Prince v. Bear River Mut. Ins. Co.

Decision Date23 July 2002
Docket NumberNo. 20010298.,20010298.
PartiesGarrett PRINCE, Plaintiff and Appellant, v. BEAR RIVER MUTUAL INSURANCE CO., Defendant and Appellee.
CourtUtah Supreme Court

Trent J. Waddoups, Salt Lake City, for plaintiff.

Joseph J. Joyce, Kristin A. Van Orman, Salt Lake City, for defendant. RUSSON, Justice:

¶ 1 Garrett Prince ("Prince") appeals an order granting partial summary judgment to Bear River Mutual Insurance Company ("Bear River") and asks us to hold that Bear River breached the insurance policy that afforded Prince personal injury protection ("PIP") coverage. Further, Prince appeals the trial court's award of $450 in attorney fees. We affirm.

BACKGROUND

¶ 2 The matters on appeal arose out of Prince's allegations that Bear River improperly refused to pay PIP benefits under an insurance policy to Prince for injuries Prince suffered in an automobile accident. At all times relevant to this appeal, Bear River insured Prince for PIP coverage with a policy limit of $3,000, and Prince was current in paying the insurance premiums required by the policy.

¶ 3 On November 8, 1995, Prince was injured in an automobile accident. In connection with his injuries, Prince claims he incurred more than $3,000 in medical expenses. On May 12, 1997, at Bear River's request, Prince underwent a medical examination to investigate the necessity of Prince's medical expenses. Bear River retained Dr. Stephen Marble to conduct the examination.

¶ 4 After the examination, Dr. Marble prepared a report summarizing his findings in which he explained:

By the time Mr. Prince presented to Dr. Howard for chiropractic care, he would have been considered presenting with a complicated spine injury, owing to the delay in treatment initiation. As such, a maximum of 12 weeks of chiropractic care could have been justified. I do not think that the chiropractic care exceeding 12 weeks was medically necessary. No further chiropractic care should continue. The chiropractic care has been palliative rather than curative. The patient was only getting up to two days of pain relief with these treatments, but there has been no long-term benefit. Following such a whiplash injury, a multi-disciplinary consultation should have been obtained within 12 weeks from treatment initiation, rather than waiting six months, as was the case here.

(Emphasis added and omitted.) Pursuant to Dr. Marble's report, Bear River concluded that Prince was not entitled to PIP benefits to cover chiropractic care beyond the original twelve weeks of treatment because such care was unnecessary and therefore was excluded from coverage. As a result, Bear River discontinued PIP payments to Prince. Before Bear River received Dr. Marble's report, Bear River had paid $1,924.34 in PIP benefits to Prince.

¶ 5 To obtain additional PIP benefits up to the policy limit to which Prince believed he was entitled, Prince brought suit against Bear River on August 11, 1997, alleging breach of contract, breach of the covenant of good faith and fair dealing, intentional infliction of emotional distress, fraud, and the tort of violation of public policy embodied in the No-fault Automobile Insurance Act, Utah Code Ann. §§ 31A-22-306 to -309 (2001) (the "Act"). After answering Prince's complaint, Bear River moved for partial summary judgment on all of Prince's claims except for the breach of contract claim. On April 1, 1998, the trial court granted summary judgment on these claims, leaving only Prince's breach of contract claim.

¶ 6 On April 16, 1998, Bear River paid the balance of Prince's PIP claims up to the $3,000 policy limit although Bear River's liability remained in dispute. Then, on March 10, 2000, Bear River tendered a draft to Prince for statutory interest on Prince's PIP claims as set forth in section 31A-22-309(5)(c) of the Utah Code. Prince rejected the draft's tender and returned it to Bear River.

¶ 7 On February 16, 2000, Bear River again moved for summary judgment, this time on Prince's breach of contract claim. Bear River contended summary judgment should be granted because Bear River had paid the PIP insurance policy limit in full. The trial court denied the motion. Then, on October 2, 2000, the trial court entered a minute entry decision, awarding Prince interest that had accrued on $1,100 from August 7, 1997, to April 6, 1998, but declined to award attorney fees.

¶ 8 Subsequently, on November 8, 2000, Prince moved to amend his complaint to, among other things, convert the lawsuit into a class action. Prince also asked the trial court to reconsider its denial of attorney fees. In response, Bear River moved for rule 11 sanctions. On January 12, 2001, the trial court denied Prince's motion to amend the complaint and requested that Prince file an affidavit concerning the claimed attorney fees.

¶ 9 Complying with the request, Prince filed an affidavit regarding attorney fees on January 28, 2001. On February 27, 2001, the trial court entered a final order of dismissal awarding Prince a total of $882.15. The award included interest, costs, and $450 in attorney fees, equivalent to three hours billed for preparing the complaint.

¶ 10 Prince appeals, raising numerous issues.1 First, Prince contends that Bear River improperly denied Prince PIP benefits under the Act when Bear River concluded that Prince's continued chiropractic treatment was unnecessary. Specifically, Prince contends that Bear River violated the Act because Bear River refused to pay PIP benefits when such benefits were due and that the term "necessary" in the Act and the policy is not a term that limits the policy's coverage. Bear River counters that the term "reasonable and necessary" is a recognized standard used in the insurance industry to determine when PIP benefits must be paid and that Bear River was not required to pay Prince additional PIP benefits because they were not covered by the policy.

¶ 11 Prince also contends that the trial court erred in granting Bear River summary judgment on Prince's breach of the covenant of good faith and fair dealing claim because Bear River failed to plead as an affirmative defense that Prince's claim for PIP benefits was fairly debatable and because denial of PIP benefits in reliance on only the opinion of Bear River's own doctor contravenes the covenant. In response, Bear River contends that summary judgment was appropriate because Prince's PIP benefits claim was fairly debatable and Bear River was not required to plead its fairly debatable defense as an affirmative defense.

¶ 12 Additionally, Prince contends that the trial court erred in granting Bear River summary judgment on its fraud and intentional infliction of emotional distress claims because Bear River did not properly support its summary judgment motion. Bear River counters that Prince did not make out all the elements of these claims and that therefore judgment as a matter of law was appropriate.

¶ 13 Finally, Prince asserts that the trial court abused its discretion by refusing to permit Prince to amend his complaint and by refusing to award him more than $450 in attorney fees. In response, Bear River contends, among other things, that the trial court properly denied Prince's motion to amend because Prince sought to revive with the amended complaint causes of action that the trial court had already dismissed and because Prince's motion to amend was untimely. Bear River also argues that the trial court did not abuse its discretion in not awarding additional attorney fees.

STANDARD OF REVIEW

¶ 14 Summary judgment is proper when "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Utah R. Civ. P. 56(c); see also Ault v. Holden, 2002 UT 33, ¶ 15, 44 P.3d 781

. We review the trial court's order granting Bear River summary judgment for correctness and accord no deference to the trial court's legal conclusions. Holmes Dev., LLC v. Cook, 2002 UT 38, ¶ 21, 48 P.3d 895; Regal Ins. Co. v. Bott, 2001 UT 71, ¶ 6, 31 P.3d 524. In making this determination, "`we view the facts and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party.'" Ault, 2002 UT 33 at ¶ 15, 44 P.3d 781 (quoting DCM Inv. Corp. v. Pinecrest Inv. Co., 2001 UT 91, ¶ 6, 34 P.3d 785).

ANALYSIS

I. PIP INSURANCE
A. No-Fault Automobile Insurance Act

¶ 15 Before we address the questions at issue, we find it necessary to expound the statutory background serving as the basis for Prince's causes of action. Utah's No-fault Automobile Insurance Act has two primary components: (1) no-fault PIP insurance coverage, and (2) partial tort immunity from certain PIP-type claims for tortfeasors that maintain no-fault insurance on their own vehicles. Bear River Mut. Ins. Co. v. Wall, 1999 UT 33, ¶ 10, 978 P.2d 460.

¶ 16 First, the Act requires that insurers provide no-fault PIP coverage to their insureds under any policy "purchased to satisfy the owner's or operator's security requirement" of the Utah Code. Utah Code Ann. § 31A-22-302(2) (2001). This component of the Act "allows accident victims to claim PIP benefits from their own insurers—regardless of fault—up to statutory limits." Bear River Ins. Co., 1999 UT 33 at ¶ 10, 978 P.2d 460; see also Allstate Ins. Co. v. Ivie, 606 P.2d 1197, 1200 (Utah 1980)

. The PIP benefits under the Act include the payment of the reasonable value, up to the statutory limit of $3,000, of necessary medical and related expenses incurred as a result of personal injury sustained in an automobile accident. Utah Code Ann. § 31A-22-307(1)(a) (2001). PIP benefits are to "be [paid] on a monthly basis as expenses are incurred," id. § 31A-22-309(5)(a), "so that claimants can continue to meet basic living expenses," Versluis v. Guar. Nat'l Cos., 842 P.2d 865, 867 (Utah 1992). Such benefits are overdue on any valid claim for PIP benefits if not paid within thirty days of the insurer's receipt of...

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