Courts take heed of important ruling on small-dollar PIP lawsuits

July 21st, 2010

A judge wanted to hand over $0.17 or $9.63 in interest (depending on whether the judge found the interest fluctuated or was a flat rate) to the plaintiff and big fees to its attorney, but the recent appellate court ruling on “de minimis” lawsuits put a stop to the nonsense.

Miami-Dade County Court Judge Lawrence D. King granted a motion for summary judgment by United Automobile Insurance Company (UAIC) after a higher court ruled that the courts should be cleared of small-dollar lawsuits.

Let’s hope that other county court judges fall in line and put an end to the abuse of the law by plaintiff attorneys. This ridiculous game of suing for pennies and pocketing tens of thousands of dollars in fees should have come to an end a long time ago.

George A. David had sued UAIC in 2008 on behalf of Stand-Up MRI, Inc., claiming that UAIC had underpaid the interest owed on a PIP treatment claim. As with other lawsuits, Stand-Up MRI had cashed the payment check before hiring an attorney who sent a letter demanding more money. The letter didn’t say how much.

Nor did the lawsuit. It wasn’t until David, of George A. David, P.A., got before Judge King that it became known his client was owed just $.17 or $9.63.

Judge King had denied UAIC’s motion to dismiss the lawsuit, in which the company argued that the complaint failed to state the amount due and ordered UAIC to file an answer. Subsequently, UAIC filed a motion for summary judgment regarding Stand-UP MRI’s defective demand letter, which Judge King also denied.

UAIC argued that when it responded to the initial demand letter (which did not state the amount of interest owed), it requested that Stand-Up MRI contact UAIC immediately there was a discrepancy in the payment made. But instead of contacting UAIC and advising the interest was short by $0.17 or $9.63, Stand-Up MRI filed suit less than a week later.

UAIC then filed a motion for summary judgment based on the doctrine of “de minimis non curat lex” which was set for hearing on July 17, 2010.  Based upon the recent ruling by the appellate circuit court which found that a similar lawsuit must be dismissed based upon the same doctrine, Judge King granted UAIC’s motion for summary judgment.

UAIC has been sued countless times for amounts from a few cents to a few dollars. Now that plaintiff attorneys cannot collect five- and six-figure fees for these needless lawsuits, the courts and taxpayers should see some relief.

There’s more to be done – stamping out PIP fraud, for instance – but taking away the economic incentive to sue first and let the insurance company know what you are suing for later has started to level the playing field in the courtroom.

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No ‘PIP time machine’ for auto insurance claim, says Miami-Dade court

July 17th, 2010

Been in a car accident? No insurance policy? No problem. At least that is one driver’s thought when she bought insurance from United Automobile Insurance Company (UAIC) after her daughter was injured in a collision.

Now, more than four years and seven months later, a Miami-Dade County circuit court, sitting in its appellate capacity, says that county court judge Teretha Thomas erred when she found a UAIC adjuster could promise coverage despite there being no insurance policy in effect.

A driver was involved in an accident on Dec. 7, 2005, at 7:55 a.m., in which her daughter was a passenger, according to court records. At 10:23 a.m., the driver purchased an insurance policy with UAIC. The next day, the daughter began receiving treatment for injuries allegedly received in the accident, and made a claim for payment through UAIC.

When the medical provider submitted the bill, UAIC did not pay and was sued. When the provider’s attorney, Todd A. Landau, took the deposition of UAIC’s claims adjuster, that person erroneously said the company had no issue with regard to coverage.

Landau argued to Judge Thomas that the adjuster’s testimony meant UAIC had no objection to paying the claim. The judge agreed and ordered a judgment before the lawsuit went to trial.

UAIC appealed and three circuit court judges sitting in their appellate capacity agreed that UAIC never promised to pay the medical bills. The judges unanimously ruled that while insurance coverage cannot be forfeited, it also cannot be created where it doesn’t exist. And any agreement to change the effective date – or time – of coverage cannot come after a lawsuit is filed.

It’s obvious to us that any responsible driver that you should have insurance before you get behind the wheel. You cannot force an insurance company to pay for an accident when no insurance policy was purchased or in effect. That’s plain common sense.

The appellate court agreed with our reasoning and granted UAIC’s motion for attorney fees. The court found the appeal was frivolous as there was no reasonable basis in fact or law to uphold Landau’s argument that coverage should exist despite no insurance policy being in effect. Landau wrote a check to UAIC for $15,250.

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Appeals court overturns verdict that gave big payoff to plaintiff attorney

July 13th, 2010

The fee faucet from which so many plaintiff attorneys drink has been reduced to a potential trickle by the appellate division of Miami-Dade County circuit court. Before attorneys sue auto insurance companies over Personal Injury Protection (PIP) claims, they must make clear beforehand what their client wants, said the court in a July 1, 2010, opinion authored by Judge Mark King Leban.

The court showed excellent common and financial sense. There is no reason that an attorney should pocket $13,000 when suing for two bucks.

In handing down a unanimous decision, the court said the only motivation for the lawsuit was attorney fees. The court told the county court judge to look at the lawsuit again, deny the plaintiff attorney her fees, and dismiss the complaint.

The case began after a United Automobile Insurance Co. (UAIC) policyholder was injured in a car accident in 2004. Fourteen months after UAIC paid her medical bills, her attorney, Maria Corredor, sent a letter saying that additional money was owed, but did not state how much.  Four months later Corredor filed suit, and only then did she explain that her client was seeking $2.53 in alleged overdue interest.

Corredor is a regular player in the plaintiff PIP bar.  When UAIC surveyed PIP plaintiff attorneys who sought the highest legal fees, the company found that she charged and was regularly awarded $400 an hour. She had every incentive to sue rather than write UAIC and ask for the tiny amount owed.

Without a trial, Miami-Dade county court judge Robin Faber awarded the plaintiff a total of $2.53 and gave Corredor $13,370.25 in fees and costs, plus interest.

The amounts made no sense – legally or economically – so UAIC appealed. Ridiculous fee awards like this one just encourage more plaintiff attorneys to bring frivolous suits in hopes of a big payday.

A panel of three Miami-Dade circuit judges acting in their appellate capacity agreed with UAIC in a 15-page opinion.  Had the plaintiff and her lawyer sent a letter specifying exactly how much was owed, “no lawsuit would have been filed, nor any judgment entered for such a paltry amount, nor any award for attorney’s fees for such a conscience-of-the-court shockingly large amount,” the court wrote in its opinion.

The judges then absolved UAIC of any wrongdoing.

“In the case at bar, there was no wrongful conduct by United,” they wrote in their opinion. The company paid the medical providers 14 months before Corredor sent her vague letter demanding more money. And her client waited 18 months after the medical providers cashed their checks to sue.

The court also said that county courtrooms should not entertain lawsuits for trivial dollar amounts. The court cited a Florida Supreme Court decision from 1858 in which a case was dismissed because the amount involved was a small (“de minimis”) amount between $9 and $11.  In the UAIC case, the judges wrote, “One wonders how ‘de minimis’ an amount for which an insured/provider will repair to the court for redress: $1.23? $0.25? A nickel?”

The answer is 17 cents, as reported in this blog. The good news is that the courts are running out of patience with plaintiff lawyers who waste the time and money of taxpayers and insured drivers. One can only hope that judges in Miami-Dade county courts and beyond heed the wise words in this court decision.

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Florida Insurance Consumer Advocate PIP Roundtable Scheduled for August 4, 2010

June 30th, 2010

Florida Insurance Consumer Advocate PIP Roundtable Scheduled for August 4, 2010

Wednesday, June 30, 2010

In light of the recent National Insurance Crime Bureau report indicating that questionable claims involving staged vehicle accidents have substantially increased in Florida between 2008 and 2009, Florida Insurance Consumer Advocate Sean Shaw will host a roundtable discussion on Personal Injury Protection (”PIP”) insurance-related issues on Wednesday, August 4, 2010 from 9:00 a.m. to approximately 4:00 p.m.

PIP fraud is among the primary reasons attributed to the recent increase in staged accidents. Many think that abusive and fraudulent activities associated with Florida’s mandatory PIP coverage may outweigh its intended benefits.

The August 4 roundtable participants will include insurance industry members, medical providers, attorneys and other professionals who work directly with PIP-related claims. Their goal will be to identify areas of PIP-related concern and make recommendations to ensure that PIP coverage remains a cost-effective means for Floridians to receive medical treatment for minor injuries without undue financial hardship on medical providers and facilities. Roundtable participants also will review ways to curb fraudulent activities, improve the claim payment process and ensure licensure of health care clinics is adequate. Accomplishing these goals is expected to help control automobile insurance rates.

The roundtable will be held in the Florida House of Representatives’ Committee Room 404, House Office Building. An agenda is forthcoming.

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Suspicious accidents, PIP claims soar in Florida, National Insurance Crime Bureau says

June 29th, 2010

The number of suspicious auto accidents that were staged or deliberately caused by criminals in Florida has increased dramatically in the past year, according to the National Insurance Crime Bureau (NICB). The independent organization said on June 29, 2010, the number of questionable claims submitted to its insurance company members shows a 58 percent jump from 2008 to 2009.

This comes to no surprise to those of us at United Automobile Insurance Co. (UAIC) who fight insurance fraud every day. We see fake accidents and fake injuries all the time.

The report, shows the following trends in Florida:

  • Tampa had 487 questionable claims related to staged or caused accidents in 2009, a 290 percent increase over the previous year.
  • Miami had 258 questionable claims, an 11 percent increase year to year.
  • Orlando had 240 questionable claims, a 24 percent increase.

South Florida was the hotbed of staged crashes, according to the bureau. While the Miami and Hialeah areas continue to show increased activity, criminals have moved north and Tampa Bay is now the center of this crime trend.

The number of questionable claims for all insurance fraud increased 15 percent from 2008 to 2009 in Florida. But the 58 percent jump in the staged accident category shows that criminals are taking advantage of the state’s no-fault auto accident coverage, the bureau said. Florida had the highest rates of fraud in both bodily injury and personal injury protection among states with no-fault insurance.

We have been telling legislators, regulators and law enforcement officials for years that Florida is the epicenter of PIP fraud. Now we have the numbers to back that up.

To combat the problem, the bureau created a task force in South Florida in 2002. The success of the program pushed criminals to Tampa and Orlando areas. Staying in pursuit, the bureau will soon open another major medical fraud task force in Tampa.

The bureau has launched a public awareness campaign in the Tampa Bay area, using billboard and bus shelter ads, as well as radio spots to urge people who suspect a staged accident scheme to call 1-800-TEL-NICB or text their information to TIP411, keyword “fraud.”

We urge every driver in the Tampa Bay area and around the state to report fraud when you see it. You will be bringing criminals to justice and could see your insurance premiums drop if we all do enough to stamp out fake claims.

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Attorney tries to dodge fees when PIP lawsuit goes bad

June 29th, 2010

When it comes to money that plaintiffs or their attorneys have to pay out of their pockets, some lawsuits never come to an end. And that’s what happened with a claim that started seven years ago.

Plaintiff attorneys are paid as much as $500 an hour for filing paperwork at the courthouse and filling in forms, United Automobile Insurance Co. (UAIC) uncovered in its research of court records.

But when those attorneys lose, they want the other side to receive less than $100 an hour. How surprising.

UAIC fought a 2003 accident claim in Broward County, Florida. The claimant, who was not insured by UAIC, sought Personal Injury Protection (PIP) coverage relating to an alleged accident. UAIC denied payment of PIP benefits after discovering the claimant herself owned two vehicles for which insurance was required. That led to a lawsuit in Broward County Court.

During litigation, plaintiff attorney William C. Ruggiero argued that one of the vehicles the claimant owned had been stolen and the other was inoperable, and as such, United was responsible for PIP coverage. Ruggeiro, whose law offices are in Fort Lauderdale,  even filed an affidavit of the claimant’s daughter alleging the vehicle was inoperable.

UAIC discovered from the claimant herself that she did in fact own two vehicles, that neither had ever been stolen, and that both vehicles were in fine working condition. In fact, one of the vehicles was actively driven by her daughter, the person who signed the affidavit alleging the vehicle was inoperable.

After two long hearings on UAIC’s motion to dismiss the case, Broward County Court Judge Martin Dishowitz finally ruled in our favor.

UAIC then asked for payment of the attorney’s fees incurred while litigating the bogus claim. Ruggiero and his client once again made every argument possible to deny UAIC’s request. Judge Dishowitz ultimately dismissed the plaintiff’s arguments and granted entitlement to fees but challenged just how much UAIC’s defense attorney should be paid per hour.

A fee expert hired by Ruggeiro said that insurance defense attorneys usually get paid $85 to $150 per hour, with the average being $100 to $135 per hour.

UAIC argued that because its defense attorney had five years of experience defending PIP cases, the rate should be $250 to $350 per hour. Judge Dishowitz regularly awards plaintiff PIP attorneys with similar experience $250 to $350 per hour.

Judge Dishowitz made UAIC argue twice for why it should be paid and in the end only awarded $145 per hour. Was that a reasonable amount? It would be if the plaintiff attorneys were not asking for and being awarded $300 to $500 an hour. Somehow, those lawyers believe their time is more valuable than ours and the judges seem to believe that too. It is such a biased system.

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Staged accidents put Florida at top of scammer list

June 25th, 2010

It comes to no surprise to us that Florida leads the nation in phony accident claims. The National Insurance Crime Bureau says that these types of rip-offs increased 46 percent between 2007 and 2009.

Florida was the leader with 3,006 staged accidents over the two-year period. Tampa was the worst city for fraud, followed by Miami and Orlando.

The Miami CBS affiliate reports that the problem is huge in South Florida. The video report shows how unsuspecting drivers can become victims of fraud.

And the South Florida Sun-Sentinel quoted the NICB report as saying, “Staged accidents are dangerous criminal events that target innocent drivers with increasingly bold schemes aimed at defrauding insurance companies out of millions of dollars. Unless someone becomes suspicious, many of these staged accidents go undetected.”

We have long been suspicious of these type of accidents, and of the claims filed by medical service providers. As we previously reported, people will recruit insured drivers to fake accidents so that bogus Personal Injury Protection (PIP) claims can be filed. In these cases, the people involved never suffer any injury and never see a doctor or receive medical treatment.

The rise in staged accidents means insurance premiums are also going up. Insurance companies like ours must pass along the costs to safe, honest drivers. Part of the solution is stronger law enforcement. This year, the Florida Department of Financial Services worked with NICB and local police to arrest 27 people who were charged in faking accidents and medical claims.

The other step that’s needed: legal reform. The Florida legislature must make it harder for drivers and medical clinics to set up phony schemes. And the state must eliminate the financial incentives for plaintiff attorneys to sue when claims are not paid. Right now, the clinics and attorneys have all to gain and little to lose when an insurance company challenges their claims. Until there are strong deterrents to fraud, Florida drivers will continue to pay for drivers, clinics and lawyers who cheat.

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UAIC to LaBovick: Let’s get to truth on PIP lawsuits

May 12th, 2010

Our report on April 13 that LaBovick & LaBovick was filing hundreds of small-dollar lawsuits in Broward County apparently got the attention of the law firm and its managing shareholder, Brian F. LaBovick. Don’t think he caught United Automobile Insurance Company (UAIC) in the act of something devious, as the headline of his blog post would suggest. We were the ones who lifted the veil on his operations. Now, he is howling about “bringing the insurance giant to justice” in an April 27 blog post.

Thanks to our enterprising work, Mr. LaBovick now admits in his blog post that his firm has flooded the Broward courts with at least 1,000 lawsuits that are Personal Injury Protection (PIP) related. He also acknowledges that the plaintiff in every case is a company he controls, Gulfstream Medigroup. And Mr. LaBovick also admits that many of the lawsuits are for small sums of money.

Mr. LaBovick has a lot to say in his post about how he thinks his firm is undertaking a noble effort. He says his firm stands up for the rights of doctors and medical providers. There is a big problem with his argument: the doctors and medical providers he claims he is standing up for are not the ones filing suit and claiming they have been underpaid.

Mr. LaBovick also raises the question, “How much is the ‘right amount’ to be ripped off before a doctor sues?” Sadly, he has no numbers or statistics to back up the claim that anyone has been cheated. In reality, Mr. Labovick is filing lawsuits for bills that were previously paid in full, or were paid at an amount that the medical clinic accepted as full and final payment.  In one case, UAIC erroneously paid the medical clinic twice for the same services, with both checks cashed by the provider, and the LaBovick firm still filed a lawsuit claiming UAIC underpaid!  These are the numbers and statistics that will come out in court.

If you want to talk about rip-offs, cite numbers, such as the fact that the Florida Department of Insurance Fraud gets as many tips about PIP fraud as all other types of insurance fraud combined. Or read about the busts of medical clinics that excessively overcharge, submit bills for services never rendered, or treat people who stage accidents. Those people are the criminals who Mr. LaBovick should be criticizing.

So, Mr. LaBovick, let’s get down to what this is really about: your legal fees. In every case, LaBovick & LaBovick is seeking the same thing: attorney’s fees from insurance companies like UAIC.  If it weren’t about the attorney’s fees, then the lawsuits would have never been filed.  Why else would Mr. Labovick file a lawsuit for an alleged underpayment of $3.89 when it costs a minimum of $55 to file the suit?

Gulfstream Medigroup and LaBovick & LaBovick (which, of course, are one and the same) are just another group in a long line of attorneys that are out to milk Florida’s no-fault PIP system for exorbitant attorney’s fees.  This is a game to them, and the ones who ultimately pay are taxpayers and honest Florida drivers. The game needs to end.

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‘Notorius’ law firm disliked for PIP lawsuits in Broward County

May 5th, 2010

Money cannot buy a good reputation, or so it seems for LaBovick & LaBovick, a Palm Beach Gardens law firm that’s unpopular in Broward County for the hundreds of Personal Injury Protection (PIP) lawsuits it has filed. The Palm Beach Post reports that the law firm has raised the ire of not just United Automobile Insurance Corp. (UAIC) Its penny-ante tactics have angered Allstate Insurance and its attorney.

To the fans of SunFest, though, LaBovick & LaBovick may seem like a good corporate citizen. The law firm sponsored a stage at the music and arts festival that took place in West Palm Beach the first week of May.

However, appearances are deceptive. We broke the news that LaBovick & LaBovick had clogged the Broward courthouse with hundreds of lawsuits for amounts as little $3.89 using a billing company it owns as its plaintiff. In essence, the law firm has created its own client that buys billings from medical clinics.

“They’re looking to shake us down for legal fees,” Richard Parrillo Sr., founder and CEO of UAIC, told the Post. “It’s all about the fees.”

Attorneys routinely are paid upwards of $300 per hour for filing paperwork, UAIC found in an inspection of court records. Fees can total tens of thousands of dollars even if the client collects only a few dollars.

Some judges are rejecting LaBovick’s flood of lawsuits, which now total more than 1,200. According to the Post article, Broward County Court Judge Robert Lee has thrown out six cases LaBovick filed, ruling Allstate calculated reimbursement rates correctly. LaBovick vowed to appeal. The insurance company’s attorney is confident Judge Lee’s rulings will be upheld.

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Tampa arrests inside look at PIP fraud

April 28th, 2010

Thank you to the Hillsborough Sheriff’s department for telling the public what automobile insurers know: Staged accidents are a huge source of insurance fraud.

Undercover agents broke up a ring of at least 55 people on April 21, 2010, with arrests relating to staged accidents, insurance fraud and racketeering. Based on what we have heard about widespread fraud in the Tampa Bay area, more investigations and arrests are needed.

Personal Injury Protection (PIP) fraud is a huge problem, not just in Tampa Bay, but across the state. Drivers pay hundreds of dollars more in insurance premiums to cover medical claims that either overstated or outright fraudulent. State legislators need to take action to protect drivers, the courts and insurers from fraudulent PIP claims and baseless lawsuits. There should be funding for investigations that uncover phony medical clinics, recruiters for faked auto accidents, and the attorneys who file unfounded lawsuits on behalf of the clinics.

In announcing the arrests, the Sheriff’s office gave the media an inside look at how these rings operate, complete with a video of a staged accident.  Here is a summary from the Tampa Bay Tribune’s article:

“Deputies released the video, showing an SUV and a car pulling into a parking lot at night. The SUV parks; the car stops behind it. The driver gets out of the SUV and walks to the driver’s side of the car.

After a short conversation, the driver returns to the SUV. The car then positions itself and the SUV drives away. Three people get out of the car. The car parks and the driver turns off the headlights and gets out.

Almost immediately, the SUV drives toward the car at a high speed, and strikes it on the driver’s side. The SUV drives away and the four people get back in the car.”

The arrests follow another crackdown by federal, state and local authorities that involved a Tampa Bay treatment clinic. Our company and every other auto insurer in Florida can document that almost identical criminal activity takes place across the state. It’s time to stamp out PIP fraud with more arrests and fewer economic incentives to try to rip off Florida insurers.

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