Gillan v. Government Employees Ins. Co.
| Decision Date | 17 April 2008 |
| Docket Number | No. 28075.,28075. |
| Citation | 184 P.3d 780,117 Haw. 465 |
| Parties | Margret GILLAN and Howard Keller, M.D., Plaintiffs-Appellees, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Defendant-Appellant, and John Does 1-10; Jane Does 1-10; Doe Corporations 1-10; Doe Partnerships 1-10; Roe "NON-Profit" Corporations 1-10; and Roe Governmental entities 1-10, Defendants. |
| Court | Hawaii Court of Appeals |
Kathy K. Higham (Kessner Duca Umebayashi Bain & Matsunaga), Honolulu, for Defendant-Appellant.
Roy K.S. Chang and Harvey M. Demetrakopoulos (Shim & Chang), Honolulu, for Plaintiffs-Appellees.
David A. Webber and Deborah Day Emerson, Deputy Attorneys General for Amicus Curiae State of Hawai`i, by J.P. Schmidt, Insurance Commissioner.
Katherine M. Nohr (Miyagi, Nohr & Myhre), Honolulu, for Amici Curiae Hawaii Insurers Council.
Defendant-Appellant Government Employees Insurance Company (GEICO) appeals from the Amended Partial Judgment filed on July 17, 2006 in the Circuit Court of the First Circuit (circuit court).1 The circuit court entered judgment against GEICO and in favor of Plaintiffs-Appellees Margret Gillan (Gillan) and Howard Keller, M.D. (Dr. Keller) (hereinafter collectively referred to as Plaintiffs) on Plaintiffs' claim that GEICO violated Hawaii Revised Statutes (HRS) § 431:10C-308.5 (2005 Repl.)2 by basing its denial of Gillan's claim for Personal Injury Protection (PIP) benefits on the opinion of a doctor whom GEICO had chosen, without Gillan's approval, to review Gillan's medical records.
On appeal, GEICO contends the circuit court erred by granting partial judgment against GEICO and in favor of Plaintiffs because the judgment was based on an erroneous interpretation of HRS § 431:10C-308.5(b).
This case arose from GEICO's refusal to approve Gillan's claim for PIP benefits. Gillan was injured in a car accident on or about December 15, 2002, while riding as a passenger in a car insured by GEICO. It is undisputed that at the time of the accident, Gillan was entitled to treatment under PIP coverage of the GEICO policy. Gillian did receive chiropractic treatment and acupuncture, which were paid for by GEICO as PIP benefits. After receiving chiropractic treatment on March 24, 2003, Gillan did not submit a claim for PIP benefits to GEICO until her September 29, 2003 visit to Dr. Keller.
On November 12, 2003, GEICO hired Bruce Hector, M.D., (Dr. Hector) to review Gillan's medical records. In his report, dated December 8, 2003, Dr. Hector opined that Gillan's "current subjective complaints" had likely been caused by "temporal factors such as poor posture or bad sleeping position rather than long-term sequelae consequent to the accident of 12/15/02." Further, he concluded that Gillan "medically probably reached to preinjury status by April 1, 2003." He determined that Gillan should not continue to receive "passive" treatments.
Gillan also made claims to GEICO for treatment she received from Dr. Keller on December 11, 2003 and October 30, 2004, and for Magnetic Resonance Imaging services from Castle Medical Center that she received on March 18, 2005. GEICO denied these claims for the following reasons:
1. Based on a report written by [Dr. Hector], dated 12/08/03, Dr. Hector notes cessation of medical treatment, encouragement to return to a normal lifestyle, with provision of home exercise program.
2. Pursuant to HRS 431:10C-103.5(a), Treatment is not appropriate, reasonable and necessary.
On April 15, 2005, Plaintiffs filed a Complaint against GEICO, alleging that the insurer had wrongfully denied Gillan's claim. Among other things, Plaintiffs alleged that GEICO had "wrongfully resorted to hiring doctors to do records [sic] reviews in an attempt to circumvent the requirements of HRS § 431:10C-308.5(b)."
GEICO filed its answer to the Complaint on June 9, 2005.
On September 8, 2005, Plaintiffs filed a Motion for Partial Summary Judgment (Motion for Partial SJ), requesting the circuit court to find that GEICO had breached the requirements of HRS § 431:10C-308.5(b) and wrongfully denied PIP benefits owed to Gillan and payments owed to Dr. Keller. Plaintiffs also alleged that GEICO had hired Dr. Hector to conduct an Independent Medical Examination (IME) without Gillan's agreement.
On October 3, 2005, GEICO filed its opposition memorandum, in which it argued that the circuit court should deny the motion for the following reasons:
A. Neither a physical examination of a PIP claimant or [sic] even a medical opinion is a statutory condition to an insurer denying any PIP claim;
B. The legislature describes a record review as an "ancillary procedure incident to the conducting of an IME" and not, by itself, an [IME];
C. The Insurance Commissioner sanctions the use of record reviews in PIP denials, including when the PIP claimant has no say in the selection of the record reviewer;
D. GEICO is entitled to have a jury determine whether either [Gillan or Dr. Keller] is entitled to the disputed PIP benefits.
On October 6, 2005, Plaintiffs filed their reply memorandum, in which they argued that the requirements set forth in HRS § 431:10C-308.5(b) applied to record reviews.
On October 20, 2005, the circuit court filed its "Order Granting in Part and Denying in Part Plaintiffs' Motion for Partial Summary Judgment" (Order), which provided in relevant part:
A. H.R.S. SECTION 431:10C-308.5 PLAINLY AND UNAMBIGUOUSLY INCLUDES "RECORDS [sic] REVIEWS" WITHIN "[IMEs]," WHICH REQUIRES MUTUAL AGREEMENT AS TO THE IDENTITY OF THE REVIEWER.
. . . .
This motion requires that this court construe this statute to determine whether the "records [sic] review" conducted by DR. HECTOR is an [IME]. If so, "mutual agreement" between GILLAN and GEICO would have been required regarding the identity of the examiner to perform the records [sic] review. There is no dispute that no consent was obtained.
. . . .
According to H.R.S. Section 431:10C-308.5(b) an "[IME]" plainly and obviously includes "record reviews," such as the one conducted by DR. HECTOR. Accordingly, pursuant to the "plain, unambiguous and explicit" terms of the statute, GEICO was required to obtain GILLAN'S "mutual agreement" before selecting DR. HECTOR to conduct the "record review."
This court is aware that Judge Susan Oki Mollway, for whom this court has the utmost respect, in construing the same statute, ruled [in Engle v. Liberty Mutual Fire Ins. Co., 402 F.Supp.2d 1157, 1164 (D.C.Hawai`i 2005),] that a records [sic] review is not an [IME]. In so ruling, she expressed her belief "that the Hawaii Supreme Court would not apply IME statutory requirements to a mere record review or to an opinion based only on a record review." For the additional reasons stated below, this court believes that if faced with the question, the Hawaii Supreme Court would instead hold, as previously ruled by Judge Bert Ayabe of this First Circuit Court, [in Dakota v. AUG Hawaii Ins. Co., Civil No. 04-1-0436-03(BIA)], that not only a plain reading of the statute, but also, its legislative history, "indicate that an [IME] ... includes record reviews[.]"
. . . .
For the following reasons, it appears that the legislature intended to include a "record reviews" [sic] within the "[IMEs]" requiring mutual agreement.
. . . .
[I]n 1998, the Legislature specifically included [in HRS § 431:10C-308.5] "record reviews, physical examinations, history taking, and reports" under "[IMEs]" for PIP purposes, and limited charges for such examinations and reviews to permissible charges under workers' compensation schedules. In so amending the statute, the Legislature in Conference Committee Report No. 1173 stated:
The purpose of this bill is to continue the reforms enacted in Act 251, Session Laws of Hawaii 1997. In the years prior to passage of Act 251, Hawaii's consumers paid the highest auto insurance premiums in the nation in some years and the second highest in other years. Since the passage of Act 251, Hawaii's consumers have already realized significant savings. Preliminary data indicates that this favorable downward trend will continue.
Your Committee was committed to continuing the trend of decreasing automobile insurance rates for our driving public, and to that end, has focused on clarifying existing provisions and making technical corrections to Act 251. Amendments to strengthen the provisions of Act 251 and effectuate its purpose of creating a fair and equitable system that delivers maximum benefits with the greatest efficiency and the lowest cost are included. In summary, H.B. No. 2823, H.D. 1, S.D. 1, C.D. 1 contains the following amendments:
. . . .
(9) The bill incorporates measures designed to eliminate abuses and excessive charges associated with [IMEs]. The bill clarifies that the workers' compensation fee schedule charge allowable for IMEs may not be exceeded by submitting a separate charge for the report or other ancillary procedures incident to the conducting of an IME. The practice of charging up to several thousand dollars in excess of the permissible fee under the workers' compensation schedule for consultation for a complex medical problem violates the cost containment provision.
. . . .
Thus, the Legislature specifically included "record reviews" under the PIP IME statute for the explicit purpose of cost containment.
GEICO argues that the language of subsection (9) supports [ ] its position that DR. HECTOR's record review did not require GILLAN's mutual agreement, focusing on the portion which refers to "the report or other ancillary procedures incident to the conducting of an IME." According to GEICO, this means that "records [sic] reviews" were also considered ancillary...
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Gillan v. Government Employees Ins. Co.
...on June 23, 2008 to review the published opinion of the Intermediate Court of Appeals (ICA) in Gillan v. Government Employees Insurance Co., 117 Hawai`i 465, 477, 184 P.3d 780, 792 (App.2008), which vacated the July 17, 2006 amended partial judgment of the first circuit court, the Honorable......
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Gillan v. Government Employees Ins. Co.
...P.3d 163 118 Hawai'i 173 GILLAN v. GOVERNMENT EMPLOYEES INS. CO. No. 28075. Supreme Court of Hawai`i. June 23, 2008. Appeal from 117 Hawai`i 465, 184 P.3d 780. Application for writ of certiorari. ...