The opinion of the court was delivered by: Robert F. Kelly, Sr. J.
Presently before the Court are a Motion for Summary Judgment filed by Defendant, Allstate Insurance Company ("Allstate"), a Response in Opposition to Allstate's Motion for Summary Judgment ("Opposition") filed by Plaintiff, Nancy Thomer ("Thomer"), a Reply Memorandum ("Reply") filed by Allstate, and a Surreply filed by Thomer. For the reasons set forth below, we will grant Allstate's Motion for Summary Judgment in part and deny it in part.
This case stems from Allstate's alleged bad faith handling of Thomer's Underinsured Motorist ("UIM") claim. Because Thomer argues that Allstate's bad faith conduct stems from "years of delayed investigation and unreasonable offers" we feel that a detailed account of the facts involved in this case is warranted.
On April 15, 2002, Thomer was involved in a motor vehicle accident ("MVA") caused by another motorist. (Allstate Ex. 2.) The issue of fault regarding the MVA is not in dispute. At all times relevant to this claim, Allstate was Thomer's insurer. (Compl. ¶ 6.) The nature and of extent of the injuries sustained by Thomer as a result of the MVA represent a point of sharp disagreement between the Parties. The alleged injuries include but are not limited to: personal injuries to [Thomer's] entire head, neck, back, shoulders, abdomen, torso and extremities, closed head injury with cognitive deficits, a serious shock to the nerves and nervous system, traumatic brain injury, traumatic concussion, traumatic injuries to the cervical, lumbar, dorsal and thoracic spine, the muscles, nerves, nervous system, broad vision, vestibular dysfunction,*fn1 myofacial disease*fn2 and the sequalae thereof . . . (Compl. ¶ 9) (footnotes added). Thomer claims that these injuries are permanent. (Id.) Furthermore, Thomer claims that, due to these injuries, she is no longer able to earn an income. (Allstate Ex. 3 at ALL1209-11.)
A. Thomer's Medical Treatment
On the day of the MVA, Thomer repeatedly declined emergency medical care and arranged for a friend's husband to drive her home instead. (Allstate Ex. 3 at ALL1201.) Two days after the accident on April 17, 2002, Thomer visited Dr. Paul Baron, D.O. ("Dr. Baron"), an osteopathic healthcare provider who is familiar with craniosacral manipulation,*fn3 with complaints regarding her head, neck, arm, back and tingling in both arms and legs. (Id.) Dr. Baron diagnosed Thomer with a closed head injury and referred Thomer to several specialists. (Allstate Ex. 8). Dr. Baron continued to treat Thomer with craniosacral therapy until Allstate discontinued coverage in June of 2003 (Opposition at 4).
On May 8, 2002, Thomer went to Doylestown Hospital complaining of pain secondary to the accident. (Allstate Ex. 6 at 2.) However, a cervical spine study showed only minor degenerative changes. (Allstate Ex. 11 at 1.) An MRI of the brain was normal (Id. at 2) as was an MRI of the cervical spine (Id, at 3). Also on May 8, 2002, Thomer visited an ophthalmologist, Dr. Jeffrey H. Cohen, M.D., complaining of blurred vision in both eyes secondary to the accident and trouble focusing after reading. (Allstate Ex. 11.) Dr. Cohen diagnosed Thomer with "blurred vision, probably secondary to concussion" and he explained to her that it "should improve with time" and asked her to return in a month's time for a follow-up exam. (Id.) Dr. Cohen did not indicate whether he reviewed Thomer's medical records prior to the examination. (Id.)
On June 5, 2002, Thomer underwent a physical therapy evaluation at
Doylestown Hospital. (Allstate Ex. 3 at 52-53.) She then participated
in physical therapy sessions, twice weekly, for approximately ten
weeks but she felt that it was only worsening her condition. (Id.
53.) In August of 2002, Dr. Baron referred Thomer for a neurologic
examination with Dr. Roy
A. Jackel, M.D. (Allstate Ex. 12 at 1.) On August 14, 2002, Dr.
Jackel diagnosed Thomer with post-concussive syndrome*fn4
and post-traumatic myofascial sydrome.*fn5
(Id. at 2.) He also recommended that Thomer submit to an Electroencephalogram
("EEG")*fn6 and formal neuropsychological testing.
(Id.) On October 9, 2002, Thomer had an abdominal ultrasound performed
at Doylestown Hospital, the result of which was "normal." (Allstate
In October of 2003, Dr. Baron referred Thomer for a second neurological examination with Dr. W. Stover Wiggins, M.D. On October 8, 2003, Dr. Wiggins summarized Thomer's neurological exam as non-focal and diagnosed her with a closed head injury. (Allstate Ex. 15.) He recommended that she have a repeat MRI of the brain and cervical spine and to have "Evoked Potential"*fn7 studies as well. (Id.) On October 16, 2003, Thomer returned to Doylestown Hospital, where she underwent a cervical spine MRI that revealed mild degenerative disc disease (Allstate Ex. 15 at 1) and a brain MRI was normal. (Id. at 2). Also on October 16, 2003, Dr. Wiggins performed three tests on Thomer. Dr. Wiggins performed a Brainstem Auditory Evoked Potential test ("BAEP"),*fn8 which resulted in a diagnosis of "abnormal" and an audiogram result of "mild bilateral hearing loss." (Allstate Ex.16 at 1.) He also performed a Visual Evoked Potential test ("VEP")*fn9 on Thomer and found that her results were normal. (Allstate Ex. 16 at 2.) Dr. Wiggins also performed an EEG test, the results of which indicate a "normal EEG recording." (Allstate Ex. 16 at 3.)
On October 31, 2003 Thomer began physical therapy at Newtown-Jamison Physical Therapy. (Thomer Ex. 1 at 6.) Although her physical therapist noted improvement (Id. at 19-20), Thomer felt that she was not benefitting from the sessions and stopped attending them on January 26, 2004. (Id. at 13.)
On July 8, 2004, Thomer visited Dr. John E. Gordon, Ph.D., P.A., for a neuropsychological evaluation. (Allstate Ex. 18 at 1.) The results of this evaluation indicated that Thomer was at least average or above average in every category of cognitive testing. (Id. at 6.) Dr. Gordon could not link Thomer's symptoms with a brain injury because he found that "[t]he pattern of neuropsychological test results is not indicative of a well-lateralized or highly focal area of cortical level impairment which is significantly affecting her basic adaptive abilities at the present time." (Id.) However, he also found that Thomer had "a tendency to become easily overwhelmed when having to process too much information at one time" and that she was also "experiencing a significant degree of emotional distress." (Id.) In sum, Dr. Gordon believed that, in light of Thomer's history, Thomer had been experiencing the symptoms of "post-concussive syndrome, the recovery of which has been interfered with and complicated by the emotional sequelae from the incident." (Id.) He could not determine the nature of any physical limitations as they were "outside of [his] professional area." (Id.)
In a report rendered at the request of Thomer's counsel, on October 27, 2004, Dr. Wiggins stated, "Unfortunately, I cannot describe to you how a closed head injury of this degree causes such dramatic neurocognitive symptoms," and recommended that Thomer receive a neuropsychological evaluation. (Allstate Ex. 83 at ALL1405).
On March 14, 2005, Thomer visited a dentist, Dr. Harry Habbell, D.D.S., complaining of three fractured teeth, which she claimed she sustained as a result of the April 15, 2002 MVA. (Allstate Ex. 21.) Whether Thomer's dental injuries were caused by the 2002 MVA is disputed by the Parties, because Thomer was involved in a MVA during the Summer of 1997 and, thereafter sought dental care claiming the injuries were a result of the 1997 MVA. (Allstate Ex. 22.)
On January 13, 2005, Thomer sought the care of neurologist Michael Martin Cohen, M.D. Thomer complained of headaches, vision, tinnitus,*fn10 vertigo, dizziness, chronic fatigue, anxiety attacks, neck pain with radiation into both trapezii, back pain and numbness and paresthesia*fn11 in both arms. (Allstate Ex. 5.) Dr. Cohen diagnosed Thomer with a cerebral concussion which caused a traumatic brain injury, producing cognitive impairment and behavioral changes, which he believed to be permanent given the length of time that they had persisted. (Allstate Ex. 25.) On a follow-up visit on March 15, 2005, Dr. Cohen recommended that Thomer continue to treat with craniosacral therapy as she believed it was most helpful to her. (Allstate Ex. 26.)
On February 4, 2005, Thomer visited psychiatrist, Robert W. Mauthe, M.D., who diagnosed her with a closed head injury and possible Thoracic Outlet Syndrome ("TOS").*fn12
(Allstate Ex. 27 at 2.) He found that Thomer's Myofascial Disorder was directly caused by the MVA. (Id.) On February 14, 2005, Thomer saw psychiatrist Dr. Robert L. Sadoff, M.D., who was unable to render a final opinion because he required additional information. (Allstate Ex. 28 at ALL1429.) As of March 9, 2005, after receiving the police report and the reports by Drs. M. Cohen and Mauthe, Dr. Sadoff was still not in a position to finalize his report. (Allstate Ex. 29 at P2012.) He recommended further psychological and neuropsychological tests as well as a referral to a competent cognitive therapist for more definitive treatment. (Id.) In the absence of Thomer's complete treatment records, Dr. Sadoff was only able to say that she "had symptoms of anxiety and depression which started when she had the accident." (Id.)
On August 6, 2005, Thomer was admitted to the Emergency Room at Doylestown Hospital believing that she had experienced a seizure. (Allstate Ex. 19 at ALL1280.) Tests performed on Thomer that day revealed normal results. (Allstate Ex. 19.) Thomer's neurologic exam, EKG, and CT of the head were all normal. (Id. at ALL121280-82.) Thomer was released the same day she was admitted with a formal diagnosis of fainting. (Id. at ALL1287.)
On November 8, 2005, Thomer was treated at the Penn Epilepsy Center. (Allstate Ex. 30 at ALL1305.) Dr. Susan Herman was unable to pinpoint the cause of Thomer's complaints but noted that there was possibly a presence of subclinical seizures, depression, and dementia. (Id.) On April 14, 2006, Dr. John Pollard, Attending Neurologist at the University of Pennsylvania, performed an EEG on Thomer and found the results were normal. (Id. at ALL1308.)
After 2005, Thomer continued to see a psychologist and had a follow-up with Dr. Cohen. (Allstate Ex. 6 at 5.) Additionally, Thomer had been treating with craniosacral therapy since the MVA and she continued to do so until she exhausted her benefits in 2008. (Allstate Ex. 31.)
B. Allstate Terminates Payments to Thomer's Medical Providers
In April of 2003, Allstate stopped paying the bills submitted by
Thomer's medical providers. (Mot. Summ. J. at 8.) At this point,
Allstate had serious reservations regarding the reasonableness and
necessity of Thomer's treatment and requested that a Peer Review
Organization ("PRO")*fn13 review the bills to
determine whether treatment was reasonable. (Id.) Allstate had paid
all prior bills submitted by Thomer's care providers up to this time.
(Id.) The PRO determined that "maximum medical improvement" was
achieved by August 15, 2002 and, thus, treatment received after that
date was not reasonable and necessary. (Allstate Ex. 33 at 5.) Dr.
Baron requested reconsideration of the PRO's decision, but failed to
provide additional information requested by the PRO.*fn14
(Opposition at 9.) Ultimately, the PRO reached the
conclusion that treatment after May 24, 2002 was medically
unreasonable and unnecessary.*fn15
C. Thomer Seeks Payment for Neurological Treatment
In November of 2003, Allstate received bills for Thomer's treatment with neurologists, including the Neurology Group and Dr. Wiggins. (Allstate Ex. 36 at ALL0496.) These treatments reflected new diagnoses of myalgia*fn16 and myositis.*fn17 (Id.) Allstate decided it required an independent medical examination ("IME") to determine whether those conditions were caused by the accident. (Id.) However, in June of 2004, Thomer filed suit against Allstate alleging that Allstate's reliance on the PRO was done in bad faith and, as a consequence of the litigation, an IME was not performed.*fn18 (Allstate Ex. 38.)
Allstate and Thomer agreed to settle Thomer's first party medical loss benefits whereby Allstate paid all of Thomer's back medical bills, resumed payment of medical bills going forward, and payed $30,000 to Thomer and $11,983.00 to her for attorney, Robert Mangold, Esq. ("Mangold") in attorney's fees. (Allstate Exs. 45, 46.) In return, Thomer signed a release of her bad faith claims arising out her first party medical loss claim. (Allstate Ex. 47.) Allstate continued to pay for Thomer's medical treatment until she exhausted the $100,000 medical loss policy limit. (Allstate Ex. 31.) Thomer also received the maximum benefits allowable under her income loss policy in the amount of $50,000. (Opposition at 1.) Thomer would eventually settle with the tortfeasor's insurer, Nationwide, for $50,000. (Reply at 25.)
D. The UIM Claim Settlement
In July of 2005, Mangold forwarded Allstate various medical bills and demanded the full $100,000 UIM policy limit claiming that damages clearly exceeded the combined policy limits of Allstate and Nationwide of $150,000. (Allstate Ex. 50.) The primary source of valuation was an actuarial-economic report. (Opposition at 11.) At that time, Mangold also informed Allstate that he was pursuing a claim against Nationwide and that he was providing Allstate "with a credit for the $50,000 of coverage available to the tortfeasor." (Allstate Ex. 50.) Allstate adjuster, Martha Ruggero ("Ruggero"), reviewed the medical records, requested additional records and information from Mangold and, upon receipt, completed an evaluation of the claim. (Allstate Ex. 36 at ALL0545, ALL0552.) Ruggero determined that the UIM claim was worth between $35,000-$45,000, taking into account the $50,000 credit from Nationwide. (Allstate Ex. 53.) On October 28, 2005, Ruggero offered Thomer $30,000 to settle the UIM claim. (Allstate Ex. 56.)
Allstate alleges that neither Thomer nor her counsel responded to Allstate's initial offer for approximately seven months. (Mot. Summ. J. at 12.) Thomer does not contest this point. In the summer of 2006, Mangold forwarded Allstate additional medical records and reiterated the demand for the full policy limits. (Opposition at 13.) These records indicated the possible presence of subclinical siezures, depression, and dementia (Allstate Ex. 36 at ALL0574.) The claim entries also show that Dr. Cohen diagnosed Thomer with a closed head injury, posttraumatic stress disorder, depression, and anxiety caused by the accident. (Id. at ALL0580.) At this point, Ruggero submitted all of Thomer's medical records for review. (Opposition at 13.) The medical reviewer, Dr. Victor J. Malatesta, Ph.D., concluded that there was little evidence in Thomer's records to indicate that ...