Freedom Medical Supply v. Allstate Fire
3420 EDA 2015
| Pa. Super. Ct. | Nov 15, 2016Background
- On June 2, 2011 Pablo Santos (insured) was injured; Dr. Singer prescribed various durable medical equipment (DME). Freedom Medical billed Allstate for the DME after delivering it, supported by a signed work order and billing records.
- Allstate opened an investigation, denied payment initially as under investigation and later (April 29, 2013) because Santos allegedly could not confirm receipt of the DME.
- An Allstate investigator, Mathis-Bush, took a recorded statement in April 2012 from an individual who identified as Santos; later she concluded that person was an imposter.
- After arbitration awarded Freedom Medical $13,309.51, Allstate appealed; the court trial (Jan 2015) resulted in judgment for Allstate (July 14, 2015). Freedom Medical appealed.
- The trial court discredited Santos’ testimony about receipt of the DME (contradictory descriptions, inability to produce the equipment, evidence someone impersonated him) and found Allstate’s denial reasonable. Freedom Medical’s statutory fee and bad-faith claims were denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Freedom Medical proved delivery of DME under MVFRL §1716 (reasonable proof) | Freedom Medical: work order, prescription, HCFA form, recorded statement, photos and billing show delivery; Allstate’s delayed challenge impaired proof | Allstate: evidence was unreliable (impersonator, inconsistent testimony, lack of physical equipment); insurer not obliged to pay absent reasonable proof | Court: credited trial-court credibility findings; plaintiff failed to prove delivery; judgment for Allstate |
| Whether Santos’ failure to bring DME to trial justified adverse inference | Freedom Medical: subpoenaed Santos; he lacked equipment (withheld by son); photos should suffice, no adverse inference | Allstate: Santos disobeyed subpoena and could not corroborate delivery; failure to produce relevant evidence is admissible | Court: trial court permissibly considered failure to produce DME; no error |
| Whether Allstate was limited to its pre-suit denial reason or barred from raising new defenses | Freedom Medical: insurer should be bound by pre-suit denial reason; switching reasons indicates bad faith | Allstate: may raise defenses discovered after suit; defendants can plead inconsistent defenses | Court: insurer may present new information learned after suit; not precluded from challenging evidence reliability |
| Whether Allstate acted unreasonably/bad faith; entitlement to statutory interest, treble damages, fees (MVFRL, UIPA, UCSPR) | Freedom Medical: delayed/insufficient investigation, misrepresentations, failure to follow UCSPR/UIPA procedures, warranting interest, fees, treble damages | Allstate: communicated with claimant; denial reasonable given unreliable proof and impersonation; UCSPR/UIPA do not create private cause of action; no wanton conduct | Court: Allstate’s conduct not wanton or unreasonable under facts; regulations apply to claimants and do not create private cause of action; no statutory damages or fees awarded |
Key Cases Cited
- Stephan v. Waldron Elec. Heating & Cooling LLC, 100 A.3d 660 (Pa. Super. 2014) (standard of review for non-jury trial findings and credibility determinations)
- Herd Chiropractic Clinic, P.C. v. State Farm Mut. Auto. Ins. Co., 29 A.3d 19 (Pa. Super. 2011) (awarding attorney’s fees under MVFRL in certain circumstances)
- Levine v. Travelers Prop. Cas. Ins. Co., 69 A.3d 671 (Pa. Super. 2013) (discussion of peer review presumptions and provider burden)
- Morrison v. Mountain Laurel Assurance Co., 748 A.2d 689 (Pa. Super. 2000) (bad-faith standard where denial of coverage was unreasonable)
- Commonwealth v. Dreibelbis, 426 A.2d 1111 (Pa. 1981) (scope of redirect examination and trial-court discretion)