Insured Woman Had No Right to $10,000 in Uninsured Motorist Benefits; Money Went to Hospital’s Claim of Lien

GEICO Gen. Ins. Co. v. Hoy (Fla. 2d DCA 2013)

A woman with automobile insurance providing $10,000 in per person uninsured/underinsured motorist coverage (“UM”) was treated at a hospital for injuries she sustained in an automobile accident with an uninsured motorist. The woman was discharged from the hospital owing it $39,000, and the hospital filed a claim of lien in that amount in the public records.

The woman signed a release for the $10,000 UM benefits in favor of her insurer and, in exchange, the insurer issued a check in the amount of $10,000. The hospital advised the insurer that it would agree to accept $5,000 of the $10,000 in UM benefits to permit the woman and her husband to have the remaining $5,000 and to satisfy its claim of lien in full. Although the woman thus collected $5,000, she sued her insurer for fraud in the inducement (among other things), claiming that the insurer had misinformed her about the amount she would receive in exchange for signing the release.

The matter went to trial and on appeal the second district ruled that the trial court should have granted the insurer’s motion for directed verdict since the woman failed to establish the damages element of her claim. The court explained that the woman sustained no loss in reliance on the alleged misrepresentation because the hospital had a lien entitling it to receive the entire $10,000 UM benefit and, therefore, the woman technically received $5,000 to which she had no right.

Chiropractic Clinic is Withheld Insurance Benefits for Failure to Comply with Florida Health Care Clinic Act (FHCCA)

State Farm Fire & Cas. Co. v. Silver Star Health & Rehab (11th Cir. 2013)

An insurer paid a chiropractic clinic $151,000 for treatments provided to its insureds, but withheld an additional $86,000 on the basis that the clinic’s failure to comply with the licensing requirements of the Florida Health Care Clinic Act (“FHCCA”) rendered the treatments unlawfully provided.  The insurer then prevailed in a suit for declaratory relief and unjust enrichment.  The clinic appealed, but the Eleventh Circuit affirmed, ruling, inter alia, that a court in a civil action may determine whether there has been a violation of a FHCCA licensing requirement.