219 A.3d 1110
Pa.2019Background:
- Two consolidated cases: Scott v. Travelers and Sayles v. Allstate, each involving automobile policies with clauses requiring insureds seeking first-party medical benefits to submit to IMEs by physicians selected by the insurer "when and as often as" the insurer reasonably requires.
- In both matters insurers refused payment of medical benefits after the insureds declined insurer-scheduled IMEs; insureds sued alleging the clauses conflict with 75 Pa.C.S. § 1796(a) of the MVFRL.
- Federal district judges (in the Middle District of Pa.) predicted Pennsylvania law would require court-ordered IMEs (motion, good cause, judge-prescribed scope and examiner) and denied insurer defenses; interlocutory appeals went to the Third Circuit.
- The Third Circuit certified the question to the Pennsylvania Supreme Court about whether such contractual IME provisions conflict with § 1796(a) and are void as against public policy.
- The Pennsylvania Supreme Court held the IME clauses conflict with § 1796(a)—which mandates court-supervised IMEs on a showing of good cause—and therefore the clauses are void as against public policy; the case was returned to the Third Circuit.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether insurer-selected, contract IME clauses ("when and as often as we reasonably require") conflict with 75 Pa.C.S. § 1796(a) and are void as against public policy | Sayles/Scott: §1796(a) requires insurer to petition a court, show good cause, and obtain a judge-ordered IME (judge sets time, scope, and selects physician); policy clauses bypass these protections and are void | Allstate/Travelers: §1796(a) uses "may" and omits "insurer" and "shall," so it is not mandatory on insurers; parties may contract for IMEs; clause furthers cost-containment and mirrors Dept. of Insurance sample language | Court: Clause conflicts with §1796(a)’s mandatory, court-supervised procedures and is void as against public policy |
| Whether the Court should make the ruling prospective-only | Plaintiffs: Decision should apply retroactively; statute-based protection has always existed | Insurers/amicus: If new rule, apply only prospectively to avoid disruption | Court: Declined to decide retroactivity/prospectivity (outside scope of certified question) |
Key Cases Cited
- Generette v. Donegal Mut. Ins. Co., 957 A.2d 1180 (Pa. 2008) (statutory provisions applicable to a contract control and invalidate conflicting contract terms)
- Prudential Prop. & Cas. Ins. Co. v. Colbert, 813 A.2d 747 (Pa. 2002) (contracts cannot alter statutory rights created by legislature)
- Fleming v. CNA Ins. Co., 597 A.2d 1206 (Pa. Super. 1991) (interpreted IME clause permissively but did not address public-policy challenge to clause)
- Williams v. Allstate Ins. Co., 595 F. Supp. 2d 532 (E.D. Pa. 2009) (upheld enforceability of IME clause relying on Fleming)
- Lardas v. Underwriters Ins. Co., 231 A.2d 740 (Pa. 1967) (parties may agree to shorten a statutory limitations period where statute expressly permits it)
- Ins. Fed'n of Pa. v. Pa. Dep't of Ins., 889 A.2d 550 (Pa. 2005) (administrative regulation cannot override statutory mandates)
- State Farm v. Swantner, 594 A.2d 316 (Pa. Super. 1991) (Section 1796(a)’s good-cause standard protects insureds from unwarranted examinations)
- Lewis v. Erie Ins., 793 A.2d 143 (Pa. 2002) (MVFRL construed to effectuate comprehensive and uniform statutory framework for motor vehicle insurance)