farm had confessed judgment on the amended

counterclaim. Following the hearing, the trial court entered a final summary judgment in

favor of State Farm, ruling that the amended counterclaim no longer presented a

justiciable controversy or a bona fide need for declaration, and that the court therefore

lacked subject-matter jurisdiction over the case. This timely appeal ensued.

       On appeal, Tampa Chiropractic argues that the trial court erred in entering the final

judgment in favor of State Farm on the basis that it lacked subject-matter jurisdiction over

the declaratory judgment action. Tampa Chiropractic further submits that if State Farm

paid the disputed claims after it filed its counterclaim, then State Farm confessed

judgment, and an award of attorney’s fees to Tampa Chiropractic pursuant to section

627.428, Florida Statutes (2010), is appropriate. We agree.

       Section 627.428 provides for the award of attorney’s fees to an insured upon the

rendition of a judgment against an insurer in an action between the insurer and its

insured. 2 § 627.428, Fla. Stat. “By using the legal fiction of a ‘confession of judgment,’

our supreme court extended the statute’s application” to cases in which the insurer settles

       2 Although the instant case involves a suit between the insurer and the insureds’
medical provider—as opposed to the insureds themselves—this does not preclude us
from applying section 627.428 and the confession of judgment doctrine because the
insureds assigned their policy benefits to Tampa Chiropractic. See Ind. Lumbermens
Mut. Ins. Co. v. Pa. Lumbermens Mut. Ins. Co., 125 So. 3d 263, 266 (Fla. 4th DCA 2013)
(“An assignee of an insurance claim stands to all intents and purposes in the shoes of the
insured and logically should be entitled to an attorney’s fee when he sues and recovers
on the claim.”).

                                             4
or pays a disputed claim before rendition of judgment. Basik Exports & Imports, Inc. v.

Preferred Nat’l Ins. Co., 911 So. 2d 291, 293 (Fla. 4th DCA 2005) (citing Wollard v. Lloyd’s

& Cos. of Lloyd’s, 439 So. 2d 217 (Fla. 1983)). When the insurer has agreed to settle a

disputed case, “it has, in effect, declined to defend its position in the pending suit,” and

its “payment of the claim is . . . the functional equivalent of a confession of judgment or a

verdict in favor of the insured.” Wollard, 439 So. 2d at 218. For the confession of

judgment doctrine to apply, the insurer must have unreasonably withheld payment under

the policy, id. at 219 n.2, or engaged in some other wrongful behavior that forced the

insured to sue, Gov’t Emps. Ins. Co. v. Battaglia, 503 So. 2d 358, 360 (Fla. 5th DCA

1987); see also Jerkins v. USF & G Specialty Ins. Co., 982 So. 2d 15, 17 (Fla. 5th DCA

2008). This Court has described the rationale for the confession of judgment doctrine as

follows:

              [T]he statutory obligation for attorney’s fees cannot be
              avoided [by the insurer] simply by paying the policy proceeds
              after suit is filed but before a judgment is actually entered
              because to so construe [section 627.428, Florida Statutes,]
              would do violence to its purpose, which is to discourage
              litigation and encourage prompt disposition of valid insurance
              claims without litigation.

Gibson v. Walker, 380 So. 2d 531, 533 (Fla. 5th DCA 1980); accord First Floridian Auto

& Home Ins. Co. v. Myrick, 969 So. 2d 1121, 1124 (Fla. 2d DCA 2007) (noting that

confession of judgment doctrine operates “to penalize an insurance company for

wrongfully causing its insured to resort to litigation in order to resolve a conflict with its

insurer when it was within the company’s power to resolve it”); Cincinnati Ins. Co. v.

Palmer, 297 So. 2d 96, 99 (Fla. 4th DCA 1974) (“[I]t is neither reasonable nor just that an

insurer can avoid liability for statutory attorney’s fees by the simple expedient of paying

                                              5
the insurance proceeds to the insured or the beneficiary at some point after suit is filed

but before final judgment is entered, thereby making unnecessary the entry of a

judgment.”).

      We conclude that the trial court erred in entering final summary judgment in favor

of State Farm. Instead, the court should have applied the confession of judgment doctrine

if State Farm, in fact, paid the claims after Tampa Chiropractic filed the amended

counterclaim. At the outset, State Farm not only unreasonably withheld payment based

on its contention that the scope of its document requests was proper under section

627.736(6)(b), 3 but it also threatened litigation in the event that Tampa Chiropractic

refused to comply with its document requests. In light of State Farm’s position that it

would not pay the claims until Tampa Chiropractic produced the documents, Tampa

Chiropractic was forced to file suit seeking a declaratory judgment. In its answer to the

counterclaim, State Farm maintained its position that it could, in fact, predicate payment

on Tampa Chiropractic’s provision of the documents. By the time the summary judgment

hearing took place, however, State Farm had paid the disputed claims and changed its

position regarding its entitlement to the documents. If State Farm indeed paid the medical

bills after Tampa Chiropractic filed its counterclaim, this constitutes a confession of

judgment, entitling Tampa Chiropractic to attorney’s fees. Cf. Bassette v. Standard Fire

Ins. Co., 803 So. 2d 744 (Fla. 2d DCA 2001) (holding that attorney’s fees were properly

      3  While section 627.736(6)(b) allows the insurer to request 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” and the clinic’s “records regarding such history, condition, treatment, dates,
and costs of treatment,” it does not permit the insurer to request records regarding the
ownership and management of the medical provider, or the medical provider’s tax
documents or leases. § 627.736(6)(b), Fla. Stat.

                                            6
awarded where insured successfully brought declaratory judgment action seeking

declaration that she was not required to execute authorizations for insurer to secure her

medical records where insurer had previously advised the insured it would deny coverage

if she refused to execute such authorizations); see also Jerkins, 982 So. 2d at 18 (holding

that insured was entitled to attorney’s fees under section 627.428 where “it appear[ed]

that [the insurer] would not have paid [the insureds] the proper amount of the loss without

judicial intervention”).

       We reject State Farm’s argument that it could not confess judgment in a cause of

action over which the trial court lacked subject-matter jurisdiction. This argument is at

odds with the very purpose of the confession of judgment doctrine: to deter insurers from

contesting valid insurance claims. Under State Farm’s theory, every time an insurer paid

a disputed claim while litigation was pending, the court would lose subject-matter

jurisdiction over the case and the confession of judgment doctrine would therefore never

apply. We disagree with that position.

       Nevertheless, the record does not indicate exactly when State Farm paid the

medical bills. Accordingly, we reverse the final summary judgment and remand with

instructions for the lower court to determine when the payments were made. For the

claims paid after Tampa Chiropractic filed its counterclaim, the lower court should enter

judgment in favor of Tampa Chiropractic and award attorney’s fees under section

627.428. For the claims paid before the filing of the counterclaim, Tampa Chiropractic

will not be entitled to fees based upon a confession of judgment.

       We affirm the other issue raised by Tampa Chiropractic without comment.

    AFFIRMED IN PART; REVERSED IN PART; REMANDED FOR FURTHER
PROCEEDINGS.

                                            7
EVANDER, J., and SILVERMAN, D.E., Associate Judge, concur.

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