Posts Tagged ‘plaintiff attorney’

‘Good faith’ is gone from PIP litigation in Florida

Saturday, May 4th, 2013

To understand how plaintiff attorneys play the blame game in Personal Injury Protection (PIP) lawsuits, follow the money. Insurance companies do what they are supposed to do, and then they are sued for millions of dollars because they supposedly acted in bad faith.

“A pair of decisions out of the Fourth District Court of Appeal has revived the bad faith debate,” reports the Daily Business Review in an April 29 news article headlined, “Restoring the Good Faith in Florida’s ‘Bad Faith’ Insurance Litigation.”

The article describes a hypothetical case in which a policyholder is at fault in an auto accident. The insurance company tries to settle and the insured person is hit with big damages. What happens next? An attorney sues the insurance company, claiming it acted in bad faith. The insurance company loses the trial and pays millions of dollars more than the insurance policy required.

Asked about that scenario, UAIC chairman and CEO Richard Parrillo Sr. notes that his company recently paid out $12 million to cover a $5.2 million bad faith award and the associated legal costs.

“If I had more of these, we wouldn’t be sitting here,” he is quoted as saying in the article.

Plaintiff attorneys see it another way, saying that insurance companies make it expensive to litigate. That doesn’t make sense, given that Florida is one of the most pro-plaintiff states in the nation, according to the article, Florida allows first-party and third-party claims under common law and by statute.

To make matters worse, insurers are required to use “the same degree of care and diligence as a person of ordinary care and prudence should exercise in the management of his own business,” according to a state supreme court ruling. A jury, not a judge, decides whether the insurer acted negligently.

Efforts to reform the bad-faith rules are stuck in the courts and the state legislature. Bills in the House and Senate failed to pass in the latest session. That is bad news for every driver in Florida because the costs eventually are passed on.

‘Ambulance-chasing’ attorneys run from spotlight

Monday, March 4th, 2013

If you’re wondering why personal injury lawyers are often called ambulance chasers, an open-and-shut civil suit among seven South Florida law firms provides an answer. Four firms that often represent people injured in accidents such as car crashes sued three competing firms, claiming that they illegally solicited clients.

The lawsuit alleged that the three firms used non-employees, known in the legal trade as “runners,” to direct injured people to those law firms. You see, it’s illegal for attorneys to chase an ambulance up the street, down the hill and over to a hospital in order to sign the banged-up occupant as a client. It’s also against the law for attorneys to pay other people to knock on the doors of patients’ rooms and homes to do the same.

However, some law firms bend or break the solicitation rules. Almost every personal injury attorney knows of at least one firm that’s engaged in the practice. It’s a dirty, little not-that secret which the Florida Bar does little about.

When the situation gets out of control, the offended firms do what they know best: go to court. After all, top attorneys at firms like these regularly make $400 or more an hour suing insurance companies like ours for Personal Injury Protection (PIP) claims. One PIP case can produce upwards of $50,000 in fees, even if the client collects only a few bucks.

That makes runners a source of irritation to the firms that are losing out on the sprint to sign clients. Along with some language about how integrity and the reputation of lawyers are being damaged, the lawsuit says that people working indirectly for the defendants put injured people in touch with their lawyers. For example, an employee of Broward Health Medical Center arranged a meeting between an injured patient and an attorney, according to the lawsuit.

The defendants responded with threats and indignation.

“The true headline, if any, ought to be that these attorneys have abused the judicial process and are maliciously prosecuting false and unsustainable legal claims to serve their own personal and political interests,” one attorney told the Daily Business Review.

The news article may have also prompted the two sides to figure out that publicity helped no one. According to the Broward County Clerk of Court, the lawsuit is done. No details were available, but you can guess that if seven law firms shut down a case in less than two months, they have decided it is better to settle their differences in private.

We’re not going to publicize the names of the law firms here. They neither need nor deserve the attention. But if you want look them up, here’s the case number: CACE13-00031.

Wonder why PIP rates don’t go down? Look at how that money gets paid out in court

Thursday, February 28th, 2013

What would happen if you put on your time sheet hours that other employees worked and your boss caught you? Would you be punished? For sure. Would you be fired? Probably.

What if you’re attorney suing an insurance company for Personal Injury Protection (PIP) claims and you get caught padding your legal bill? Nothing. No penalty, no warning, no report to the Florida Bar.

That’s what attorney Rita Baez of Coral Gables got away with in not one, but two lawsuits against our company in Miami-Dade County. She claimed that she did all the legal work on behalf of General Health Medical Inc. while working at the law firm of Neil Gonzalez & Associates and, later, at her own firm.

At a fee hearing on the first lawsuit, Baez repeatedly testified under oath that she personally performed all of the tasks listed on her timesheet. However, on cross-examination, UAIC’s attorneys confronted Baez and proved that other, less-experienced attorneys had actually prepared and signed the documents.

Baez said she was entitled to be paid at her higher hourly rate because she supervised them. Just so you know, a judge considers an attorney’s skill, experience and reputation in calculating attorneys’ fees.

Our company wanted all the attorneys’ fees tossed because Baez had committed a fraud upon the court. Did she admonish Baez for faking her time sheets? Did he penalize her in any way? No, he awarded attorneys’ fees that included the lower hourly rates paid to Baez’s underlings.

In the second lawsuit, Baez quickly revised her time sheets to reveal all of the other attorneys at the Gonzalez firm who performed the work. However, when the two sides arrived at the fee hearing, her old boss, Neil Gonzalez, made a surprise appearance seeking payment of his fees as well as the fees of his less-experienced associates.

Based on this last-minute surprise and that false statement Baez made at the first fee hearing, UAIC asked the court for a delay. However, the trial court denied that request and ultimately entered a fee judgment against UAIC, ordering it to pay Baez, Gonzalez and his associates.

Think about it. What if your boss put in hours for work you did? Would you think he was cheating the company? Would you expect him to be escorted out of the building?

The trial court did nothing. When we challenged the ruling, an appeals court said that the corrections to the time sheets made everything OK.

However, the appeals court added the following to its opinion: “Although this Court affirms the judgments on appeal, this ruling should not be construed as an approval of Ms. Baez’s actions and misguided rationale in the court below. We caution attorneys who may attempt to pad their billing with misleading time records. The practice is an affront to the solemn oath of attorney and will result in dire consequences for the practitioner.”

High-level working group seeks cures for PIP fraud in Florida

Monday, October 17th, 2011

The Office of the Insurance Advocate is investigating the causes and solutions to Personal Injury Protection (PIP) fraud. Its working group held an all-day meeting on the matter on Oct. 10.

Robin S. Westcott, Florida Insurance Consumer Advocate, leads the group, which includes representatives from the medical and insurance industries, including Michael Neimand, an appellate attorney with the Office of the General Counsel at United Auto Insurance Corp.

The group heard from two experts in its morning session:

  • Albert Rosati, General Manager of ExamWorks, said that the no-show rate for independent medical examinations is about 50 percent, and can be higher in cases involving attorney representation
  • Dr. Ashley Booth-Norse of the Florida College of Emergency Room Physicians said that the current $5,000 set-aside for emergency care is being used to pay hospital liens, or is applied to a deductible. She suggested strengthening the language of the law to clarify that the set-aside may not be used to settle liens and that the deductible does not apply.

The working group also discussed licensing of medical clinics, as much of PIP fraud comes from that source. Most group members said that exemptions to the license requirements should be tightened to allow an exemption for only one location. Some argued for eliminating all exemptions.

In the afternoon session, a form titled “Application for Florida No-Fault benefits” was criticized first by Jeff Scott of the Florida Medical Association. He said it could be used as an administrative tool to reject legitimate claims.

Michael Neimand of UAIC said that instead of adding a claim form, the PIP statute should be amended to limit the ability to demand PIP benefits to policyholders and their attorneys.

Scott said that that limit would injure physicians. Niemand responded that an exception could be worked out for first responders and emergency medical providers.

The working group then discussed the idea of annually setting PIP reimbursement rates at the Medicare rate on a given date. The idea was proposed during the 2011 legislative session.  The group agreed that a schedule might reduce fee disputes. Scott stated the medical association would support the idea provided that the minimum PIP rate were based on the 2007 Medicare reimbursement rate.

The group agreed that changing the maximum PIP benefit, currently $10,000, was not central to PIP reform. Repeal of PIP would also not be essential. Ralph Gladfelter of the Florida Hospitals Association said replacing PIP with bodily injury coverage was a near-catastrophe for Colorado’s trauma care system.

A representative of the Florida Justice Association stated that most states have made bodily injury coverage mandatory because too many accident victims were left uncompensated under PIP systems.  Colorado’s problems were solved through adoption of a medical payment system. The association thinks a combination of bodily injury and personal injury protection coverage would be the most effective solution.

Allen McGlynn of State Farm said that other states have healthy auto insurance markets because they have attorney fee schedules, utilization controls, “loser pays” attorneys’ fees, appropriate investigation tools, no contingency risk multipliers, and no threat of a catastrophic bad faith claim.

The attorneys’ representative responded that insurance companies have long sought a fee schedule and now want further reform of litigation that would encourage underpayment of benefits. He said that more than 10,000 lawsuits for underpayment have been filed over the last 18 months against State Farm, USAA and United Auto.

Neimand said that of United Auto’s 790 open cases, 600 were claims of underpayment by providers. United was paying the prescribed Medicare rate, but providers demand higher payments because the Medicare fee schedule was not incorporated in United’s contract.

Westcott concluded the meeting by restating the group’s desire to reform PIP instead of repeal it, while aggressively seeking PIP policy that would reduce litigation.

High-level working group seeks cure for PIP fraud in Florida

Monday, October 17th, 2011

The Office of the Insurance Advocate is investigating the causes and solutions to Personal Injury Protection (PIP) fraud. Its working group held an all-day meeting on the matter on Oct. 10.

Robin S. Westcott, Florida Insurance Consumer Advocate, leads the group, which includes representatives from the medical and insurance industries, including Michael Neimand, an appellate attorney with the Office of the General Counsel at United Auto Insurance Corp.

The group heard from two experts in its morning session:

  • Albert Rosati, General Manager of ExamWorks, said that the no-show rate for independent medical examinations is about 50 percent, and can be higher in cases involving attorney representation.
  • Dr. Ashley Booth-Norse of the Florida College of Emergency Room Physicians said that the current $5,000 set-aside for emergency care is being used to pay hospital liens, or is applied to a deductible. She suggested strengthening the language of the law to clarify that the set-aside may not be used to settle liens and that the deductible does not apply.

The working group also discussed licensing of medical clinics, as much of PIP fraud comes from that source. Most group members said that exemptions to the license requirements should be tightened to allow an exemption for only one location. Some argued for eliminating all exemptions.

In the afternoon session, a form titled “Application for Florida No-Fault benefits” was criticized first by Jeff Scott of the Florida Medical Association. He said it could be used as an administrative tool to reject legitimate claims.

Michael Neimand of UAIC said that instead of adding a claim form, the PIP statute should be amended to limit the ability to demand PIP benefits to policyholders and their attorneys.

Scott said that that limit would injure physicians. Niemand responded that an exception could be worked out for first responders and emergency medical providers.

The working group then discussed the idea of annually setting PIP reimbursement rates at the Medicare rate on a given date. The idea was proposed during the 2011 legislative session.  The group agreed that a schedule might reduce fee disputes. Scott stated the medical association would support the idea provided that the minimum PIP rate were based on the 2007 Medicare reimbursement rate.

The group agreed that changing the maximum PIP benefit, currently $10,000, was not central to PIP reform. Repeal of PIP would also not be essential. Ralph Gladfelter of the Florida Hospitals Association said replacing PIP with bodily injury coverage was a near-catastrophe for Colorado’s trauma care system.

A representative of the Florida Justice Association stated that most states have made bodily injury coverage mandatory because too many accident victims were left uncompensated under PIP systems.  Colorado’s problems were solved through adoption of a medical payment system. The association thinks a combination of bodily injury and personal injury protection coverage would be the most effective solution.

Allen McGlynn of State Farm said that other states have healthy auto insurance markets because they have attorney fee schedules, utilization controls, “loser pays” attorneys’ fees, appropriate investigation tools, no contingency risk multipliers, and no threat of a catastrophic bad faith claim.

The attorneys’ representative responded that insurance companies have long sought a fee schedule and now want further reform of litigation that would encourage underpayment of benefits. He said that more than 10,000 lawsuits for underpayment have been filed over the last 18 months against State Farm, USAA and United Auto.

Neimand said that of United Auto’s 790 open cases, 600 were claims of underpayment by providers. United was paying the prescribed Medicare rate, but providers demand higher payments because the Medicare fee schedule was not incorporated in United’s contract.

Westcott concluded the meeting by restating the group’s desire to reform PIP instead of repeal it, while aggressively seeking PIP policy that would reduce litigation.

Legislators, are you listening to the urgent call for PIP reform?

Thursday, October 13th, 2011

Perk up your ears, Florida legislators. Personal Injury Protection (PIP) reform needs to be the priority of the 2012 session.

Tampa Bay Online has weighed in with an excellent editorial that reflects what people in that metropolitan area feel about a situation that has gotten out of control.

“While the main purpose of the law is good — to ensure that medical bills are covered in a timely manner, and without litigation — the system has spawned an epidemic of fraud in Florida as breathtaking as the crack cocaine explosion of the 1980s,” the editorial states. (Read entire editorial here.)

“Motorists who pay little attention to such things should pay attention. You’re paying for all this. Insurance industry officials say the average ‘fraud tax,’ as it’s called, on Florida drivers was $48.62 per vehicle last year, meaning a family with two cars paid nearly $100,” the editorial states.

We told legislators the same things during the 2011 session and they promised action. However, the votes never materialized. Most PIP reform bills died in committee, others on the floor. The one or two that passed were watered down.

Why? Special interests. The editorial urges legislators to resist the same efforts to thwart PIP reform. “They must not buckle to the selfish interests of lawyers, clinic operators and others who are benefitting most from a flawed system rampant with fraud,” the editorial states.

The editorial commends Hillsborough County commissioners for cracking down on PIP fraud with the toughest ordinance in the state. We agree and go a step forward.

The law should be a model for all counties in Florida. Every county commission from Monroe to Escambia should adopt the same rules that, among other things, mandates having a physician on site and allows the county to deny or revoke a license for fraud-related reasons.

Thank you, Tampa Bay Online, for speaking up for all Florida drivers and trying to get the attention of our state legislators. Let’s hope that they listen.

Summit with Florida CFO Atwater highlights PIP fraud

Friday, July 8th, 2011

Despite cries of foul from plaintiff lawyers, Personal Injury Protection (PIP) benefit payments continue to rise and with that, so does rampant abuse of auto insurance. The latest numbers on PIP fraud were revealed at a summit in late June 2011.

More than $8 billion in PIP claims have been paid in the past five years, said Monte Stevens of the Government Affairs Unit of the Florida Office of Insurance Regulation. The rate of PIP-related lawsuits has increased by over 300 percent during that time.

Another disturbing trend: $1billion more was paid out in auto insurance claims in 2010 than 2009, according to the OIR.

The summit was called because PIP fraud has become widespread in Florida. The state has 3 of the top 10 cities for PIP fraud in the nation, according to the National Insurance Crime Bureau (NICB).

By Florida law, drivers must carry PIP insurance. The coverage pays up to $10,000 in benefits and lost wages per incident. Each Florida driver pays an extra $49 per year in PIP premiums due to fraud, according to insurance industry estimates.

Action is needed, agreed the summit participants who included Florida Chief Financial Officer Jeff Atwater and Florida Rep. Bryan Nelson (Apopka), Rep. Geraldine Thompson (Orlando), Sen. Gary Siplin (Orlando) and representatives from the OIR, NICB and Central Florida law enforcement agencies. The Rotary Club of West Orlando hosted the event.

When Sen. Siplin asked CFO Atwater about enforcement efforts, Atwater said his goal was to punish fraudsters. He asked event attendees to contact Florida’s insurance fraud hotline or the state prosecutor’s office if they suspect auto insurance fraud.

Atwater also advocated holding more PIP-fraud summits around the state to make drivers more aware of how much extra they pay in premiums due to widespread fraud.

Florida Rep. Mike Horner (Kissimmee), who was in the audience, told the group that efforts to stem PIP abuses through legislation failed during the 2011 legislative session. He said reform measures failed due to lobbying pressure from the legal and medical communities, which profit from the PIP system through lawsuits and benefit payments.

Rep. Horner said he plans to re-file PIP-reform bills in the 2012 session.

PIP attorney suspended; he put ‘his personal interest above the interests of his client’

Tuesday, July 5th, 2011

Here’s an insight into personal injury protection (PIP) lawsuits that plaintiff PIP attorneys don’t want you to know: They sue for the money that they will make – not for their clients.

Case in point: Attorney Timothy Allen Patrick, whom the Florida Supreme Court ordered suspended for one year for his mishandling of a PIP lawsuit for a chiropractor. The court said in a decision released June 23, 2011, that Patrick “had encouraged his client to proceed with the cases and not accept the offer at mediation because [he] wanted to be paid his attorney’s fees.”

Patrick’s misdeeds show just how far PIP attorneys will go to collect the money they want and how little they care about their clients. Attorneys like Patrick demonstrate that contrary to the oath they take to practice law in Florida, they are willing to put their clients at financial risk.

Patrick broke several rules, and it wasn’t the first time. In handing down the one-year suspension, the Florida Supreme Court wrote that he had “previously been before this Court for the same form of serious misconduct, and he has now harmed three clients by his continued misdeeds.”

The Florida Bar brought a complaint against Patrick in November 2009 over his handling of two PIP claims by a chiropractor, Dr. Newman, against Progressive Insurance Co. The claims totaled $48. That’s right, just $48.  Sound familiar?

When the claims reached mediation, Patrick said he had spent 60 hours on the case. His normal billing rate is $225 per hour, according to court records.  (Clearly Patrick doesn’t practice in Dade and Broward counties where Judges award far in excess of $225 per hour for PIP cases).

Progressive offered $2,500 to settle the claim, with $48 going to Newman and the rest to Patrick. The Bar referee who investigated the complaint reported that “Newman could not have gained or benefited any more than the offer made at mediation.” So suing posed a financial danger to Newman, because if he lost, he would have to pay Progressive’s legal bills.

The referee found that Patrick pushed Newman to pursue the lawsuit, for which he won $24 on one claim and Patrick hit a payday of $120,772.50 based on his bill for 235.5 hours.

Progressive won the other case and the court awarded the insurance company $10,200 in legal fees and costs. Both sides appealed, with an appellate lawyer representing Newman.

Progressive won a first round of appeals, which meant that Newman didn’t get his $48 and was liable for Progressive’s much larger legal expenses. Patrick didn’t get paid because he took the case based on a winning contingency.  If he didn’t win, he didn’t get paid.

Patrick, not Newman, hired a second attorney for more appeals. That attorney lost too, and Progressive sought payment from the chiropractor. When the bill came, Patrick refused to pay any of it.

In his investigation, the Bar referee found that Newman rejected the initial offer to settle based upon Patrick’s inducements so Patrick could pursue the full claim for attorney’s fees. Further, Patrick stretched out the litigation by paying some of the legal bills of the second appeals attorney.

This was not the first time that Patrick had been accused of such conduct. In handing down the one-year suspension and requiring the attorney to take an ethics course, the Florida Supreme Court found that Patrick failed to tell one client that her insurance company had won a $15,300 judgment against her for attorney’s fees and costs.

In another instance, Patrick did not tell his client, a doctor, that Progressive had offered a payment to settle. The claim went to court, where the client lost and had to pay Progressive $13,000.

The facts, read them at Florida Supreme Court’s website, show how PIP lawsuits can be so little about justice and so much about greed.

Judge: ‘I don’t believe a PIP attorney is entitled to $450 an hour’

Monday, May 23rd, 2011

Personal Injury Protection (PIP) attorneys don’t deserve the fat fees they try to collect for filing PIP lawsuits, says one well-respected South Florida judge.

“I don’t believe a PIP attorney is entitled to $450 an hour, Miami-Dade County Judge Marvin H. Gillman said at a hearing held May 10, 2011. “There is nothing so complicated about PIP that deserves a neurosurgeon attorney to handle it.”

Well put! We’ve been saying all along that attorneys who charge upwards of $350 an hour to file basic paperwork are using the legal system for personal gain and forcing honest drivers to pay too much for their auto insurance. We applaud the courage Judge Gillman showed.

At issue was a demand by the Patino Law Firm of Hialeah to be paid more than $40,000 in legal fees for 98.5 hours of work at $425 per hour. Attorney Ryan Peterson of the firm represented one of his bosses, Richard Patino, who worked on the case when it was originally filed in 2001. Peterson sought to block UAIC’s request to take a deposition of Patino.

“I don’t understand why anybody who is seeking, in this case $40,000 in attorney’s fees ten years after the fact would object to being deposed to defend their claim for $40,000 in fees,” Judge Gillman said, according to a transcript of the hearing.

Judge Gillman went on to question the fees that PIP lawyers demand of insurance companies as part of a legal settlement.

“You know, some guy swinging a hammer playing ordinary lawyer should be able to handle these cases for $150 to $200 an hour,” Judge Gillman said. “You don’t need somebody at $450 an hour to handle PIP, not unless it’s become so complicated in the past ten years that it’s beyond my comprehension.”

“People two years out of law school are doing PIP cases, Judge Gillman said. “And they don’t get $450 an hour. They wouldn’t even dare ask for that amount of money.”

“It just offends me that Mr. Patino asks for that kind of money from a third party,” Gillman said. “Now, if he wants to get [that] from his client, that is his client’s deal and himself. But not from the third party with the court’s approval. I can’t condone that at all.”
UAIC argued before Judge Gillman that it was entitled to know more information before going into a fee hearing over the amount. Peterson had objected, arguing that “other county courts have called depositions after the fact ‘Rambo-like overkill,’” according to a court transcript.

Judge Gillman disagreed, saying, “Why should that be treated any differently than a plaintiff who is seeking to collect a judgment against somebody?”

Peterson’s response carried no weight. Judge Gillman ordered a deposition, saying that the UAIC attorney could “take his deposition until the cows come home as long as it pertains to the point about the $40,000. Or why he’s entitled to $450 an hour, which, in my opinion is an outrageous amount of money.”

We hope the other county court judges take notice of Judge Gillman’s comments. Too often we hear from plaintiff attorneys that they have no incentive to settle because they know the judges are going to give them everything they want.

Some judges have even mentioned that they know the rates awarded to plaintiff PIP attorneys are out of control, but they can’t do anything about it because they fear they won’t be re-elected.  It’s a very sad state of affairs, and one of the reasons South Florida is rated the Number One judicial hellhole year after year.

Confusion in the courts: PIP ruling thwarts justice

Monday, January 24th, 2011

It’s a matter of law in Florida that when you send a check to someone with a note that says, “If you cash this, you are accepting payment in full,” then the matter is settled.

Not so, one of Florida’s top courts now tells us. United Automobile Insurance Company (UAIC) thought it had settled a PIP bill with Palm Chiropractic Center when the Pembroke Pines clinic cashed a check that had “full and final payment” written on it.

Instead, the center, which assumed the claim of a UAIC policyholder, said in a lawsuit filed in county court in Broward County that it was owed more money.

The judge ruled in favor of Palm Chiropractic without a trial and a circuit court panel acting as an appeals court agreed. UAIC went a rung higher on the legal ladder to the 4th District Court of Appeals. It said that both the county and circuit courts were wrong, but that a correction wasn’t warranted.

What? Two courts make mistakes and when a third discovers it, it says only, “Sorry”? The 4th District court said that the county judge should have ruled in favor of UAIC. The appeals court also said while the mistake cost the insurance company $55,000 in legal fees paid to Palm Chiropractic’s attorney, the lower court’s error was not “a miscarriage of justice” and did not establish a legal precedent that would enable anyone else who cashed a PIP claim check to sue.

We beg to differ. UAIC being forced to pay $55,000 in attorney’s fees when it followed the law is certainly a miscarriage of justice. PIP law says that insurers are liable for attorney fees only if they wrongfully withhold the proceeds of the policy.

Second, the 4th District’s opinion means that any business that thinks a matter is settled when a check marked “full and final payment” is cashed is in for a rude surprise. It’s not! A person or company can pocket the money and sue for more.

Not only that, the plaintiff attorney can bill the other party for fees. In this instance, the clinic collected a few dollars while its lawyer took home tens of thousands of dollars.

The business being sued may not get its day in court. The county judge ruled in favor of the clinic without a trial. The higher courts did not see the need for a trial, either.

The legal system has protections to keep innocent people out of prison and help blameless companies from being harmed. When a court makes a mistake, there’s supposed to be a way to set things right.

But when those safeguards fail, then everyone suffers. We hope that the 4th District Court understands that by correcting the error in this case, everyone in Florida will benefit.