STATE FARM MUTUAL

v.

PRIME MEDICAL & REHAB A.A.O ORLANDO E. PEREZ

Before: TRAWICK, WALSH, and SANTOVENIA, JJ. [*2] PER CURIAM.

State Farm Mutual Automobile Insurance Company ("State Farm") appeals the trial court's order entering a final judgment on behalf of the provider, Prime Medical & Rehab Services, Inc. ("Prime" or "Provider").

The November 6, 2018 final judgment was also premised on the trial court's May 14, 2018 amended order granting the Provider's motion for judgment on the pleadings on State Farm's affirmative defense pursuant to Section 627.736(5)(b)1.c., Fla. Stat., which argued that the Provider submitted false and misleading bills for payment.

The Motion for Judgment on the Pleadings

Appellant argues that it was error for the trial court to grant the Provider's motion for judgment on the pleadings on State Farm's 627.736(5)(b)1.c. affirmative defense.

The standard of review of an order granting judgment on the pleadings as well as the interpretation of a statute is de novo. See GTC, Inc. v. Edgar, 967 So. 2d 781 (Fla. 2007). “[A] motion for judgment on the pleadings... has limited application. It is appropriate where the complaint fails to state a cause of action against the defendant or where the answer fails to state a defense or tender any issue of fact. It is similar to a motion to dismiss and raises only questions of law arising out of the pleadings." Venditti-Siravo, Inc. v. City of Hollywood, 418 So. 2d 1251 (Fla. 4th [*3] DCA 1982). It is settled that "[a] motion for judgment on the pleadings must be decided wholly on the pleadings without aid of outside matters." Jaramillo v. Dubow, 588 So. 2d 677 (Fla. 3d DCA 1991) (citing J & J Util. Co., 485 So. 2d at 36 (citations omitted); accord Hanft v. Phelan, 488 So. 2d 531, 531 n. (Fla. 1986) ("Extrinsic evidence cannot be considered ... on a motion for judgment on the pleadings.").

In considering a motion for judgment on the pleadings, "all material allegations of the opposing party's pleading are taken as true, and all of the movant's allegations which have been denied are taken as false." Jaramillo, supra., 588 So. 2d at 677 (citing Butts v. State Farm Mut. Auto. Ins. Co., 207 So. 2d 73, 75 (Fla. 3d DCA 1968) (citations omitted)) Section 627.736(5)(b)1.c., Fla. Stat., on which State Farm's second affirmative defense is premised, provides that:

An insurer or insured is not required to pay a claim or charges: c. To any person who knowingly submits a false or misleading statement relating to the claim or charges;

State Farm argued as to its second affirmative defense that the Provider knowingly overbilled certain listed CPT codes for x-rays, thereby relieving State Farm of its obligation to pay. The affirmative defense states that the radiologist interpreting the x-rays noted that two views were taken of each body part, but the CPT codes included in the bills to State Farm were for three to four views for the [*4] various x-rays. The Provider filed a Reply to State Farm's affirmative defense, stating that the allegation that Prime knowingly submitted a false or misleading statement to State Farm relating to the claim and charges at issue is incorrect since the specific charges that are the subject of State Farm's defense are not "at issue" in this case because Provider neither demanded payment of the x-rays performed on the insured, Orlando Perez nor included the bills in its notice of filing of the bills at issue in the litigation. In the same Reply, the Provider acknowledged that State Farm originally received the x-ray bills pre-suit from the Provider along with the x-ray reports indicating the number of views for each x-ray.

The Provider's motion for judgment on the pleadings would have been appropriately granted only "where the answer fail[ed] to state a defense or tender any issue of fact." See Venditti-Siravo, Inc., supra., 418 So. 2d at 1253. Here, it was undisputed that the x-ray bills were submitted for payment by the Provider to State Farm before suit was filed and before the pre-suit demand letter was sent. State Farm notes that the x-ray bills which were submitted to the insurer for payment by the Provider were never withdrawn. The facts alleged in the affirmative defense that only two x-ray views were taken of each body part while the Provider submitted bills for more than two views, which must be taken as true on the Provider's motion for judgment on the pleadings, coupled with the Provider's acknowledgment that the x- ray bills were submitted to State Farm pre-suit, do establish an issue of fact as to [*5] State Farm's second affirmative defense precluding the judgment on the pleadings in favor of the Provider. Given the issues of fact, the Provider's judgment on the pleadings then could only have been premised on State Farm's failure to state a defense as a matter of law. Id. The Provider argued below that the specific charges that are the subject of State Farm's defense were not "at issue" in the case because Provider neither demanded payment of the x-rays performed on Perez nor included the bills in its notice of filing of the bills at issue in the litigation.

The "at issue" verbiage comes from the wording of State Farm's affirmative defense¹. Notably, the statute does not refer to the claim or charges "at issue" or "sued for" in the litigation. The application of Section 627.736(5)(b)1.c. does not turn on when the false or misleading statement is made as to unpaid bills. Indeed, even where an insured or a provider does not file a lawsuit, nothing in the statute precludes the insurer from relying on Section 627.736(5)(b)1.c. as the basis for rejecting a pre-suit claim.

No legal authority supporting the restrictive interpretation urged by the Provider has been provided to this court, nor does the court adopt such a restrictive reading of the statute. The "false or misleading statement relating to the claim or N 1 State Farm also argues on appeal that the trial court erred in denying State Farm's motion to amend its 627.736(5)(b)1.c. affirmative defense to delete the words "at issue". That hearing and ruling occurred after the Provider's motion for judgment on the pleadings was granted. Given this court's ruling, infra., regarding the judgment on the pleadings, it is not necessary to reach this argument. [*6] charges" clearly encompasses bills submitted for payment before suit is filed or the pre-suit demand letter is sent. To find otherwise would allow an insured or provider who knowingly submits false and misleading bills for payment as part of its pre-suit claim to circumvent the statute by not including those bills in the pre-suit demand letter or the litigation.

Similarly, the Provider's argument that the statute only applies to charges included in the litigation would render meaningless the reference to "claim" in Section 627.736(5)(b)1.c. Further, the Provider's argument has already been rejected by the court in Chiropractic One, Inc. v. State Farm Mutual Automobile, 2 So. 3d 871, 874 (Fla 5th DCA 2012), which interpreted Section 627.736(5)(b)1.c. ("Although "claim" and "charges" are not defined by the PIP statutes..., it is logical to conclude that the Legislature established that dichotomy to be certain that not only the specific individual offensive "charges" were invalidated, but also that the entire "claim," i.e., the collective of all charges, was invalidated, as well"). The pertinent arguments and holding addressed in Chiropractic One are summarized as follows:

The appellees, both of which are State Farm entities, take the position that if a medical provider "knowingly" submits a false claim or false charges, both the insurer and the insured are relieved of the obligation to pay both the entire claim or charges currently before the insurer... The appellant, Chiropractic One, Inc., asserts that if it knowingly submits a false charge, then the insurer is relieved of paying for that charge, but not for any other charges. The trial court ruled in favor of State Farm and held essentially that the provider forfeits its right to receive compensation on a claim by knowingly making a false or misleading charge relating to the claim... Given the legislative [*7] history of this statute and the language chosen by the Legislature, we conclude that the trial court was correct and affirm.

Id. at 872 (emphasis added).

Here, the trial court explained the reasons for its ruling on the motion for judgment on the pleadings at the hearing on State Farm's motion to amend its second affirmative defense premised on Section 627.736(5)(b)1.c.. The trial court explained that it considered the deposition testimony of Monica Crespo, the Provider's principal, in finding that Crespo did not submit false bills intentionally or with reckless disregard, but rather had mistakenly done so or committed a scrivener's error. It was error for the trial court to consider and resolve matters extrinsic to the pleadings. See Jaramillo, supra., 588 So. 2d at 677.

The Summary Judgment

The standard of review of a trial court's entry of final summary judgment is de novo. See Volusia Cnty. v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000); Sierra v. Shevin, 767 So. 2d 524, 525 (Fla. 3d DCA 2000). Summary judgment is proper when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. State Farm Mut. Auto. Ins. Co. v. Gonzalez, 178 So. 3d 448, 450 (Fla. 3d DCA 2015), citing State Farm Mut. Auto. Ins. Co. v. Pressley, 28 So. 3d 105, 107 (Fla. 1st DCA 2010). “On a motion for summary judgment, it is well settled that a trial court is not permitted to weigh material conflicting evidence or pass on the credibility of the witnesses." Sierra v. [*8] Shevin, 767 So. 2d 524, 525 (Fla. 3d DCA 2000); Pita v. State Street Bank and Trust Co., 666 So. 2d 268 (Fla. 3d DCA 1996).

The parties below filed cross summary judgment motions. Prime filed the affidavit of its expert, Kevin Wood, D.C., and the peer review reports of Peter J. Millheiser, M.D. and Michael Weinreb, D.C. in support of its summary judgment motion and the Provider's position that the charges for the x-rays were medically necessary, related and reasonable. In granting Prime's motion for summary judgment, the trial court necessarily found that Prime introduced competent evidence supporting its prima facie claim that its bills were medically necessary, related and reasonable.

In support of its summary judgment motion and in opposition to the Provider's motion for summary judgment, State Farm filed the deposition testimony of Monica Crespo, the Provider's principal, supporting, inter alia, that Crespo had submitted bills to State Farm for payment for more x-rays than were taken by Provider. State Farm also relied on the peer review reports of Drs. Millheiser and Weinreb, which were submitted in support of the Provider's summary judgment motion. State Farm argued that submission of the x-ray bills was done either in reckless disregard or with actual knowledge of the falsity of the Provider's claim. The Provider filed the affidavit of Crespo for the proposition that she did not knowingly submit false or misleading bills to State Farm for payment. Even assuming arguendo that the [*9] Crespo affidavit were sufficient to contradict her deposition testimony (which State Farm contested below), at a minimum there are evident disputed issues of material fact as to the 627.736(5)(b)1.c. defense².

Chiropractic One acknowledges that "[a]ny knowingly misleading or false charge, by definition, is unreasonable, not medically necessary, and in excess of permitted amounts." 2 So. 3d at 874. The Provider's summary judgment motion was heard after the judgment on the pleadings was granted in Provider's favor on State Farm's 627.736(5)(b)1.c. defense. Had State Farm's 627.736(5)(b)1.c. defense not been precluded by the judgment on the pleadings in favor of Provider, the 627.736(5)(b)1.c. affirmative defense would have been pertinent to refute the relatedness, reasonableness and medical necessity of Prime's bills on its summary judgment motion. And, had the judgment on the pleadings not been entered erroneously, the Provider would have been required on its summary judgment motion to show that State Farm could not prevail on its 627.736(5)(b)1.c. affirmative defense. See Leal v. Deutsche Bank National Trust Co., 21 So. 3d 907, 909 (Fla. 3d N 2 The parties have brought to the court's attention a related appeal involving a different claimant in the same accident under the same State Farm policy insuring Orlando Perez in this case: Prime Medical & Rehab. Services, Inc. a/a/o Maylin Ferradas v. State Farm Mutual Automobile Ins. Co., Eleventh Judicial Circuit Court Appellate Division Case No. 2016-492-AP-01. There, the trial court granted State Farm's summary judgment motion premised on its 627.736(5)(b)1.c. defense on a very similar factual record. A different appellate panel of this court reversed the summary judgment, finding that "[a] question of fact exists as to whether there were systemic improper billing practices, or merely an unknowing mistake... A question of fact exists regarding whether Ms. Crespo "knowingly" provided false and misleading information. There is also a question of fact as to whether Ms. Crespo acted with deliberate indifference, and, reckless disregard in submitting the wrong [CPT] Codes. Thus, summary judgment for both parties is precluded." [*10] DCA 2009) ("[t]he party moving for summary judgment must factually refute or disprove the affirmative defenses raised, or establish that the defenses are insufficient as a matter of law."). On that basis alone, the summary judgment in favor of Prime must be reversed.

The Wood affidavit attached all of the insured's medical records, including the x-rays which the Provider claims are not "at issue". Crespo's deposition testimony supports the conclusion that some of the x-rays that Dr. Wood found medically necessary and related were not even performed. Both peer reviews disputed that a portion of the bills was medically necessary and related.

Accordingly, it was error to accept the Provider's affidavit of Dr. Wood while rejecting that the peer review reports of Drs. Millheiser and Weinreb raised disputed issues of material fact precluding summary judgment as to the reasonableness, medical necessity and relatedness of some of the treatments provided by Prime. It was thus error to grant summary judgment. See State Farm Mutual Ins. Co. v. Gables Insurance Recovery a/a/o Yuderis Rego, 27 Fla. L. Weekly Supp. 860a (Fla. 11th Cir. Ct. Nov. 20. 2019); United Automobile Insurance Co. v. Open MRI of Miami Dade, Ltd. a/a/o Rosa Castillo, Case No. 2017-326-AP-01 (Fla. 11th Cir. Ct. Nov. 6, 2019); United Automobile Insurance Co., v. Miami Dade County MRI, Corp. a/a/o Marta Figueredo, 27 Fla. L. Weekly Supp. 506b (Fla. 11th Cir. App. July 30, 2019); United Automobile Insurance Co., v. Miami Dade County MRI, Corp. a/a/o [*11] Javier Rodriguez, 27 Fla. L. Weekly Supp. 225c (Fla. 11th Cir. Ct. July 25, 2019); United Automobile Insurance Co. v. Miami Dade County MRI, Corp. a/a/o Rene Dechard, 27 Fla. L. Weekly Supp. 226a (Fla. 11th Cir. Ct., August 12, 2019); United Automobile Insurance Co. v. Millennium Radiology, LLC a/a/o Javier Rodriguez, 25 Fla. L. Weekly Supp. 911b (Fla. 11th Cir. Ct., July 19, 2019).

Because the trial court erred when it granted the Provider's motion for judgment on the pleadings on State Farm's 627.736(5)(b)1.c. affirmative defense, the final judgment on the pleadings was erroneously entered below and must be reversed. Further, that error was compounded when the summary judgment was entered in favor of Provider. Accordingly, the order granting Provider's motion for judgment on the pleadings, and the summary judgment and final judgment entered below are hereby REVERSED, and this cause is REMANDED to the trial court. Appellant's Motion for Attorney's Fees is conditionally GRANTED (conditioned upon Appellant ultimately prevailing and the enforceability of the proposal for settlement) and REMANDED to the trial court to fix the amount.

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