Preview
Filing # 105808113 E-Filed 04/02/2020 04:55:34 PM
IN THE CIRCUIT COURT OF THE
NINTH JUDICIAL CIRCUIT IN AND
FOR ORANGE COUNTY, FLORIDA
CASE NO. 2020-CA-924-O
ELLIS H. SCHAUDER, D.C. D/B/A
SCHAUDER CHIRO. & WELLNESS
CENTER, a/a/o NOELIA VELASQUEZ,
Plaintiff,
v.
PROGRESSIVE SELECT INSURANCE
COMPANY,
Defendant.
/
DEFENDANT’S MOTION TO DISMISS THE CLASS ACTION COMPLAINT
(With Incorporated Memorandum of Law)
Defendant Progressive Select Insurance Company (“Progressive”) moves to dismiss the
Amended Class Action Complaint (the “A.C.”) of Plaintiff Ellis H. Schauder, D.C. (“Schauder”),
and states:
Statement of the Relief Requested
Progressive seeks the dismissal of the Complaint in its entirety. As a threshold matter,
Schauder fails to allege standing to sue. First, Schauder has not alleged compliance with the pre-
suit demand requirement of the Florida No-Fault (“PIP”) Statute, Fla. Stat. § 627.736(10).
Second, while Schauder alleges standing to sue as an assignee of a Progressive insured, he fails
to attach the necessary assignment or policy. Third, Schauder has no standing to assert his single
count for declaratory relief because he has an adequate remedy at law and there is no substantial
likelihood of a cognizable future injury to his assignor.
52568220;1
Not only is Schauder’s standing deficient, he also seeks to sever a legal issue (the
declaratory relief request) from the associated damages in violation of claim-splitting rules and
Fla. Stat. § 627.736(15). In addition, Florida state courts have dismissed PIP billing disputes like
this one, finding that they are not the proper subject of class action treatment and/or declaratory
relief of universal application. The Court should dismiss the Complaint.
Background
Progressive insured Noelia Velasquez (“Velasquez”) was involved in an auto accident on
March 26, 2019. (A.C. ¶¶ 13-15). Schauder is a chiropractor who allegedly treated Velasquez
after her accident. (Id. ¶ 16). Schauder submitted charges for Velasquez’s treatment to
Progressive, and Progressive allegedly paid 80% of the face amount of those charges. (Id. ¶¶ 18-
20). Schauder alleges that Progressive is obligated to pay more – either 100% of the face amount
or 80% of the amount provided by the schedule of maximum charges (the “PIP Schedule”) set
forth in Fla. Stat. § 627.736(5)(a)1. (2012 to date).1 (Id. ¶¶ 20-23). Because Schauder is not a
party to the contract between Progressive and Velasquez, he alleges standing to sue pursuant to
an assignment of benefits from Velasquez. (Id. ¶ 17).
Schauder’s factual allegations are inadequate. He does not attach the assignment of
benefits or the policy, and he fails to identify any particular charge and/or any specific amounts
paid (or not paid) by Progressive. Schauder brings a single claim for declaratory relief on behalf
of a class defined as (Id. ¶ 27):
Any and all of Defendant’s insureds and health care providers who submitted Gap
Charges and/or Lesser Charges under Florida automobile insurance policies
containing PIP coverage where Defendant calculated and limited reimbursements
pursuant to 80% of the charge submitted as opposed to 80% of the Schedule of
1
While beyond the scope of this Motion, Schauder’s interpretation of the PIP Statute and the policy at issue
– which would require Progressive to pay amounts in excess of the maximum PIP coverage contemplated by either
the PIP Statute or the policy – is precluded by the language of the PIP Statute, the applicable policy, and precedent.
2
52568220;1
Maximum Charges for all Gap Charges and either 80% of the Schedule of
Maximum Charges or the Lesser Charged amount in full for all Lesser Charges
where benefits have not been exhausted.
I. The PIP Statute
The PIP Statute,2 Fla. Stat. 627.736(1)(a) (2012 to date), requires that an insurer cover
80% of all reasonable expenses for medically necessary medical services:
(1) Required Benefits: – An insurance policy complying with the security
requirements of s. 627.733 must provide personal injury protection to the named
insured . . . as follows:
(a) Medical benefits. – Eighty percent of all reasonable expenses for medically
necessary medical, surgical, X-ray, dental, and rehabilitative services. . . . .
Pursuant to Section (5)(a), medical providers may only charge a “reasonable amount;” and that a
charge may not exceed “the amount [the provider] customarily charges for like services:”
(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
. . . , However, such a charge may not exceed the amount the person or
institution customarily charges for like services or supplies. ....
Fla. Stat. § 627.736(5)(a) (emphasis added).
In addition, Section (5)(a)1. sets forth the PIP Schedule, which insurers may use to limit
reimbursement of PIP medical bills:
1. The insurer may limit reimbursement to 80 percent of the following
schedule of maximum charges: 3
***
2
A full copy of the PIP Statute in effect on the date of Velasquez’s accident is attached as Exhibit 1.
3
Subsections (a) through (f) of the PIP Schedule set limitations based on different payment sources
depending on the type of service rendered. Subsection (f) applies to the chiropractic services rendered by Schauder.
3
52568220;1
f. For all other medical services, supplies, and care, 200 percent of the
allowable amount under:
(I) The participating physicians fee schedule of Medicare Part B, except as
provided in sub-sub-subparagraph (II) and (III). . . .
Section (5)(a)5. provides that insurers who want to limit reimbursement based on the PIP
Schedule must elect to do so in the policy:
5. Effective July 1, 2012, an insurer may limit payment as authorized by this
paragraph [the Schedule] only if the insurance policy includes a notice at the time
of issuance or renewal that the insurer may limit payment pursuant to the schedule
of charges specified in this paragraph. A policy form approved by the office
satisfies this requirement. If a provider submits a charge for an amount less than
the amount allowed under subparagraph 1., the insurer may pay the amount of the
charge submitted.
II. The Velasquez Policy
As Schauder recognizes, the Velasquez policy4 limits reimbursement based on the PIP
Schedule. (A.C. ¶ 14). The policy booklet states (Ex. 1 at Form 9610D FL (10/05) at 7):
INSURING AGREEMENT
If you pay the premium for this coverage, we will pay benefits that an insured
person is entitled to receive pursuant to the Florida Motor Vehicle No-Fault Law,
as amended, because of bodily injury:
1. caused by an accident;
2. sustained by an insured person; and
3. arising out of the ownership, maintenance or use of a motor vehicle.
Personal Injury Protection Coverage benefits consist of:
1. medical benefits . . . .
An endorsement defines Medical benefits as:
"Medical benefits" means 80 percent of all reasonable expenses incurred for
medically necessary medical, surgical, x-ray, dental and rehabilitative services
4
A certified copy of the policy in effect as of the date of loss is attached as Exhibit 2. The Court may
consider this policy on a motion to dismiss. Allen v. USAA Cas. Ins. Co., 790 F.3d 1274, 1278 (11th Cir. 2015); Fin.
Sec. Assur., Inc. v. Stephens, Inc., 500 F.3d 1276, 1284 (11th Cir. 2007); Posigian v. Am. Reliance Ins. Co., 549 So.
2d 751, 753 (Fla. 3d DCA 1989); Fla. R. Civ. P. 1.130.
4
52568220;1
(Ex. 1, Form AO85 FL (05/12) at 2 (italicized emphasis added)). The endorsement also provides
(Id. at 1):
. . . Pursuant to Florida law, we will limit reimbursement to, and pay no more
than, 80 percent of the following schedule of maximum charges;
***
f. for all other medical services, supplies and care, 200 percent of the
allowable amount under the participating physicians fee schedule of
Medicare Part B, except as follows . . . .
Argument
I. Schauder Lacks Standing To Sue
Whether Schauder has standing to sue is a “threshold inquiry” that must be considered at
the outset of this case. See, e.g., Sosa v. Safeway Premium Fin. Co., 73 So. 3d 91, 116 (Fla.
2011); McCarty v. Myers, 125 So. 3d 333, 336 (Fla. 1st DCA 2013); United Auto. Ins. Co. v.
Diags. of So. Fla., Inc., 921 So. 2d 23, 25 (Fla. 3d DCA 2006); Stone v. CompuServe Interactive
Servs., Inc., 804 So. 2d 383, 388 (Fla. 4th DCA 2001). A named class plaintiff must have
standing; otherwise, the case is subject to dismissal. See, e.g., Graham v. State Farm Fire & Cas.
Ins. Co., 813 So. 2d 273, 274 (Fla. 5th DCA 2002) (affirming dismissal of class action claims
based on plaintiffs’ lack of standing); see also Chinchilla v. Star Cas. Ins. Co., 833 So. 2d 804,
805 (Fla. 3d DCA 2002). Here, Schauder lacks standing because he has failed to allege
compliance with the PIP Statute’s pre-suit demand requirement on an individual or class-wide
basis, has not attached the assignment of benefits upon which he bases his standing, and cannot
pursue an isolated claim for declaratory relief.
A. Schauder Has Failed to Allege Compliance with the
Pre-Suit Demand Requirement of Fla. Stat. § 627.736(10)
Section (10) of the PIP Statute provides (emphasis added):
(10) DEMAND LETTER.—
5
52568220;1
(a) As a condition precedent to filing any action for benefits under this
section, written notice of an intent to initiate litigation must be provided to
the insurer. Such notice may not be sent until the claim is overdue, including any
additional time the insurer has to pay the claim pursuant to paragraph (4)(b).
***
(d) If,within 30 days after receipt of notice by the insurer, the overdue claim
specified in the notice is paid by the insurer together with applicable interest and a
penalty of 10 percent of the overdue amount paid by the insurer, subject to a
maximum penalty of $250, no action may be brought against the insurer.
See MRI Assocs. of Am. v. State Farm Fire and Cas. Co., 61 So. 3d 462, 465 (Fla. 4th DCA
2011) (“[t]he statutory requirements surrounding a demand letter are significant, substantive
preconditions to bringing a cause of action for PIP benefits”); see also Menendez v. Progressive
Express Ins. Co., 35 So. 3d 873, 876 (Fla. 2010); Bristol West Ins. Co. v. MD Readers, Inc., 52
So. 3d 48, 51 (Fla. 4th DCA 2010). Serving a pre-suit notice is a condition precedent to filing an
action for benefits, and Schauder does not allege compliance with this provision. The failure to
allege or serve a demand before filing this lawsuit is fatal to this action. See City of Coconut
Creek v. City of Deerfield Beach, 840 So. 2d 389, 393 (Fla. 4th DCA 2003) (“…failure to
comply with a statutory condition precedent, absent waiver or estoppel, requires dismissal.”);
Levine v. Dade Cnty. Sch. Bd., 442 So. 2d 210, 212-13 (Fla. 1983).
Not only has Schauder failed to allege compliance with this condition precedent on his
own behalf, Schauder cannot allege the required compliance by every class member. See Ocean
Harbor Cas. Ins. v. MSPA Claims, 1, 261 So. 3d 637, 648 (Fla. 3d DCA 2018) (“… Florida law
mandates that a demand letter be sent to the insurer as a condition precedent to litigation.”);
Shenandoah Chiro., P.A. v. Nat’l Specialty Ins. Co., 526 F. Supp. 2d 1283, 1290 (S.D. Fla.
2007). In Ocean Harbor, 261 So. 3d at 648, the Third DCA reversed class certification in a case
involving PIP benefits, recognizing, among other things, that the insurer was entitled to raise the
defense of failure to serve a pre-suit notice in response to individual class member claims.
6
52568220;1
To the extent that Schauder thinks that the pre-suit notice requirement does not apply to
this Action because he only seeks declaratory relief, he is wrong. This Action focuses on
disputed medical “charges” and seeks a declaration that Progressive violated the PIP Statute by
paying only 80% of the charges submitted. (A.C., Prayer for Relief at C(2) and C(3)). The
disputed charges arise from Velasquez’s assigned PIP insurance benefits. The only way the pre-
suit notice requirement would not apply is if Schauder were suing over benefits or coverage
external to the policy, but that is not the case.
The PIP Statute does not exempt declaratory or injunctive relief claims from the pre-suit
notice requirement if they focus on issues of entitlement to PIP benefits. See, e.g., Bristol West,
52 So. 3d at 51; DWFII Corp. v. State Farm Mut. Auto. Ins. Co., 271 F.R.D. 676, 685 (S.D.
Fla. 2010), aff’d, 469 F. App’x 762 (11th Cir. 2012); MRI Assocs. of St. Pete, Inc. v. State
Farm Mut. Auto. Ins. Co., 755 F. Supp. 2d 1205, 1207-08 (M.D. Fla. 2010); Shenandoah, 526 F.
Supp. 2d at 1290; Pan Am Diagnostic Servs., Inc. v. Equity Ins. Co., 22 Fla. L. Weekly Supp.
814a (Fla. 11th Jud’l Cir. Dec. 11, 2014) (Exhibit 3); Progressive Health Servs., Inc. v. Security
Nat’l Ins. Co., 22 Fla. L. Weekly Supp. 816a (Fla. 11th Jud’l Cir. Sept. 17, 2013) (Exhibit 4). In
Shenandoah, MRI Assocs. of St. Pete, Pan Am Diagnostic, and Progressive Health Servs., the
courts dismissed equitable relief claims because the medical provider could not allege that the
class members complied with the demand letter requirement.
The ruling in Bristol West, 52 So. 3d at 51, confirms that the demand letter requirement
applies to declaratory relief actions if PIP benefits are at issue – as they are here. There, the court
considered whether the plaintiff lacked standing because it failed to send a demand letter. Id. at
50-51. The court found “because [the plaintiff] did not seek any monetary relief, [its] claim is not
an action for benefits and thus the statutory notice is not required.” Id. at 51. However, while the
7
52568220;1
court found that a demand letter was not required for the count for declaratory relief in that case,
that was only because there was no claim for damages made by the plaintiff and a claim for
damages was not even possible. Id. at 49. As the court observed, “not one member of the class
[could] collect based upon that declaration.” Id. at 52 (concurring). Notably, the lower court
subsequently entered summary judgment in favor of the insurer – finding “there is no ‘bona fide,
actual, present practical need’ for a declaration” because the complaint sought no money
damages, and the plaintiff thus could not recover damages in that lawsuit or any subsequent
lawsuit even if a declaration were issued. See MD Readers, Inc. v. Bristol West Ins. Co., No.
CACE 08-021302 (14) (Fla. 17th Jud’l Cir. Jan. 11, 2012) (Exhibit 5).
This case is not the same as Bristol West. While Schauder states that he “does not assert
a claim for monetary relief,” there is nothing (including the application of the statute of
limitations) that would prevent Schauder from bringing a damage claim. While Schauder may
choose to forego his own damages claim, that may not be true for other members of the class.
Accordingly, this case is not Bristol West – where a damages claim was impossible – and
compliance with the pre-suit demand letter is required.
Plaintiff may also argue that Progressive’s records will indicate whether there was
compliance with the demand letter requirement. However, even assuming Progressive could
easily identify those claims where a demand letter was served, the Court would have to examine
those letters individually to determine if they satisfy the requirements of Section (10).5 This
inquiry cannot be accomplished on a class-wide basis. See, e.g., Ocean Harbor, 261 So. 3d at
5
Section 627.736(10) imposes strict requirements on the form and procedures for demand letters – including
with regard to specific wording and content. Courts have rejected demands that do not comply. See, e.g., MRI
Assocs. of Am., 61 So. 3d at 465 (rejecting premature demand letter); Fountain Imaging of West Palm Beach, LLC v.
Progressive Express Ins. Co., 14 Fla. L. Weekly Supp. 614a (Palm Beach Cir. Ct. 2007) (approved by MRI Assocs.
of Am., 61 So. 3d at 464) (rejecting demand letter which had not provided the exact amount owed).
8
52568220;1
648; MRI Assocs. of St. Pete, 755 F. Supp. 2d at 1207; Bristol West, 52 So. 3d at 52 (Warner, J.,
concurring); Progressive Health Servs., (Ex. 4).
B. Schauder’s Theory Implicates Forbidden Claim-Splitting
Even if Schauder foreswears a benefit recovery on his own behalf, the rule against
splitting a cause of action requires class members other than Schauder to bring their damage
claims in this action or risk losing them. Both the PIP Statute and the rule against splitting a
single cause of action require that all damages sustained as a result of a single wrongful act –
here the alleged underpayment of PIP benefits – must be brought in one action. See Fla. Stat. §
627.736(15) (A PIP plaintiff generally must bring “all claims related to the same health care
provider for the same injured person in one action[.]”); Vanover v. NCO Fin. Servs., Inc., 857
F.3d 833, 843 (11th Cir. 2017); Aquatherm Indus., Inc. v. Fla. Power & Light Co., 84 F.3d 1388,
1395 (11th Cir. 1996); Kelecseny v. Chevron, U.S.A., Inc., 262 F.R.D. 660, 673 (S.D. Fla. 2009)
(claim-splitting rule “applies with equal force in the class action context.”); Horton v. Metro.
Life. Ins. Co., 459 F. Supp. 2d 1246, 1250 (M.D. Fla. 2006); Bryant v. Tarman, 21 So. 3d 137,
137 (Fla. 5th DCA 2009) (auto accident claim for bodily injury and property damage could not
be split).
In Florida Farm Bureau Gen. Ins. Co. v. Peacock’s Excavating Serv., Inc., 186 So. 3d 6,
9 (Fla. 2d DCA 2015) (quoting Travelers Ins. Co. v. Wilson, 371 So. 2d 145, 147 (Fla. 3d DCA
1979) (emphasis added), the Second DCA found that, once a complaint for declaratory relief is
pleaded, a court becomes “fully empowered and should completely adjudicate all the rights of
the parties relating to coverage, liability and damages in order that the rights of the parties
not be determined in a piecemeal fashion.” The very purpose of a claim for declaratory relief
is “to obtain a final resolution of all the aspects of the controversy between litigants in a single
9
52568220;1
action.” Id. Accordingly, the court refused to review a judgment that simply disposed of the issue
of the insurer’s duty to defend – but did not dispose of the issue of the duty to indemnify or other
issues. Id.
Schauder proposes the very course of action rejected in Peacock’s. He proposes a class
action addressing one isolated issue (the payment of certain charges at 80%) -- without
addressing all of the necessary aspects of the controversy between the litigants. Florida courts
abhor piecemeal litigation; and Schauder’s proposed class for declaratory relief runs directly
afoul of this principle of Florida law. See Miller v. Allstate Ins. Co., 650 So. 2d 671, 673-674
(Fla. 3d DCA 1995).
While Schauder may only be seeking a declaration with regard to the calculation of
certain medical charges, other class members will undoubtedly have other issues related to
Progressive’s handling of the implicated charges, bills, and claims. Examples include challenges
to reductions based on the application of the PIP Statute’s emergency medical condition
provisions (Fla. Stat. § 627.736(1)(a)3.-4.), reductions based on Progressive challenging the
reasonableness or medical necessity of the treatment at issue (Fla. Stat. § 627.736(1)(a) and
(5)(a)), reductions or denials based on improper coding or bill submissions (Fla. Stat. §
627.736(5)(d)), reductions or denials based on untimely billing (Fla. Stat. § 627.736(c)),
reductions or denials on charges from brokers or based on false statements (Fla. Stat. §
627.736(b)(1)), etc. See Ocean Harbor, 261 So. 3d at 648 (noting the myriad of issues with
regard to PIP billing). Given that Section (15) of the PIP Statute requires that all such issues be
brought together, it is no wonder that class actions for PIP benefits are not feasible. See id.
(reversing class action against PIP insurer and noting that establishing liability will necessarily
10
52568220;1
devolve into a series of mini-trials under Florida no-fault law); see also IDS Prop. Cas. Ins. Co.
v. MSPA Claims 1, LLC, 263 So. 3d 122, 124-25 (Fla. 3d DCA 2018).
C. Schauder Has Failed to Attach the Assignment of Benefits
Fla. R. Civ. P. 1.130 mandates that “[a]ll bonds, notes, bills of exchange, contracts,
accounts, or documents on which action may be brought or defense made, or a copy thereof or a
copy of the portions thereof material to the pleadings, must be incorporated in or attached to the
pleading.” Schauder has failed to attach or incorporate the policy sued upon. While Progressive
has provided the policy, Schauder has failed to attach or incorporate itsassignment of benefits
from Velasquez – which is a document on which this action is brought.6 See Fla. R. Civ. P.
1.130; Jeff-Ray Corp. v. Jacobson, 566 So. 2d 885, 886 (Fla. 4th DCA 1990) (noting that Rule
1.130’s requirement to attach documents to a complaint applied to an assignment).
D. Schauder Lacks Standing Because He Has Not Brought a Damages
Claim and He Has No Substantial Likelihood of Future Injury
Schauder’s allegations center on past conduct by Progressive. Schauder alleges that
Progressive improperly “reimbursed” services and “failed” to calculate reimbursement properly.
(A.C. ¶¶ 19-24). The request for declaratory relief seeks a declaration that Progressive “violated”
Florida law in paying its bills. (Id. at Prayer for Relief, (C)(2) and (3)). There are no allegations
of possible future injury to either Schauder or Velasquez in connection with the Velasquez claim.
The federal Eleventh Circuit recently reversed class certification and summary judgment
orders in a similar PIP billing class action because the court found that the medical provider
6
In a PIP action, a non-insured plaintiffwho purports to be proceeding pursuant to an assignment of
benefits, but who fails to have an appropriate assignment, lacks standing. See Progressive Express Ins. Co. v.
McGrath Cmty. Chiro., 913 So. 2d 1281, 1285 (Fla. 2d DCA 2005). See also State Farm Mut. Auto. Ins. Co. v.
Pressley, 28 So. 3d 105, 109 (Fla. 1st DCA 2010) (“an entity other than a medical provider may recover PIP benefits
for services provided by a provider, but only pursuant to a valid assignment of benefits”); Hartford Ins. Co. of Se. v.
St. Mary’s Hosp., Inc., 771 So. 2d 1210, 1212 (Fla. 4th DCA 2000).
11
52568220;1
plaintiff lacked standing to represent a class seeking declaratory relief when there was no
substantial likelihood that the insured (and not the medical provider) would suffer injury in the
future. A&M Gerber Chiro. LLC v. Geico Gen. Ins. Co., 925 F.3d 1205, 1214-1216 (11th Cir.
2019). The court stated:
As earlier noted, however, when a plaintiff is seeking declaratory relief
without a claim for money damages for injuries already suffered, the plaintiff
must allege facts from which it appears that there is a substantial likelihood
that he will suffer injury in the future.
***
Whether and to what extent [the medical provider] might be injured is beside
the point because the proper inquiry in this case must focus on the potential
future injury to [the insured], not to [the medical provider] or other
members of the class. And we can see no potential future threat to [the insured],
other than the possibility that he may someday be in another car accident; sustain
an injury entitling him to PIP benefits; and still be insured by GEICO under the
same or a similar policy being interpreted the same way, thereby having this issue
present itself again. But, that is too contingent to constitute a “substantial
likelihood” of future injury.
In the absence of a claim for money damages or substantial likelihood that [the
insured] will suffer a future injury—both of which [the medical provider] was
careful to avoid alleging here—[the medical provider] has no standing to pursue
this case.
Id. at 1214-1216. (emphasis added and citations omitted). Exactly like the plaintiff in Gerber,
Schauder alleges standing as the assignee of an insured. Schauder similarly does not seek any
money damages. (A.C. ¶ 1). And, as in Gerber, itappears highly unlikely that Velasquez will
sustain a future injury. Accordingly, like the plaintiff in Gerber, Schauder lacks standing.
II. The Issue of Entitlement to Benefits Must Be Determined
on an Individual Basis and Not on a Class-wide or Global Basis
As defined by both the PIP Statute and the Velasquez policy, Progressive must reimburse
the covered and reasonable amount of necessary medical expenses. Whether a particular medical
charge is reasonable, medically necessary, and/or covered are questions that necessarily depend
on the timing, type, amount, frequency, character, and location of the service provided. They also
12
52568220;1
depend on the nature and extent of the insured’s injuries, the circumstances of the insured’s car
accident, and the particular insurance coverage elected under the insured’s policy. It is clear that
these questions are inherently individual in nature and must be addressed on an individualized
basis. See Ocean Harbor, 261 So. 3d at 648 (in reversing certification of a class action involving
PIP benefits, court noted that the PIP Statute authorizes an insurer to decline or reduce payment
if the claim was not reasonable or medically necessary – an individualized issue); IDS Property,
263 So. 3d at 124 (same); State Farm Mut. Auto. Ins. Co. v. Sestile, 821 So. 2d 1244, 1245 (Fla.
2d DCA 2002) (dismissing declaratory relief action on this basis); Cruz v. Union Gen. Ins., 586
So. 2d 91 (Fla. 3d DCA 1991) (dismissing declaratory relief action on this basis).
In Ocean Harbor, 261 So. 3d at 648, the Third DCA recognized that the certification of a
proposed class action involving PIP medical benefits was unworkable, finding that the “proof to
establish liability will necessarily devolve into a series of mini-trials under Florida no-fault [PIP]
law. . .” See also Sestile, 821 So. 2d at 1246 (“The fact-finder must construe the word
‘reasonable’ and determine whether the insurance company’s evaluation of PIP medical bills fits
the definition on a case-by-case basis.”). As emphasized by the Florida Supreme Court in Geico
Gen. Ins. Co. v. Virtual Imaging Servs., Inc., 141 So. 3d 147, 155-56 (Fla. 2013), the
determination of reasonableness under the PIP Statute “is a fact-dependent inquiry determined by
the consideration of various factors.”
The reasonableness and necessity of the class members’ charges and Progressive’s
payments are inescapably intertwined with the resolution of this dispute. If the underlying
medical expenses were not reasonable, medically necessary, timely submitted, properly coded,
and/or lawfully rendered, there is no coverage at all and no entitlement to any declaration –
whether due to an improper payment method or any other reason. Even though Progressive may
13
52568220;1
have paid some portion of the disputed charges, nothing stops Progressive from challenging an
expense’s reasonableness at any time – including after payment. Fla. Stat. § 627.736(4)(b); see
also United Auto. Ins. Co. v. Millennium Diag. Imaging Ctr., 12 So. 3d 242, 246 (Fla. 3d DCA
2009).
Given this backdrop, it is not surprising that Florida courts have dismissed PIP class
actions when it is clear that individual issues of reasonableness or necessity are likely to render a
class action inappropriate as a matter of law.7 See, e.g., MSPA Claims 1, LLC, v. Security Nat’l
Ins. Co., No. 2015-28181, 2017 WL 1375163, at *6 (Fla. 11th Jud’l Cir. Mar. 31, 2017) (“The
need to assess the class members’ claims and Defendant’s defenses to each will require a
succession of mini trials, making Plaintiff’s claims inappropriate for class action treatment as a
matter of law. It is appropriate for this Court to make this determination on a motion to dismiss;
waiting for class certification is not necessary.”); Millennium Diag. & Imaging Ctr., Inc. v. State
Farm Fire & Cas. Co., No. 10-03091-CA 06 (Fla. 11th Jud’l Cir. Sept. 5, 2016) (dismissing PIP
class action); Accumed Chiro. & Wellness Ctr., Inc. v. Progressive Select Ins. Co., 22 Fla. L.
Weekly Supp. 349a (Fla. 11th Jud’l Cir. July 31, 2014) (striking class allegations in PIP billing
class action, finding that “the necessary and individualized questions associated with the
underlying PIP claims of the class will predominate in this Action and render this Action
inappropriate for class action treatment as a matter of law.”); Progressive Health Servs., 22 Fla.
L. Weekly 816a (dismissing PIP class action claims); Feijoo v. Progressive Am. Ins. Co., 23 Fla.
7
See also Espana v. Universal Prop. & Cas. Ins. Co., No. 14-5454-CA-25 (Fla. 11th Jud’l Cir. Mar. 12,
2015) (dismissing class allegations in homeowners’ insurance case with prejudice); Graham v. State Farm Fire &
Cas. Co., slip op., No. CI0-01-1352(40) (Fla. 9th Jud’l Cir. Aug. 17, 2001), aff’d, 813 So. 2d 273 (Fla. 5th DCA
2002) (dismissing class allegations against insurer in a homeowners’ insurance class action with prejudice); Premier
Open MRI Ctr. v. Allstate Ins. Co., No. 16-2003-CA-004498 (Fla. 4th Jud’l Cir. Jan. 7, 2005) (class allegations
dismissed in automobile insurance class action); Pineda v. State Farm Mut. Auto. Ins. Co., No. 02-013458-02 (Fla.
17th Jud’l Cir. April 3, 2003), aff’d, 904 So. 2d 565 (Fla. 4th DCA 2005) (auto insurance class action inappropriate
for declaratory relief) (Composite Exhibit 6).
14
52568220;1
L. Weekly Supp. 138a (Fla. 11th Jud’l Cir. April 13, 2015) (same); Berman v. Windhaven Ins.
Co., 23 Fla. L. Weekly Supp. 139a (Fla. 11th Jud’l Cir. May 28, 2015) (same); Integra Health
Servs., Inc. v. Progressive Am. Ins. Co., No. 07-01917 CACE (08), 2008 WL 6914623 (Fla. 17th
Jud’l Cir. Feb. 14, 2008), slip. op., aff’d, 18 So. 3d 1129 (Fla. 4th DCA 2009) (same) (attached
as Composite Exhibit 7).
Here, the need to assess the individual charges of each claimant and Progressive’s
payments on the individual charges will require a succession of mini-trials. See Sestile, 821 So.
2d at 1245-46. For example, individual issues may include:
• whether coverage has been afforded to the claimant;
• whether the healthcare provider timely submitted medical bills to Progressive under PIP
coverage;
• whether a healthcare provider has appropriate legal standing to sue Progressive (whether
through an assignment of benefits or otherwise);
• whether the healthcare provider’s submission of claims/bills complied with statutory and/or
policy requirements for the submission of such claims/bills;
• whether a PIP deductible was applied to the claim;
• whether the claim was not paid or reduced because benefits were otherwise exhausted;
• whether the healthcare provider complied with the pre-suit notice requirement of Fla. Stat.
§ 627.736(10);
• whether or not the services and care were lawfully provided, supervised, ordered, or
prescribed by an appropriately licensed medical provider; and
• whether the bills and services at issue were reasonable and medically necessary pursuant to
Fla. Stat. § 627.736(1)(a).
It is therefore unsurprising that similar class actions against insurers seeking similar relief
regarding the alleged failure to PIP benefits have been roundly rejected. Schauder’s class
allegations should be dismissed or stricken.
15
52568220;1
III. The Single Count for Declaratory Relief Fails Because
Schauder Has an Adequate Remedy at Law and Otherwise
Fails to Allege the Requisite Elements for a Declaratory Judgment
To state a claim for declaratory relief:
[A] complaint for declaratory relief should allege that there is a bona fide dispute
between the parties and that the moving party has a justiciable question as to the
existence or non-existence of some right, status, immunity, power or privilege, or
as to some fact upon which the existence of such right, status, immunity, power or
privilege does or may depend, that plaintiff is in doubt as to the right, status,
immunity, power or privilege, and that there is a bona fide, actual, present need
for the declaration.
Smith v. City of Fort Myers, 898 So. 2d 1177, 1178 (Fla. 2d DCA 2005). Schauder’s Count I
merely contains a bald demand for a declaration, which is wholly insufficient.
Equitable relief, such as a claim for a declaratory judgment, is not available when the
potential loss can be adequately addressed by a claim for monetary damages. Tiller v. State Farm
Mut. Auto. Ins. Co., 549 F. App’x 849, 855 (11th Cir. 2013) (declaratory relief is unavailable
where plaintiffs have “complain[ed] that [the insurer] has not fully compensated them . . . but all
of these acts took place in the past, and could be redressed through legal remedies”); State Farm
Mut. Auto. Ins. Co. v. Altamonte Springs Diag. Imaging, Inc., No. 6:11–cv–1373–Orl–31GJK,
2012 WL 1565387, at *4 (M.D. Fla. May 2, 2012) (dismissing PIP claim for declaratory relief
where provider had a sufficient remedy at law for damages); Eisenberg v. Standard Ins. Co., No.
09–80199–CIV, 2009 WL 3667086, at *3 (S.D. Fla. Oct. 26, 2009) (plaintiff was not entitled to
a declaration regarding the recovery of insurance benefits); see, e.g., Smith, 898 So. 2d at 1178
(holding that plaintiff met the requirements for pleading a declaratory judgment claim because
the complaint alleged the need for a declaration to prevent irreparable injury for which there was
no adequate remedy at law). Count I should be dismissed for this reason as well.
16
52568220;1
A proposed class action for declaratory relief – as here – is not appropriate where such
equitable relief is not the primary relief sought. See DWFII Corp., 271 F.R.D. at 686 (holding
that money damages in an auto insurance case were not “incidental” as applied under analogous
Fed. R. Civ. P. 23(b)(2)); Rollins, Inc. v. Butland, 951 So. 2d 860, 881-82 (Fla. 2d DCA 2006)
(noting that permitting class action to proceed as to declaratory and injunctive relief “is not
proper” where case relates exclusively or predominantly to money damages); see also
Alderwoods Group, Inc. v. Garcia, 119 So. 3d 497, 506 (Fla. 3d DCA 2013). In Rollins,
plaintiffs brought a class action seeking declaratory relief as to the validity of certain contract
disclaimers. The court concluded that “the only function served by the claim for declaratory and
injunctive relief … is to lay a legal foundation for the recovery of money damages against the
[defendants].” Id. at 882; see also Bay Area Injury Rehab Specialists Holdings, Inc. v. United
Servs. Auto. Ass’n, 173 So. 3d 1004, 1009 (Fla. 2d DCA 2015) (affirming the dismissal of
injunctive and declaratory relief class claims regarding the payment of PIP benefits, the court
found “no error in the trial court characterizing the class claims in Count II as predominantly
seeking monetary relief, thus precluding certification of an injunction class”); Freedom Life Ins.