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Some Florida drivers may be able to sue their insurer for nonpayment of personal injury protection (PIP) and automobile medical payment (or medpay) benefits before they pay the underlying medical bills themselves, the Florida 1st District Court of Appeal ruled on July 26. Kaklamanos v. Allstate Ins. Co., No. 1D00-2974. Ruling on a case where Allstate Insurance Co. had refused to pay an insured’s medpay and PIP benefits, the court said that an insured “may not, indeed, be able to pay such bills” without first receiving the benefits from its carrier. Florida’s no-fault laws require insurers to pay benefits within 30 days after written notice of the claim or contest the claim’s reasonableness before a trier of fact and risk paying interest and attorney fees. In its policy, Allstate had agreed to pay the defense costs and any resulting judgment if a medical provider sued their insured for expenses Allstate deemed unnecessary and declined to pay. When Dino and Keely Kaklamanos sought payment for medical diagnostic work performed on Keely after she was hurt in a car accident, the carrier refused to pay, claiming the tests were unreasonable and not medically necessary. The Kaklamanoses filed suit. Allstate moved for summary judgment, contending its insureds had no claim. It argued that the couple had not sustained any damages because their medical providers had not sued them and that the couple would not suffer any future damages because Allstate would pay the judgment. A county court granted Allstate’s motion and a state circuit court affirmed it. The appeals court, however, quashed the summary judgment award and remanded the matter for trial. The three-judge panel ruled that the cause of action accrued the day Allstate refused to pay the claim, because the insureds had already incurred liability. The court said that the purpose of the no-fault law was to provide swift payment so an insured could get on with his life. It reasoned that Allstate’s plan to wait until an insured was sued before paying a provider did not account for damage it might cause to the insured’s credit. The Kaklamanos’ lawyer, David Lee Sellers, a Pensacola, Fla., sole practitioner said, “Allstate’s argument in this case highlights how devious and deceptive the insurance industry has been.” He added, “When we were in county court facing summary judgment, I thought, ‘This policy provision is patently unenforceable.’ “ But Allstate’s counsel, Yancey F. Langston of Pensacola’s Moore, Hill, Westmoreland, said the appellate court “resolved the case on grounds not even argued in the briefs. The court did its own research and concluded that the statute had created a contract of indemnity against liability, even though neither party had addressed that issue.” At the court’s request, Katherine E. Giddings of Katz, Kutter, Haigler, Alderman, Bryant & Yon in Tallahassee, Fla., filed an amicus brief on behalf of the American Insurance Association addressing whether the policy language was consistent with the no-fault statutes. “The opinion seems to imply that the language is compatible,” she said, “but the result appears to say the opposite.”

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