March 15, 2023

CONFLICT ALERT: The Doctrine of De Minimis Non Curat Lex

In 2021, the Fourth District Court of Appeal issued an opinion in an exhaustion case, asserting an amount of underpaid interest the Court considered de minimis. In Precision Diagnostic Inc. v. Progressive American Insurance Company, 330 So.3d 32 (Fla. 4th DCA 2021), Defendant paid the amount it believed was due within the 30-day time limit required by Fla. Stat. § 627.736(4)(b) after receiving a demand letter from Plaintiff. Due to a miscalculation, an additional benefit amount was paid on the 1,234th day. Defendant provided additional interest, but due to the way Defendant calculated the interest, interest was underpaid by $4.17. This case was an exhaustion case, so the suit was not concerning benefits, but rather, interest only. The Court found the amount of $4.17 in interest was a “trifling” amount. 

In February 2023, the Fifth District Court of Appeal rendered a decision in direct conflict with a ruling by the Fourth District Court of Appeal on the doctrine of de minimis non curat lex (“de minimis doctrine”). Its rationale was particularly interesting and surrounded the timing of payment in response to the pre-suit demand letter and application of two safe harbor provisions within Florida’s Personal Injury Protection (“PIP”) Statute.  

In Baker Family Chiropractic, LLC a/a/o Hahn Dinh v. Liberty Mutual Ins. Co., Case No. 5D21-3137 (Fla. 5th DCA 2023), the Court found $1.48 in interest only was due and Fla. Stat. § 627.428 required the payment of attorney’s fees by the insurer. The decision largely focused on the timeframe in which Defendant paid the claim and provided a detailed evaluation of the two safe harbor provisions in Fla. Stat. § 627.736(10)(d) of which Defendant failed to avail itself. Specifically, the Court stated the following:  

  • “The first safe harbor is one of complete protection from suit. “[N]o action may be brought against the insurer,” if within 30 days after receipt of the demand letter it pays (1) the overdue claim, (2) applicable interest, and (3) a penalty of 10 percent of the overdue claim, not to exceed $250. Id. Liberty Mutual is not entitled to the absolute protection of the first safe harbor because it was not until the 41st day after receiving the demand letter that it paid the admittedly overdue claim of $168 together with the incorrect amount of interest. 
  • The second safe harbor provided under subsection (10) protects the insurer only, but importantly, from payment of attorney’s fees. “The insurer is not obligated to pay any attorney’s fees if the insurer pays the claim . . . within the time prescribed by this subsection.” Id. (emphasis added). If Liberty Mutual had paid the $168 and nothing more within 30 days, no attorney’s fees would be owed. However, Liberty Mutual is not entitled to the protection of this second safe harbor because it failed to pay the claim, $168, within the 30-day time frame provided by this subsection. It was eleven days late.” Id. 

 According to the Fifth DCA, under either safe harbor provision, the insurer was not protected from having to pay attorneys’ fees because it did not pay the claim within the 30-day time frame. The first safe harbor is an absolute protection – if benefits, interest, and penalty are paid timely. The second safe harbor period is a protection from attorneys’ fees if the claim (benefits) is paid timely, but interest, penalty, and postage are not.  

There is no provision in the PIP statute that requires the insurer to respond to a pre-suit demand letter. Many plaintiffs’ counsels try to make this argument and, in the absence of a demand response, claim defendants have waived a defense. While this argument is seen often, it is hard to assert waiver when no requirement by statute or law requires response. While there is no requirement to respond, if the insurer is paying benefits in response to the pre-suit demand letter, the timing is imperative. Any payment should be made within the 30-day timeframe to avoid plaintiffs’ entitlement to attorneys’ fees.  

The take-away from the case in the Fifth DCA case is twofold. One, if the insurer is obligated to pay benefits or interest, the amount is irrelevant. If benefits and interest are owed, they are due and should be paid. Two, if the payment is correct, and timely, the insurer is protected from paying attorneys’ fees and costs. However, if the payment of benefits is made beyond 30 days, the insurer may be subject to paying attorneys’ fees and costs. According to this decision, if just interest is miscalculated, or penalty and postage are underpaid, the interest, penalty, and postage are due, but there is no entitlement to attorneys’ fees. 

If you are facing the issue of whether to defend an amount of liability that is seemingly minimal, we are here to help guide you in your decision making. These decisions are particular to venue and the timeliness of the response to the pre-suit demand and must be taken on a case-by-case basis.  

Catherine Arpen, Esq.
Attorney, Personal Injury Protection Defense.
Kelley Kronenberg-Jacksonville, FL.
(904) 549-7700