In Neal v. State Farm Mutual Automobile Insurance Company, the Court granted the insurer’s motion for summary judgment and held that the insurer did not act in bad faith after denying benefits to the insured based on an independent medical examination (“IME”) that showed the insured had reached “pre-injury” status. In the underlying action, the insured was injured when a vehicle rear-ended the car in which the insured was a passenger.
The insurer’s claim representative requested an IME to be performed on the insured to address if “her ongoing complaints were accident related and whether she had reached pre-injury status from the accident.” The insurer contacted a vendor to arrange an IME by an orthopedic surgeon. After a surgeon was selected, the insurer requested an examination closer to her residence, so the vendor arranged for another doctor to perform the IME. Prior to going to the IME, the insured briefly discussed that doctor with her own current physician, and it turned out that the two doctors formerly had a practice together.
After performing the IME, the doctor observed that, among other things, he was “unable to detect any specific injury which occurred from the most recent motor vehicle accident,” and that the insured had reached full recovery from the car accident. Subsequently, the insurer denied all bills for treatment that the insured received after the IME.
The insured’s bad faith claim was premised on allegations that the insurer did not act reasonably in “refusing to reconsider its decision or schedule a new IME when presented with a potential conflict of interest” and “choosing to automatically follow the findings of the IME Report despite conflicting evidence regarding the nature and causation of Plaintiff’s injuries.”
In granting the insurer’s motion for summary judgment on the bad faith claim, the Court stated with regards to the potential conflict of interest, “there is no dispute that [the insurer] did not know about the prior association between the doctors at the time [the vendor] arranged for the IME to be performed….” The Court pointed out that even though the insured knew of the doctors’ prior association, she did not inform her insurer of any alleged conflict, nor did she believe that the doctor would be biased against her in performing the IME. Because the insured did not show clear and convincing evidence of any bad faith, the Court could find no material disputes of fact on this issue.
As for the claim that the insurer automatically followed the findings of the IME, the Court reasoned that “an insurer is entitled to rely on the findings of an IME … even in the fact of contrary medical opinions.” Further, the insured presented no evidence that the IME was flawed. In sum, the Court found that “the record evidence [was] insufficient to allow a reasonable fact-finder to find that Defendant exhibited bad faith in relying on [the allegedly conflicted doctor’s] IME.”
Date of Decision: May 12, 2015
Neal v. State Farm Mut. Auto. Ins. Co., 1:13-cv-02309, 2015 U.S. Dist. LEXIS 61770 (M.D. Pa. May 12, 2015) (Kane, J.)