Appeal from the Judgment Entered August 8, 2012 In the Court of Common Pleas of Dauphin County Civil Division at No(s): 2009 CV 1567
BEFORE: BOWES, GANTMAN, and OLSON, JJ.
Travelers Property Casualty Insurance Company ("Travelers") appeals from the judgment entered in favor of Beverly Levine in this breach of contract action instituted against the insurer for its refusal to pay her medical bills following a rear-end collision. The trial court found the charges to be reasonable and necessary and awarded attorneys' fees pursuant to the Motor Vehicle Financial Responsibility Law ("MVFRL"), 75 Pa.C.S. §1797(b). After careful review, we affirm.
The pertinent facts are as follows. Beverly Levine sustained injuries to her back and shoulder in a rear-end automobile collision on February 5, 2003. She sought medical treatment and underwent physical therapy prescribed by her physician from February 23, 2003 through March 21, 2003. The bills were submitted to her automobile insurance carrier, Travelers, under the first-party medical coverage,  and Travelers paid the providers.
On June 17, 2003, Ms. Levine was evaluated by Dr. Steven Wolf, an orthopedic surgeon, and he prescribed McKenzie format physical therapy, a different type of rehabilitative treatment. Ms. Levine attended physical therapy sessions from June 23, 2003 through June 30, 2003, and continued to perform the exercises at home. Upon receipt of the bills for Dr. Wolf's evaluation and McKenzie physical therapy, Travelers submitted her file for review by one of its nurses, who recommended referral of the claims to peer review.
Travelers submitted the claims to Perspective Consulting, a peer review organization ("PRO"), and received a response on September 29, 2003. The PRO concluded that Dr. Wolf's initial evaluation was reasonable and necessary, but that the physical therapy he ordered was not, since Ms. Levine had responded well from the earlier physical therapy. Based on that review, Travelers denied payment for the McKenzie physical therapy.
In November 2004, upon receipt of a bill for EMG and nerve conduction studies ordered by Dr. Wolf, Travelers corresponded with the physician requesting his rationale in ordering the testing. Prior to receiving Dr. Wolf's response, Travelers sought an independent medical examination ("IME") to determine if Ms. Levine's carpal tunnel symptoms were causally related to the motor vehicle accident. In January 2005, Ms. Levine underwent a physical examination performed by Dr. Bruce Goodman, an orthopedic surgeon, who subsequently reported to Travelers that Ms. Levine's carpal tunnel was unrelated to the accident and that she had achieved maximum medical improvement ("MMI") from her accident-related injuries as of the date of the examination. Based on that IME and the earlier peer review results, Travelers denied payment for treatments related to carpal tunnel symptoms.
On February 6, 2007, Beverly Levine commenced the first of two lawsuits against Travelers, "Levine I" at Docket No.: 2007-cv-1125. That case settled on March 12, 2008, with payment of all of Ms. Levine's medical and rehabilitation bills through February 13, 2008, together with attorneys' fees and costs of suit. The release executed by the parties in that lawsuit provided that Ms. Levine was not prevented from seeking further medical treatment, submitting the bills to Travelers for payment, and bringing suit against Travelers for additional medical expenses. Plaintiff's Exhibit 3. Travelers retained the right to request additional IMEs and conduct future peer review investigations. Id.
Commencing November 11, 2008, Ms. Levine underwent additional medical treatment and rehabilitative services, which the providers tendered to Travelers for payment. Without explanation, Travelers refused to pay the charges. At trial, the insurer maintained that its denial was based on the January 2005 IME. On February 6, 2009, Ms. Levine commenced this second breach of contract action against Travelers to recover the outstanding medical expenses incurred after November 11, 2008, together with attorneys' fees and costs. Following a non-jury trial, the court concluded that Ms. Levine pled a violation of the Motor Vehicle Financial Responsibility Law ("MVFRL"), that the charges were reasonable and necessary, and that Travelers breached its contract with its insured by refusing to pay. Trial Court Opinion, 6/12/12, at unnumbered 2-3. The court ordered Travelers to pay the outstanding medical expenses, together with interest and costs. Relying upon 75 Pa.C.S. § 1797(b) and our decision in Herd Chiropractic Clinic, P.C. v. State Farm Mut. Auto Ins. Co., 29 A.3d 19 (Pa.Super. 2011), rev'd 2013 Pa LEXIS 304 (Pa. 2013), the trial court also awarded reasonable attorneys' fees of $27, 930, holding such fees recoverable under that statutory provision "if the court determines treatment was medically necessary[.]" Trial Court Opinion, 6/12/12, at unnumbered 7.
Travelers filed a post-trial motion, and the trial court scheduled an evidentiary hearing on the reasonableness of the attorneys' fees award. The hearing was cancelled, however, when the parties elected to submit the matter on briefs. Travelers now appeals to this Court challenging the propriety of the award of attorneys' fees in two respects:
Was the Court's determination in the June 12, 2012 order granting an award of attorney's fees in a breach of contract claim where attorney's fees were neither 1) authorized by statute, 2) authorized by contract or agreement among the parties, nor 3) authorized by some other recognized exception, an error of law and/or abuse of discretion?
Whether an error of law was committed where the Court of Common Pleas interpreted the case law and statutory framework of Act 6, including 75 Pa.C.S. §1797 and the regulations pertaining to Act 6 (including 31 Pa.Code §69.51 et seq), to allow the imposition of ...