Appellate Division holds claimant's failure to attend IME is complete defense to PIP claim

Barron Chiropractic provided treatment to Corey Hinds after Hinds was in a car accident while operating a car owned and insured by ERAC.


Barron sought PIP payments for the treatments.  ERAC argued that it was not obligated to pay the PIP claim because Hinds failed to attend independent medical examinations scheduled by ERAC's third-party administrator.


In Barron Chiropractic & Rehabilitation, P.C. v. Enterprise Rent-A-Car Co. of Boston, Inc., 2015 WL 4619841 (Mass. App. Div.), the Massachusetts Appellate Division affirmed summary judgment for ERAC.  "Where, as here, the insured fails to submit to a request for an IME, that amounts to non-cooperation which is a complete defense.  The insurer is not required to make any payments where that condition precedent was not met." 

Massachusetts Appeals Court continues trend of PIP decisions against insurers

On April 7, 2007 a passenger was injured in an automobile accident.  Pilgrim was the PIP carrier.  Bryan Hartunian provided orthopedic treatments to the insured.  Pilgrim paid some of the bills from the treatment but withheld payment of $990 on the ground that the charges exceeded an amount that was reasonable in comparison to other medical providers in the same geographic area.  However, it did not notify Hartunian  within ten days of its intention not to pay. 

After twelve months of demanding payment, Hartunian sued Pilgrim in the Massachusetts District Court.  In addition to the unpaid portion of his bill he sought damages under Mass. Gen. Laws ch. 93A.  Pilgrim then issued payment of $990 and filed a motion for summary judgment on all counts of the complaint.  The motion was denied with respect to the 93A count.  Pilgrim was found liable for breach of 93A after a bench and subsequently appealed.

In Hartunian v. Pilgrim Ins. Co.,  __ N.E.3d __, 2014 WL 6607866 (Mass. App. Ct.), Pilgrim argued that its refusal to make payment was not an unfair business practice because it disputed the obligation to pay in good faith.  The court held that that argument ignored the fact that an insurer must, by statute, make PIP payments within ten days or notify the submitting physician or claimant of its intention not to pay. 

Pilgrim also argued that it did not act in bad when  it had an independent medical exam conducted by a physical therapist (apparently a common thing now) rather than a practitioner licensed in the same medical specialty as Hartunian. While not dismissing out of hand the use in all circumstances of a physical therapist for an IME, the court held that whether such use is in good faith raises a factual issue. 

Similarly, the court held that review of the bills by a billing program is not automatically a bad faith act by an insurer but that "its use as a substitute for a practitioner's review of billing statements and underlying services provides an additional basis for an inference of Pilgrim's lack of good faith." 

It's a whole new ballgame in PIP litigation, thanks to an SJC decision

I have written before, here, about why it is difficult to sue PIP carriers who fail to pay claims.  PIP claims are by their nature small: generally not more than $2000 and never more than $8000.  The PIP statute provides that the insurer must pay the claimant's attorney's fees if a judgment against the carrier enters.  Up until now, an insurer could avoid paying those fees if it forced a claimant to file suit, conduct discovery and go to trial and then, minutes before judgment enters, paid the claim.  Of course if the claimant proved bad faith in the insurer's actions then attorney's fees were available under Mass. Gen. Laws ch. 93A, but bad faith is harder to prove than mere failure to pay a claim when due.  Although some wiggle room was found by various decisions of the Massachusetts Appellate Division (a court that does not set precedent), see here and here, PIP cases in general were simply a bad risk. 

The Supreme Judicial Court of Massachusetts has changed all that.

In Barron Chiropractic & Rehabilitation, P.C. v. Norfolk & Dedham Group, 469 Mass. 800 (2014), the SJC has held that an unpaid party who has brought suit may refuse the insurer's tender of PIP amounts due, proceed with suit, and obtain a judgment for those amounts as well as its costs and attorney's fees. 

The plaintiff, Barron Chiropractic & Rehabilitation, provided chiropractic services to Nicole Jean-Pierre after an auto accident.  Jean-Pierre's PIP carrier was Norfolk & Dedham. 

Jean Pierre's chiropractor at Barron and Norfolk & Dedham disagreed about the length of treatment made necessary by the accident and about the proper price for her treatment.  The disputed amount was $1,544.05. 

Barron sued Norfolk & Dedham in District Court.  Norfolk & Dedham determined that its anticipated litigation costs would substantially exceed the amount of the disputed medical fees.  Six days prior to trial it sent Barron a check for the disputed amount with an attached check stub that stated "full and final settlement."  Barron's counsel returned the check to Norfolk's counsel with a letter stating that its offer of settlement was rejected.

The SJC held that under contract law Barron was not required to accept the tender of settlement for the amount due after the time for payment under the PIP statute had passed.  It also held that it would be unfair and against the purpose of the PIP statute to allow the insurer to escape costs and attorney's fees by paying the PIP amount that was due after forcing the claimant to file suit. 

Massachusetts Appeals Court admirably untangles interstate PIP web

One of the most annoying issues in insurance coverage is how PIP statutes in various states interact with one another.  If a Massachusetts driver is injured by a Virginia driver in Florida, does PIP apply?  Does the PIP tort limit apply?  Does the PIP offset apply?  Does the intercompany reimbursement scheme apply?  What if a driver from Toronto injures a pedestrian in Massachusetts? (I mention the latter example because I represented a Toronto driver in just such a circumstance.  We won on liability.  The plaintiff's attorney later told me that if he had understood that the PIP offset would apply he would not have taken the case to trial because it would have lowered the potential damages by too much.) 

I frequently receive calls from adjusters wondering if I can answer off the top of my head a question about the application of PIP to an interstate situation.  I never can, because all the details matter and a change in details -- the home state of the other driver, for example -- can change the answer.  It often requires extrajurisdictional research, and even then there is often no clear answer.  If there is an answer, it will take a long time to figure out what it is, because PIP statutes are crazy hard to decipher and typically do not have a lot of case law interpreting their application to interstate accidents.  And with very limited exceptions the most money that could ever be at stake, under the Massachusetts PIP statute, is $8000.00.

The Massachusetts Appeals Court recently applied notable common sense to an interstate PIP dispute.

David Allen was driving a car insured by Commerce under a Massachusetts policy when he was involved in a collision in Holyoke.  Julio and Maria Alvarado were in the other car, which was insured under a New York policy by Peerless.

The Alvarados were injured and received no-fault benefits under the New York PIP scheme, which has a limit of up to $50,000 covering medical bills and lost wages.

Commerce sought a declaratory judgment that the PIP offset would cover the entire amount of PIP coverage the Alvarados received.  The Alvarados argued that the Massachusetts PIP statute creates an exemption only for PIP benefits received from a Massachusetts insurance policy, not a New York insurance policy.

In Commerce Ins. Co. v. Alvarado, 83 Mass. App. Ct. 604 (2013), the court held that the objective of the Massachusetts PIP scheme is to avoid duplicative recovery.  Very sensibly, the court held that Commerce is entitled to an offset for the benefits the Alvarados received from the New York policy.  Even more sensibly, the court ruled apparently sua sponte that Commerce must reimburse Peerless for the PIP benefits the Alvarados received from Peerless. 

Mass. Appellate Division holds that failure to attend two IME's after notification by mail sufficient to deny PIP claim

Arbella Mutual Insurance Company denied PIP payments to Chiropractic Care Centers, Inc. when its patient, Arbella's insured, failed to attend two scheduled independent medical examination.

In Chiropractic Care Centers, Inc. v. Arbella Mut. Ins. Co., 2012 WL 5830706 (Mass. App. Div.), the Massachusetts Appellate Division held that the insured's failure to appear for the IMEs after being notified of them by letter was a wilful failure to attend, justifying denial of PIP payments to Chiropractic Care.

The court noted that under Massachusetts law, the mailing of a properly addressed letter constitutes prima facie evidence of the intended recipient's receipt of the mailing.