Diaz v. Allstate Northbrook Indem. Co.

687 F.Supp.3d 1022

Esai DIAZ, Plaintiff, v. ALLSTATE NORTHBROOK INDEMNITY COMPANY, Defendant.

Case No.: 22-cv-705-MMA (WVG)

United States District Court, S.D. California

Signed August 15, 2023

Alise M. Fonseca, Philip C. Alexander, Harris Personal Injury Lawyers, Oceanside, CA, for Plaintiff.

Joseph E. Foss, Peter H. Klee, Sheppard, Mullin, Richter & Hampton LLP, San Diego, CA, for Defendant.

ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

MICHAEL M. ANELLO, United States District Judge

Plaintiff Esai Diaz ("Plaintiff") brings this action against property and casualty insurer, Allstate Northbrook Indemnity Company ("Defendant"). See Doc. No. 1. Presently before the Court is Defendant's motion for summary judgment or, alternatively, partial summary judgment. Doc. No. 13. Plaintiff filed an opposition, Doc. No. 14, to which Defendant replied, Doc. No. 15. The Court found the matter suitable for determination on the papers and without oral argument pursuant to Federal Rule of Civil Procedure 78(b) and Civil Local Rule 7.1.d.1. See Doc. No. 16. For the reasons set forth below, the Court GRANTS Defendant's motion.

I. PROCEDURAL BACKGROUND

On November 17, 2021, Plaintiff initiated this action against Defendant in the Superior Court of California, County of San Diego. See Doc. No. 1-2. On May 17, 2022, Defendant filed a notice of removal to this Court. Doc. No. 1. Plaintiff brings two causes of action against Defendant: (1) breach of contract; and (2) breach of implied covenant of good faith and fair dealing. See generally id. Plaintiff seeks the following damages: general damages of pain, suffering, inconvenience, and emotional distress; punitive damages; at least $46,695.00 in attorney's fees and costs; and at least $5,794.52 in prejudgment interest. Doc. No. 1-6 at 2.¹ On May 17, 2022, Defendant removed the action to this Court. See generally Doc. No. 1. On June 13, 2022, Plaintiff moved to remand the action to state court. See Doc. No. 5. On September 2, 2022, this Court denied Plaintiff's motion to remand. Doc. No. 9. Defendant now moves for summary judgment on both of Plaintiff's causes of action or, alternatively, partial summary judgment on Plaintiff's claim for punitive damages. See generally Doc. No. 13.

II. FACTUAL BACKGROUND²

On January 31, 2016, when he was 18 years old, Plaintiff was rear-ended in an automobile accident. Doc. No. 13-3 ("Defendant's Separate Statement" or "DSS") at No. 1; see also Doc. No. 14-1 ("Plaintiff's Response Statement" or "PRS") at No. 1; Doc. No. 13-9, Defendant's Ex. 5 ("Traffic Collision Report") at 2. The traffic collision report did not mention whether Plaintiff or any other person sustained any injuries in the accident. See Traffic Collision Report at 2-7. At the time, Plaintiff had an automobile insurance policy with Defendant. DSS at No. 2; PRS at No. 2. The policy provided underinsured motorist ("UIM") bodily injury coverage with a $1 million limit. DSS at No. 2; PRS at No. 2. The driver who rear-ended Plaintiff had $15,000 in liability coverage. DSS at No. 3; PRS at No. 3. After the accident, Plaintiff hired a lawyer and made a claim to the other driver's liability insurer. DSS at No. 4; PRS at No. 4.

Plaintiff's father contacted Defendant shortly after the accident and indicated that Plaintiff was experiencing back pain.³ PRS at Nos. 6; 32. However, in August 2016, Plaintiff submitted medical records and bills to Defendant for payment under his medical payment ("med-pay") coverage, which indicated that Plaintiff did not seek medical treatment until five weeks after the accident. DSS at No. 7; PRS at No. 8.

In September 2016, Defendant retained Dr. John Qian, M.D., a board-certified orthopedic surgeon, to perform an Independent Medical Examination ("IME") on Plaintiff regarding his accident-related injuries and symptoms. DSS at No. 8; PRS at No. 9. Although it was scheduled for three different dates in November 2016, December 2016, and January 2017, the IME did not go forward due to a disagreement between Dr. Qian and Plaintiff's counsel about the right to record the examination. DSS at No. 9; PRS at No. 10. Therefore, the IME was rescheduled to April 28, 2017 with a different board-certified orthopedic surgeon, Dr. Luke Bremner, M.D., who allowed the examination to be recorded. DSS at No. 9; PRS at No. 10.

After examining Plaintiff, Dr. Bremner prepared an IME report on May 18, 2017. See Doc. Nos. 13-11 at 5; 13-12, Defendant's Ex. 8 ("Bremner Report"), at 2-9. In the report, Dr. Bremner concluded the following:

(1) [Plaintiff's] soft-tissue injuries did not require the excessive treatment [Plaintiff] claimed to need; (2) [Plaintiff's] complaints of pain supported a "more benign level of injury;" (3) [Plaintiff's] subjective complaints were not supported by objective findings (he had "mild pain on exam with good range of motion and strength"); (4) [Plaintiff's] symptoms should have resolved with conservative treatment within three months of the accident; and (5) there was "no objective indication for the need for additional treatment."

DSS at No. 10; PRS at No. 11; see generally Bremner Report. Based on Dr. Bremner's opinions, Defendant paid Plaintiff $1,450 for three months of conservative treatment under his med-pay coverage. DSS at No. 11; PRS at No. 12.

On January 10, 2018, Plaintiff sent a letter to Defendant indicating he had settled with the other driver's insurer for the $15,000 liability limit, providing a copy of the settlement agreement signed by the parties, and demanding $150,000 in UIM benefits from Defendant and that the UIM claim be arbitrated. DSS at No. 12; PRS at No. 13. On January 19, 2018, Defendant acknowledged its receipt of Plaintiff's arbitration demand. PRS at No. 34; Doc. No. 14-3 at 18. Plaintiff attached documents to his demand letter that showed the following:

(1) [Plaintiff] did not seek any medical treatment until five weeks after the accident; (2) [Plaintiff] had only minor soft-tissue injuries; (3) some of [Plaintiff's] claimed expenses were for Botox injections for headaches that he first mentioned to a doctor more than ten months after the accident; and (4) [Plaintiff] missed no time from work after the accident.⁴

DSS at No. 14. However, Plaintiff did not attach to his demand letter proof of actual payment from the other driver's insurance. DSS at No. 12; PRS at No. 13.

On July 26, 2018, Defendant advised Plaintiff that it was not in receipt of his UIM demand. PRS at No. 36. On October 4, 2018, Plaintiff sent Defendant a second demand letter for $150,000 in UIM benefits based on the same information he had provided with his earlier demand. DSS at No. 13; PRS at No. 13; Doc. No. 14-3 at 23. On October 16, 2018, Plaintiff e-mailed Defendant a copy of the settlement check he had received from the other driver's liability insurer for $15,000. DSS at No. 15; PRS at No. 15; Doc. No. 13-6 at 2.

In May 2019, Defendant evaluated Plaintiff's claim based on the records provided with the demands. DSS at No. 16; PRS at No. 17. After giving Plaintiff full credit for his post-accident treatment and reducing his claimed medical expenses to reasonable and customary amounts, Defendant arrived at a settlement value of $13,400, which consisted of $7,800 in past medical expenses and $5,600 in general damages. DSS at No. 16; PRS at No. 17. Because this amount was less than Plaintiff's earlier $15,000 settlement with the at-fault driver, Defendant concluded that Plaintiff had been fully compensated and, therefore, was not entitled to UIM benefits. DSS at No. 16; PRS at No. 17.

Plaintiff disagreed with Defendant's evaluation and insisted that his claim was worth $150,000. DSS at No. 17; PRS at No. 17.⁵ As a result, Defendant retained a second board-certified orthopedic surgeon, Dr. Larry D. Dodge, M.D., to examine Plaintiff, review his medical records, and provide a second opinion regarding his injuries and treatment. DSS at No. 17; PRS at No. 17; Doc. No. 13-19 at 13.

On September 24, 2019, Defendant deposed Plaintiff. PRS at No. 41. Plaintiff testified that he felt sore in the days following the collision but felt like his symptoms would resolve. Id.; Doc. No. 14-3 at 30.

On November 8, 2019, Plaintiff sent another $150,000 demand. DSS at No. 18; PRS at No. 18. After receiving this demand, Defendant stated that it could neither accept nor reject the demand, but that it would be in a position to respond within 45 days of receipt of Dr. Dodge's IME report that was scheduled for February 2020. DSS at No. 19; PRS at No. 20. On February 13, 2020, Dr. Dodge examined Plaintiff and prepared an IME report. Doc. No. 13-19 at 2-13. In his report, Dr. Dodge stated that (1) it was "somewhat debatable" whether Plaintiff's symptoms were related to the accident; (2) up to three physician visits and six physical therapy/chiropractic visits would have been reasonable to treat Plaintiff's soft-tissue symptoms; and (3) Plaintiff was not a candidate for any pain injections. DSS at No. 20; PRS at No. 20.

Between February 2020 and December 2020, the parties conducted discovery, discussed the selection of an arbitrator, and prepared for arbitration. DSS at No. 21; PRS at No. 22. On December 7, 2020, Plaintiff demanded $60,000. DSS at No. 22; PRS at No. 23. On March, 1, 2021, Plaintiff demanded $35,000. DSS at No. 23; PRS at No. 24.

Defendant declined to accept Plaintiff's demands because it determined that Plaintiff had already been fully compensated. DSS at No. 24; PRS at No. 25. Because the parties could not agree on the value of Plaintiff's claim, they scheduled an arbitration hearing to resolve their dispute. DSS at No. 25; PRS at No. 26.

On April 16, 2021, Plaintiff claimed $180,000 in damages, consisting of $45,000 in claimed medical expenses and $135,000 in general damages. DSS at No. 26; PRS at No. 27.

On April 23, 2021, the parties attended an arbitration hearing. DSS at No. 27; PRS at No. 28. After hearing the evidence, the arbitrator found that Plaintiff's UIM claim...