Federal Middle District Court Allows First Party Bad Faith Claim to Proceed

In her recent decision in the case of Neal v. State Farm, PICS Case No. 14-0387 (M.D. Pa. Feb. 18, 2014 Kane, J.), Judge Yvette Kane of the Federal District Court for the Middle District of Pennsylvania allowed a Plaintiff’s bad faith claim to proceed under allegations that the carrier knowingly used a biased independent medical examiner to provide negative reports and and thereby support the carrier’s denial of payments in a first party context. 


The Plaintiff also sued under various provisions of the Motor Vehicle Financial Responsibility Law pertaining to the dispute over the reasonableness and necessity of the Plaintiff’s treatment.  


According to a summary of the Opinion, after being involved in an accident, the insured injured party began receiving payments for her medical expenses from the first party benefits carrier.   Approximately a year later, the carrier retained a doctor to perform an independent medical examination.  


Based upon the IME, the carrier denied further payment of the insured’s medical bills.   The IME report contained conclusions that the Plaintiff had fully recovered from the accident and that the Plaintiff showed signs of symptoms magnification and inappropriate illness behavior.


The Plaintiff insured filed a bad faith suit alleging violations of the Motor Vehicle Financial Responsibility Law and the Unfair Trade Practices Law.  


According to the summary, the insured Plaintiff agreed to the dismissal of claims for breach of contract and deceit.   The Court otherwise allowed the claims for bad faith and other claims related to the carrier’s alleged nonfeasance and misfeasance for failure to pay medical bills to go forward into the discovery phase of the case.   


Anyone desiring a copy of Judge Kane's Opinion may click this LINK.  The accompanying Order can be viewed HERE.




Source:  "Case Digests," Pennsylvania Law Weekly.