County Line Chiropractic brought suit against United Auto, as assignee of United's insured, Anasa Dexter, to recover unpaid PIP benefits which they claimed were owed as a result of a 2002 motor vehicle accident. County Line subsequently amended its complaint to add three claims for statutory violations under section 627.736(4)(f), (6)(b) and (11)(f), Florida Statutes (2001), and for unfair or deceptive practices under section 626.9541, Florida Statutes (2002). 1County Line sought pre-judgment interest, attorneys' fees and costs, along with the imposition of fines under section 626.9521, Florida Statutes (1992), for each statutory violation.

United Auto responded by filing a motion to dismiss Counts III, IV and V arguing that the provider had no standing to bring a civil action against Appellant for the alleged statutory violations. United Auto also argued that the provider's cause of action was essentially a "bad faith" action, encompassed in section 624.155. Since the provider had failed to comply with the pre-suit requirements for that statute, the claims must be dismissed. The Trial Court denied the motion to dismiss and required discovery. When United Auto failed to comply, their pleadings were stricken and the court entered a default finding that United Auto "routinely violated F. S. 627.736 (4)(f) and (6)(b) and (11)(f)," and that "these violations occurred with such frequency as to constitute a general business practice & these violations were willful." 2

Thereafter, the trial court entered a final judgment in favor of the provider and awarded statutory fines pursuant to section 626.9521, in the amount of $45,000 ($15,000 per count). United Auto appealed to the circuit court of Broward County.

The Circuit Court first noted that the issue presented was whether the Florida legislature intended to establish a private right of action under section 627.736, which presents a question of law. Therefore, the appeal was subject to de novo review. See Merkle v. Health Options, Inc, 940 So.2d 1190 (Fla. 4th DCA 2006)(explaining that a ruling on a motion to dismiss is subject to de novo review); see also Maggio v. Florida Dept. of Labor and Employment Sec., 899 So.2d 1074 (Fla. 2005)(holding that statutory construction is a question of law subject to de novo review).

In support of its argument that there was a private right of action to recover fines for statutory violations, the provider cited Lutz v. Protective Life Ins. Co., 951 So. 2d 884 (Fla. 4th DCA 2007) and Isasi v. American Colonial Ins. Co., 863 So. 2d 1240 (Fla. 4th DCA 2003). However, the appellate Court rejected this, finding that both cases are materially distinguishable as the plaintiffs in Lutz and Isasi were not claiming any private right of action to merely enforce compliance with statutory provisions for alleged violations. The court stated, "unlike here, the plaintiffs in those cases sought relief under distinct common law theories, i.e. breach of contract and collection of interest on a debt owed. There is nothing to suggest that Appellee's claims are grounded in any common law cause of action, but rather Appellee's claims merely seek to enforce compliance with section 627.736. Consequently, its reliance on these cases is unavailing."

In deciding whether there was a private right of action, the court stated, "[a]bsent a specific expression of such intent, a private right of action to do so is not implied. Villazon v. Prudential Health Care Plan, Inc., 843 So. 2d 842 (Fla. 2003)." The court further cited Murthy v. N Sinha Corp., 644 So. 2d 983 (Fla. 1994) and Baumstein v. Sunrise Cmty., Inc., 738 So. 2d 420, 421 (Fla. 3d DCA 1999)(holding "[i]t is axiomatic that whether a private right of action exists for a violation of a statute is a matter of legislative intent."). "A statute that does not purport to establish civil liability, but merely makes provision to secure the safety or welfare of the public, will not be construed as establishing a civil liability".

The court then concluded that analysis of the legislative intent must begin with an examination of the purpose of §627.736, which is set forth in §627.731. After reviewing this language, the court stated:

As the purpose of section 627.736 clearly appears to secure the welfare and safety of the public, it is highly probative evidence that the Florida legislature did not intend for the statutory violations alleged here to give rise to any private cause of action. See Horowitz v. Plantation General Hosp. Ltd. Partnership, 959 So. 2d 176, 182 (Fla. 2007).

The Broward Circuit appellate panel also noted that further evidence of the Florida legislature's intent was incorporated into the 2008 amendment to section 627.736(11), which specifically codified the Office of Insurance Regulation's power to enforce statutory compliance and statutory penalties for an insurer's failure to pay valid claims and unfair or deceptive practices. After reviewing that language, the court stated:

Plainly, matters of statutory violations where an insurer fails to pay valid claims with such frequency as to indicate a general business practice, like those alleged by Appellee, do not rise to any private remedy, and instead, fall under the purview of the Office. See §636.736, Fla. Stat. (2008); §624.05(3), Fla. Stat. (2008) ("(3) "Office" means the Office of Insurance Regulation of the Financial Services Commission.")

The Broward court found further support for its conclusion in the recent decision in United Auto. Ins. Co. v. A 1st Choice Healthcare Systems, 2009 WL 3616293 (Fla. 3rd DCA 2009) [34 Fla. L. Weekly D2268a], where the Third District Court of Appeal, faced with a similar issue, explained that where there is nothing in the text of the statutory provision from which one can deduce that the legislature intended an insured to have a private right of action against an insurer for alleged statutory violation, no such right may be implied. Id. at *4.

After rejecting that there was any intended private right o faction to merely enforce compliance with statutory provisions, the Court then analyzed whether the fines imposed by the trial court could be upheld. First, the court noted that the provider "inexplicably ignores the statutory provisions under which it claims entitlement to fines (sections 626.9521 and 626.9561)." Instead, the provider asked the Court to analyze the amendments to an entirely different statutory penalty section found in sections 627.011-627.381, Florida Statutes (known as the "Rating Law"). The Court noted that this had been raised for the first time on appeal, but nonetheless pointed out "that Appellee's argument overlooks the obvious language and legislative intent of section 626.9561."

After citing the specific statutory provision that defined the power of the Department of Insurance, the court stated, "[i]t is clear that it is the Department of Insurance which has the authority to enforce compliance with statutory violations and seek the imposition of fines under section 626.9521(2), Florida Statutes. On the plain language of the statute, there is nothing which allows Appellee a private right of action from which the award of statutory fines here under section 626.9521(2) is appropriate."

Based on this conclusion, the appellate court reversed the final judgment in favor of the provider.

1(1) Count III alleged violations of sections 627.736(4)(f) and 626.9541, that Appellant engaged in a business practice not to pay the medical bills submitted by health care providers under the insured's PIP policies; (2) Count IV alleged violations of sections 627.736(6)(b) and 626.9541, that Appellant routinely requested documentation pertaining to the reasonableness of charges or medical necessity without a reasonable basis for hundreds of claims filed by Appellee and other health care providers; and (3) Count V alleged violations of sections 627.736(11)(f) and 626.9541, that Appellant routinely failed to timely provide payment for hundreds of valid claims submitted by Appellee and other health care providers.

2United Auto confessed judgment as to Counts I and II, which sought recovery of the PIP benefits.

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