Wednesday, June 8, 2011

On the Lighter Side: Florida Consumer Levies on Assets at Local Bank of America Branch

I've been told that the subjects we usually discuss here are boring to many readers. With that in mind, it's nice to be able to post something funny (ok, it's probably still boring).

I recently read a story on naked capitalism about a Florida consumer levying on the assets of Bank of America to satisfy an attorney's fee award. The bank instituted a foreclosure case that it shouldn't have (hard to believe, I know), because the house they were seeking to foreclosure had actually been purchased cash. The homeowner obtained an attorney's fee award based on the meritless lawsuit, but the bank didn't pay (again, shocking). As a result, the homeowner invoked its rights under Chapter 56, Florida Statutes, which we encourage our creditor clients to consider under certain circumstances, and sent the sheriff to a local bank branch to levy upon the property there. At that point, as I understand it, the bank manager cut a check for the attorney's fees.

The story is funny to me, because it represents a reversal of the roles typically played by consumers and institutions; but there is also a lesson to be learned from it: creditors and debtors alike need to be mindful of their rights and available remedies.

Tuesday, June 7, 2011

Florida Statutory Health Care Reimbursement Dispute Resolution Process Held Constitutional


Recently, a Florida court considered the constitutionality of the dispute resolution process outlined in Fla. Stat. § 408.757 (2010). That section allows a medical provider or health insurer to submit disputed claims for review and determination by an independent organization appointed by The Agency for Health Care Administration (AHCA).

After Maximus (the organization chosen by AHCA) issued a decision favorable to the healthcare providers and ACHA adopted Maximus's decision, Blue Cross Blue Shield of Florida (BCBS) appealed the decision to the First District Court of Appeals, challenging the statute's constitutionality. The court held that inasmuch as the statute gave BCBS the right to withdraw from the dispute resolution process and file a lawsuit at any time, the statute passed constitutional muster and BCBS would be bound by Maximus's decision. The full opinion can be read here.

Providers and health plans should be aware of their rights should a payment dispute arise. In addition to the legal rights existing under ERISA and the Florida HMO Act (and other state law), alternative dispute resolution may be available, and is often a successful tool in amicably resolving payment disputes, both under contracts between the provider and the payor and under non-contracted provider payment rules.

Thursday, June 2, 2011

Florida Court Holds that Creditor, Not Creditor's Attorney, Must Sign Sworn Denial of Garnishment Exemption

A very recent ruling by Florida's Fourth District Court of Appeals discusses the procedure for denying a judgment debtor's head of household exemption to garnishment, and spells trouble for creditor's attorneys, especially attorneys representing major banks and credit card companies. At issue in Caproc Third Ave., LLC v. Donisi Ins., Inc., ___ So. 3d ____ (Fla. 4th DCA June 1, 2011) (pdf), was Fla. Stat. § 222.12, which provides that,
"When such an affidavit [of head of household] is made [by a judgment debtor facing a writ of garnishment], notice of same shall be forthwith given to the party, or her or his attorney, who sued out the process, and if the facts set forth in such affidavit are not denied under oath within 2 business days after the service of said notice, the process shall be returned, and all proceedings under the same shall cease. If the facts stated in the affidavit are denied by the party who sued out the process within the time above set forth and under oath, then the matter shall be tried by the court from which the writ or process issued, in like manner as claims to property levied upon by writ of execution are tried, and the money or thing attached shall remain subject to the process until released by the judgment of the court which shall try the issue."
The creditor's attorney attempted to file an affidavit denying the exemption himself, rather than having his client do so. Most creditors attorneys that we know have in the past done it that way. After this case, however, that practice appears to be no longer viable. The court ruled that the attorney was not "the party who sued out the process," and therefore he could not sign the affidavit of denial. As a result, the writ of garnishment was immediately dissolved without the need for an evidentiary hearing. The court also noted that the affidavit filed by the attorney was insufficient because he himself had no basis for personal knowledge as to the defendant's claim of exemption.

As a practical matter, given the strict time constraints for filing the sworn denial - 2 days - the requirements imposed by this case will make it difficult for the attorney who represents a hard to reach client to defeat a claim of head of household exemption [regardless of the claim's merit].