On March 10, 2015, the Eleventh Judicial Circuit in and for Miami-Dade County issued a ruling in favor of Imperial Fire & Casualty Insurance in a mandatory licensing (House Bill 119) case. The Court found that the charges submitted for Personal Injury Protection (PIP) benefits to Imperial Fire & Casualty, to be unlawful and thus, noncompensable pursuant to Florida’s Motor Vehicle No-Fault Law.
Imperial Fire & Casualty issued a policy of automobile insurance to the Insured under which the Defendant, Magic Hands Solutions Inc. sought payment. Magic Hands Solutions operated as a medical clinic and allegedly rendered medical treatment to the Insured who was injured in an automobile accident. Subsequently, Magic Hands Solutions submitted charges for payment of PIP benefits to Imperial Fire & Casualty. Magic Hands Solutions was advised that the claim submitted for PIP benefits was not payable because the clinic was not properly licensed pursuant to Section 627.736, Florida Statutes (2013).
In 2012, the Legislature required mandatory licensing for all clinics holding an exempt status, whether by issuance of Certificate of Exemption or self-determined, in order for clinics to receive reimbursement pursuant to the “PIP Statute.” Hence, a clinic must be licensed under Part X, Chapter 400 to receive reimbursement for PIP benefits, unless it qualifies for an exception listed in Section 627.736(5)(h).
The Court found that the Magic Hands Solutions being wholly owned by a license massage therapist does not qualify for any of the exceptions delineated in §627.736(5)(h)(1)-(6) and was required to obtain a Health Care Clinic license as a condition precedent to receiving reimbursement of PIP benefits.
As a result of Magic Hands Solutions’ failure to obtain a Health Care Clinic License, the Court found that the charges submitted were unlawful and thus, noncompensable pursuant to Florida’s Motor Vehicle No-Fault Law and that Imperial Fire & Casualty.
Imperial Fire & Casualty Insurance Company vs. Magic Hands Solution Inc., Case No. 2014-2211 CC 24 (01) (Fla. 11th Circuit March 10, 2015).
In accordance with Florida’s PIP Statute, Plaintiff State Farm informally requested discovery from Defendant MR Services pursuant to Fla. St. § 627.736(6)(b). MR Services informally responded, but only in part, and the responses were deemed inadequate and incomplete. State Farm petitioned the Court for an order permitting discovery.
MR Services argued that it need not fully respond to the discovery requests because State Farm could obtain the discovery it wanted from other cases pending in Broward County. The Court held that, while this may be true, it does not preclude discovery under the provisions of the PIP Statute.
The Court therefore granted the Motion to Allow Discovery and required that MR Services produce all documents and information requested by State Farm.
State Farm is thus entitled to:
- Take the depositions of Dr. Mark Gans, Gary Howle, and Stacy Howle
- Issue a third-party subpoena to LinkedIn for account information on subscriber Gary Howle
- Receive from MR Services complete income tax returns, financial statements, and balance sheets from 2008 through 2012
Click on the link to view the Order in State Farm Mutual Automobile Insurance Co. vs. MR Services, Inc., No. 16-2013-CA-1731-XXXX-MA (Fla. 4th Cir. Ct. 2014).
Petitioner State Farm sought to depose Respondent YH Imaging’s owner, Yamir Hernandez, as well as other individuals who allegedly performed portable x-rays in this case. Respondent YH sought to have State Farm’s motion for discovery dismissed.
State Farm made their Motion for Discovery pursuant to Florida’s PIP Statute. That statute provides, in relevant part, that 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 . . . .” §627.736(6)(c) Fla. Stat. (2013) (emphasis added).
In this case, the Court concluded that State Farm had established, through its motion and supporting affidavit, the necessary good cause to bring the discovery action. The Court cited favorably two cases holding that PIP insurers should be able to obtain informal discovery upon simple request and that court-ordered discovery is available upon a showing of good cause. See Kaminester v. State Farm, 775 So. 2d 981 (Fla. 4th DCA 2000); State Farm v. Goldstein, 798 So. 2d 807 (Fla. 4th DCA 2001). The Court also found persuasive orders granting similar actions for discovery entered by other judges in the 11th Judicial Circuit.
The Court granted petitioner’s Motion for Discovery and denied Respondent’s Motion to Dismiss. State Farm was thereby granted leave to conduct the depositions at issue.
The case is State Farm Mutual Automobile Insurance Company, et al. v. YH Imaging, Inc., In Re OM, MM, et al., Circuit Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 11 28263 CA 05 (24). December, 3, 2013. Click on the link to read the court order.
The basis for an insurer’s right to petition a court to enter an order permitting discovery of facts is Section (6) of the Florida No-Fault (PIP) Statute, 627.736. It is one of the investigative tools available to combat insurance fraud. As highlighted below, Section (6) requires a:
- Timely “request” for information;
- “Reasonable basis” for the request as to why additional documentation is necessary;
- “Dispute” warranting a Petition for the “discovery of facts”; and
- “Good cause”, i.e. some affirmative evidence before court warranting further investigation
Specifically, Section 627.736(6)(b), Florida Statutes provides that a medical provider:
“shall, if requested to do so by the insurer … furnish forthwith a written report of the history, condition, treatment, dates, and costs of such treatment … together with a sworn statement that the treatment or services rendered were reasonable and necessary … and permit inspection and copying of its records regarding such…treatment, dates and costs of treatment …If an insurer makes a written request for documentation or information under this paragraph within 30 days after having received notice of the amount of a covered loss under paragraph 4(a), the amount of partial amount which is the subject of the insurer’s inquiry shall become overdue if the insurer does not pay in accordance with paragraph 4(b) or within 10 days after the insurer’s receipt of the requested documentation or information, which ever occurs later … An insurer that requests documentation or information pertaining to reasonableness of charges or medical necessity under this paragraph without a reasonable basis for such requests as a general business practice is engaging in an unfair trade practice under the insurance code.”
Section 627.736(6)(c), Florida Statutes, further provides that:
“In the event of any dispute regarding an insurer’s right to discovery of facts about an injured person’s … treatment, or the dates and costs of such treatment, the insurer may petition a court of competent jurisdiction to enter an order permitting such discovery. The order may be made only a motion for good cause shown…Such a court may …order payments of costs and expenses of the proceeding, including reasonable fees for the appearance of attorneys at the proceeding, as justice requires”.
To see a recently entered Court order on a petition for discovery click here