PAIN DIAGNOSTICS v. Brockman
| Decision Date | 22 October 1999 |
| Docket Number | No. 22706-1-II.,22706-1-II. |
| Citation | 97 Wash.App. 691,988 P.2d 972 |
| Court | Washington Court of Appeals |
| Parties | PAIN DIAGNOSTICS AND REHABILITATION ASSOCIATES, P.S., Appellant, v. Ronald C. BROCKMAN, D.O., and Jane Doe Brockman, husband and wife, and the marital community thereof; Haelan Medical Evalutions, a Washington corporation licensed to do business in the State of Washington; Independent Medical Services, a Washington corporation licensed to do business in the State of Washington; and State Farm Mutual Automobile Insurance Company, an Illinois corporation licensed to do business in the State of Washington, Respondents. |
Sanford C. Cox, Tacoma, for Appellant.
Nigel Stephen Malden, Davies Pearson, P.c., Maureen Mullane Falecki, Burgess Fitzer et al., Tacoma, Michael Simpson Rogers, William Leitch Holder, Reed McClure, Seattle, for Respondents.
Pain Diagnostics and Rehabilitative Associates (Pain Diagnostics) appeals the summary judgment dismissal of its negligence and Consumer Protection Act (CPA) claims brought against State Farm Mutual Automobile Insurance Company (State Farm), Independent Medical Services (IMS), Haelan Inc., and Ronald Brockman, D.O. We affirm.
Carla Tansey, Rebecca Burgard, Senora Stewart, and Lori and Larry Prewitt were all injured in automobile accidents. State Farm was obligated to pay each insured's reasonable and necessary medical expenses by virtue of its applicable personal injury protection ("PIP") coverage.1 Each of the insureds sought and received treatment from Pain Diagnostics.
Before treatment, each patient signed a form entitled "Insurance and Payment Policy" that assigned to Pain Diagnostics:
all interest in and to any claims of any nature whatsoever, against any insurance company, health care services contractor, HMO, PPO, liability insurance company, personal injury protection coverage provider (first party), or any other source of reimbursement that the patient is entitled to for medical services or health care costs.
Upon submission of Pain Diagnostics' treatment bills, State Farm asked Independent Medical Services and Haelan, Inc. (Haelan) to review the patients' records and give an opinion whether Pain Diagnostics' charges were reasonable and necessary.2
Both IMS and Haelan requested that Ronald O. Brockman, D. O., a board certified orthopedic surgeon and doctor of osteopathy, perform the reviews. When asked whether the treatment had been reasonable and necessary, Dr. Brockman opined that in three instances excessive treatment had been provided and in two instances independent medical examinations were needed to determine the necessity for the charged treatment.3
Pain Diagnostics, through Dr. Scott Havsy, the treating physician, strenuously objected to the contents of the reviews in correspondence with State Farm, arguing that Dr. Brockman was unqualified to give opinions. Pain Diagnostics cited the doctor's lack of clinical experience with one of the tests reviewed, the doctor's admission in a prior unrelated review of his unfamiliarity with the "fancy" tests used by Dr. Havsy, and the doctor's lack of coursework in soft tissue therapy. Clerk's Papers at 455, 459. Following Dr. Brockman's reviews, State Farm denied PIP payments for at least part of the treatment provided to each patient by Pain Diagnostics.4
After the denial of payments, Pain Diagnostics filed a lawsuit against State Farm, IMS, Haelan, and Dr. Brockman for: (1) violation of the CPA, and (2) negligence, based upon an alleged breach of RCW 48.01.030 duties imposed on insurers and their representatives to insured parties. Pain Diagnostics asserted claims both in its own stead and as assignee of the personal injury protection policies of its patients.
State Farm, Haelan, and Dr. Brockman moved for summary judgment. The trial court granted the motions; specifically holding that RCW 48.01.030 did not govern the relationship between the moving parties and Pain Diagnostics, and that the assignments related only to medical reimbursement claims, not negligence or CPA claims. Given the identical legal positions of IMS and Haelan,5 the trial court later entered an order dismissing all claims against IMS. Pain Diagnostics appeals.
When reviewing an order of summary judgment, we engage in the same inquiry as the trial court. Wilson v. Steinbach, 98 Wash.2d 434, 437, 656 P.2d 1030 (1982). Summary judgment is appropriate only if the pleadings, affidavits, depositions, and admissions on file demonstrate the absence of any genuine issues of material fact, and that the moving party is entitled to judgment as a matter of law. CR 56(c). We consider all facts submitted and all reasonable inferences from them in the light most favorable to the nonmoving party. Wilson, 98 Wash.2d at 437, 656 P.2d 1030.
But the nonmoving party may not rely on speculation, argumentative assertions that unresolved factual issues remain, or consideration of its affidavits, at face value; after the moving party has submitted adequate affidavits, the burden shifts to the nonmoving party to set forth specific facts sufficiently rebutting the moving party's contentions and disclosing the existence of a material issues of fact. Seven Gables Corp. v. MGM/UA Entertainment Co., 106 Wash.2d 1, 13, 721 P.2d 1 (1986). The court should grant the motion only if, from all the evidence, reasonable persons could reach but one conclusion. Wilson, 98 Wash.2d at 437, 656 P.2d 1030.
Pain Diagnostics first contends that the trial court erred in dismissing its negligence claims based upon a breach of RCW 48.01.030, which imposes a duty of good faith on parties involved in insurance transactions.6 We disagree.
In creating the insurance regulatory scheme, the Legislature and the insurance commissioner did not intend to provide protection or remedies for individual interests; they only intended to create a mechanism for regulating the insurance industry. Escalante v. Sentry Ins., 49 Wash.App. 375, 389, 743 P.2d 832,review denied, 109 Wash.2d 1025 (1988). Instead, private causes of action for violations of the insurance statutes and regulations must be brought under the CPA. Escalante, 49 Wash.App. at 390,743 P.2d 832; see also Industrial Indem. Co. of the N.W., Inc. v. Kallevig, 114 Wash.2d 907, 924, 792 P.2d 520, 7 A.L.R. 5th 1014 (1990)
. Pain Diagnostics' argument fails.
Pain Diagnostics next contends that each of the respondents violated the CPA, arguing that: (1) Dr. Brockman rendered unqualified opinions on the reasonableness of treatment; (2) Haelan and IMS provided these opinions to State Farm, knowing the opinions were meritless; and (3) State Farm unreasonably relied upon Dr. Brockman's opinions in denying the insurance claims.
The CPA provides that unfair or deceptive acts or practices in the conduct of any trade or commerce are unlawful. RCW 19.86.020. To prevail in a private action based on a CPA violation, a party must establish five distinct elements: (1) an unfair or deceptive act or practice, (2) occurring in trade or commerce, (3) public interest impact, (4) injury to the party in his business or property, and (5) causation. Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wash.2d 778, 780, 719 P.2d 531 (1986). Whether particular action or conduct gives rise to a CPA violation is a question of law that we review de novo. Leingang v. Pierce County Med. Bureau, Inc., 131 Wash.2d 133, 149-50, 930 P.2d 288 (1997).
Here, Pain Diagnostics asserts CPA claims directly, in its own stead, and as assignee of its patients' rights.
Pain Diagnostics' direct claims fail as they pertain to a per se action. It is well established that "only an insured may bring a per se action." Tank v. State Farm Fire & Cas. Co., 105 Wash.2d 381, 394, 715 P.2d 1133 (1986) (citing Transamerica Title Ins. Co. v. Johnson, 103 Wash.2d 409, 418, 693 P.2d 697 (1985)). Moreover, Pain Diagnostics asserts, without citation to authority, that it may maintain de facto CPA claims on its own behalf. We decline to review this argument. See State v. Johnson, 119 Wash.2d 167, 171, 829 P.2d 1082 (1992)
(); see also RAP 10.3(a)(5).
Pain Diagnostics further contends that it may maintain a CPA claim against each of the respondents via an assignment clause that each patient signed before treatment. Based upon the plain language of the assignment, Pain Diagnostics' claims against Haelan, IMS and Dr. Brockman fail.
The form that each of the appellant's patients signed before treatment, entitled "Insurance and Payment Policy," assigned to Pain Diagnostics:
all interest in and to any claims of any nature whatsoever, against any insurance company, health care services contractor, HMO, PPO, liability insurance company, personal injury protection coverage provider (first party), or any other source of reimbursement that the patient is entitled to for medical services or health care costs.
An assignee steps into the shoes of assignor and cannot recover more than the assignor could recover. Havsy v. Flynn, 88 Wash.App. 514, 519, 945 P.2d 221 (1997); Morse Electro Prods. Corp. v. Beneficial Indus. Loan Co., 90 Wash.2d 195, 198, 579 P.2d 1341 (1978). Here, the agreement assigns to Pain Diagnostics the patient's right to payment of his or her medical bills from insurers or other source of reimbursement.7 As none of the assignors was entitled to reimbursement for medical expenses from Haelan, IMS or Dr. Brockman, neither is Pain Diagnostics, as assignee. Pain Diagnostics' CPA claims against Haelan, IMS and Dr. Brockman through the assignment fail.
Pain Diagnostics also asserts that it may maintain CPA claims against State Farm through the...
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