HomeMy WebLinkAbout05-3844ANNIE A. KROL-KNIGHT,
V.
: IN THE COURT OF COMMON PLEAS
Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA
PEERLESS INSURANCE, a member of
LIBERTY MUTUAL GROUP,
Defendant
NO. ?d0L LC-7- .?
CIVIL ACTION - LAW
JURY TRIAL DEMANDED
NOTICE
YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the
following pages, you must take action within twenty (20) days after this Complaint and Notice
are served, by entering a written appearance personally or by attorney and filing in writing with
the Court your defenses or objections to the claims set forth against you. You are warned that if
you fail to do so the case may proceed without you and a judgment maybe entered against you
by the Court without further notice for any money claimed in the Complaint or for any other
claim or relief requested by the Plaintiff. You may lose money or property or other rights
important to you.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT
HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS
OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER.
IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO
PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL
SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE.
CUMBERLAND COUNTY BAR ASSOCIATION
32 South Bedford Street
Carlisle, PA 17013
(800) 990-9108
ANNIE A. KROL-KNIGHT,
V.
: IN THE COURT OF COMMON PLEAS
Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA
PEERLESS INSURANCE, a member of
LIBERTY MUTUAL GROUP,
Defendant
NO.
CIVIL ACTION - LAW
JURY TRIAL DEMANDED
AV1SO
USTED HA SIDO DEMANDADO/A EN CORTE. Si usted desea defenderse de las demandas
quo se presentan mas adelante on las siguientes paginas, debe tomar acci6n dentro de los
pr6ximos veinte (20) dias despu6s de la notificaci6n de esta Demanda y Aviso radicando
personalmente o por medio de un abogado una comparecencia escrita y radicando en la Corte por
escrito sus defensas de, y objecciones a, las demandas presentadas aqui en contra suya. Se le
advierte de que si usted falla de tomar accion como se describe anteriormente, el caso puede
proceder sin usted y un fallo por cualquier suma de dinero reclamada en la demanda o cualquier
otra reclamaci6n o remedio solicitado por el demandante puede ser dictado en contra suya por la
Corte sin mas aviso adicional. Usted puede perder dinero o propiedad u otros derechos
importantes para usted.
USTED DEBE LLEVAR ESTE DOCUMENTO A SU ABOGADO INMEDIATAMENTE. SI
USTED NO TIENE UN ABOGADO, LLAME O VAYA A LA SIGUIENTE OFICINA. ESTA
OFICINA PUEDE PROVEERLE INFORMACION A CERCA DE COMO CONSEGUIR UN
ABOGADO.
SI USTED NO PUEDE PAGAR POR LOS SERVICIOS DE UN ABOGADO, ES POSIBLE
QUE ESTA OFICINA LE PUEDA PROVEER INFORMACION SOBRE AGENCIAS QUE
OFREZCAN SERVICIOS LEGALES SIN CARGO O BAJO COSTO A PERSONAS QUE
CUALIFICAN.
CUMBERLAND COUNTY BAR ASSOCIATION
32 South Bedford Street
Carlisle, PA 17013
(800) 990-9108
ANNIE A. KROL-KNIGHT, IN THE COURT OF COMMON PLEAS
Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA
V.
: NO. OS -3Py? [fir,UL
PEERLESS INSURANCE, a member of
LIBERTY MUTUAL GROUP, CIVIL ACTION -LAW
Defendant JURY TRIAL DEMANDED
COMPLAINT
Plaintiff, Annie A. Krol-Knight is an adult residing at 71 Sherwood Street, Enola,
Cumberland County, Pennsylvania.
Defendant Peerless Insurance, a member of Liberty Mutual Group, (hereinafter
"Peerless") is an insurance company licensed to transact business in Pennsylvania with offices at
100 Corporate Center Drive, Camp Hill, Cumberland County, Pennsylvania.
3. Defendant Peerless regularly conducts business in Cumberland County.
4. On or about August 11, 2003, Plaintiff Annie A. Krol-Knight was involved in a
motor vehicle accident in which she sustained personal injuries.
On or about August 11, 2003, Plaintiff Annie A. Krol-Knight was insured through
a policy of automobile insurance issued to her by Defendant Peerless under Policy No.
PLPM554021, attached hereto as Exhibit "A."
The applicable automobile policy provided $100,000.00 in first-party medical
benefits in accordance with the requirements of the Pennsylvania Motor Vehicle Financial
Responsibility Law, 75 Pa.C.S.A. §1711, as amended. See Exhibit "A"
7. As a direct and proximate result of the aforementioned accident, Plaintiff Annie
A. Krol-Knight sustained bodily injuries to her back and neck.
As a further direct and proximate result of the aforementioned accident, Plaintiff
Annie A. Krol-Knight has undergone reasonable and necessary medical treatment from
Mahmood Nasir, M.D., of Sunbury, Northumberland County, Pennsylvania.
9. At various times, the aforementioned provider requested that Defendant pay for
treatment rendered to the Plaintiff as a result of the injuries she sustained in the August 11, 2003
automobile accident.
W. Under the terms of the applicable automobile insurance policy, Defendant
Peerless was obligated to provide medical expense benefits to the Plaintiff in accordance with the
provisions of the Motor Vehicle Financial Responsibility Law (hereinafter "MVFRL"), 75
Pa.C.S.A. §1701, et seq., for all reasonable and necessary medical treatment and rehabilitative
services.
11. The aforementioned automobile policy of insurance providing first-party benefits
coverage was effective and in full force at the time of the above-described accident on or about
August 11, 2003.
12. Pursuant to §§1712 and 1797(a) of the MVFRL, Defendant is obligated to pay for
all reasonable and necessary medical treatment and rehabilitation services rendered to the
Plaintiff for the aforementioned injuries.
13. Section 1797(b)(1) of the MVFRL authorizes an insurer such as Peerless to
contract with a peer review organization (hereinafter referred to as "PRO") solely for the
purposes of "confirming that such treatment, products, services, or accommodations conform to
the professional standards of performance and are medically necessary."
14. Section 1797(b) of the MVFRL only empowers a PRO retained by an insurer to
confirm that treatment conforms to professional standards and is medically necessary, but does
not authorize or enable a PRO contracted by an insurer to make a causation finding by
attempting to determine or conclude that medical treatment was not causally related to a
particular motor vehicle accident. Abazzio v. Nationwide Mutual, PIGS Case No. 96-7964
(C.C.P. Monroe Co. 10/24/96); Dysinger v. Penn Nat'l Ins., PICS Case No. 95-4832 (C.C.P.
Franklin Co. 10/9/95); Pierce v. State Farm Ins. Co., 94 Lackawanna J. 38 (1994); Pipchok V.
State Farm, No. 7811 of 1991 (CCP Allegheny Co. 3/20/92); Leone v. Sate Farm, No. 99 civ.
1992 (Cumberland Co. 10/15/92); Lutkowski v. State Farm Ins. Co., 96 Lacka. Jur. 4 (1995);
BoVp v. Allstate Ins. Co., No. 93 C.P. 1790, Kopriva, J., at p. 5 (Blair Co., February 2, 1994);
Scott v. Pa. Millers Mutual Ins. Co., No. 145-E of 1991, Lokuta, J., at p. 10 (Luzerne Co.,
October 14, 1992), pet`n for review denied, No. 27 M.D.E. 1993 (Pa. Super., June 8, 1993);
Knox v. Worldwide, 140 Pitts. Leg. J. 185, 187-8 (Allegheny Co. 1992); McKeen v. State Farm
Ins. Co., No. 90-SV-05089-01 (York Co., October 29, 1991); Porter v. Erie Ins. Co., No. AD
9630-1990 (Allegheny Co. 5/17/91); Schwartz v. State Farm, 1996 W.L. 189839 (E.D. Pa.
4/18/96) (Rendell, J.); Seeger v. Allstate, 776 F. Supp. 986 (M.D. Pa. 1991).
15. Auto insurers have acknowledged to the Superior Court of Pennsylvania that they
may be chargeable with bad faith if they deny payment for medical bills on the basis of a peer
review report which makes a causality determination and concludes that treatment was not
casually related to an automobile accident. State Farm Mut. Auto. Ins. Co. v. Veltri, 424 Pa.
Super. 612, 623 A.2d 849, 850 n.2 (1993).
16. In connection with Plaintiffs first-party medical expense benefits, Defendant
Peerless, pursuant to 75 Pa. C.S.A. §1797(b)(1), expressly and improperly contracted with a
PRO physician for the expressed purpose of confirming that treatment, products, services or
accommodations rendered by Mahmood Nasir, M.D. were causally related to the August 11,
2003 automobile accident.
17. The name and address of the aforementioned peer review physician contracted by
the Defendant is Jon Glass, M.D., 1015 Chestnut Street, Suite 313, Philadelphia, Pennsylvania
19107.
18. The PRO physician determined that Plaintiffs treatment with Dr. Nasir after
October 27, 2003 was not "reasonable and necessary as a sole and direct result of the August
11, 2003 automobile accident. See Exhibit "B" attached hereto and made a part hereof.
19. This determination was made on July 6, 2004, and it was mailed to the insurer in
accordance with 31 Pa. Code §69.53(d).
20. Neither 75 Pa.C.S.A. §1797(b)(1) nor the court decisions interpreting that section
authorize or empower a PRO or insurance company to make such a causality determination by
attempting to opine that medical treatment is not causally related to a particular motor vehicle
accident.
21. At all times material hereto, Peerless knew that it was not entitled to abuse the
peer review process by attempting to deny payment of medical bills based upon a causality
determination by a PRO physician.
22. Peerless knew or recklessly disregarded its lack of a reasonable legal basis when
it denied benefits due to the Plaintiff.
23. As of the date of this pleading, approximately $4,000.00 of reasonable and
necessary expenses for services rendered by the aforementioned medical providers remain
unpaid by Defendant Peerless.
24. All medical bills at issue are fair and reasonable. Said treatment was medically
necessary. Said treatment conformed to professional standards of performance.
25. Defendant has denied and/or failed to pay, without a reasonable basis in law or in
fact, Plaintiff Annie A. Krol-Knight's reasonable and necessary bills for medical treatment from
October 27, 2003 to the present, despite the fact that all medical bills submitted to Defendant
have been accompanied by reasonable proof of loss.
COUNT I-BREACH OF CONTRACT
26. Plaintiff hereby incorporates by reference all of the averments contained in
paragraphs 1 through 25, inclusive, as if same were set forth at length herein.
27. Under § 1712(1) of the MVFRL, the Defendant is obligated to pay for all
reasonable and necessary medical treatments and rehabilitation services received by the Plaintiff
for her foregoing injuries.
28. Pursuant to § 1716 of the MVFRL, if any such healthcare costs are not paid within
thirty (30) days after the Defendant receives reasonable proof of the amount of such costs, the
Defendant is obligated to pay 12% interest per annum on such unpaid healthcare expenses.
29. The Defendant has not paid for the Plaintiffs reasonable and necessary medical
treatment and rehabilitative services within thirty (30) days of the date that Defendant received
reasonable proof of the amount of such expenses.
30. The Defendant has acted in an unreasonable manner in refusing to pay said
healthcare costs, thereby entitling the Plaintiff to an award of reasonable counsel fees and
expenses against the Defendant.
31. The aforementioned conduct on the part of the Defendant is in violation of the
foregoing provisions of the MVFRL and is in breach of the terms and conditions of the
aforementioned automobile insurance policy.
WHEREFORE, Plaintiff demands judgment against Defendant for an amount not in
excess of Thirty-Five Thousand Dollars ($35,000.00) plus interest, costs, attorneys fees, delay
damages, and other relief this Court may deem appropriate.
COUNT II-BAD FAITH LIABILITY UNDER 42 PA.C.S.A. 48371
32. Plaintiff hereby incorporates by reference his Complaint as set forth in paragraphs
1 through 31, inclusive, as though same were set forth at length herein.
33. On or about February 7, 1990, the Governor of Pennsylvania signed into law 42
Pa.C.S.A. §8371, effective July 1, 1990, entitled "Actions on Insurance Policies", which provides
a private cause of action for bad faith against insurance companies.
34. The foregoing conduct and actions of the Defendant constitute bad faith on the
part of the Defendant towards the Plaintiff by:
(a) refusing to pay for the Plaintiffs healthcare expenses by allegedly relying
upon a peer review report which improperly recommended denial of
payment by opining that the treatment reviewed was not sole and direct
result of the automobile accident;
(b) ostensibly relying upon a peer review report which improperly attempted
to make a causation determination;
(c) blatantly refusing to comply with the mandate of 31 Pa. Code §69.52(b)
by not paying for the treatment recommended by Plaintiffs treating
healthcare provider;
(d) intentionally retaining a biased PRO physician in an effort to manufacture
a basis upon which to seek to avoid Peerless's contractual obligation to
provide medical expense benefits to Plaintiff;
(e) failing to exercise good faith in considering the interests of Plaintiff by
promptly paying Plaintiffs claim after receiving reasonable proof of the
amount of such loss;
(f) failing and/or refusing to pay the full amount of Plaintiffs expenses and
benefits without a reasonable foundation to do so;
(g) wrongfully refusing to pay for Plaintiffs medical treatment, thereby
jeopardizing Plaintiffs continuous course of treatment and care for her
injuries;
(h) compelling the Plaintiff to institute this litigation to recover those benefits
rightfully due her by repeatedly failing and/or refusing to pay such
benefits;
(i) repeatedly violating and ignoring the duty imposed upon the Defendant by
virtue of the provisions of the MVFRL and the foregoing insurance policy;
0) failing to exercise the utmost good faith in the discharge of its duty to the
Plaintiff;
(k) engaging in unfair claims settlement and insurance practices in violation
of its common law and statutory obligations; and
(1) expressly retaining a PRO physician to make a decision based on
causation.
35. As a result of the bad faith conduct and actions of the Defendant, the Plaintiff is
entitled to recover in addition to her claim for first-party benefits, separate recovery and awards
for: (a) additional interest on the amount of her claim in an amount equal to the Prime Rate of
interest plus 3% from the date that payment was due and owing by the Defendant; (b) punitive
9
damages against the Defendant; (c) reasonable counsel fees and court costs incurred by the
Plaintiff in prosecuting this action. 42 Pa. C.S. §8371.
36. It is believed, and therefore averred, that the Defendant has contracted with said
peer review physician in bad faith and that said peer review physician performs a substantial
amount of peer review work for Defendant, and therefore, has a significant motive for pecuniary
gain in providing Defendant with a biased peer review report.
WHEREFORE, Plaintiff demands judgment against Defendant for an amount not in
excess of Thirty-Five Thousand Dollars (535,000.00) plus interest, costs, attorneys fees, delay
damages, and other relief this Court may deem appropriate.
Dated: Id
By:
Respectfully submitted,
CALDWELL & KEARNS
r McGuire, Esquire
ey I.D. No. 73617
1 North Front Street
Harrisburg, PA 17110
(717) 232-7661
Attorney for Plaintiff, Annie A. Krol-Knight
0486182817
10
VERIFICATION
The undersigned, ANNIE A. KROL-KNIGHT, hereby verifies that the facts set forth in
the Complaint are true and correct to the best of her knowledge, information and belief and
further states that false statements herein are made subject to the penalties of 18 Pa.C.S. Section
4904 relating to unswom falsification to authorities.
ANNIE A. KROL-KNIGHT
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Peter J. Speaker, Esquire
Attorney 1. D. 42834
THOMAS, THOMAS & HAFER, LLP
305 North Front Street
P.O. Box 999
Harrisburg, PA 17108
(717) 255-7644
pspeaker@tthlaw.com
ANNIE A. KROL-KNIGHT,
ATTORNEY FOR DEFENDANT
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiff
v
PEERLESS INSURANCE, a member of
LIBERTY MUTUAL GROUP,
NO. 05-3844 CIVIL TERM
CIVIL ACTION - LAW
JURY TRIAL DEMANDED
Defendant
To: Prothonotary
Please enter the appearance of the undersigned as counsel of record for Peerless
Insurance, a member of Liberty Mutual Group, Defendant, in connection with the above
matter.
& HAFER, LLP
Weter" . eaTtR, Esquire
I. D 34
3 orth Front Street
.Box 999
Harrisburg, PA 17108
(717) 255-7644
Date: e -0j, pspeaker@tthi?iw.com
o
CERTIFICATE OF SERVICE
I, Peter J. Speaker, Esquire, of the law firm of Thomas, Thomas & Hafer, LLP,
attorney for Defendant, hereby certify that a true and correct copy of the foregoing
document was sent to the following counsel of record by placing a copy of same in the
United States mail, postage prepaid, at Harrisburg, Pennsylvania addressed as follows:
Jeffrey T. McGuire, Esquire
Caldwell & Kearns
3631 North Front Street
Harrisburg, PA 17110
& HAFER, LLP
aker, Esquire
PetefB
I.D. 305 ront Street
P. O 9
burg, PA 17108
Harris
(717) 255-7644
pspeaker@tthl;aw.cwm
Dated: '
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SHERIFF'S RETURN - REGULAR
CASE NO: 2005-03844 P
COMMONWEALTH OF PENNSYLVANIA:
COUNTY OF CUMBERLAND
KROL-KNIGHT ANNIE A
VS
PEERLESS INSURANCE
DAVID MCKINEY , Sheriff or Deputy Sheriff of
Cumberland County,Pennsylvania, who being duly sworn according to law,
says, the within NOTICE was served upon
PEERLESS INSURANCE
the
DEFENDANT , at 0016:15 HOURS, on the 5th day of August 2005
at 275 GRANDVIEW AVE SUITE 300
CAMP HILL, PA 17011 by handing to
BRENDA RADLE (TEAM LEADER)
a true and attested copy of NOTICE together with
COMPLAINT
and at the same time directing Her attention to the contents thereof.
Sheriff's Costs: So Answers:
Docketing 18.00
Service 12.80 -000
M,?/?? ?
Affidavit .00
Surcharge 10.00 R. Thomas Kline
nn
2 V .. V
Sworn and Subscribed to before
me this R0 day of
AU49--5-1? Obs A.D.
L
Pro tar
08/08/2005
CALDWELL & KEARNS
By: Deguty' Sh rif
0-
Jeffrey T. McGuire, Esquire
PA I.D. # 73617
Caldwell & Kearns, P.C.
3631 North Front Street
Harrisburg, PA 171 10-1533
(717) 232-7661
Fax: 717 232-2766 Attorney for Plaintiff
ANNIE A. KROL-KNIGHT, IN THE COURT OF COMMON PLEAS
Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA
V.
PEERLESS INSURANCE, a member of
LIBERTY MUTUAL GROUP,
Defendant
NO. 2005-3844 Civil Term
CIVIL ACTION - LAW
JURY TRIAL DEMANDED
NOTICE
YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the
following pages, you must take action within twenty (20) days after this Complaint and Notice
are served, by entering a written appearance personally or by attorney and filing in writing with
the Court your defenses or objections to the claims set forth against you. You are warned that if
you fail to do so the case may proceed without you and a judgment may be entered against you
by the Court without further notice for any money claimed in the Complaint or for any other
claim or relief requested by the Plaintiff. You may lose money or property or other rights
important to you.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOt J DO NOT
HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS
OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER.
IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO
PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL
SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE.
CUMBERLAND COUNTY BAR ASSOCIATION
32 South Bedford Street
Carlisle, PA 17013
(800) 990-9108
Jeffrey T. McGuire, Esquire
PA I.D. # 73617
Caldwell & Kearns, P.C.
3631 North Front Street
Harrisburg, PA 17110-1533
(717) 232-7661
Fax: (717) 232-2766 Attorney for Plaintiff
ANNIE A. KROL-KNIGHT, IN THE COURT OF COMMON PLEAS
Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA
V.
PEERLESS INSURANCE, a member of
LIBERTY MUTUAL GROUP,
Defendant
NO. 2005-3844 Civil Term
CIVIL ACTION - LAW
JURY TRIAL DEMANDED
AVISO
USTED HA SIDO DEMANDADO/A EN CORTE. Si usted desea defenderse de las demandas
que se presentan mas adelante on ]as siguientes paginas, debe tomar acci6n dentro de los
pr6ximos veinte (20) d]as despu6s de la notificaci6n de esta Demanda y Aviso radicando
personalmente o por medio de un abogado una comparecencia escrita y radicando en la Corte por
escrito sus defensas de, y objecciones a, las demandas presentadas aqui en contra suya. Se le
advierte de que si usted falla de tomar acci6n como se describe anteriormente, el caso puede
proceder sin usted y un fallo por cualquier suma de dinero reclamada on la demanda o cualquier
otra reclamaci6n o remedio solicitado por el demandante puede ser dictado on contra suya por la
Corte sin mas aviso adicional. Usted puede perder dinero o propiedad u otros derechos
importantes para usted.
USTED DEBE LLEVAR ESTE DOCUMENTO A SU ABOGADO INMEDIATAMENTE. SI
USTED NO TIENE UN ABOGADO, LLAME O VAYA A LA SIGUIENTE OFICINA. ESTA
OFICINA PUEDE PROVEERLE INFORMACION A CERCA DE COMO CONSEGUIR UN
ABOGADO.
St USTED NO PUEDE PAGAR POR LOS SERVICIOS DE UN ABOGADO, ES POSIBLE
QUE ESTA OFICINA LE PUEDA PROVEER INFORMACION SOBRE AGENCIAS QUE
OFREZCAN SERVICIOS LEGALES SIN CARGO O BAJO COSTO A PERSONAS QUE
CUALIFICAN.
CUMBERLAND COUNTY BAR ASSOCIATION
32 South Bedford Street
Carlisle, PA 17013
(800) 440-4108
Jeffrey T. McGuire, Esquire
PA I.D. # 73617
Caldwell & Kearns, P.C.
3631 North Front Street
Harrisburg, PA 17110-1533
(717) 232-7661
Fax: (717) 232-2766 Attorney for Plaintiff
ANNIE A, KROL-KNIGHT, IN THE COURT OF COMMON PLEAS
Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA
V.
NO. 2005-3844 Civil Term
PEERLESS INSURANCE, a member of
LIBERTY MUTUAL GROUP, CIVIL ACTION -LAW
Defendant JURY TRIAL DEMANDED
AMENDED COMPLAINT
Plaintiff, Annie A. Krol-Knight is an adult residing at 71 Sherwood Street, Enola,
Cumberland County, Pennsylvania.
2. Defendant Peerless insurance, a member of Liberty Mutual Group, (hereinafter
"Peerless") is an insurance company licensed to transact business in Pennsylvania with offices at
100 Corporate Center Drive, Camp Hill, Cumberland County, Pennsylvania.
3. Defendant Peerless regularly conducts business in Cumberland County.
4. On or about August 11, 2003, Plaintiff Annie A. Krol-Knight was involved in a
motor vehicle accident in which she sustained personal injuries.
On or about August 11, 2003, Plaintiff Annie A. Krol-Knight was insured through
a policy of automobile insurance issued to her by Defendant Peerless under Policy No.
PLPM554021.
6. The applicable automobile policy provided $100,000.00 in first-party medical
benefits in accordance with the requirements of the Pennsylvania Motor Vehicle Financial
Responsibility Law, 75 Pa.C.S.A. §1711, as amended.
As a direct and proximate result of the aforementioned accident, Plaintiff Annie
A. Krol-Knight sustained bodily injuries to her back and neck.
As a further direct and proximate result of the aforementioned accident, Plaintiff
Annie A. Krol-Knight has undergone reasonable and necessary medical treatment from
Mahmood Nasir, M.D., of Sunbury, Northumberland County, Pennsylvania.
At various times, the aforementioned provider requested that Defendant pay for
treatment rendered to the Plaintiff as a result of the injuries she sustained in the August 11, 2003
automobile accident.
10. Under the terms of the applicable automobile insurance policy, Defendant
Peerless was obligated to provide medical expense benefits to the Plaintiff in accordance with the
provisions of the Motor Vehicle Financial Responsibility Law (hereinafter "MVFRL"), 75
Pa.C.S.A. § 1701, et seq., for all reasonable and necessary medical treatment and rehabilitative
services.
11. The aforementioned automobile policy of insurance providing first-party benefits
coverage was effective and in full force at the time of the above-described accident on or about
August 11, 2003.
12. Pursuant to §§1712 and 1797(a) of the MVFRL, Defendant is obligated to pay for
all reasonable and necessary medical treatment and rehabilitation services rendered to the
Plaintiff for the aforementioned injuries.
13. Section 1797(b)(1) of the MVFRL authorizes an insurer such as Peerless to
contract with a peer review organization (hereinafter referred to as "PRO") solely for the
purposes of "confirming that such treatment, products, services, or accommodations conform to
the professional standards of performance and are medically necessary."
2
14. Section 1797(b) of the MVFRL only empowers a PRO retained by an insurer to
confirm that treatment conforms to professional standards and is medically necessary, but does
not authorize or enable a PRO contracted by an insurer to make a causation finding by
attempting to determine or conclude that medical treatment was not causally related to a
particular motor vehicle accident. Abazzio v. Nationwide Mutual, PICS Case No. 96-7964
(C.C.P. Monroe Co. 10/24/96); Dysinger v. Penn Nat'l Ins., PICS Case No. 95-4832 (C.C.P.
Franklin Co. 10/9/95); Pierce v. State Farm Ins. Co., 94 Lackawanna J. 38 (1994); Pinchok v.
State Farm, No. 7811 of 1991 (CCP Allegheny Co. 3/20/92); Leone v. Sate Farm, No. 99 civ.
1992 (Cumberland Co. 10/15/92); Lutkowski v. State Farm Ins. Co., 96 Lacka. Jur. 4 (1995);
Bopn v. Allstate Ins. Co., No. 93 C.P. 1790, Kopriva, J., at p. 5 (Blair Co., February 2, 1994);
Scott v. Pa. Millers Mutual Ins. Co., No. 145-E of 1991, Lokuta, J., at p. 10 (Luzeme Co.,
October 14, 1992), pet'n for review denied, No. 27 M.D.E. 1993 (Pa. Super., June 8, 1993);
Knox v. Worldwide, 140 Pitts. Leg. J. 185, 187-8 (Allegheny Co. 1992); McKeen v. State Farm
Ins. Co., No. 90-SV-05089-01 (York Co., October 29, 1991); Porter v. Erie Ins. Co., No. AD
9630-1990 (Allegheny Co. 5/17/91); Schwartz v. State Farm, 1996 W.L. 189839 (E.D. Pa.
4/18/96) (Rendell, J.); Seeger v. Allstate, 776 F. Supp. 986 (M.D. Pa. 1991).
15. Auto insurers have acknowledged to the Superior Court of Pennsylvania that they
may be chargeable with bad faith if they deny payment for medical bills on the basis of a peer
review report which makes a causality determination and concludes that treatment was not
casually related to an automobile accident. State Farm Mut. Auto. Ins. Co. v. Veltri, 424 Pa.
Super. 612, 623 A.2d 849, 850 n.2 (1993).
16. In connection with Plaintiffs first-party medical expense benefits, Defendant
Peerless, pursuant to 75 Pa. C.S.A. §I797(b)(1), expressly and improperly contracted with a
3
PRO physician for the expressed purpose of confirming that treatment, products, services or
accommodations rendered by Mahmood Nasir, M.D. were causally related to the August 11,
2003 automobile accident.
17. The name and address of the aforementioned peer review physician contracted by
the Defendant is Jon Glass, M.D., 1015 Chestnut Street, Suite 313, Philadelphia, Pennsylvania
19107.
t8. The PRO physician determined that Plaintiffs treatment with Dr. Nasir after
October 27, 2003, was not "reasonable and necessary as a sole and direct result of the August
11, 2003 automobile accident. See Exhibit "A" attached hereto and made a part hereof.
19. This determination was made on July 6, 2004, and it was mailed to the insurer in
accordance with 31 Pa. Code §69.53(d).
20. Neither 75 Pa.C.S.A. §1797(b)(1) nor the court decisions interpreting that section
authorize or empower a PRO or insurance company to make such a causality determination by
attempting to opine that medical treatment is not causally related to a particular motor vehicle
accident.
21. At all times material hereto, Peerless knew that it was not entitled to abuse the
peer review process by attempting to deny payment of medical bills based upon a causality
determination by a PRO physician.
22. Peerless knew or recklessly disregarded its lack of a reasonable legal basis when
it denied benefits due to the Plaintiff.
23. As of the date of this pleading, approximately $4,000.00 of reasonable and
necessary expenses for services rendered by the aforementioned medical providers remain
unpaid by Defendant Peerless.
4
24. All medical bills at issue are fair and reasonable. Said treatment was medically
necessary. Said treatment conformed to professional standards of performance.
25. Defendant has denied and/or failed to pay, without a reasonable basis in law or in
fact, Plaintiff Annie A. Krol-Knight's reasonable and necessary bills for medical treatment from
October 27, 2003 to the present, despite the fact that all medical bills submitted to Defendant
have been accompanied by reasonable proof of loss.
COUNT 1-BREACH OF CONTRACT
26. Plaintiff hereby incorporates by reference all of the averments contained in
paragraphs 1 through 25, inclusive, as if same were set forth at length herein.
27. Under §1712(1) of the MVFRL, the Defendant is obligated to pay for all
reasonable and necessary medical treatments and rehabilitation services received by the Plaintiff
for her foregoing injuries.
28. Pursuant to §1716 of the MVFRL, if any such healthcare costs are not paid within
thirty (30) days after the Defendant receives reasonable proof of the amount of such costs, the
Defendant is obligated to pay 12% interest per annum on such unpaid healthcare expenses.
29. The Defendant has not paid for the Plaintiffs reasonable and necessary medical
treatment and rehabilitative services within thirty (30) days of the date that Defendant received
reasonable proof of the amount of such expenses.
30. The Defendant has acted in an unreasonable manner in refusing to pay said
healthcare costs, thereby entitling the Plaintiff to an award of reasonable counsel fees and
expenses against the Defendant.
31. The aforementioned conduct on the part of the Defendant is in violation of the
foregoing provisions of the MVFRL and is in breach of the terms and conditions of the
aforementioned automobile insurance policy.
WHEREFORE, Plaintiff demands judgment against Defendant for an amount not in
excess of Thirty-Five Thousand Dollars ($35,000.00) plus interest, costs, attorneys fees, delay
damages, and other relief this Court may deem appropriate.
COUNT II-BAD FAITH LIABILITY UNDER 42 PA.C.S.A. $8371
32. Plaintiff hereby incorporates by reference his Complaint as set forth in paragraphs
1 through 31, inclusive, as though same were set forth at length herein.
33. On or about February 7, 1990, the Governor of Pennsylvania signed into law 42
Pa.C.S.A. §8371, effective July 1, 1990, entitled "Actions on Insurance Policies", which provides
a private cause of action for bad faith against insurance companies.
34. The foregoing conduct and actions of the Defendant constitute bad faith on the
part of the Defendant towards the Plaintiff by:
(a) refusing to pay for the Plaintiffs healthcare expenses by allegedly relying
upon a peer review report which improperly recommended denial of
payment by opining that the treatment reviewed was not sole and direct
result of the automobile accident;
(b) ostensibly relying upon a peer review report which improperly attempted
to make a causation determination;
(c) blatantly refusing to comply with the mandate of 31 Pa. Code §69.52(b)
by not paying for the treatment recommended by Plaintiffs treating
healthcare provider;
6
(d) intentionally retaining a biased PRO physician in an effort to manufacture
a basis upon which to seek to avoid Peerless's contractual obligation to
provide medical expense benefits to Plaintiff,
(e) failing to exercise good faith in considering the interests of Plaintiff by
promptly paying Plaintiffs claim after receiving reasonable proof of the
amount of such loss;
(f) failing and/or refusing to pay the full amount of Plaintiffs expenses and
benefits without a reasonable foundation to do so;
(g) wrongfully refusing to pay for Plaintiffs medical treatment, thereby
jeopardizing Plaintiffs continuous course of treatment and care for her
injuries;
(h) compelling the Plaintiff to institute this litigation to recover those benefits
rightfully due her by repeatedly failing and/or refusing to pay such
benefits;
(i) repeatedly violating and ignoring the duty imposed upon the Defendant by
virtue of the provisions of the MVFRL and the foregoing insurance policy;
0) failing to exercise the utmost good faith in the discharge of its duty to the
Plaintiff;
(k) engaging in unfair claims settlement and insurance practices in violation
of its common law and statutory obligations; and
(1) expressly retaining a PRO physician to make a decision based on
causation.
35. As a result of the bad faith conduct and actions of the Defendant, the Plaintiff is
entitled to recover in addition to her claim for first-party benefits, separate recovery and awards
for: (a) additional interest on the amount of her claim in an amount equal to the Prime Rate of
interest plus 3% from the date that payment was due and owing by the Defendant; (b) punitive
damages against the Defendant; (c) reasonable counsel fees and court costs incurred by the
Plaintiff in prosecuting this action. 42 Pa. C.S. §8371.
36. It is believed, and therefore averred, that the Defendant has contracted with said
peer review physician in bad faith and that said peer review physician performs a substantial
amount of peer review work for Defendant, and therefore, has a significant motive for pecuniary
gain in providing Defendant with a biased peer review report.
WHEREFORE, Plaintiff demands judgment against Defendant for an amount not in
excess of Thirty-Five Thousand Dollars ($35,000.00) plus interest, costs, attorneys fees, delay
damages, and other relief this Court may deem appropriate.
Respectfully submitted,
& KEARNS
Dated: /05?
By: / ?-
?c T. McGuire, Esquire
)mey I.D. No. 73617
1 North Front Street
Harrisburg, PA 17110
(717) 232-7661
Attorney for Plaintiff, Annie A. Krol-Knight
0486/93578
Jon Glass, MD
Neurology • Neuro-oncology 1015 Chestnut Street, Suite 313
Philadelphia, PA 19107
Tel: (215) 923-5170
Fax: (215) 923-5180
July 6, 2004
Re: Krol-Knight, Annie
Date of injury: 8/11103
File #: 202135470
Awl
7'12 00
RECORDS REVIEWED:
1. Mahmood Nasir, MD
Office notes: 8/13/03, 9/10/03, 9/24/03, 10/27/03, 12/2/03, 2/3/04, 3/11/04, 4/7/04, 5112/04
2. HealthSouth Diagnostic Center
MRI report: 11112/03
3. Insurance information
Application for benefits: 8/16/03
HISTORY:
An MRI of the lumbar spine performed on 11/12/03 was interpreted as revealing disc degeneration a
protrusion T11-12, bulging annulus and a paracentral herniation at T12-1-1, moderate bulging annulus
and small left paracentral protrusion at 1_1-2 with interval resolution of the right paracentral disc herniation
since 2001, a moderate bulging annulus and small left lateral disc herniation at L3-4, and mild bulging
annuli L2-3, 4-5, and L5-S1.
An MRI of the cervical spine performed on 11121/03 was interpreted as revealing mild degenerative
changes and probable paramedial epidural hemorrhage vs. disc protrusion that was not compressive.
The first note from Dr. Nasir was a follow-up report dated 8/13/03. It was noted that Ms. Krol-Knight had
been in a motor vehicle accident on 8/11/03. It was noted that are previous cervical and lumbar pain had
been aggravated and were worse than ever. She was noted to be complaining of headaches.
Examination revealed irritable greater and lesser occipital nerves bilaterally with reproduction of
headaches, tenderness over the paravertebral area at C4-5 and C5-6 bilaterally, depressed right biceps
reflex, absent right ankle reflexes, positive straight leg raise testing bilaterally, cervicothoracic and lumbar
spasms, and limited cervical flexion. Dr. Nasir performed blocks bilaterally to the greater and lesser
occipital nerves, and performed cervical paravertebral nerve blocks. Neurontin 300 mg daily was
prescribed.
A follow-up office visit from 9/10/02 reveals complaints of post-traumatic headaches, neck pain and back
pain, with the back pain being worse. Examination revealed tender paravertebral areas and L3-4, L4-5,
and LS-S1 bilaterally. Lumbar paravertebral blocks were provided on that date.
A 9/24/03 note from Dr. Nasir revealed complaints of headaches and neck pain. Examination revealed
reproduction of headaches with palpation of the greater and lesser occipital nerves bilaterally, and tender
paravertebral areas of the 4-5 and C5-6. Dr. Nasir performed blocks bilaterally to the greater and lesser
occipital nerves, and performed cervical paravertebral nerve blocks.
The next notes from Dr. Nasir was dated 10/27/03. There were complaints of post-traumatic headaches,
neck pain, and back pain. It noted that her pain had worsened since the motor vehicle accident.
Examination revealed tender paravertebral areas at L3-4, L4-5, and L5-S1 bilaterally. Lumbar
Re: Krol-Knight, Annie
paravertebral blocks were provided on that date.
July 6, 2004
Page 2
A follow-up report from Dr. Nasir dated 12/2/03 revealed complaints of continued lumbar pain and pain in
the cervical region. Lumbar paravertebral blocks were provided on that date.
The next note from Dr. Nasir was dated 2/3/04, at which time there were continued complaints of pain in
the lumbar spine with headaches and neck pain. Examination revealed tender paravertebral areas at L3-
4, 1-4-5, and L5-S1 bilaterally. Lumbar paravertebral blocks were provided on that date.
A 3/11/04 note from Dr. Nasir reveals complaints of back pain that was documented as unbearable.
Examination revealed tender paravertebral areas at L3-4 and L4-5, and L5-S1 spasms, guarding, and
positive straight leg raise testing, Lumbar paravertebral blocks were provided on that date.
A 4/7/04 office note from Dr. Nasir revealed complaints of post-traumatic headaches, neck pain, and
back pain with the back pain being worse. She was noted to have spasms in the lumbar region.
Examination revealed spasm and guarding in the lumbar region and tender paravertebral areas at L3-4,
1-4-5, and L5-S1 bilaterally. Lumbar paravertebral blocks were provided on that date.
The last note from Dr. Nasir was dated 5/12/04. There were complaints of ongoing neck pain and low
back pain. Examination revealed tender paravertebral areas at C4 to C5-6 bilaterally and tender greater
and lesser occipital nerves bilaterally with reproduction of headaches on palpation. Dr. Nasir performed
blocks bilaterally to the greater and lesser occipital nerves, and performed cervical paravertebral nerve
blocks.
CONCLUSIONS:
Based on the documentation provided, it is my opinion that care provided by Dr. Nasir through 10/27/03
was reasonable and necessary as a sole and direct result of injuries sustained in the 8/11/03 motor
vehicle accident, Any subsequent treatment would not be considered reasonable or necessary.
Ms. Krol-Knight was being followed by Dr. Nasir for ongoing headaches and neck and back pain prior to
the 6/11/03 motor vehicle accident, According to Dr. Nasir, her symptoms worsened after the accident.
There was documentation of persistent worsened symptoms through 10/27/03. While Dr. Nasir did not
document when the patient returned to baseline, by 12/2/03 (and subsequently) there was no
documentation that her pain was worse than baseline as it had been previously.
Dr. Nasir never rendered a diagnosis in any of his office notes. However, the documentation provided
suggests acute superimposed on chronic cervical and lumbosacral sprain/strain injuries. The timeframe
for return to baseline and to achieve maximum medical improvement would be approximately three
months. Maximum medical improvement would therefore have been achieved subsequent to the
10/27/03 office visit and prior to the 12/2/03 office visit, and would have occurred around 11/11/03.
There was no documentation of any persistence of worsened pain subsequent to 10/27/03 to indicate
that treatment subsequent to that date was reasonable and necessary for injuries sustained on 8/11/03.
No additional care would be considered reasonable and necessary as a sole and direct result of the
8/11/0 motor vehicle accident subsequent to 10/27/03.
Jon Glass, MD
Re: Krol-Knight,,-Annie
References:
July 6, 2004
Page 3
1. Aronoff GM. Evaluation and Treatment of Chronic Pain. Baltimore, Williams & Wilkins, 1992. p.
366.
2. Adams R, Victor M. Principles of Neurology, 4th Edition. McGraw Hill, 1994. pp 317, 1068
Dictated: 7/2/04
Transcribed: 7/6/04
CERTIFICATE OF SERVICE
AND NOW, this A day of October 2005, I hereby certify that I have served a
copy of the within document on the following by depositing a true and correct copy of the same
in the U.S. Mail at Harrisburg, Pennsylvania, postage prepaid, addressed to:
Jefferson J. Shipman, Esquire
Johnson, Duffie, Stewart & Weidner
301 Market Street
P. O. box 109
Lemoyne, PA 17043-0109
CALDWELL & KEARNS
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By: !/? .
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ANNIE A. KROL-KNIGHT,
V.
: IN THE COURT OF COMMON PLEAS
Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA
PEERLESS INSURANCE, a member of
LIBERTY MUTUAL GROUP,
Defendant
NO. 05-3844- Civil Tenn
CIVIL ACTION - LAW
JURY TRIAL DEMANDED
PRAECIPE
TO THE PROTHONOTARY:
Please enter the attached Certificate of Service for the Amended Complaint previously
entered on the above-referenced Docket.
submitted,
Date: & I-) 66?
By:
J6ffy6/ T. McGuire, Esquire
ttomey I. D. #i 73617
Caldwell & Kearns, P.C.
3631 North Front Street
Harrisburg, PA 17110-1533
(717) 232-7661
Attorney for Plaintiff, Annie Krol-Knight
04-86/93821
ANNIE A. KROL-KNIGHT, IN THE COURT OF COMMON PLEAS
Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA
V.
: NO. 05-3844- Civil Term
PEERLESS INSURANCE, a member of
LIBERTY MUTUAL GROUP, CIVIL ACTION -LAW
Defendant JURY TRIAL DEMANDED
CERTIFICATE OF SERVICE
AND NOW, this 12th day of October 2005, I hereby certify that I have served a copy
of the Amended Complaint on the following by depositing a true and correct copy of the same in
the U.S. Mail at Harrisburg, Pennsylvania, postage prepaid, addressed to:
Peter J. Speaker, Esquire
305 North Front Street
P. O. Box 999
Harrisburg, PA 17108
CALDWELL & KEARNS
By: W
Shire Erb, Secretary
t.. -r
N
PRAECIPE FOR LISTING CASE FOR ARGUMENT
(Must be typewritten and submitted in duplicate)
TO THE PROTHONOTARY OF CUMBERLAND COUNTY:
Please list the within matter for the next Argument Court.
--------------------------------------------------------------------------------------------------------------------------------
ANNIE A. KROL-KNIGHT : IN THE COURT OF COMMON PLEAS
Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL-ACTION
PEERLESS INSURANCE, a member of No. 05-3844 CIVIL TERM
LIBERTY MUTUAL GROUP,
Defendants JURY TRIAL DEMANDED
State matter to be argued (i.e., plaintiffs motion for new trial, defendant's demurrer to complaint, etc.):
Defendant's Preliminary Objections to Plaintiff's Amended Complaint
2. Identify counsel who will argue case:
(a) for plaintiff: Jeffrey T. McGuire, Esquire
Caldwell & Kearns
3631 North Front Street
Harrisburg, PA 17110
(717) 232-7661
(b) for defendant: Peter J. Speaker, Esquire
Thomas, Thomas & Hafer, LLP
P. 0. Box 999
Harrisburg, PA 17108
(717) 255-7644
3. 1 will notify all parties in writing within two days that this case has been listed for argument.
4. Argument Court Date: November 23, 2005
Dated: October 18, 2005
Peter J. Speaker. Esquire
Attorneys for Defendant
CERTIFICATE OF SERVICE
I, Peter J. Speaker, Esquire, of the law firm of Thomas, Thomas & Hafer, LLP,
attorney for Defendant, hereby certify that a true and correct copy of the foregoing
document was sent to the following counsel of record by placing a copy of same in the
United States mail, postage prepaid, at Harrisburg, Pennsylvania addressed as follows:
Jeffrey T. McGuire, Esquire
Caldwell & Kearns
3631 North Front Street
Harrisburg, PA 17110
& HAFER, LLP
Dated: /V '
376663.1
Pete?orth eaker, Esquire
I.D.
305 Front Street
P. O. Box 999
Harrisburg, PA 17108
(717) 255-7644
pspeaker@tthlaw.com
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Peter J. Speaker, Esquire
Attorney I.D. 42834
THOMAS, THOMAS & HAFER, LLP
305 North Front Street
P.O. Box 999
Harrisburg, PA 17108
(717) 255-7644
pspeaker@tthlaw.com
ANNIE A. KROL-KNIGHT,
Plaintiff
v
PEERLESS INSURANCE, a member of
LIBERTY MUTUAL GROUP,
Defendant
ATTORNEY FOR DEFENDANT
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
NO. 05-3844 CIVIL TERM
CIVIL ACTION - LAW
JURY TRIAL DEMANDED
1. Count II (Bad Faith) fails to state a cause of action as a matter of law.
2. The Amended Complaint fails to state a cause of action to the extent that
the claims are based on the alleged impropriety of an insurer relying on a PRO
physician's opinion that certain treatment was not reasonable and necessary as a result
of the accident.
WHEREFORE, the Defendant objects to Plaintiff's Amended Complaint and
requests that strike and dismiss the above described parts of the Amended Complaint.
Respectfully submitted,
R, LLP
i
Dated: ?0 ' ri, 0 f
Peter J. S 46r, Esquire
I.D. #428)74
305 North Front Street
P. O. Box 999
Harrisburg, PA 17108
(717) 255-7644
2
CERTIFICATE OF SERVICE
I, Peter J. Speaker, Esquire, of the law firm of Thomas, Thomas & Hafer, LLP,
attorney for Defendant, hereby certify that a true and correct copy of the foregoing
document was sent to the following counsel of record by placing a copy of same in the
United States mail, postage prepaid, at Harrisburg, Pennsylvania addressed as follows:
Jeffrey T. McGuire, Esquire
Caldwell & Kearns
3631 North Front Street
Harrisburg, PA 17110
HAFER,LLP
Dated:
376663.1
Peter J. S ker, Esquire
I.D. #42
305 N Front Street
P. O. ox 999
Harrisburg, PA 17108
(717) 255-7644
pspeaker@tthlaw.com
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ANNIE A. KROL-KNIGHT IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
V.
PEERLESS INSURANCE,
A member of LIBERTY
MUTUAL GROUP
NO. 2005 - 3844 CIVIL TERM
CIVIL ACTION- LAW
IN RE: DEFENDANT'S PRELIMINARY OBJECTIONS
BEFORE BAYLEY, P.J., GUIDO, J.
ORDER OF COURT
AND NOW, this 24TH day of MARCH, 2006, for the reasons stated in the
accompanying opinion the defendant' preliminary objections in the nature of a demurrer
are OVERRULED.
the Court,
Edward E. Guido, J.
Afrey T. McGuire, Esquire
y,,Kter J. Speaker, Esquire
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ANNIE A. KROL-KNIGHT : IN THE COURT OF COMMON PLEAS OF
V.
PEERLESS INSURANCE,
A member of LIBERTY
MUTUAL GROUP
CUMBERLAND COUNTY, PENNSYLVANIA
NO. 2005 - 3844 CIVIL TERM
CIVIL ACTION - LAW
IN RE: DEFENDANT'S PRELIMINARY OBJECTIONS
BEFORE BAYLEY, P.J., GUIDO, J.
OPINION AND ORDER OF COURT
Plaintiff has filed a two count amended complaint against her insurance company.
Count I is for breach of contract arising from the defendants alleged improper refusal to
pay first party medical benefits as required under the Pennsylvania Motor Vehicle
Financial Responsibility Law (MVFRL).t Count II is an action for bad faith under 42 Pa.
C.S.A. § 8371.
Defendant has filed preliminary objections in the nature of a demurrer to Count 11.
It has also filed a demurrer "to the extent that the claims are based upon the alleged
impropriety of an insurer relying on a PRO physician's opinion that certain treatment was
not reasonable and necessary as a result of the accident."2
Standard of Review
The standard of review to be applied to preliminary objections in the nature of a
demurrer is well settled. It should be sustained only when plaintiff has pleaded no facts
sufficient to establish a right to relief. Bower v. Bower, 531 Pa. 54, 611 A.2d 181 (1992).
' 75 Pa. C.S.A. § 1711 et seq.
2 See Preliminary Objections to Plaintiff's Amended Complaint.
NO. 2005 - 3844 CIVIL TERM
"(A)11 material facts set forth in the complaint as well as all inferences reasonably
deducible therefrom are admitted as true...". Vosk v. Encompass, Ins. Co., 851 A.2d
162, 164 (Pa.Super 2004). Finally, "(w)here a doubt exists as to whether a demurrer
should be sustained, this doubt should be resolved in favor of overruling it" (citation
omitted). Price v. Brown, 545 Pa. 216, 221, 680 A.2d 1149, 1151 (1996).
Bad Faith
Count II of the amended complaint is an action for bad faith based upon 42 Pa.
C.S.A. § 8371. Plaintiff alleges, inter alia, that the defendant contracted with a PRO
physician in bad faith "to manufacture a basis upon which to seek to avoid (its)
contractual obligation to provide medical expense benefits to plaintiff"3 In McIntyre v.
State Farm Automobile Ins. Co., 47 Comb. 206 (1998) the plaintiff alleged that
"Defendant's peer review was a sham, conducted for the sole purpose of intimidating
plaintiff' at 207. After a lengthy discussion we overruled defendant's demurrer to the
bad faith claim under 42 Pa. C.S.A. § 8371. Based upon McIntyre, which we find to be
factually indistinguishable, Defendant's demurrer to the bad faith claim in the instant
case will also be overruled.
PRO Physician's Opinion as to Causation
Plaintiff makes several allegations to the effect that defendant improperly
contracted with a PRO physician to determine whether the medical services rendered
were causally related to the automobile accident. She contends that this goes well
'See Amended Complaint, paragraphs 34 (d) and 36.
• NO. 2005 - 3844 CIVIL TERM
beyond the authority granted under the MVFRL's peer review plan.4 She has cited
several cases in support of her position that an insurer cannot use the peer review plan to
deny payment for services on the basis that they were not causally related to the accident.
On the other hand, defendant cites numerous cases to support its position that a causation
determination is within the perogative of a PRO physician. However, for one reason or
another, none of the cases cited by either party is binding upon this court. Having
reviewed the cases cited by the parties, we are persuaded by the reasoning of Judge Ford
Elliot in her dissent in Bodtke v. State Farm, 432 Pa.Super 31, 637 A.2d 648 (1994)
(reversed on other grounds 540 Pa. 540, 659 A.2d 541 (Pa. 1995). As Judge Ford Elliot
stated:
I cannot agree "that (the PRO's determination that] certain injuries
treated were not related to the accident is simply another way of
stating that they were not medically necessary." Majority
memorandum at 3. Section 1797(b)(1) specifically provides that
the evaluation of a PRO "shall be for the purpose of confirming
that such treatment, products, services or accommodations
conform to the professional standards of performance and are
medically necessary." I do not equate either of these functions
with causation and coverage under an insurance policy. Whether
treatment is medically necessary for a specified injury is an
entirely different issue from whether that injury is causally
related to the accident and therefore covered under the
applicable policy of insurance.
659 A.2d at 650 (emphasis added). We adopt her reasoning and will overrule the
demurrer.
Section 1797 (b) (1) provides
(b) Peer review plan for challenges to reasonableness and necessity of treatment:
(1) Peer review plan: Insurers shall contract jointly or separately with any
peer review organization established for the purpose of evaluating
treatment, health care services, products or accommodations provided to
any injured person. Such evaluation shall be for the purpose of confirming
that such treatment, products, services or accommodations conform to the
professional standards or performance and are medically necessary.
(emphasis added).
NO. 2005 - 3844 CIVIL TERM
ORDER OF COURT
AND NOW, this 24TH day of MARCH, 2006, for the reasons stated in the
accompanying opinion the defendant's preliminary objections in the nature of a demurrer
are OVERRULED.
By the Court,
/s/ Edward E. Guido
Edward E. Guido, J.
Jeffrey T. McGuire, Esquire
Peter J. Speaker, Esquire
:sld
4
Jeffrey T. McGuire, Esquire
PA I.D. # 73617
Caldwell & Kearns, P.C.
3631 North Front Street
Harrisburg, PA 17110-1533
(717) 232-7661
Fax: (717) 232-2766
Attorney for Plaintiff, Annie Krol-Knight
ANNIE A. KROL-KNIGHT, IN THE COURT OF COMMON PLEAS
Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA
V.
NO. 2005-3844 Civil Term
PEERLESS INSURANCE, a member of
LIBERTY MUTUAL GROUP, CIVIL ACTION -LAW
Defendant JURY TRIAL DEMANDED
PRAECIPE TO DISCONTINUE
TO THE PROTHONOTARY OF SAID COURT:
Please mark the above-captioned action sew discontinued and ended.
Date: January 30, 2009
By:
fre . Mc uire, Esquire
11 tt ey I. q. #73617
V63?1 dwell Kearns, P.C.
North Front Street
Harrisburg, PA 17110-1533
(717) 232-7661
(717) 232-2766 (Fax)
Attorney for Annie Krol-Knight
0486/144081
CERTIFICATE OF SERVICE
AND NOW, this 30`h day of January 2009, I hereby certify that I have served a copy
of the within document on the following by depositing a true and correct copy of the same in the
U.S. Mail at Harrisburg, Pennsylvania, postage prepaid, addressed to:
Peter J. Speaker, Esquire
Thomas, Thomas & Hafer, LLP
305 North Front Street
P. O. Box 999
Harrisburg, PA 17108
CALDWELL & KEARNS
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