Monday, May 9, 2011

Unsettled Issues Regarding Future Medical Expenses in Motor Vehicle Accident Matters

In a recent April 11, 2011 Memorandum Opinion, Judge James Munley of the District Court for the Middle District of Pennsylvania decided several issues in response to various pre-trial motions in limine filed by both parties in the case of Kansky v. Snowman, 3:09cv1863 (M.D. Pa. April 11, 2011, Munley, J.).  As part of his decision, Judge Munley found that a plaintiff may plead, prove and recover future medical expenses as those expenses were not shown to be "paid or payable."

In Kansky, the Plaintiff was prepared to present his medical expert's opinion at trial that included that expert's prediction on the extent of substantial future medical expenses the Plaintiff would incur due to his accident-related injuries.

The Defendant filed a motion in limine in which it was asserted that the Pennsylvania Motor Vehicle Financial Responsibility Law precluded the Plaintiff from recovering future medical benefits which may be covered by the Plaintiff's health insurance.  More specifically, 75 Pa.C.S.A. Section 1720 and/or 1722 precluded the Plaintiff from introducing into evidence any medical expenses that were "paid or payable" by applicable forms of insurance.

Judge Munley denied the Defendant's motion in limine under the rationale that the future medical expenses evidence at issue could not deemed be "payable" under the law because there was no guarantee that the Plaintiff would still have such health insurance in place at the time the bills were incurred in the future to pay for those medical expenses.

More specifically, Judge Munley wrote:

"The word “payable” in Act 6 can have many meanings, such as “owed, to be paid, due”. Future medical payments are not currently due and outstanding. The defendants cannot guarantee that any future expenses will in fact be paid. It is merely speculation. For instance, plaintiff's insurer could become bankrupt, or deny future medical bills for a variety of reasons. We agree with the plaintiffs. Because the insurance benefits are not necessarily due and owing at this time and nothing could compel the insurer to pay a lump sum for future expenses, plaintiffs future medical bills are not “payable” under Act 6. Fairness and public policy dictate that the burden of any risk or speculation should fall on the defendants, not plaintiffs."

Judge Munley therefore found that, since the future medical expenses were not "payable" under any form of applicable insurance, the future medical expenses could be pled, proven, and recovered by the Plaintiff at trial.

Judge Munley's decision can be contrasted by the opposite decision reached on the same issue by Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas case of Orzel v. Morgan, No. 03-CV-4929 (Lacka. Co. 2008 Nealon, J.), an automobile accident case in which I was the defense counsel.

In Orzel, a pre-trial motion in limine was filed on behalf of the defense seeking to limit the Plaintiff's introduction of evidence of substantial future medical expenses that the defense asserted were "payable" under the Plaintiff's remaining first party medical benefits coverage and/or the Plaintiff's available health insurance.  This issue was raised again in post-trial motions filings as well.

The Plaintiff in Orzel argued that future medical expenses could not be regarded as "payable" under 75 Pa.C.S.A. Section 1722 as her first party benefits carrier, Erie Insurance Exchange, "could become bankrupt" or may deny payment of future medical bills through a peer review process.  The Plaintiff also asserted that there was no statute or case law applying the "paid or payable" language to future medical expenses claims.

As noted in his Opinion on the post-trial issues presented, Judge Nealon had granted the Defendant's pre-trial motion in limine in this regard and also ruled in the same fashion when the issue was revisited in the post-trial motions stage.

More specifically, Judge Nealon found that the alleged future medical expenses were indeed "payable" under the Plaintiff's remaining first party medical benefits coverage.  Citing a series of cases, Judge Nealon noted that the word "payable" is generally defined as capable of being paid, or suitable to be paid, or legally enforceable.

Judge Nealon also noted that, in the case of Schroeder v. Schrader, 682 A.2d 1305, 1310 (Pa.Super. 1996), the Pennsylvania Superior Court  held that "[a]bsent a statutory or judicial definition to the contrary, the word 'payable' plainly refers to a claimant's entitlement to future payments, until such time as the payments are modified or terminated."

As such, Judge Nealon noted that the Plaintiff had failed to offer any proof in support of the contention that the medical expenses would not be paid in the future by the available first party benefits coverage and he therefore found that the Plaintiff's alleged future medical expenses were indeed "payable."  Accordingly, the portion of alleged future medical expenses that could be covered by the remaining PIP medical benefits were not recoverable under the Motor Vehicle Financial Responsibility Law.

As such, Judge Nealon's decision in Orzel supports a contention that future medical expenses can be deemed to be "payable" under appropriate insurance coverages possessed by a plaintiff at the time of a trial.

It is noted parenthetically that the Orzel opinion arguably also stands for the proposition that the burden of proving that medical expenses are not "paid or payable" rests with the Plaintiff.  See also Grant v. Baggott, 36 Pa.D.&C.4th 298, 310, 723 A.2d 240 (Pa.Super. 1998), appeal denied 734 A.2d 394 (Pa. 1998)("Plaintiffs have failed to meet their burden of demonstrating that these benefits were not either paid or payable pursuant to Section 1722 of the Act.").

In Orzel, Judge Nealon was faced with the additional dilemma of how to handle the situation where the Plaintiff was offering evidence of the alleged potential of substantial future medical expenses in a dollar amount that exceeded any available  insurance coverage that such expenses would be "payable" under. 

More specifically, the Plaintiff in Orzel had about $85,000 in PIP medical benefits coverage remaining but was offering evidence through a medical expert that the future medical expenses would amount to hundreds of thousands of dollars.

As noted, the defense in Orzel argued that those future medical expenses that remained "payable" should not be admitted into evidence as they were not recoverable under Pennsylvania law.  The defense also asserted, in reliance upon the case of Pittsburgh Neurosurgy Assoc., Inc. v. Danner, 733 A.2d 1279 (Pa.Super. 1999) appeal denied, 751 A.2d 192 (Pa. 2000), that before any other recoverable future medical expenses are presented to a jury, they should first be reduced in accordance with Act 6 of the Pennsylvania MVFRL (75 Pa.C.S.A. 1797).

The Plaintiff asserted that the case of Moorehead v. Crozer Chester Medical Center, 765 A.2d 786 (Pa. 2001) supported her contention that the full amount of any and all future medical expenses should be admitted, without reference to any Act 6 reduction.  The Plaintiff also asserted that, since there was no legal authority on point to the contrary, the Plaintiff should be allowed to recover the full or entire amount of future medical expenses awarded by the jury without an offset or credit to the defense in the amount of any remaining policy limits of any policy those future medical expenses remained "payable" under.

Although Judge Nealon had ruled that future medical expenses could be "payable" under applicable available insurance and, therefore, not recoverable, in this scenario set forth in Orzel where the Plaintiff had potential future medical expenses well in excess of the available insurance coverage, Judge Nealon allowed the Plaintiff to put before the jury all of the evidence of future medical expenses subject to a post-verdict molding proceeding. 

He also noted that, if the Plaintiff's expert did not testify that this evidence of future medical expenses had not been reduced in accordance with Act 6, the defense could cross-examine the Plaintiff's medical expert concerning the statutory requirement under 75 Pa.C.S.A. Section 1797 that the medical care provider accept a reduced sum as full payment for the medical services provided.

Under Judge Nealon's framework, the future medical expenses awarded by the jury could be made the subject of a post-verdict molding proceeding whereby the defense could request that the full amount of medical expenses awarded by the jury be reduced by Act 6 and then offset by any amounts of PIP coverage or applicable health insurance coverage under which those future medical expenses remained "payable."

Judge Nealon rejected the argument of the defense in Orzel that one potential problem with this framework is that the Act 6 reduction of future medical expenses may not be possible because there are no actual medical bills incurred yet to apply to the very specific formula set forth under Act 6 for the determination of the reduced amount of the medical bills that are recoverable.  Apparently, that issue can be resolved by the presentation of expert testimony from each side by a medical expert or life care planning expert, "to a reasonable degree of certainty," as to what the Act 6 reduced amount of medical expenses would be.

Orzel was settled by the parties prior to the case going up on appeal. This issue therefore remains a tricky one and, to date, there does not appear to be any appellate guidance on point with regards to how to handle the presentation of future medical expenses at an automobile accident trial, including the issues of the Act 6 reduction and the mandate that any medical expenses that remain "paid or payable" are not recoverable by the plaintiff.


I thank Attorney Paul Oven of the Moosic, Pennsylvania office of the law firm of Dougherty, Leventhal & Price for bringing the case of Kansky v. Snowman to my attention.

Anyone desiring a copy of Federal Middle District Court Judge James Munley's opinion in Kansky or Judge Terrence R. Nealon's opinion in the case of Orzel v. Morgan may contact me at dancummins@comcast.net.

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