Freedom Medical Supply v. Allstate Fire

J-A21034-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
FREEDOM MEDICAL SUPPLY, INC., : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
v. :
:
ALLSTATE FIRE AND CASUALTY : :
INSURANCE COMPANY : No. 3420 EDA 2015
Appeal from the Judgment entered December 11, 2015
in the Court of Common Pleas of Philadelphia County,
Civil Division, No(s:) 2268 October Term 2013
BEFORE: BENDER, P.J.E., DUBOW and MUSMANNO, JJ.
MEMORANDUM BY MUSMANNO, J.: FILED NOVEMBER 15, 2016
Freedom Medical Supply, Inc. (“Freedom Medical”), appeals from the
Judgment1 entered in favor of Allstate Fire and Casualty Insurance Company
(“Allstate”). We affirm.
The trial court set forth the relevant underlying facts as follows:
On June 2, 2011, Pablo Santos [(“Santos”)] was injured in
a car accident. At the time, [] Santos was the named insured on
an automobile insurance policy issued by [Allstate]. On
September 21, 2011, [] Santos saw Dr. Maurice Singer (“Dr.
Singer”) for his injuries. The next day, [Freedom Medical]
received a prescription from Dr. Singer on Freedom Medical’s
pre-made prescription form dated September 22, 2011. The
1
Initially, Freedom Medical filed a Notice of Appeal following the denial of its
Post-Trial Motions. On December 7, 2015, this Court entered a per curiam
Order directing Freedom Medical “to praecipe the trial court Prothonotary to
enter judgment on the decision of the trial court.” Order, 12/7/15. This
Court further stated that “[u]pon compliance with Pa.R.A.P. 301, the
[N]otice of [A]ppeal previously filed in this case will be treated as filed after
the entry of judgment.” Id. A judgment in favor of Allstate was entered on
December 11, 2015, and Freedom Medical’s appeal properly lies from that
Judgment.
J-A21034-16
prescription prescribed various durable medical equipment
(“DME”) for [] Santos[,] including a lumbosacral support, a
portable home whirlpool, electric moist heat pad, cervical pillow,
and a portable muscle stimulator. On November 2, 2011,
Freedom Medical logged a work order, signed by [] Santos,
indicating delivery of all the prescribed DME to his address on
12003 Bustleton Avenue in Philadelphia.
On November 12, 2011, Freedom Medical submitted a bill
to Allstate for reimbursement for the DME. On November 29,
2011, Allstate sent a letter to Freedom Medical denying its claim
for reimbursement and indicat[ing] that the claim was under
investigation. [On] April 29, 2013, Allstate sent a letter to
Freedom Medical again denying payment[,] explaining that []
Santos was unable to confirm receipt of DME from the
prescribing doctor.
April Mathis-Bush (“Mathis-Bush”), a claims service
adjustor in the special investigation unit for Allstate, was
assigned to investigate Freedom Medical’s claim for
reimbursement. On April 26, 2012, Mathis-Bush took a
statement from an individual who claimed to be [] Santos. The
individual presented a driver’s license with the name Pablo
Santos. The individual stated that he received the DME from
Freedom Medical. [] Mathis-Bush did not find the individual to
be credible and denied the claim for reimbursement. After suit
had been filed, [] Mathis-Bush attended an arbitration hearing
where [] Santos was present. [] Mathis-Bush confirmed that the
individual who gave the statement in April[] 2012 was not []
Santos. At trial, [] Mathis-Bush also testified that the individual
who gave the statement was not the same [] Santos who
appeared at trial.
At trial, [] Santos testified that after he went to Dr.
Singer[,] he received some medical equipment, but he did not
know on what date he received it. [] Santos described the
equipment he received as “the thing for the chest, the bracelet
that is hot, and something for the feet.” About a week after he
received the equipment, he gave it to his son because he [did
not] need the equipment. [] Santos was subpoenaed to bring the
medical equipment he received to trial. Instead of bringing the
equipment, [] Santos brought pictures of equipment taken by his
son. [] Santos testified that he did not remember ever giving a
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statement about the equipment and indicated that the first time
he ever met [] Mathis-Bush was at the arbitration hearing.
***
[Freedom Medical] brought this action[,] which arose from
[Allstate’s] denial of reimbursement for certain medical
equipment. On May 12, 2014, after an arbitration hearing, there
was a finding for [Freedom Medical] against [Allstate] in the
amount of $13,309.51. On June 2, 2014, [Allstate] appealed the
arbitrators’ award. On November 14, 2014, [Freedom Medical]
filed three Motions in Limine[,] and on January 9, 2015,
[Allstate] filed its responses. The case was tried in front of th[e
trial c]ourt[,] sitting without a jury[,] on January 12, 2015[,]
and January 13, 2015. On July 14, 2015, th[e trial c]ourt found
for [Allstate] and against [Freedom Medical]. On October 22,
2015, after [P]ost-[T]rial [M]otions were denied, [Freedom
Medical] filed a Notice of Appeal to the Superior Court of
Pennsylvania. On November 6, 2015, [Freedom Medical] filed a
timely Statement of Matters Complained of on Appeal pursuant
[to] Pa.R.A.P. 1925(b). [Thereafter, following this Court’s per
curiam Order, Judgment was entered in favor of Allstate on
December 11, 2015.]
Trial Court Opinion, 12/29/15, at 1-3 (citations omitted).
On appeal, Freedom Medical raises the following questions for our
review:
1. Did the [t]rial [c]ourt improperly conclude that [Santos] did
not receive [DME] from [Freedom Medical], where Freedom
Medical presented “reasonable proof” pursuant to § 1716 of
the Pennsylvania Financial Responsibility Motor Vehicle Act
[“MVFRL”] of its receipt at trial?
2. Did the [t]rial [c]ourt improperly conclude that Santos was
required to bring the DME to trial to demonstrate that it had
been delivered to him by Freedom Medical?
3. Did the [t]rial [c]ourt improperly conclude that the refusal of
[Allstate] to pay for the DME was not limited to the one
reason it asserted prior to the suit for denying Freedom
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Medical’s claim, namely that the patient could not confirm
receipt of the DME?
4. Did the [t]rial [c]ourt improperly conclude that Allstate’s
refusal to pay Freedom Medical’s medical bills was
reasonable?
Brief for Appellant at 4.
Our appellate role in cases arising from non-jury trial
verdicts is to determine whether the findings of the trial court
are supported by competent evidence and whether the trial court
committed error in any application of the law. The findings of
fact of the trial judge must be given the same weight and effect
on appeal as the verdict of a jury. We consider the evidence in a
light most favorable to the verdict winner. We will reverse the
trial court only if its findings of fact are not supported by
competent evidence in the record or if its findings are premised
on an error of law. However, where the issue ... concerns a
question of law, our scope of review is plenary.
The trial court’s conclusions of law on appeal originating
from a non-jury trial are not binding on an appellate court
because it is the appellate court’s duty to determine if the trial
court correctly applied the law to the facts of the case.
Stephan v. Waldron Elec. Heating & Cooling LLC, 100 A.3d 660, 664–65
(Pa. Super. 2014) (citation and brackets omitted).
In its first claim, Freedom Medical contends that the evidence
demonstrated that Santos received the DME, and that Allstate’s payments
were overdue. Brief for Appellant at 18, 19-20, 22-23; see also id. at 18
(wherein Freedom Medical cites to section 1716 of the MVFRL to
demonstrate that it presented “reasonable proof” of the delivery of the
DME). Freedom Medical argues that Allstate had the following information
demonstrating that Santos had received the DME: (1) a prescription
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received on November 21, 2011, for the DME; (2) Santos’s medical records;
(3) a Health Care Financing Administration form that detailed Santo’s
address, phone number, date of birth, date of the accident, the treating
doctor, the medical provider, the diagnosis, the DME, and the amount
charged for the DME; (4) a recorded statement by Santos confirming receipt
of the DME; and (5) a signed work order. Id. at 19; see also id. at 22-23
(averring that the testimony of Jeffery Bonn, a former collections manager
at Freedom Medical, and Santos was sufficient to demonstrate that the DME
was delivered). Freedom Medical asserts that, despite Allstate’s admission
that Santos had receive some of the DME equipment, the trial court
erroneously found that Santos had not received the DME. Id. at 22.
Freedom Medical further asserts that the trial court should not have relied
upon Mathis-Bush’s speculative testimony that an imposter, not Santos,
gave the statements regarding delivery of the DME. Id. at 21-23. Freedom
Medical also claims that Allstate failed to question the receipt of the DME
until a demand for payment had been made, approximately 1½ years
following the delivery of the DME. Id. at 20. Freedom Medical argues that
this delay hampered its ability to provide more testimony regarding the
delivery of the DME. Id. at 21.
The trial court addressed Freedom Medical’s first claim and determined
that it is without merit. See Trial Court Opinion, 12/29/15, at 16-19.
Specifically, the trial court weighed the evidence and made credibility
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determinations against Santos regarding the delivery of the DME. See id. at
17-19; see also Stephan, 100 A.3d at 664. We will not re-weigh the
evidence. Accordingly, we adopt the trial court’s sound reasoning, and
affirm on this basis. See Trial Court Opinion, 12/29/15, at 16-19.
In its next claim, Freedom Medical contends that the trial court erred
in finding that Santos was required to produce the DME at trial to support
the claim that the DME had been delivered. Brief for Appellant at 23.
Freedom Medical claims that it served a subpoena on Santos to testify at
trial and bring the DME; however, Santos stated that he no longer had the
DME and only had photographs of the DME taken by his son. Id. at 23-24.
Freedom Medical argues that the trial court should not have drawn an
inference against Santos for failing to produce the DME, and instead should
have relied upon photographs of the DME taken by Santos’s son. Id. at 23,
24-25. Freedom Medical also asserts that the trial court erred in finding that
Freedom Medical waived this issue by failing to object to the absence of the
DME because it introduced the testimony. Id. at 24.
The trial court addressed this claim as follows:
Freedom Medical incorrectly asserts that because [] Santos did
not comply with the subpoena issued by Freedom Medical, [the
trial c]ourt was precluded from considering this fact. Freedom
Medical does not contend that the subpoena was not lawfully
issued nor that [] Santos was under an obligation to bring the
DME to trial. [] Santos testified regarding the subpoena and
why he did not bring the DME to court. [The trial c]ourt
considered the evidence presented. [The trial c]ourt properly
permitted evidence that [] Santos failed to comply with the
subpoena and produce the DME at trial.
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Trial Court Opinion, 12/29/15, at 11; see also N.T., 1/13/15, at 20-22
(wherein Santos testified that he did not comply with the subpoena requiring
him to bring the DME to trial).
Upon our review, we conclude that the trial court was free to consider
the fact that Santos failed to produce the DME, in contravention of the
subpoena, because the trial court was required to determine whether the
DME was delivered to Santos, and whether Freedom Medical properly billed
Allstate. See Pa.R.C.P. 234.1(a) (noting that “[a] subpoena is an order of
the court commanding a person to attend and testify at a particular time and
place. It may also require the person to produce documents or things which
are under the possession, custody or control of that person.”). Thus, we
agree with the trial court’s sound reasoning, and conclude that the trial court
was free to consider the fact that Santos failed to produce the DME. See
Trial Court Opinion, 12/29/15, at 11.
In its third claim, Freedom Medical contends that the trial court erred
in failing to acknowledge that this case involved an insurance policy, “which
required consideration of a higher standard of care by an insurer towards its
insured or medical provider than in other situations.” Brief for Appellant at
25. Freedom Medical argues that Allstate violated the MVFRL by failing to
pay the first party medical benefits on behalf of Santos within 30 days of the
receipt of reasonable proof of the benefits. Id. at 25, 28.
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The trial court addressed Freedom Medical’s claim and determined that
it is without merit. See Trial Court Opinion, 12/29/15, at 19. We affirm on
the sound reasoning of the trial court for the purposes of this appeal. See
id.
Freedom Medical also argues that even if it had failed to provide
reasonable proof under the MVFRL, Allstate violated the Unfair Claims
Settlement Practices Regulations (“UCSPR”) and the Unfair Insurance
Practices Act (“UIPA”). Brief for Appellant at 25-26, 28. Freedom Medical
specifically asserts that Allstate failed to complete the investigation within a
reasonable amount of time; failed to advise Freedom Medical when the
investigation would be completed; failed to acknowledge the work order sent
by Freedom Medical; failed to notify Freedom Medical of the results of the
investigation; and misrepresented the reasons for denying the claim. Id. at
25-27. Freedom Medical claims that the trial court does not dispute that
Allstate violated the USCPR and UIPA. Id. at 27-28.2
Initially, the regulations cited by Freedom Medical that were
purportedly violated only apply to claimants. See, e.g., 31 Pa. Code
2
Freedom Medical acknowledges that the UIPA and UCSPR do not create
private causes of action. See Reply Brief for Appellant at 6; see also Smith
v. Nationwide Mut. Fire Ins. Co., 935 F. Supp. 616, 620 (W.D. Pa. 1996)
(applying Pennsylvania law and concluding that “there is no private cause of
action under the UIPA or the [UCSPR].”); Albert v. Erie Ins. Exch., 65
A.3d 923, 931 (Pa. Super. 2013) (stating that “[t]he authority to enforce the
[UIPA] is vested in the Pennsylvania Department of Insurance. In light of
the fact that the Act does not create a private cause of action, the
regulations promulgated thereunder do not create a private cause of
action.”) (citation omitted).
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§ 146.7(a)(1) (stating that “[w]ithin 15 working days after receipt by the
insurer of properly executed proofs of loss, the first-party claimant shall be
advised of the acceptance or denial of the claim by the insurer. … The denial
shall be given to the claimant in writing and the claim file of the insurer shall
contain a copy of the denial.”) (emphasis added); 31 Pa. Code § 146.7(c)(1)
(stating that “[i]f the insurer needs more time to determine whether a first-
party claim should be accepted or denied, it shall so notify the first-party
claimant within 15 working days after receipt of the proofs of loss giving the
reasons more time is needed. …”) (emphasis added); 31 Pa. Code § 146.6(stating that “[e]very insurer shall complete investigation of a claim within
30 days after notification of claim, unless the investigation cannot
reasonably be completed within the time. … [T]he insurer shall provide the
claimant with a reasonable written explanation for the delay and state when
a decision on the claim may be expected.”) (emphasis added). Santos, the
purchaser of the insurance policy with Allstate, not Freedom Medical, is the
claimant. See 31 Pa. Code § 146.2 (defining claimant as “either a first-
party claimant, a third-party claimant, or both, and including the claimant’s
attorney and a member of the claimant's immediate family designated by
the claimant.”); id. (defining first-party claimant as “[a]n individual,
corporation, association, partnership or other legal entity asserting a right to
payment under an insurance policy or insurance contract arising out of the
occurrence of the contingency or loss covered by such policy or contract.”);
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see also 31 Pa. Code § 69.3 (defining “provider” as “[a] person or
institution which provides treatment, accommodations, products or
services.”). Further, Allstate regularly communicated with the claimant,
Santos, and his attorney during the investigation. See Trial Court Opinion,
12/29/15, at 21. Based upon the foregoing, Freedom Medical is not entitled
to relief on their UIPA and UCSPR claims.
Finally, Freedom Medical contends that Allstate could not assert new
reasons for the denial at trial, i.e., that the person who gave the recorded
statement in 2012 was not the same person (Santos) who testified at
arbitration in 2014 and trial in 2015. Brief for Appellant at 28-29.
Here, Allstate initially denied payment to Freedom Medical because
Santos was unable to confirm the receipt of the DME. See Trial Court
Opinion, 12/29/15, at 2, 19. Following the filing of Freedom Medical’s
action, Allstate learned that Santos had not provided the statement to
Mathis-Bush in April 2012. See N.T., 1/13/15, 42-43; see also Trial Court
Opinion, 12/29/15, at 3. The fact that Allstate learned new information
following the institution of the action does not preclude it from raising the
new information as a defense. See Trial Court Opinion, 12/29/15, at 12
(stating that “[a]lthough Allstate only provided a single reason for denial of
the claim in 2013[,] that does not mean that it is precluded from raising
additional reasons at trial); 16 (stating that “[a]lthough Allstate denied the
claim for a specific reason, this does not preclude Allstate from defending
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itself in court and challenging the reliability of the evidence presented by
Freedom Medical.”). We conclude that Freedom Medical’s claim in this
regard is without merit.
In its fourth claim, Freedom Medical contends that Allstate’s conduct in
denying the claim was unreasonable. Brief for Appellant at 29-30. Freedom
Medical argues that Allstate’s failure to respond to evidence of the delivery
of the DME forced Freedom Medical to file the instant action. Id. at 29.
Freedom Medical asserts that under section 1716 of the MVFRL, Allstate
should have paid Freedom Medical the amount of its unpaid bills plus 12%
interest, and counsel fees and costs. Id. Freedom Medical claims that
Allstate purposefully makes it difficult for medical providers, such as
Freedom Medical, to pursue meritorious claims by “making misleading
statements, filing repeated appeals, and presenting frivolous defenses that
were never communicated to Freedom Medical prior to suit.” Id. at 30; see
also id. at 29-30.
Here, Freedom Medical again attacks the trial court’s credibility
findings and denial of the claim. As noted above, the trial court was free to
make credibility determinations against Freedom Medical regarding the
delivery of the DME. See Trial Court Opinion, 12/29/15, at 17-19; see also
Stephan, 100 A.3d at 664. We will not re-weigh the trial court’s credibility
determinations, and conclude that Allstate did not act unreasonably in
denying the claim. See Trial Court Opinion, 12/29/15, at 17-19.
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Furthermore, we adopt the trial court’s sound reasoning and determination
that Freedom Medical’s counsel fees and costs claims are without merit.
See id. at 23-24.
Judgment affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/15/2016
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Circulated 10/19/2016 10:36 AM
IN THE COURT OF COMMON PLEAS
FIRST JUDICIAL DISTRICT OF PENNSYLVANIA
CIVIL TRIAL DIVISION
FREEDOM MEDICAL SUPPLY. INC. : OCTOBER TERM 2013 -
-·
.· .-
:•. .... .,'
: NO. 02268 • I
PLArNTIFF : 3420 EDA 2015
v.
ALLSTATE FIRE AND CASUAL TY
INSURANCE COMPANY
DEFENDANT
Powell, J. December 29, 2015
OPINION
I. PROCEDURAL HISTORY
Plaintiff brought this action which arose from Defendant's denial of reimbursement for
certain medical equipment. On May 12, 2014. after an arbitration hearing, there was a finding for
Plaintiff against the Defendant in the amount of$13,309.51. On June 2, 2014, Defendant
appealed the arbitrators' award. On November 14, 2014. Plaintiff filed three Motions in Limine
and on January 9, 2015, the Defendant filed its responses. The case was tried in front of this
Court sitting without a jury on January 12, 2015 and January 13, 2015. On Ju)y 14, 2015, this
Court found for the Defendant and against the Plaintiff. On October 22, 20 t 5, after post-trial
motions were denied, the Plaintiff filed a Notice of Appeal to the Superior Court of
Pennsylvania. On November 6, 2015, the Plaintiff filed a timely Statement of Matters
Complained of on Appeal pursuant Pa.RA.P. 1925(b).
II. FACTUAL BACKGROUND
On June 2, 201 J, Pablo Santos ("Mr. Santos") was injured in a car accident. At the time,
Pablo Santos was the named insured on an automobile insurance policy issued by Allstate
11111111 IIIIIIIIIIH 11111111111
•
Insurance Company(" Allstate"). On September 21, 2011, Mr. Santos saw Dr. Maurice Singer
("Dr. Singer") for his injuries. The next day, Freedom Medical Supply ("Freedom Medical")
received a prescription from Dr. Singer on Freedom Medical's pre-made prescription form dated
September 22, 2011. The prescription prescribed various durab)e medical equipment ("OM E")
for Mr. Santos including a Iumbosacral support, a portable home whirlpool, electric moist heat
pad, cervical pillow, and a portable muscle stimulator. On November 2, 2011, Freedom Medical
logged a work order, signed by Mr. Santos, indicating delivery of all the prescribed DME to his
address on 12003 Bustleton Avenue in Philadelphia. N.T. 1/12/2015 at 14, 16, 20, 23, 92; N.T.
1/13/2015 at 87.
On November 12, 2011, Freedom Medical submitted a bill to Allstate for reimbursement for
the DME. On November 29, 2011, Allstate sent a Jetter to Freedom Medical denying its claim
for reimbursement and indicated that the claim was under investigation. April 29, 2013, Allstate
sent a letter to Freedom Medical again denying payment explaining that Mr. Santos was unable
to confirm receipt of DME from the prescribing doctor. N.T. 1/12/2015 at 24, 36-37, 43.
April Mathis-Bush ("Mathis-Bush"), a claims service adjustor in the special investigation
unit for Allstate, was assigned to investigate Freedom Medical's claim for reimbursement. On
April 26, 2012, Mathis-Bush took a statement from an individual who claimed to be Mr. Santos.
The individual presented a driver's license with the name Pablo Santos. The individual stated
that he received the DME from Freedom Medical. Ms. Mathis-Bush did not find the individual to
be credible and denied the claim for reimbursement. After suit had been filed, Ms. Mathis-Bush
attended an arbitration hearing where Mr. Santos was present. Ms. Mathis-Bush confirmed that
the individual who gave the statement in April, 2012 was not Mr. Santos. At trial, Ms. Mathis-
2
Bush also testified that the individual who gave the statement was not the same Mr. Santos who
appeared at trial. N.T. 1/12/2015 at 107. 113-114, 120-121, 124; N.T. 1/13/2015 at 42-43, 57.
At triaJ, Mr. Santos testified that after he went to Dr. Singer he received some medical
equipment, but he did not know on what date he received it. Mr. Santos described the equipment
he received as "the thing for the chest, the bracelet that is hot. and something for the feet." About
a week after he received the equipment, he gave it to his son because he didn't need the
equipment. Mr. Santos was subpoenaed to bring the medical equipment he received to trial.
Instead of bringing the equipment, Mr. Santos brought pictures of equipment taken by his son.
Mr. Santos testified that he did not remember ever giving a statement about the equipment and
indicated that the first time he ever met Ms. Mathis-Bush was at the arbitration hearing. N.T.
1/13/2015 at 11, 13, 15-23, 27, 29-30.
Ill. DISCUSSION
Appellant raises the following issues:
1. The Trial Court erred in denying Freedom Medical's Motion in
Limine to preclude any challenge to the amount of Freedom
Medical's Charges for electrical muscle stimulator ("EMS") and
whirlpool (EMS and whirlpool are hereinafter referred to
collectively as "DME") and any evidence relating to the cost of
Freedom Medical from DME.
2. The Trial Court erred in denying Freedom Medical's Motion in
Limine to preclude any evidence or testimony relating to
reasonableness and necessity of the DME provided by Freedom
Medical to Pablo Santos ("Santos").
3. Allstate's responses to both [M]otions in (L]imine were untimely
by over a month and should not have been considered by the Trial
Court.
4. The Trial Court erred in allowing evidence relating to the cost of
the DME to Freedom Medical, as well as permitting any challenge
for the reasonableness and necessity of the DME since no peer
review was performed by Allstate. See January 12 2015 N. T. pp.
1
56-57.
S. The Trial Court erred in not permitting discovery of redacted
claims notes prepared by Allstate, where no privilege log was
3
produced by Allstate, and the claims of Freedom Medical involved
allegations of wanton conduct on the part of Allstate.
6. The Trial Court erred by not finding that the man who testified at
the trial in January, 201 S, who identified himself as Santos, was
the same man who gave a recorded statement to April Mathis]-
]Bush ("Bush") of Allstate on April 26, 2012. Specifically, the
photograph on the driver's license presented to Bush on April 26,
2012 depicts the same person who testified at the time of
arbitration and trial. This driver's license expired on March 22,
2013. This driver's license presented by Santos at trial marked at
P-23 has the same address that he had been using (12003 Bustleton
Avenue, Philadelphia, PA, where the DME was delivered). The
photograph on the more recent license depicts the same person as
the man who testified at trial, i.e. Santos.
7. Based upon a review of the cvidentiary record as a whole. The
Trial Court erred by failing to find that Jeffrey BoM of Freedom
Medical was a credible witness, that Bush was not a credible
witness, and that Santos was credible insofar that DME was
delivered to his house in November, 2011.
8. The Trial Court erred by not rejecting Allstate's stated position that
Santos could not verify receipt of the DME was unreasonable and
completely unsupported by any evidence as Santos testified at his
April 26, 2012 recorded statement that he received the DME. Other
than Bush's mere hunch that Santos did not receive the DME, there
was overwhelming credible evidence presented at trial that the
DME was delivered to Santos. Santos also signed a work order
confirming receipt which was provided to Allstate prior to suit.
Photographs of the DME were sent to Allstate. No additional
investigation was performed by Allstate. Finally, Santos testified at
the arbitration and at trial that he received the DME and later gave
it to his son, Paul Santos.
9. The Trial Court erred in concluding that Santos was required to
bring the DME to trial to demonstrate it had been delivered to him
by Freedom Medical. Although the trial subpoena issued to Santos
by counsel for Freedom Medical asked him to bring the DME,
Santos no longer had the DME in his possession and was not
required to retrieve it from his son to bring it to trial. Sec January
13, 2015 N.T. p. 82-83. No inference should have been drawn from
Santos' not bringing the DME, especially when photographs of the
DME taken by Santos' son where introduced into evidence.
I 0. The Trial Court erred in allowing Bush to testify regarding office
notes from Maurice Singer, D.0. as it was beyond the scope of
Bush's direct and cross examination. See January 13, 2015 N.T.,
pp. 88-97.
11. The Trial Court erred in failing to find that Al1state's failure to pay
for the DME is limited to the one reason it asserted prior to suit for
4
denying Freedom Medical's claim, namely that the patient could
not confirm receipt of the DME. See, Lyman v. State Fann Mut.
Auto. Ins. Co., 2014 U.S. Dist. LEXIS 173345 (E.D. Pa. 2014)
(Stengel, J.). (Shift in insurer's reasons for denying claim can
constitute bad faith).
12. The Trial Court erred in failing to find that Allstate's failure to pay
Freedom Medical's medical bills was unreasonable. The Trial
Court should have found that Allstate was liable for damages under
§ 17 J 6 and 1798 of the Pennsylvania Financial Responsibility
Motor Vehicle Act, including interest at 12% of the bills of
$373.56 from December 15, 2011 to the present. This amount is
$3.73 per month, for a total of $138.21 in interest as of the end of
trial.
13. The Trial Court erred by failing to find that Allstate violated the
Unfair Insurance Practices Act ("UIPA"), 40 Pa. C.S.A. § 1171.1
and Unfair Claims Settlement Practices Regulations (''UCSPA"),
31 Pa. C. § 146-6, 146. 7 by not completing its investigation within
a reasonable time and by not properly advising Freedom Medical
of the results of the investigation.
I 4. The peer review process is the exclusive system for an insurer to
challenge the reasonableness and necessity of medical treatment
provided to an insured. Danton v. State Farm and Mut. Auto
Insurance Company, 769 f'. Supp. 174, 177 (E.D. Pa. I 991 ); ~
v. State Farm Insurance Company, 1996 U.S. Dist. LEXIS 5738(E.D. Pa. 1996); (peer review is the exclusive system for an insurer
to challenge the reasonableness and necessity of medical treatment
to an insured. Williams v. State Farm Mut. Auto. Ins. Co., 763 F.
Supp. 121, 124 (E.D. Pa. 1991).
15. Products, which are determined to be necessary by a licensed
health care provider, are necessary medical treatment and
rehabilitative services unless they shall have been found or
determined to be unnecessary by a state-approved peer review
organization. 75 Pa. C.S.A. § 1702. Thus, duly presented medical
care is presumptively reasonable and necessary unless peer review
results is a contrary determination. Levine v. Travelers Pro~rty
Cas. Ins. Co., 69 A.3d 671, 677 (Pa. Super. 2013).
16. The Trial Court erred in finding that the DME was not reasonable
and necessary because Allstate failed to have a peer review
performed.
17. Pursuant to the Unfair Claims Settlement Practices Regulations
("UCSPR"), "[e]very insurer shall complete investigation of the
claim within 30 days after notification of the claim, unless the
investigation cannot reasonably be completed within the time. If
the investigation cannot be completed within 30 days, and every 45
days thereafter, the insurer shall provide the claimant with a
5
.
reasonable written explanation for the delay and state when a
decision on the cJaim may be expected]."] 31 Pa. C. § 146.6.
18. Pursuant to the UCSPR, "[w[lthin 15 working days after receipt by
the insurer of the properly executed proofs of loss, the first party
claimant shall be advised of the acceptance of denial of the claim
by the insurer. An insurer may not deny a claim on the grounds of
a specific policy provision, condition or exclusion unless reference
to the provision, condition or exclusion is included in the denial.
The denial shall be given to the claimant in writing and the claim
file of the insurer shall contain a copy of the denial". 31 Pa. C. §
146. 7(a)(1 ).
19. "If the insurer needs more time to determine whether a first-party
claim should be accepted or denied, it shall so notify the first party
claimant within 15 working days after receipt of the proof of loss
giving the reason why more time is needed. lf the investigation
remains incomplete, the insurer shall, within 30 days of the initial
notification, and every 45 days thereafter, send to the claimant a
letter setting forth the reasons why additional time is needed for
investigation and state when a decision on the claim may be
expected]."] UCSPR, 31 Pa. C. §164.7.
20. The Unfair Insurance Practices Act (''UIPA"), 40 Pa. C.S.A.
§ 1171.1. specifically prohibits:
(i) Misrepresenting pertinent facts or policy or contract
provisions relating to coverage at issue;
(ii) Failing to acknowledge and act promptly upon written or
oral communications with respect to claims arising under
insurance policies, ...
(iii) Refusing to pay claims without conducting a reasonable
investigation based upon all available information;
[(iv)] Not attempting in good faith to effectuate prompt, fair
and equitable settlements of claims in which the company's
liability under the policy has become reasonable clear;
[(v)] Compelling persons to institute litigation to recover
amounts due under an insurance policy ... ;
[(vi)] Failing to promptly provide a reasonable explanation of
the basis in the insurance policy in relation to the facts of
applicable law for denial of a claim ... ".
40 P.S.§1171.S(aXIO) (cited by Grigos v. Certain Underwriters at
Lloyds, London, 20 IO Phila. Ct. Com. Pl. LEXIS 3 83 (Phila. CCP
2010) (Bernstein, J.).
21. The Trial Court erred in failing to find that the conduct of Allstate
was wanton because its statement to Freedom Medical on Apri) 29,
2013 that Santos had not received the DME was misleading and an
outright falsehood. Further, Allstate refused to respond to Freedom
Medical's request for a copy of the statement of Santos. Allstate's
goal has been to make it as costly as possible for medical providers
6
such as Freedom Medical to pursue meritorious claims by making
misleading statements, filing repeated appeals, and presenting
frivolous defenses that were never communicated to Freedom
Medical prior to suit.
22. The Trial Court erred in failing to find that the failure of Allstate to
pay Freedom Medical's invoice is conduct which is wanton,
subjecting Allstate to treble damages pursuant 75 Pa. S.C.A.
Section 1797(b)(4), as Allstate had no basis not to pay for the
DME, conducted an incomplete investigation, failed to apprise
Freedom Medical and Santos of the status of its investigation as
required by the UIPA, and made false and misleading statements
that the DME had not been received by Santos. Olsofsky. v.
Progressive Ins. Co., 52 Pa. D&C 4th 449, 480 fn. 3 (Lack. Cty.,
2001), 2001 Pa. Dist. & Cnty Dec. LEXIS 418. See also, 75 Pa.
C.S. § t 797(bXl), for the purpose of PRO.
23. The Trial Court erred in failing to award reasonable counsel fees to
Freedom Medical pursuant to 75 Pa. C.S.A. § J 7 l 6, J 797 and 1798.
Courts have made significant awards for legal fees on similar
cases. Herd Chiropractic Clinic, P.C. v. State Fann Mutual Auto.
Ins. Co., 29 A.3d 19 {Pa. Super. 2011) rev'd on other grounds 64
A.3d 1058 (Pa. 2013) (allowing legal fees of $27,04 7. 50), Levine.
supra (awarding $27,930.00 in legal fees).
24. The Trial Court erred in failing to find that the hourly rate of Dean
E. Weisgold, Esquire, in the amount of $350.00 per hour is
consistent with other practitioners with his level of experience (26
years) in this jurisdiction.
25. The Trial Court erred in failing to find that the legal fees and costs
submitted by Freedom Medical ($27,079. JO), were fair and
reasonable and necessarily incurred in connection with this
litigation, which began at the Philadelphia Municipal Court level in
2013, continued through arbitration and then concluded at a two
day trial in 2015. See Exhibit P-9, and updated invoice.
Pre-Trial Matters
Freedom Medical's first three assignments of error challenge this Court's rulings on
Motions in Limine. A trial court's decision to grant or deny a Motion in Lirnine is subject to an
cvidentiary abuse of discretion standard of review. Catlin v, Hamburg, 56 A.3d 914, 922 (Pa.
Super. 20l2}{quotlng Commonwealth v. Reese, 31 A.3d 708, 715-716 (Pa. Super. 2011)). "An
abuse of discretion may not be found merely because an appellate court might have reached a
different conclusion, but 'requires a manifest unreasonableness, or partiality, prejudice, bias, or
7
ill-will, or such lack of support so as to be clearly erroneous." Parr v. Ford Motor Co., l 09 A.3d
682, 690-91 (Pa. Super. 2014) (quoting Grady v. Frito-lay, lnc., 839 A.2d 1038, l 046 (Pa.
2003); Keystone Dedicated logistics, LLC v. JGB Enterprises, Inc.. 77 A.3d I, 11 (Pa. Super.
2013). To constitute reversible error, an evidentiary ruling must not only be erroneous, but also
harmful or prejudicial to the complaining party. Parr, J09 A.3d at 690-91 (citation omitted).
First, Freedom Medical claims that "[tlhe Trial Court erred in denying Freedom
Medical's Motion in Limine to preclude any challenge to the amount of Freedom Medical's
charges for electrical muscle stimulator ("EMS") and whirlpool (EMS and whirlpool are
hereinafter referred to collectively as "DME") and any evidence relating to the cost of Freedom
Medical from DME." In its Motion, freedom Medical argued that Allstate should be precluded
from challenging the amount Freedom Medical charged for DMEs at trial because Allstate had
not previously challenged the amount of the charges and that the amount Freedom Medical
charges for DMEs are set statutorily.
Under the Pennsylvania Motor Vehicle Financial Responsibility Law ("MVFRV'),
automobile insurance companies must provide insurance coverage "for reasonable and
necessary medical treatment and rehabilitative services." 75 Pa. Stat. and Cons. Stat. Ann. §
1712( I). To be able to be reimbursed under the MVFRL, Freedom Medical is required to
demonstrate the reasonableness of its services. See Freedom Med. Supply,Inc. v Stale Farm
Fire & Cas. Co., 2014 WL 626430, at *7 (E.D. Pa. 2014) (citing Allied Medical Assocs. v. State
Farm Mut. Auto. Ins. Co., 2009 WL 1578603, at •s (E.D. Pa. 2009) (finding an insurer only
needs to pay providers for medical devices that are ..reasonable and necessary").
Under the MVFRL, "{i)f a prevailing charge, fee schedule, recommended fee, inflation
index charge or DRG payment has not been calculated under the Medicare program for a
8
particular treatment, accommodation, product or service, the amount of the payment may not
exceed 80% of the provider's usual and customary charge. 75 Pa.C.S. § l 797(a). Neither the
EMS nor the Whirlpool are included in the Medicare Fee Schedule and therefore are unJisted
products subject to the 80% limit.
Contrary to Freedom Medical's assertion, the MVFRL does not proscribe a single way
for providers to calculate their usual and customary charge. Usual and customary charge is
defined as "[t]he charge most often made by providers of similar training, experience and
licensurc for a specific treatment, accommodation, product or service in the geographic area
where the treatment, accommodation, product or service is provided." 31 Pa. Code§ 69.3. "In
calculating the usual and customary charge, an insurer may utilize the requested payment amount
on the provider's bill for services or the data collected by the carrier or intermediaries to the
extent that the data is made available. 31 Pa. Code§ 69.43(c) (emphasis added). Here, the statute
uses the permissive term "may" which indicates that it not only contemplates, but allows, other
manners of calculating charges. Commonwealth v. Baraniak, 504 A.2d 931 (Pa. Super. 1986)
("While the word 'shall' might, in a proper setting, be interpreted as permissive, the word "may"
can never be given the imperative meaning.") (citation omitted). Accordingly, the requested
payment amount on the provider's bill is not the exclusive means of calculating the usual and
customary charge; but merely an example of one way to calculate the usual and customary
charge. Freedom Medical, to be able to recover, needed to present evidence of its usual and
customary charge. This Court did not err in permitting the parties to present evidence of the
usual and customary charges for DMEs, including the amount of Freedom Medical's bill and the
cost of equipment to Freedom Medical.
9
Second, Freedom Medical claims .. (t)he Trial Court erred in denying Freedom Medical's
Motion in Limine to preclude any evidence or testimony relating to reasonableness and necessity
of the DME provided by Freedom Medical to Pablo Santos ("Santos")." In its Motion, Freedom
Medical argued that no evidence should be permitted regarding the reasonableness and necessity
of the DME because there was no peer review. The MVFRL provides a mechanism by which an
insurer may challenge the reasonableness and necessity of an insured's medical treatment. An
insurer may submit an insured's medical bill to a peer review organization ("PRO") to confirm
that such treatment is medically necessary. 75 Pa.C.S. § I 797(b)(l ). However, an insurer is not
required to engage in the PRO process. which is anticipated by the statute. If an insurer does not
utilize the PRO process, an insured or a provider "may challenge before a court an insurer's
refusal to pay for past or future medical treatment or rehabilitative services or merchandise."
Perkins v. Stale Farm Ins. Co., 589 F. Supp. 2d 559, 562-63 (M.0. Pa. 2008) (quoting 15 Pa.C.S.
§ l 797(b)(4)). There is no requirement that an insurer use the PRO process or challenge whether
products are reasonable and necessary. It is the Plaintiffs burden to prove that medical supplies
and charges are recoverable. This Court properly denied Freedom Medical's Motion in Limine.
Third, Freedom Medical asserts that "Allstate's responses to both Motions in Limine
were untimely by over a month and should not have been considered by the Trial Court."
Relative to a Motion's timeliness, we recognize that a trial court has the discretion to control its
calendar. and this Court may interfereonly when justice demands it. Cheng v. Se. Pennsylvania
Transp. Auth; 981 A.2d 371 (Pa. Cmwlth. 2009). On June 5, 2014, it was ordered that "all pre-
trial and dispositive motions must be filed no later than October 6, 2014." Without requesting a
continuance, Freedom Medical filed both of his Motions in Li mine on November 14, 20 I 4.
Allstate responded on January 9, 2015. Freedom Medical's Motion in Limine were untimely and
10
in violation of the June 5.2015 Order. This Court finds that Freedom Medical has waived any
challenge to the timeliness of Allstate's response. In addition, Freedom Medical was not
prejudiced by the timing of Allstate's response. This claim is meritless.
Next, Freedom Medical alleges that "the Trial Court erred in concluding that Santos was
required to bring the DME to trial to demonstrate it had been delivered to him by Freedom
Medical. Although the trial subpoena issued to Santos by counsel for Freedom Medical asked
him to bring the DME, Santos no longer had the DME in his possession and was not required to
retrieve it from his son to bring it to trial. See January 13, 2015 N.T. p. 82-83. No inference
should have been drawn from Santos' not bringing the DME, especially when photographs of the
DME taken by Santos' son where introduced into evidence."
Initially, this Court notes that this claim is waived as counsel failed to object to this evidence at
trial. N.T. 1/13/20) 5 at 21. Issues not raised by timely objection at trial are waived for purposes
of appeal. See Pa.R.A.P. 302; Herd Chiropractic Clinic, P. C. v. State Farm Mu; Auto. Ins. Co.,
29 A.3d 19, 22 (Pa. Super. 2011) rev'd. 64 A.3d 1058 (Pa. 2013) (citing Dilliplaine v. Lehigh
Valley Trust Co.. 322 A.2d 114, 116-17 (Pa. 1974).
In the event that this issue is not waived, it is meritless. Freedom Medical incorrectly
asserts that because Mr. Santos did not comply with the subpoena issued by Freedom Medical,
this Court was precluded from considering this fact. Freedom Medical does not contend that the
subpoena was not lawfully issued nor that Mr. Santos was under an obligation to bring the DME
to trial. Mr. Santos testified regarding the subpoena and why he did not bring the DME to court.
This Court considered the evidence presented. This Court properly permitted evidence that Mr.
Santos failed to comply with the subpoena and produce the DME at trial.
11
Next, Freedom Medical claims "[tjhe Trial Court erred in failing to find that Allstate's
failure to pay for the DM£ is limited to the one reason it asserted prior to suit for denying
Freedom Medical's claim, namely that the patient could not confirm receipt of the DME. See,
Lyman v. State Farm Mut. Auto. Ins. Co., 2014 U.S. Dist. LEXIS 173345 (E.D. Pa. 2014)
(Stengel, J.). (Shift in insurer's reasons for denying claim can constitute bad faith)."
Preliminary objections shall state specifically the grounds relied upon. All preliminary
objections shall be raised at one time. They may be inconsistent. 231 Pa. Code § 3 l 42(b ). Causes
of action and defenses may be pleaded in the alternative. Pa.R.C.P. No. 1020 (b), "A party
pleading in the alternative cannot be required to elect upon which theory or which claim or
defense he rests his case. To require him to make an election would defeat the purpose of
permitting him to plead in the alternative." Laughlin v. McConnel, 191 A.2d 921, 924 (Pa. Super.
1963) (citation omitted).
Here. Allstate indicated the in its Explanation of Benefits that it denied Freedom
Medical's claim because Mr. Santos could not confirm receipt of the DME. After Freedom
Medical filed suit, Allstate raised the reasonableness and necessity of the DME as a New Matter.
Defendants are permitted to present inconsistent defenses. Although Allstate only provided a
single reason for denial of the claim in 2013 that docs not mean that it is precluded from raising
additional reasons at trial. This claim is meritless.
Trial Matters
Freedom Medical next argues that "[t]he Trial Court erred in not permitting discovery of
redacted claims notes prepared by Allstate, where no privilege Jog was produced by Allstate, and
the claims of Freedom Medical involved allegations of wanton conduct on the part of Allstate."
12
A party may obtain discovery regarding any matter, not privileged, which is relevant to
the subject matter involved in the pending action. 231 Pa. Code§ 4003.1. Pennsylvania has
historically held that the burden of proof is upon the party asserting that disclosure of the
information would not violate the attorney-client privilege. Commonwealth v. Maguigan, 511
A.2d l 327, 13 34 (Pa. 1986). "In a civil matter counsel shall not be competent or permitted to
testify to confidential communications made to him by his client, nor shall the client be
compelled to disclose the same, unless in either case this privilege is waived upon the trial by the
client." 42 Pa.C.S. § 5928. The attorney-client privilege exists to "foster a confidence between
attorney and client that will lead to a trusting and open dialogue." Gocial v. Jndep. Blue Cross.
827 A.2d 1216, J 222 (Pa. Super. 2003) ( citation omitted). The attorney-client privilege applies
only to confidential communications made by the client to the attorney in connection with
providing legal services. Id
At trial, after a request by the parties, this Court examined the redacted portions of Ms.
Mathis-Bush's log in camera. This Court determined that the redactions were covered by
attorney-client privilege and were not discoverable by Freedom Medical. N.T. 1/12/2015 at I 26-
132. Freedom Medical has not provided this Court with any information that would establish that
the redacted portions of the log were not privileged.
Freedom Medical makes multiple assignments of error challenging evidentiary rulings by
this Court. Questions concerning the admissibility of evidence are within "the sound discretion
of the trial court, and its discretion will not be reversed absent a clear abuse of discretion."
Commonwealth v. Selenski, 18 A.3d 1229, 1232 (Pa. Super. 2011). "An abuse of discretion is not
merely an error of judgment, but is rather the overriding or misapplication of the law, or the
exercise of judgment that is manifestly unreasonable, or the result of bias, prejudice, ill-will or
13
partiality, as shown by the evidence of record." Commonwealth v. Thompson, 106 A.3d 742, 754
(Pa. Super. 2014) (quoting Commonwealth v. Harris, 884 A.2d 920, 924 (Pa. Super. 2005)
appeal denied, 928 A.2d 1289 (Pa. 2007)).
Freedom Medical claims "[t]he Trial Court erred in allowing Bush to testify regarding
office notes from Maurice Singer, 0.0. as it was beyond the scope of Bush's direct and cross
examination. See January 13, 2015 N.T., pp. 88-97."
Freedom Medical challenges the following testimony:
MR. McNULTY: And during those -- those office notes, was Mr.
Santos purportedly receiving electrical stimulation as a part of the
treatment?
MS. MATHIS-BUSH: Yes.
MR. WEISGOLD: Objection. Beyond the scope of cross.
THE COURT: No, I will allow it.
MR. McNULTY: Before yesterday, had this document ever been
submitted to Allstate?
MS. MATHIS-BUSH: No.
MR. WEISGOLD: Objection, Your Honor. It's beyond the scope
of cross.
THE COURT: No, I aJlow it.
MS. MA THIS-BUSH: No.
M~. McNULTY: Now after yesterday, or --yeah, after yesterday's
court session, did you look into whether a claim had ever been
made for a May 15, 2011, accident?
MR. WEISGOLD: Objection. Beyond the scope of cross. Way
beyond.
MR. McNUL TY: I agree, but J would just ask for a little bit of
leeway.
THE COURT: I will allow it.
MR. McNUL TY: I forgot to ask it on direct.
N.T. 1/13/2015 at 89-90.
The scope of redirect examination is largely within the discretion of the trial court.
Commonwealth v. Dreibelbis, 426 A.2d 1111, 1117 (Pa 1981) (citation omitted). Moreover,
14
.,
when a party raises an issue on cross-examination, it will be no abuse of discretion for the court
to permit re-direct on that issue in order to dispel any unfair inferences. Id.On cross-examination, counsel for Freedom Medical questioned Ms. Mathis-Bush
whether she had a practice of requesting notes from doctors who proscribe DME. N.T. 1/13/2015
at 61. He questioned her regarding the prescription written by Dr. Singer for Mr. Santos. Id at
69-70. He further questioned Ms. Mathis-Bush about the date of Mr. Santos' visit to Dr. Singer
and the date of the prescription. Id. at 73-74, 87-88. Here, counsel for Allstate's questions
regarding the office notes, which corresponded to Mr. Santos' visit and prescription. were clearly
in response to the questions asked by counsel for Freedom Medical during cross-examination.
The question regarding the 2011 claim was responsive to the challenges made by counsel
for Freedom Medical about the completeness of Ms. Mathis-Bush's investigation. To the extent
they went beyond the scope of cross-examination, counsel was permitted a brief and limited
amount of questions that he omitted during direct-examination. A trial judge has wide discretion
to vary the normal order of proof and may permit a party to bring out on re-direct examination
relevant evidence which inadvertently the party failed to bring out on direct examination.
Commonwealth v. Brown, 342 A.2d 84, 91 (Pa. 1975) (citation omitted). This Court was within
its discretion.
Freedom Medical asserts that "[tjhe Trial Court erred in allowing evidence relating to the
cost of the DME to Freedom Medical, as well as permitting any challenge for the reasonableness
and necessity of the DME since no peer review was performed by Allstate. See January 12, 2015
N.T. pp. 56-57."
As discussed supra, the MVFRL does not proscribe an exclusive manner for providers to
calculate their usual and customary charge. "In caJculating the usual and customary charge, an
15
• •
insurer may utilize the requested payment amount on the provider's bill for services or the data
collected by the carrier or intermediaries to the extent that the data is made available. 31 Pa.
Code§ 69.43(c) (emphasis added). Usual and customary charge is defined as "[t]he charge most
often made by providers of similar training, experience and ticensure for a specific treatment!
accommodation, product or service in the geographic area where the treatment, accommodation,
product or service is provided." 31 Pa. Code§ 69.3.
Freedom Medical, to prevail on its claim, was required to establish its usual and
customary charge. The defense was allowed to present evidence challenging Freedom Medical's
usual and customary charge. The cost of a device to Freedom Medical is relevant to calculating
its usual and customary charge. Accordingly, this evidence was admissible. Further, Freedom
Medical again asserts that Allstate should have been precluded from challenging the evidence of
the reasonableness and necessity of the DME. Although Allstate denied the claim for a specific
reason, this does not preclude Allstate from defending itself in court and challenging the
reliability of the evidence presented by Freedom Medical.
Freedom Medical makes multiple claims of error challenging this Court's factual
findings. Freedom Medical claims that:
a. Based upon a review of the evidentiary record as a whole. The
Trial Court erred by failing to find that Jeffrey Bonn of Freedom
Medical was a credible witness, that Bush was not a credible
witness, and that Santos was credible insofar that DME was
delivered to his house in November, 2011.
b. The Trial Court erred by not finding that the man who testified at
the trial in January, 2015, who identified himself as Santos, was
the same man who gave a recorded statement to April Mathis Bush
("Bush,,) of Allstate on April 26, 2012. Specifically, the
photograph on the driver's license presented to Bush on April 26,
2012 depicts the same person who testified at the time of
arbitration and trial. This driver's license expired on March 22,
2013. This driver's license presented by Santos at trial marked at
P-23 has the same address that he had been using (12003 Bustleton
16
. .
Avenue, Philadelphia, PA, where the DME was delivered). The
photograph on the more recent license depicts the same person as
the man who testified at trial, i.e. Santos.
c. The Trial Court erred by not rejecting Allstate's stated position that
Santos could not verify receipt of the DME was unreasonable and
completely unsupported by any evidence as Santos testified at his
April 26, 2012 recorded statement that he received the DME. Other
than Bush's mere hunch that Santos did not receive the DME, there
was overwhelming credible evidence presented at trial that the
DME was delivered to Santos. Santos also signed a work order
continuing receipt which was provided to AlJstate prior to suit.
Photographs of the DME were sent to Allstate. No additional
investigation was performed by Allstate. Finally, Santos testified at
the arbitration and at trial that he received the DME and Jater gave
it to his son, Paul Santos.
It is well settled that:
[The fact-finder] is entitled to believe all, part, or none of the
evidence presented. Rafter v. Raymark Industries, Inc., 429 Pa.
Super. 360, 632 A.2d 897 (1993). A [fact-finder] can believe any
part of a witness' testimony that they choose, and may disregard
any portion of the testimony that they disbelieve. Mitzelfelt v
Kamrin, 526 Pa. 54, 584 A.2d 888 (1990). Credibility
determinations are for the [fact-finder]. Sundlun v. Shoemaker, 421
Pa. Super. 353, 617 A.2d 1330 (1992).
Randt v. Abex Corp., 234, 671 A.2d 228, 233 (Pa. Super. 1996) ." It is the function of the [fact-
finder] to evaluate evidence adduced at trial to reach a determination as to the facts) and where
the verdict is based on substantial, if conflicting evidence, it is conclusive on appeal ."
Commonwealth v. Reynolds, 835 A.2d 720, 726 (Pa. Super. 2003).
This Court credited the majority of the testimony of both Mr. Bonn and Ms. Mathis-
Bush. Both witnesses detailed the actions they took in their professional capacity. However,
neither Mr. Bonn nor Ms. Mathis-Bush could testify to the events of November 2, 2011 and
whether or not Mr. Santos received the DME.
This Court did not credit the testimony of Mr. Santos that be received the DME. It was
clear from the testimony that Mr. Santos was not in possession of the DME at the time of trial.
17
N.T. 1/13/2015 at 15. Although Mr. Santos asserted that he received some medical equipment,
he could not accurately describe the items that he received. At trial, Mr. Santos described the
items he received as ''the thing for the chest, the bracelet that is hot, and something for the feet.
Id. at J 3. At the arbitration hearing, Mr. Santos described the items he received as an electrical
thing to give shocks to the heart and over here for the neck and an electrical brace and a thing to
put your feet in the water. Id. at 18. According to Ms. Mathis-Bush, this description does not
describe the equipment Mr. Santos was billed for. N.T. 1/13/2015 at 58. Mr. Santos did not know
the date he received the equipment. Id. at 13. Mr. Santos was unable to produce the DME when
ordered to by the court, even though they were allegedly in the possession of his son. Id at 21-
22.
Mr. Santos' credibility was damaged by the fact that another person posed as Mr. Santos
and gave a statement to Ms. Mathis-Bush. Mr. Santos indicated that he did not give a statement
to someone after the accident. Td. at 27. Mr. Santos admitted that the first time he met Ms.
Mathis-Bush was at the arbitration hearing. Id. at 29·30.
Besides Mr. Santos' inaccurate descriptions and Mr. Bonn's incredible assertions that Mr.
Santos received all of the equipment billed for, there was very little corroborating evidence.
Although there was a work order with a signature purportedly from Mr. Santos, this Court does
not find it persuasive. Mr. Santos admitted lo signing papers he did not understand. Id. at 27.
Additionally, there was evidence that another individual had posed as Mr. Santos. There was
nothing in Dr. Singer's notes that indicated that any DME had been discussed with Mr. Santos.
Id. at 57. Finally, although Freedom Medical presented pictures ofDME, there was no credible
evidence supporting that the equipment in the photos was ever provided to Mr. Santos.
18
Accordingly, the weight of the evidence supported the conclusion that Mr. Santos did not receive
the DME. These claims are meritless.
Freedom Medical next alleges that "[t]he trial court erred in finding that the DME was
not reasonable and necessary because Allstate failed to have a peer review performed." Freedom
Medical is mistaken. This Court did not conclude that the DME was not reasonable and
necessary. This Court found that Mr. Santos did not receive the DME. Accordingly, no finding
as to the reasonableness or necessity of the equipment was required.
Freedom Medical claims that "[tjhe Trial Court erred in failing to find that Allstate's
failure to pay Freedom Medical's medical bills was unreasonable. The Trial Court should have
found that Allstate was liable for damages under § 17 I 6 and 1798 of the Pennsylvania Financial
Responsibility Motor Vehicle Act, including interest at 12% of the bills of $373.56 from
December 15, 2011 to the present. This amount is $3.73 per month, for a total of $138.21 in
interest as of the end of trial."
Benefits are overdue if not paid within 30 days after the insurer receives reasonable proof
of the amount of the benefits. 75 Pa.C.S. § 1716. Freedom Medical did not establish that it
provided DME to Mr. Santos; and thus, did not provide reasonable proof of the amount of
benefits. Therefore, Allstate was under no obligation to pay Freedom Medical.
Freedom Medical makes multiple allegations of error complaining of Allstate's handling
of its investigation and denial of the claim. Freedom Medical alleges that:
a. The Trial Court erred by failing to find that Allstate violated the
Unfair Insurance Practices Act ("UJPA"), 40 Pa. C.S.A. §1171.J
and Unfair Claims Settlement Practices Regulations ("UCSPA"),
3 t Pa. C. §146·6, 146.7 by not completing its investigation within
a reasonable time and by not properly advising Freedom Medical
of the results of the investigation.
b. The Trial Court erred in failing to find that the conduct of Allstate
was wanton because its statement to Freedom Medical on April 29,
19
2013 that Santos had not received the DME was misleading and an
outright falsehood. Further, Allstate refused to respond to Freedom
Medical's request for a copy of the statement of Santos. Allstate's
goal has been to make it as costly as possible for medical providers
such as Freedom Medical to pursue meritorious claims by making
misleading statements, filing repeated appeals, and presenting
frivolous defenses that were never communicated to Freedom
Medical Prior to suit.
c. The Trial Court erred in failing to find that the failure of Allstate to
pay Freedom Medical's invoice is conduct which is wanton,
subjecting Allstate to treble damages pursuant 75 Pa. S.C.A.
Section l 797(b )(4), as AJlstate had no basis not to pay for the
DME, conducted an incomplete investigation, failed to apprise
Freedom Medical and Santos of the status of its investigation as
required by the UIP A, and made false and misleading statements
that the DME had not been received by Santos. Olsofsky, v.
Progressive Ins. Co., F, 480 fn. 3 (Lack. Cty., 2001), 2001 Pa. Dist.
& Cnty Dec. LEXIS 418. See also, 75 Pa. C.S. § 1797(b )( 1 ), for the
purpose of PRO.
Initially, this Court notes that the Unfair lnsurance Practices Act states "[alny oftbe
following acts if committed or performed with such frequency as to indicate a business practice
shall constitute unfair claim settlement or compromise practices." 40 Pa.C.S.A. § 1171.S(a)(IO)
(emphasis added).. Freedom Medical has not alleged that the complained of actions by Allstate
have been committed with such frequency as to constitute a business practice. This claim is
meritless.
"Every insurer shall complete investigation of a claim within 30 days after notification of
claim, unless the investigation cannot reasonably be completed within the time. If the
investigation cannot be completed within 30 days, and every 45 days thereafter, the insurer shall
provide the claimant with a reasonable written explanation for the delay and state when a
decision on the claim may be expected." 31 Pa. Code§ 146.6. "[Ijf the investigation remains
incomplete, the insurer shall, 30 days from the date of the initial notification and every 45 days
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thereafter, send to the claimant a letter setting forth the reasons additional time is needed for
investigation and state when a decision on the claim may be expected." 31 Pa. Code§ 146.7.
On November 12, 2011, Freedom Medical submitted an invoice to Allstate. N.T.
l/12/2015 at 24. On November 29, 2011, Freedom Medical received a Jetter from AJlstate
denying reimbursement because the claim was under investigation. Id at 36-37. On April 29,
2013, Allstate sent a letter to Freedom Medical indicating payment was denied. Allstate
explained that Mr. Santos was unable to confirm receipt of the DME from the prescribing doctor.
Id. at 43. Although Allstate notified Freedom Medical that it was investigating the claim within
thirty days of initial notification of the claim, it failed to provide updates to Freedom Medical
thereafter.
"Delay is a relevant factor in determining whether bad faith has occurred, but a long
period of time between demand and settlement does not, on its own, necessarily constitute bad
faith .... [J)f delay is attributable to the need to investigate further or even to simple negligence,
no bad faith has occurred." Rowe v. Nationwide Ins. Co., 6 F. Supp. 3d 621, 634 (W.D. Pa. 2014)
(quoting Kosierowski v. Allstate Ins. Co., 51 F.Supp.2d 583, 588-89 (E.D. Pa. 1999) ajf'd, 234
F.3d 1265 {3d Cir. 2000) (holding that the insurer's failure to send letters every forty-five days
explaining why the claim had not yet been evaluated did not create a material issue of fact
regarding bad faith)).
Here, Allstate was in regular communication with Mr. Santos and his attorney during the
investigation. Freedom Medical was aware that Allstate was completing its investigation.
Freedom Medical has not demonstrated that it was prejudiced by Allstate's failure to send
regular updates. Although, Allstate was negligent in failing to inform Freedom Medical of the
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progress of the investigation in the precise manner mandated by the regulations, such negligence
does not constitute bad faith in this case.
Freedom Medical asserts that this Court erred in failing to find that Allstate's conduct
was wanton and failing to award damages for such conduct. "A provider of medical treatment or
rehabilitative services or merchandise or an insured may challenge before a court an insurer's
refusal to pay for past or future medical treatment or rehabilitative services or merchandise, the
reasonableness or necessity of which the insurer has not challenged before a PRO. Conduct
considered to be wanton shall be subject to a payment of treble damages to the injured party." 75
Pa.C.S. § 1797( 4). As this Court has discussed supra, Allstate was justified in denying
reimbursement because Mr. Santos could not establish receipt of the DME. Allstate was under no
obligation to undergo the peer review process or pay Freedom Medical's bill. Allstate acted in a
reasonable manner investigating the claim. Allstate clearly did not act in a wanton manner in
denying a meritless claim. Morrison v. Mountain Laurel Assurance Co., 748 A.2d 689, 691 {Pa.
Super. 2000) (noting where a plaintiff cannot demonstrate that denial of coverage was
unreasonable. bad faith cannot be established).
Post-Trial Matters
Finally, Freedom Medical submits multiple claims of error alleging this Court erred in
denying attorney's fees:
a. The Trial Court erred in failing to award reasonable counsel fees to
Freedom Medical pursuant to 75 Pa. C.S.A. § 1716, 1797 and I 798.
Courts have made significant awards for legal fees on similar
cases. Herd Chiropractic Clinic, P.C. v. State Farm Mutual Auto.
Ins. Co., 29 A.3d 19 (Pa. Super. 2011) rev'd on other grounds 64
A.3d 1058 (Pa. 2013) (allowing legal fees of $27,04 7 .50), Levine.
supra (awarding $27,930.00 in legal fees).
b. The Trial Court erred in failing to find that the hourly rate of Dean
E. Weisgold, Esquire, in the amount of $350.00 per hour is
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consistent with other practitioners with his level of experience (26
years) in this jurisdiction."
c. The Trial Court erred in failing to find that the legal fees and costs
submitted by Freedom Medical ($27,079. l 0), were fair and
reasonable and necessarily incurred in connection with this
litigation, which began at the Philadelphia Municipal Court level in
2013. continued through arbitration and then concluded at a two
day trial in 2015. See Exhibit P-9, and updated invoice.
Counsel for Freedom Medical argues that the foJlowing sections entitle him to attorney
fees. "ln the event the insurer is found to have acted in an unreasonable manner in refusing to
pay the benefits when due, the insurer shall pay, in addition to the benefits owed and the interest
thereon, a reasonable attorney fee based upon actual time expended." 75 Pa.C.S. § 1716
(emphasis added) .. "If, pursuant to paragraph (4), a court determines that medical treatment or
rehabilitative services or merchandise were medically necessary, the insurer must pay to the
provider the outstanding amount plus interest at 12%, as well as the costs of the challenge and all
attorney fees." 75 Pa.C.S. § 1797(6). "In the event an insurer is found to have acted with no
reasonable foundation in refusing to pay the benefits enumerated in subsection (a) when due, the
insurer shall pay, in addition to the benefits owed and the interest thereon, a reasonable attorney
fee based upon actual time expended." 75 Pa.C.S. § 1798(b).
However, counsel for Freedom Medical ignores that "[i]f it is determined by a PRO or
court that a provider has provided unnecessary medical treatment or rehabilitative services or
merchandise or that future provision of such treatment, services or merchandise will be
unnecessary, or both, the provider may not collect payment for the medically unnecessary
treatment, services or merchandise." 75 Pa.C.S. § 1797(7) (emphasis added). The default rule in
Pennsylvania is that litigants bear responsibility for their own attorneys' fees in the absence of
express statutory authorization for fee awards, contractual fee-shifting, or some other recognized
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exception. Herd Chiropractic Clinic. P.C. v. State Farm Mui. Auto. Ins. Co., 64 AJd 1058,
1062-63 (Pa. 2013) (citation omitted).
Freedom Medical did not establish that it provided DME to Mr. Santos. Freedom Medical
did not provide any merchandise to Mr. Santos, regardless of whether it was medically necessary
or not. Thus, Allstate acted in a reasonable manner in denying its claim for reimbursement.
Accordingly, counsel for Freedom Medical was not entitled to any attorney fees.
Finally, this Court notes that paragraphs 14, 15, 17, 18, 19, and 20 of Freedom Medical's
Concise Statement of Matters Complained of on Appeal do not allege any aJlegations of error.
This Court will not address them.
I. CONCl ..USION
For the foregoing reasons, the decision of this Court, granting judgment in favor of the
Defendant, Allstate, and against Plaintiff, Freedom Medical, should be aff d.
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