A Common Sense Analysis Gives Insurers Entitlement to Full Setoff of PIP Benefits
The Second District of Court of Appeal recently addressed the issue of whether an insurer is entitled to have a full setoff of PIP benefits from a jury award in a bodily injury suit when only a portion of the medical expenses claimed by the Plaintiff were caused by the accident.
In Carpenter v. Chavez, 41 Fla. L. Weekly D1998 (Fla. Sept. 9, 2016), Chavez incurred medical expenses as a result of an automobile accident but only received a fraction of those expenses after the jury considered evidence of a preexisting condition. In addition to the jury award, Chavez received the full $10,000 of PIP payments for medical expenses related to the accident. At a hearing to determine the PIP setoff, Carpenter argued that a full setoff of $10,000 comported with the “common sense” approach advanced by the Fourth District of Appeal.
The “common sense” approach states that when a jury awards damages that are the same type of damages covered by PIP, the Plaintiff should not receive a windfall as a result of the court’s duplication of benefits. However, the party seeking a setoff has the burden to prove that a duplication of benefits has occurred. This approach mirrors Florida statute Section 627.736(3), which precludes an injured party from recovering any damages for which PIP benefits are paid or payable.
The Court determined that Chavez exhausted her $10,000 of PIP benefits for medical expenses that were reasonable, related and medically necessary. As the jury determined that Chavez was only entitled to a portion of medical expenses claimed by Chavez as having been caused by the accident, the Court found that the $10,000 paid to Chavez for PIP benefits was duplicated in the jury award. As such, the Court remanded the case to the trial court to order the full $10,000 deducted from the jury award.
Defendants can use this setoff to their advantage by arguing that a jury award must include those damages for which PIP is payable. By invoking this setoff in future cases, Defendants can prevent a Plaintiff from receiving a double recovery.