Benscoter v. Nationwide Mut. Ins. Co.

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JOHN BENSCOTER, Plaintiff, v. NATIONWIDE MUTUAL INSURANCE COMPANY, Defendant.

No. 4:22-CV-01142

United States District Court, M.D. Pennsylvania

August 22, 2023

MEMORANDUM OPINION

MATTHEW W. BRANN, CHIEF UNITED STATES DISTRICT JUDGE

In 2019, Plaintiff John Benscoter, insured through an auto insurance policy issued by Defendant Nationwide Mutual Insurance Company, was involved in a motor vehicle accident in which he suffered injuries. Benscoter received, and Nationwide paid for, treatment for those injuries until after eighteen months, Nationwide required Benscoter to attend an Independent Medical Examination (“IME”) to determine whether further treatment was reasonable. Relying on the results from that IME, Nationwide determined that Benscoter had recovered from the accident and informed him that he was no longer entitled to medical benefits.

However between the time Nationwide requested the IME and Benscoter attended it, the Supreme Court of Pennsylvania held contractual provisions requiring IMEs to be void. Benscoter filed suit, bringing several claims alleging that Nationwide improperly denied him benefits based on an IME it had no right to compel.

Before the Court are the parties' cross-motions for summary judgment, in which Nationwide argues that Benscoter failed to allege he was entitled to further benefits and Benscoter argues Nationwide cannot cut his benefits based on an improperly procured IME. Though the majority of Benscoter's claims are improperly pled or untimely, there exists a dispute of material fact as to whether Benscoter was improperly denied benefits. Therefore, Nationwide's Motion is granted in part and Benscoter's Motion is denied.

I. BACKGROUND

A. Undisputed Facts

Benscoter, who at all relevant times held an auto insurance policy issued by Nationwide, was involved in a motor vehicle accident on April 13, 2018 in which he sustained injuries to his neck, lower back, right knee, and head.^[1] He subsequently received medical treatment for those injuries.^[2] After paying for Benscoter's medical treatment for a year and a half, Nationwide decided that Benscoter should undergo an IME to determine whether he had recovered to his pre-accident status.^[3] On October 8, 2019, Nationwide advised Benscoter that “given [the] time since [the accident, Nationwide] will be having someone reach out to him to schedule an exam by an independent doctor . . . [as] part of his policy agreement.”^[4] The IME was conducted on November 21, 2019 by a physician selected by Nationwide.^[5] In the IME report, the examining physician found that, though “there is ongoing left shoulder pain due to calcific tendinitis,” the “calcific tendinitis is not causally related to the motor vehicle accident” and concluded that Benscoter “has fully recovered from his motor vehicle injuries [and] returned to pre-accident status.”^[6] Based on the findings of the examining physician, Nationwide terminated Benscoter's medical benefits effective January 10, 2020.^[7]

Meanwhile, on November 20, 2019, the day before Benscoter's IME, the Pennsylvania Supreme Court issued its opinion in Sayles v. Allstate, holding that “an automobile insurance policy provision, which requires an insured seeking first-party medical benefits under the policy to submit to an independent medical exam whenever the insurer requires and with a doctor selected by the insurer” conflicts with 75 Pa. C.S. § 1796(a) of the Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”) and is void as against public policy.^[8] Benscoter's policy contained such a provision: “The Insured will ... if injured, submit to examinations by company-selected physicians as often as the company reasonably requires.”^[9] The policy also contains a provision that states: “Any terms of this policy which may be in conflict with the statutes of the state in which the policy is issued are hereby amended to conform.”^[10]

On December 27, 2019, Nationwide discussed the findings of the IME with Benscoter and advised him that Nationwide would pay for his treatment through January 10, 2020.^[11] On February 11, 2020, Benscoter informed Nationwide that he was going to continue with his current course of physical medicine and rehabilitation treatment and Nationwide reminded him that, due to the IME, it would no longer cover this treatment but that it may consider referrals for different types of treatment.^[12] Nationwide further advised Benscoter that any non-covered medical expenses would need to go through his health insurance carrier.^[13]

In late April 2020, Sandra Kisailus, an attorney representing Benscoter (not affiliated with Benscoter's counsel here), requested Benscoter's policy documents, which Nationwide sent on May 15, 2020.^[14] Two months later, Kisailus requested that Nationwide keep Benscoter's claim open and said that she needed to follow up with Benscoter to obtain an update regarding his ongoing treatment.^[15] No update would be forthcoming-despite monthly calls from Nationwide-until December 3, 2020, when Kisailus informed Nationwide that her lack of response was due to a lack of response from Benscoter to her own calls until that day.^[16] Kisailus told Nationwide that Benscoter had continued to follow up with his primary care physician, had plans to see a pain management doctor, and that he believed his ongoing treatment to be related to his April 2018 accident.^[17] Nationwide reaffirmed that, while his follow-up care with his primary care physician was not covered, it would be willing to consider a whether care by a pain management doctor would fall within the IME.^[18] In April 2021, a representative from Kisailus' office confirmed that Benscoter was continuing to receive treatment and that he had not started any new treatment.^[19] Between January 2020 and April 2021, Nationwide advised medical providers providing treatment to Benscoter of the IME and denied bills submitted on that basis.^[20]

B. Procedural History

Benscoter initiated this lawsuit on June 17, 2022 and filed the operative Amended Complaint on February 2, 2023.^[21] In his Amended Complaint, Benscoter, on behalf of himself and a class of those similarly situated, requests a declaratory judgment regarding insureds' rights with respect the disputed contractual obligation that they undergo a medical examination; equitable relief requiring Nationwide to, among other things, update all of its Pennsylvania policies in light of the Sayles decision; the repayment of certain medical benefits; attorneys' fees; treble damages; and punitive damages.^[22]

Nationwide moved to dismiss the Amended Complaint.^[23] Benscoter moved for partial summary judgment on his claims brought under 75 Pa. C.S. § 1796.^[24] In support of his motion, Benscoter attached a copy of his policy, a claims log, and records of the IME, which is the extent of the factual record before the Court.^[25]During a status conference with the Court, the parties consented to converting Nationwide's motion to dismiss into a motion for summary judgment under Federal Rule of Civil Procedure 12(d) and the Court treating the parties as having cross-moved for summary judgment.^[26] Both motions are now fully briefed and ripe for disposition.

II. LAW

Under Rule 56(a) of the Federal Rules of Civil Procedure, summary judgment is appropriate where “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” As expressed by the Supreme Court of the United States in Celotex Corp. v. Catrett, summary judgment is required where a party “fails to make a showing sufficient to establish the existence of an element essential to that party's case” on an issue that the “party will bear the burden of proof at trial.”^[27] Material facts are those “that could alter the outcome” of the litigation, “and disputes are ‘genuine' if evidence exists from which a rational person could conclude that the position of the person with the burden of proof on the disputed issue is correct.”^[28]

The party requesting summary judgment bears the initial burden of supporting its motion with evidence from the record.^[29] When the movant properly supports its motion, the nonmoving party must then show the need for a trial by setting forth “genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.”^[30] The United States Court of Appeals for the Third Circuit explains that the nonmoving party will not withstand summary judgment if all it has are “assertions, conclusory allegations, or mere suspicions.”^[31] Instead, it must “identify those facts of record which would contradict the facts identified by the movant.”^[32]

In assessing “whether there is evidence upon which a jury can properly proceed to find a verdict for the [nonmoving] party,”^[33] the Court “must view the facts and evidence presented on the motion in the light most favorable to the nonmoving party.”^[34] Moreover, “[i]f a party fails to properly support an assertion of fact or fails to properly address another party's assertion of fact as required by Rule 56(c),” the Court may “consider the fact undisputed for purposes of the motion.”^[35]Finally, although “the court need consider only the cited materials, . . . it may consider other materials in the record.”^[36] “‘This standard does not change when the issue is presented in the context of cross-motions for summary judgment.'”^[37] “When both parties move for summary judgment, ‘the court must rule on each party's motion on an individual and separate basis, determining, for each side, whether a judgment may be entered in accordance with the Rule 56 standard.'”^[38]

III. CLAIMS FOR RELEIF

In his Amended...