260 So. 3d 1038
Fla.2018Background
- Lee Memorial Health System (a public health care system created by ch. 2000-439) held statutory liens for medical services and a cause of action for impairment of those liens under §18 of that act (the "LMHS Lien Law").
- Progressive Select Insurance settled with an injured patient without Lee Memorial’s joinder or releasing its liens; Lee Memorial sued Progressive for impairment and full recovery of its charges.
- Progressive moved for summary judgment arguing: (1) the statute is an unconstitutional special law under Fla. Const. art. III, §11(a)(9); (2) it unconstitutionally impairs insurance contracts under art. I, §10; and (3) damages should be limited to settlement proceeds or policy limits.
- The trial court granted summary judgment declaring the LMHS Lien Law invalid under art. III, §11(a)(9) and was silent on the contract-impairment issue. Progressive later sought review raising the contract-impairment claim; the Second District also held art. I, §10 was violated and addressed damages.
- The Florida Supreme Court affirmed the invalidation under art. III, §11(a)(9), reversed the Second District’s decision to reach the art. I, §10 issue (for lack of timely Rule 1.071 notice), and declined to rule on damages as moot.
Issues
| Issue | Lee Memorial's Argument | Progressive's Argument | Held |
|---|---|---|---|
| Whether LMHS Lien Law is a prohibited special law under art. III, §11(a)(9) ("liens based on private contracts") | The statute governs a public entity’s liens and so is permissible | The statute creates/impairs liens that arise from private contracts and is therefore a forbidden special law | Held unconstitutional under art. III, §11(a)(9); liens arise from private contracts (contract subject matter controls) |
| Whether the statute impairs private insurance contracts under art. I, §10 | LMHS argued the issue was not properly before the court | Progressive argued statute unconstitutionally impairs its contract with insured | Not decided on the merits — reversed Second District for reaching this issue because Progressive failed to timely serve Rule 1.071 notice on the Attorney General |
| Whether the trial court/Second District could consider the art. I, §10 claim given notice requirements (Fla. R. Civ. P. 1.071) | The art. I, §10 claim was not properly noticed to the Attorney General; court should not decide it | Progressive claimed notice was cured after hearing and could be considered on appeal | Held notice was untimely; trial court correctly declined to decide art. I, §10 and Second District erred to address it |
| Proper measure of damages for lien impairment (full hospital charges vs. settlement proceeds/policy limits) | LMHS sought full amount of its charges regardless of proceeds | Progressive argued recovery should be limited to proceeds or policy limits | Not reached — moot after statute invalidated under art. III, §11(a)(9) |
Key Cases Cited
- Shands Teaching Hosp. & Clinics, Inc. v. Mercury Ins. Co., 97 So. 3d 204 (Fla. 2012) (statutory-meaning and constitutional-review principles)
- Lawnwood Medical Center, Inc. v. Seeger, 990 So. 2d 503 (Fla. 2008) (interpretation of constitutional text and use of dictionaries/common meaning)
- League of Women Voters of Florida v. Detzner, 172 So. 3d 363 (Fla. 2015) (amici may not raise new issues)
- Shelton v. Bank of New York Mellon, 203 So. 3d 1003 (Fla. 2d DCA 2016) (failure to comply with Rule 1.071 bars striking a state statute)
- Ass’n for Retarded Citizens, Dade County v. State, Dep’t of Health & Rehabilitative Servs., 619 So. 2d 452 (Fla. 3d DCA 1993) (public entities may enter into agreements characterized as private for constitutional purposes)