Roche v. New Jersey Manufacturers Insurance , 78 F. App'x 183 ( 2003 )

Opinions of the United
2003 Decisions States Court of Appeals
for the Third Circuit
10-15-2003
Roche v. NJ Mfg Ins Co
Precedential or Non-Precedential: Non-Precedential
Docket No. 02-4353
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"Roche v. NJ Mfg Ins Co" (2003). 2003 Decisions. Paper 205.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 02-4353
KATHRYN ROCHE,
Appellant
v.
NEW JERSEY MANUFACTURERS INSURANCE COMPANY
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE M IDDLE
DISTRICT OF PENNSYLVANIA
(Dist. Court No. 00-cv-02051)
District Court Judge: Hon. Malcolm Muir
Submitted Under Third Circuit LAR 34.1(a)
September 11, 2003
Before: ALITO, BARRY and AM BRO, Circuit Judges.
(Opinion Filed: October 15, 2003)
OPINION OF THE COURT
ALITO, Circuit Judge:
After suffering extensive injuries in an automobile accident, Kathryn Roche
filed this action in the United States District Court for the Middle District of Pennsylvania
against New Jersey Manufacturers Insurance Company (“NJMIC”) claiming that NJMIC,
by failing to pay her insurance claim, had breached its contractual obligations under an
insurance contract and its duty of good faith. After a bench trial, the District Court found
that Roche was entitled to $24,910.44 plus interest from NJMIC, that NJMIC had not
breached its duty of good faith, and that Roche was not entitled to attorney’s fees. The
District Court concluded that the amount owed to Roche was limited by the cost
containment provisions of the Pennsylvania Motor Vehicle Financial Responsibility Act
(hereinafter “Act 6”), 75 Pa.C.S.A. § 1797.
I.
On appeal, Roche first argues that the cost containment provision of Act 6 does not
apply to her situation. We do not agree. Rather, we believe that the explanation in
Pittsburgh Neurosurgery Assocs., Inc. v. Danner, 733 A.2d 1279 (Pa. Super. 1999), of the
legislative intent behind Act 6 strongly supports the District Court’s interpretation. In
Pittsburgh Neurosurgery, the court observed that, “[i]n enacting § 1797 our legislature
sought to reduce insurance premiums by capping medical costs. Medical providers who
treat automobile accident victims and who will receive their payments from certain
delineated forms of insurance necessarily receive less compensation for their services to
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achieve the legislature’s goal. The legislature in enacting this legislature [sic] sought to
favor the general public’s interest in reducing automobile insurance premiums at the
expense of health care providers . . . .” Id. at 1285.
Roche argues, however, that 31 Pa. Code § 69.22(f) allows full reimbursement of
her medical costs. According to Roche, this regulation is substantially similar to Sections
306(f.1)(3)(1) and 319 of the Workers’ Compensation Act (hereinafter “WCA”), 77 Pa.
C.S.A. §§ 531(3)(I) and 671, which the Pennsylvania courts have interpreted to require
full reimbursement of the amount paid by a health carrier. In making this argument,
Roche relies on Villanova University v. WCAB (Mantle), 783 A.2d 366 (Pa. Commw. Ct.
2001). However, we do not find the provisions of WCA to be substantially similar to 31
Pa. Code § 69.22(f) because, among other things, neither Section 69.22(f) nor any other
applicable regulation contains a subrogation provision like that found in the W CA. The
subrogation provision of Act 6 found at 75 Pa.C.S.A. § 1720 also does not support
Roche’s position.
II.
Roche contends that NJMIC failed to conform to Pennsylvania Insurance
Department Regulations and NJMIC’s own internal regulations by not providing a first-
party medical application form to Roche upon notification of the accident and injuries.
However, Roche has not identified any specific provision of the Pennsylvania Insurance
Department Regulations that NJMIC violated, and our own review of those regulations
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has not disclosed any such requirement. The testimony in the record to which Roche
points as indicating such an internal policy at NJMIC also does not support Roche’s
argument.
III.
Roche’s third argument is that the District Court placed the burden of determining
the cost containment amounts payable upon Roche herself rather than upon NJMIC.
However, this argument is without merit. The District Court did not require Roche to
make this determination. Rather, it merely found that Roche had not supplied NJMIC
with the requisite information upon which it could make a determination of the amount of
the medical bills that were payable.
IV.
Roche’s next argument is that the District Court did not properly enforce 75
Pa.C.S.A. § 1716, which provides in part that “[b]enefits are overdue if not paid within 30
days after the insurer receives reasonable proof of the amount of the benefits.” This
provision also states that 12% interest will accrue on overdue benefits. Id. The District
Court awarded interest from January 1, 2001. Roche believes the date from which
interest should have accrued to be earlier. The determination of when NJMIC received
reasonable proof of the amount of the benefits due is one of fact. Our examination of the
District Court’s determination shows no clear error on its part. Therefore, its
determination must stand.
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V.
Roche argues that the District Court erred in its application of Act 6 to her initial
hospitalization. 31 Pa. Code § 69.12 exempts certain treatments from the cost limitations.
These treatments include acute care and services for life-threatening or urgent injuries.
Even where the injuries are not urgent or life-threatening, the exemption can apply to the
initial assessment. See 31 Pa. Code § 69.12. Here, however, there is no evidence in the
record that such an initial assessment was made or that an assessment at this initial phase
indicated whether Roche’s injuries were or were not life-threatening and urgent.
Therefore, we conclude that the District Court did not err in applying Act 6 cost
containment provisions to the initial hospitalization.
VI.
Roche argues that the District Court erred in applying the law of the case. Roche
does not indicate what she believes the law of the case to have been or how it became the
law of the case. Nor does she cite any authority to support her argument. We therefore
reject this argument.
VII.
Roche’s next argument is that the District Court erred in awarding only the sum of
$21,151.04 and in failing to heed what Roche claims are admissions on the part of
NJMIC that the actual total was $42,672.56. But the record indicates that NJMIC did not
make such admissions. The document to which Roche points, NJMIC’s Supplemental
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Findings of Fact and Conclusions of Law, simply takes issue with Roche’s own exhibit
and states what the correct unpaid total would be under this exhibit. After stating this
corrected amount, NJMIC denies that it owes this amount. See Appellant’s Appendix
Vol. II at C-8. Therefore, we cannot find that the District Court erred.
VIII.
Roche’s final argument is that the District Court erred in refusing to award
exemplary damages. Act 6 provides that an insured may challenge an insurance
provider’s refusal to pay for medical care and that conduct that is considered “wanton
shall be subject to payment of treble damages to the injured party.” 75 Pa. C.S.A. §
1797(b)(4). Roche argues that NJMIC’s behavior was a clear example of bad faith and
therefore violated § 1797(b)(4).
We have defined bad faith as a “frivolous or unfounded refusal to pay, lack of
investigation into the facts, or a failure to communicate with the insured.” Frog, Switch,
& Mfg. Co. v. Travelers Ins. Co., 193 F.3d 742, 751 n.9 (3d Cir. 1999). Here we cannot
conclude that such bad faith was present. NJMIC never denied Roche coverage but rather
requested more information to make the necessary cost containment calculations under
Act 6. It did not make frivolous refusals to pay but continued to request the proper
documents so that it could fulfill its obligations under its policy with Roche’s stepfather.
Accordingly, we find that the District Court did not err in denying Roche’s claim for
exemplary damages.
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IX.
We have reviewed all of Roche’s arguments and see no grounds for reversal. We
affirm the District Court in full.
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TO THE CLERK OF THE COURT:
Kindly file the foregoing Opinion.
/s/ Samuel A. Alito, Jr.
Circuit Judge
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