Florida District Court of Appeal Restricts UM Insurer’s Ability to Limit Evidence of Insured’s Medical Special Damages To Amounts Paid by Private Health Insurer

In Nationwide Mutual Fire Ins. Co. v. Harrell, ___ So. 3d ___, 35 Fla. L. Weekly D2873a (Fla. 1st DCA Dec. 21, 2010), the court held that the insured, in an action against her uninsured motorist insurer, was entitled to submit to the jury the gross amount of her medical bills, instead of the lesser amount that was paid by her private health insurer in full settlement of the bills. The court relied on the common-law collateral source rule, which permits a plaintiff to present the entire amount of his or her special damages to the jury, despite the fact that all or a portion of those damages had been compensated by other sources of recovery.

The court distinguished Goble v. Frohman, 901 So. 2d 830 (Fla. 2005), which held that personal injury claimant could not claim as damages the full amount of medical bills that had been reduced by providers as the result of their contractual arrangements with private health insurers. Instead, only the reduced amounts could be placed into evidence.

The court also distinguished cases epitomized by Thyssenkrupp Elevator Corp. v. Lasky, 868 So. 2d 547 (Fla. 4th DCA 2004), which limited evidence of a plaintiff’s medical bills to amounts paid by Medicare, as to which a Medicare lien exists, rather than the gross amounts. In doing so, the First District relied on Fla. Physician’s Ins. Reciprocal v. Stanley, 452 So. 2d 514 (Fla. 1984), which permitted a defendant to present evidence of the payment to the plaintiff of governmental or charitable benefits available to all citizens, despite the collateral source rule.

It seems that the First District may have interpreted Goble too narrowly, because the amounts that had been paid by the health insurers were in full settlement of the insured’s liability to the providers for their charges. Therefore, there exists no substantive distinction between the contractual discounts at issue in Goble, and the written off amounts in the instant case. In either case, the tortfeasor’s (or UM insurer’s) liability for the bills should be co-extensive only with the amounts claimed by the subrogated health insurers, and in either case, the excess amounts constitute “phantom” damages.

It is also interesting that the court held the jury’s finding that the plaintiff had not sustained a permanent injury was inconsistent with the jury’s award of the amount of future medical expenses that the insured claimed would be needed for the remainder of her life. Under Florida law, an inconsistent verdict must be raised before the jury is discharged, or else it is waived. Therefore, because the insurer did not object before the jury was discharged, the inconsistency could not be considered by way of a motion for remittitur or new trial, or on appeal.

In Florida, uninsured motorist benefits are “over and above, but shall not duplicate” benefits available to the insured from such sources as the tortfeasor’s liability insurance, personal injury protection and medical payments insurance, and even workers’ compensation benefits, among others. However, private health insurance is not included in the laundry list; and accordingly, the insurer’s entitlement to a reduction for amounts paid by this type of insurance comes only pursuant to section 768.76, Florida Statutes, which modifies the common-law collateral source rule to allow a set-off for benefits paid by certain collateral sources, where no right of subrogation exists.