The Defendant Died…Now What?

Sometimes during litigation, a defendant in civil suit may pass away. If so, a cause of action is not extinguished by virtue of the defendant’s death. However, a cause of action can be extinguished by failure to comply with the Florida Rules of Civil Procedure (FRCP), which govern these circumstances.

When a defendant dies prior to the lawsuit being filed, Florida Statutes §768.20 states that a personal injury action against the defendant survives the defendant’s death and should be brought against the defendant’s personal representative in a pending action.

When a defendant dies during a lawsuit, Florida’s survival statute (F.S. §46.021) provides that “[n]o cause of action dies with the person. All causes of action survive and may be commenced, prosecuted, and defended in the name of the person prescribed by law.” In other words, a cause of action is not extinguished by virtue of a party’s death.

Once a defendant passes away during litigation, Florida Rules of Civil Procedure 1.260 require that the plaintiff must move to substitute the defendant’s estate within 90 days of the filing of a Notice of Suggestion of Death or else the action shall be dismissed against the deceased party. Should a plaintiff fail to timely move for substitution, the defendant may move for a dismissal pursuant to Florida Rules of Civil Procedure 1.420(b), which states any party may move for dismissal of an action for an adverse party’s failure to comply with these rules.

Substitution of a party after the death of a party is governed by Florida Rules of Civil Procedure 1.260(a)(1). This statute provides: 

(a)     Death.  (1)     If a party dies and the claim is not thereby extinguished, the court may order substitution of the proper parties. The motion for substitution may be made by any party or by the successors or representatives of the deceased party and, together with the notice of hearing, shall be served on all parties as provided in rule 1.080 and upon persons not parties in the manner provided for the service of a summons. Unless the motion for substitution is made within 90 days after the death is suggested upon the record by service of a statement of the fact of the death in the manner provided for the service of the motion, the action shall be dismissed as to the deceased party.

The suggestion of death is the triggering mechanism for the 90-day window to begin to run, during which the substitution must occur. Following the suggestion of death, counsel for a deceased party may move to dismiss the action if a motion for substitution has not been made after the expiration of the 90-day deadline.

Should a plaintiff not comply with timely filing a Motion for Substitution within 90 days of the filing of the suggestion of death and the defendant moves for a dismissal, a plaintiff may attempt to argue that it should be relieved from such dismissal due to excusable neglect. Florida Rules of Civil Procedure 1.540(b) provides that on a showing of excusable neglect a party may be relieved from dismissal. However, relief under this rule is not appropriate should a party completely fail to take action.

Courts will liberally apply the rules when the party against whom dismissal is sought made some effort to comply. See Scott v. Morris, 989 So. 2d 36 (Fla. Dist. Ct. App. 2008). In Scott, the Court held that plaintiff’s motion asking defense counsel to identify the proper party to be substituted was sufficient to satisfy the rule requiring a motion for substitution. However, a party may not avoid dismissal after having done nothing.

The requirements that a Motion to Substitute Parties must be filed within 90 days of the party’s death does not require opening of parties’ estates or designation of a personal representative of the estate within 90 days. The absence of a known personal representative is no excuse for not filing a timely motion to substitute. See Eusepi v. McGruder Eye Ist., 937 So. 2d 795, 798-799 (Fla. Dist. App. 2006).

In Eusepi, the court held that the rule requiring that a Motion to Substitute Parties be filed within 90 days of a party’s death did not require opening of the estate and appointment of a personal representative of the estate within 90 days of suggestion of death. This is since it is not uncommon for the deceased successor in interest to not be apparent or easily contacted, or for the deceased to be a defendant whose relationships are unknown or family members have no interest in facilitating the litigation. See Martin v. Hacsi, 909 So. 2d 935, 937 (Fla. 5th DCA 2005).

A plaintiff may attempt to argue excusable neglect because the deceased estate did not timely open a probate estate. Reliance on the status of the decedent’s estate is not grounds for excusable neglect. See Kash N’ Karry Food Stores, Inc. V. Smart, 814 So. 2d 530, 532 (Fla. Dist. Ct. App. 2002).

In Kash N’ Karry, the plaintiff did not file a Motion for Substitution or for Enlargement of Time prior to the expiration of the 90-day period. Id. at 532. The court also could not identify any showing of excusable neglect, as the only explanation in the record for requesting an extension of time to substitute the party is contained in counsel’s motion, wherein he asserted that “[n]o formal administration of the plaintiff’s estate had occurred thus precluding the appointment of a legal representative and thus a successive party.” Id. at 532. The 2nd District Court of Appeal held that the trial court departed from the essential requirements of law in allowing the substitution of party and in failing to grant Kash N’ Karry’s motion to dismiss with prejudice. Id. at 533.

Additionally, extenuating circumstances may not avoid dismissal. See RJ Reynolds Tobacco Co. v. Lacey, 2767 3d 103 (Fla. Dist. Ct. App. 2019).

In RJ Reynolds Tobacco, the plaintiff’s widow defeated dismissal when she was not substituted as the proper party after her husband’s death. She explained her extenuating hardship to the court, including two significant surgeries after her sole counsel had withdrawn and her successor counsel was also hospitalized. Here, the defendant was not aware of any such circumstances affecting the plaintiff’s ability to move the court in a timely fashion. In addition, ignorance of the law is not grounds for excusable neglect.

Any filing after the suggestion of death are a legal nullity.  See De La Riva v. Chavez (Fla. App. 2020).

In De La Riva, the plaintiff filed a lawsuit against James P. Todd, however, Todd passed away five months after the suit was filed. Counsel for Todd timely filed a suggestion of death. The next day, the plaintiff requested that the estate of James P. Todd be substituted as party defendant. After receiving no information as to the status of the estate, the plaintiff filed a Motion to Compel seeking defense counsel to disclose the status of the Todd estate. The trial court ordered the plaintiff to “properly set up estate for defendant” and to “substitute the defendant estate” for defendant Todd. In the meantime, the Todd estate was open in probate court, and no personal representative was appointed.

Nonetheless, in the civil case the plaintiff filed an amended complaint identifying “John Doe” as the personal representative of Todd’s estate and substituting “John Doe” for Todd as the party defendant. Thereafter, the complaint was served on defense counsel but not on any representative of the estate. Even after the probate court named Lian de la Riva as curator of Todd’s estate, with full authority to defend and initiate all lawsuits on behalf of the estate, the plaintiff failed to substitute Lian de la Riva for “John Doe” as the party defendant in the personal injury case.

In De La Riva, the plaintiff filed a proposal for settlement (PFS). The PFS identified the estate of James P. Todd as party defendant, it was emailed to State Farm counsel and Lian de la Riva. Thereafter, the defendant apparently filed a Motion to Dismiss for the plaintiff’s failure to properly substitute the party defendant. The trial court granted the defendant’s Motion to Dismiss without prejudice and ordered the plaintiff to properly substitute the estate as the party defendant. The next day, the plaintiff filed its second amended complaint identifying the defendant as “Lian de la Riva, Esq., as Curator of the Estate of James P. Todd, deceased.”

After the trial, the plaintiff filed a motion for attorney’s fees and costs pursuant to the previously filed PFS. The defendant opposed the plaintiff’s motion arguing that the prior PFS was a legal nullity because the first amended complaint failed to properly name the curator as the defendant.

In De La Riva, the Fourth District Court of Appeals analyzed Florida Rule of Civil Procedure 1.260(a)(1) and found that “If an indispensable party to an action dies, ‘the action abates until the deceased party’s estate, or other appropriate legal representative, has been substituted pursuant to [R]ule 1.260(a)(1).’” Schaeffler, 38 So. 3d at 799 (quoting Cope v. Waugh, 627 So. 2d 136, 136 (Fla. 1st DCA 1993)).

Moreover, in De La Riva, the Fourth District Court of Appeals stated “[f]ailure to substitute the proper representative or guardian nullifies subsequent proceedings.” Id. at 800; see also Ballard v. Wood, 863 So. 2d 1246, 1249 (Fla. 5th DCA 2004) (finding that a failure to substitute pursuant to Rule 1.260(a)(1) nullified the subsequent proceedings). De La Riva v. Chavez (Fla. App. 2020). As a result, a plaintiff’s failure to properly file a Motion to Substitute Party pursuant to FRCP 1.260 nullifies the pleadings filed with the court after the filing of the Suggestion of Death.

Simply amending the pleadings to add the estate is not sufficient. In De La Riva, the Fourth District Court of Appeals stated “[i]t is well-settled that ‘an “[e]state” is not an entity that can be a party to litigation. It is the personal representative of the estate, in a representative capacity, that is the proper party.” De La Riva citing Spradley v. Spradley, 213 So. 3d 1042, 1045 (Fla. 2d DCA 2017) (quoting Ganske v. Spence. 129 S.W. 3d 701, 704 n.1 (Tex. App. 2004)). “[O]nly when the proper party is in existence may it then be properly served and substituted….” Stern v. Horwitz, 249 So. 3d 688, 691 (Fla. 2d DCA 2018). Id.

In De La Riva, the court found that the PFS was a legal nullity and invalid due to the plaintiff’s failure to follow proper procedure of FRCP 1.260(a)(1). Because there was not a proper substitution of the party, the PFS filed was a legal nullity as the party which the PFS was addressed was not properly before the court when the PFS was filed, and as a result, the PFS was a legal nullity.

FRCP 1.260(a)(1) states a court shall dismiss an action for failure of a plaintiff to timely seek substitution of a deceased defendant within 90 days of the filing of a suggestion of death. Understanding these rules and cases may assist in obtaining a dismissal of a suit after a defendant dies and a plaintiff fails to act properly in substituting a party as the defendant in the case.

If you’re involved in a matter in which the defendant has died and you’re uncertain about the next steps, contact William Pratt at wpratt@roiglawyers.com.

Filed under Uncategorized

CPT Code 99072, Introduced for COVID-19, Finalized as Bundled Service by CMS

In a time when a trip to the nail salon requires a temperature check before entry, it comes as no surprise that medical providers across the globe have implemented extra protocols to keep physicians and their patients safe.  Since the start of the COVID-19 pandemic, medical providers have been forced to incur additional (and sometimes, substantial) costs associated with increased sanitization measures and personal protective equipment (PPE).

In an effort to alleviate COVID-19-related costs, the American Medical Association (AMA) created an additional supply code under CPT Code 99072, defined as: “Additional supplies, materials, and clinical staff time over and above those usually included in an office visit or other non-facility service(s), when performed during a Public Health Emergency (PHE) as defined by law, due to respiratory-transmitted infectious disease.”[1] According to the Centers for Medicare & Medicaid Services (CMS),  the COVID-19 PHE was determined to exist nationwide as of January 27, 2020.[2]

Code 99072 became effective on September 8, 2020.  It is intended to be reported only once – per – encounter by a physician or other non-facility, only during a PHE, and only for “additional items required to support a safe in-person provision of evaluation, treatment, or procedural service(s),” which could include “the additional time required by clinical staff to provide the service safely.” [3]

Insurers and third-party payers can expect to receive reimbursement requests for 99072.  The AMA provided one clinical example of appropriate billing for 99072, as follows: “A 65-year-old female presents to the physician’s office, requiring care for an illness, acute injury, or ongoing care for a chronic condition. The encounter occurs during a Public Health Emergency (PHE), as defined by law, due to respiratory-transmitted infectious disease.”[4] The AMA CPT Assistant does not specify what documentation would be sufficient to substantiate reimbursement of 99072, but notes that the required documentation for reimbursement of 99072 will likely vary between third-party payers and individual insurers.

[1]           See American Medical Association (AMA) CPT Assistant, Special Edition September Update, (Vol. 30, Sept. 2020) https://www.ama-assn.org/system/files/2020-09/cpt-assistant-guide-coronavirus-september-2020.pdf.

[2]           See Centers for Medicare & Medicaid Services (CMS), Health and Human Services (HHS), 2021 Medicare Payment Fee Schedule (MPFS) Final Rule, 85 FR 84472, 84692 (Dec. 28, 2020) https://www.federalregister.gov/documents/2020/12/28/2020-26815/medicare-program-cy-2021-payment-policies-under-the-physician-fee-schedule-and-other-changes-to-part

[3]           See American Medical Association (AMA) CPT Assistant, Special Edition September Update, (Vol. 30, Sept. 2020) https://www.ama-assn.org/system/files/2020-09/cpt-assistant-guide-coronavirus-september-2020.pdf.

[4]           Id.

 

Filed under Healthcare, Personal Injury Protection (PIP)

Miami Chiropractor Charged With COVID Relief Fraud, Health Care Fraud And Money Laundering

 Click here for full article.

Filed under Fraud, Healthcare

10 Charged in $1 Billion Medical Insurance Fraud

Ten people have been indicted in a complex scheme to allegedly defraud private insurance companies of more than $1 billion for medical testing. The Justice Department unsealed the indictments Monday in Jacksonville, Florida. Eight of the defendants are from Florida. The others are from Atlanta and Chicago. The charges include conspiracy to commit health care fraud and money laundering.

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Filed under Fraud, Healthcare

How COVID-19 Might Change The Insurance Market

COVID-19 will change our world in many ways, some good and some bad. The same holds true for the insurance marketplace. From property policies, workers compensation, business interruption and general liability, the following considerations should be noted.

Click here for the full article.

Filed under Uncategorized

Florida Dive Shop Alleges Insurer Breach of Contract, Bad Faith in BI Denial Suit

A dive shop in South Florida is one of the first businesses in the state to file suit against its insurer for the denial of a business interruption claim initiated because of the current coronavirus pandemic.

Click here for the full article.

Filed under Uncategorized

Understanding Florida Letters of Protection (LOP)

Many times after people are involved in automobile accidents and they do not have health insurance, medical providers will agree to continue to treat them with the anticipation that should the patient recover any money from a lawsuit settlement or judgment, the provider will be paid from those proceeds. This type of agreement is called a Letter of Protection, sometimes called a LOP.  A letter of protection is a letter that is sent by an attorney on behalf of a client to a medical provider. The letter is an agreement between the patient/client and the medical provider. In this agreement, the medical provider will agree to provide medical treatment to the patient in lieu of receiving payment for services until proceeds from a settlement or a jury award are received. Should the patients not receive a favorable recovery, the patient may remain liable to pay for the medical services rendered. The LOP operates as a contract between the patient and the medical provider, which operates as a lien on any injury settlement.

LOP’s are typically utilized in Florida as a result of the fact that Florida PIP insurance pays 80% of the accident-related medical bills, which leaves 20% of the medical bill outstanding. Without a LOP, a medical provider may require upfront payment or refuse to provide treatment without additional assurances that it will be paid. In addition, LOP’s may be deemed necessary in cases where the medical bills exceed $10,000 and the patient lacks health insurance or other sources of available payment.

However, these LOP’s prevent a jury from accurately evaluating bodily injury claims. For example, when a person has health insurance, the amount charged by the medical providers are typically highly regulated and controlled. When a patient treats under a LOP, these regulations and controls do not exist. As a result, plaintiffs in litigation often incur larger bills in an effort to drive up the overall value of the economic damages in their case. In turn, medical providers operating under LOP’s often charge vastly different amounts than they typically would in the treatment of patients with health insurance, which the bills are being submitted through the patient’s health insurance coverage.

After recovery in personal injury suits, the plaintiff’s attorney may further negotiate the amounts payable to the medical providers. As a result, the plaintiff’s counsel utilizes these high medical charges as “evidence” of damages in their case whereby both the plaintiff’s counsel and medical providers are fully aware that the amounts billed will be drastically reduced and paid following any recovery. As a result, the court is provided with inaccurate information for which the jury to determine actual damages. Often these plaintiff attorneys and medical providers have ongoing business relationships. Each is making referrals to the other with the anticipation of payment for services ultimately occurring at the end of any claim or case. Uncovering information concerning this ongoing business relationship between the attorneys and the medical providers has proven difficult in recent years.

In Worley v. Central Florida Young Men’s Christian, Etc. (2015)163 So. 3d 1240, the Florida Fifth District Court of Appeals addresses the issue of whether during legal proceedings, the plaintiff was required to produce information pertaining to the relationship between the patients treating physicians and her attorney. The court held that a referral of a client by an attorney to a healthcare provider is protected by attorney-client privilege. In April 2017, the Florida Supreme Court reviewed this Fifth District Court of Appeals decision and found that whether the attorney-client privilege protects a party from being required to disclose that his or her attorney referred the party to a physician for treatment implicates confidential communication between the attorney and the client and is therefore protected. This issue is sure to receive additional judicial scrutiny in the future.

To understand how letters of protection are utilized it is also important to understand how the collateral source rule works in Florida. Following a jury verdict, a trial court must reduce jury awards for medical damages by the amount that is being paid for the benefit of the claimant, or which are otherwise available to the claimant from all collateral sources. Meaning that if the plaintiff’s medical expenses incurred following an injury were covered by other available insurance, the damage award should be reduced by the amount paid by the collateral source. This rule was created in an attempt to reduce insurance costs and prevent windfall judgments. Although the set-off must occur, the payments from the collateral source benefit are not admissible at trial. It is thought that allowing such evidence would confuse the jury as to liability and damages.

Typically, contractual discounts fit within the statutory definition of collateral sources.[1] Therefore, where a medical provider bills for services at one amount but negotiates with an insurer for the payment of a decreased amount, the negotiated decreased amount is the amount used for the set-off. In Gobel, the hospital charged $574,554.31. However, due to pre-existing fee schedules between the medical provider and what the health insurer paid, and the hospital accepted less, $145,970.76. This difference between what was billed and the amount accepted shows how the amount charged is not always related to the amount of medical provider expects to receive payment or will accept in full payment for the medical services

In Florida, the Collateral Source Rule forbids negligent parties from paying less in damages simply because a third party has already compensated the injured person. As such, under the collateral source rule, health insurance payments and other sources of compensation do not affect the defendant’s liability. Generally, courts do not admit evidence of any plaintiff’s health insurance to allow the plaintiff to recover the full extent of the plaintiff’s damages.

Florida Statute 768.76(2) (a) defines Collateral Sources as “payments made to the claimant.” Therefore, letters of protection, which merely deferred payment until after settlement/judgment, the amount negotiated in a letter of protection is not considered a collateral source and are therefore not subject to collateral source reductions post-judgment.

Understanding letters of protection and how they are utilized many times in litigation will help understand how the “business” of personal injury litigation occurs. This will allow for a better understanding of how medical charges can be manipulated and utilized at trial in an attempt to increase settlements and judgments by plaintiff attorneys.

[1] Joerg v. State Farm, 176 So. 3d 1247, 1249 (Fla. 2015) citing Gobel v Froham, 901 So. 2d 830, 833 (Fla. 2001)

 

Filed under Personal Injury Protection (PIP)

Rise In Searches For ‘How To Set Fire’ As Economy Crashes

Internet search queries for “how to set fire” are spiking amid the downturn from the coronavirus pandemic, which experts say is a sign that some people may be planning to commit insurance fraud. Search term data compiled by Google shows that the number of users looking for information on how to start a fire grew by 125% in the last week of March.

Insurance companies are highly attuned to the potential for fraud, but risk experts believe it’s too soon to tell. There was a similar kind of anticipation around 2007 to 2009, “that we were going to see just ungodly amounts of insurance fraud triggered by an economic downturn,” said Frank Scafidi of the National Insurance Crime Bureau, but this never occurred to the scale some projected. They saw an increase in arson activity related to cars, however, where a vehicle would be reported stolen to an insurance company when the owner had a hand in the car’s disappearance.

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Filed under Fraud, Property (Homeowners)

Free CLM Webinar: Don’t Let COVID-19 Infect You with Insurance Fraud

There is no quarantine on fraud. Scammers and con artists don’t respect laws, individuals, or pandemics. While others are seeking to protect themselves and their families, these fraudsters are already out creating schemes and scams to profit from the COVID-19 crisis. Learn about those scams, how SIUs need to be ready and acting to fight COVID-19 fraud, and the lessons we all can learn from past experiences such as the 2008 financial crisis impact on fraud. The best way to “be prepared” is to “be aware”.

Click here to register.

Filed under Fraud

Auto Insurers Returning $8 Billion in Premiums In Coronavirus Relief Effort

Top auto insurers are offering auto insurance premium discounts as people are driving less during the coronavirus pandemic. State Farm and Nationwide joined the ranks of other insurers such as Geico, Progressive, Allstate, Liberty Mutual, USAA, Farmers, Travelers, and American Family, who had already started to provide relief last week.  According to the Insurance Information Institute (III), these and other auto insurers have announced refunds, discounts, dividends and credits totaling $8.1 billion. III estimates the total will reach $10.5 billion as more auto insurers announce their offers.

Click here for a listing of insurers and a summary of their discounts and other offerings to date.

Filed under Personal Injury Protection (PIP)