Parisi v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 07 May 2018
• Docket Number: CIVIL ACTION NO. 3:16-179
• Citation: Parisi v. State Farm Mut. Auto. Ins. Co., CIVIL ACTION NO. 3:16-179 (W.D. Pa. May 07, 2018)
• Parties: MELISSA C. PARISI and MICHAEL C. PARISI, III, wife and husband, Plaintiffs, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Western District of Pennsylvania

MELISSA C. PARISI and MICHAEL C. PARISI, III, wife and husband, Plaintiffs, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.

CIVIL ACTION NO. 3:16-179

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

May 7, 2018

JUDGE KIM R. GIBSON

MEMORANDUM OPINION

I.Introduction

Pending before the Court are (1) a Motion for Partial Summary Judgment on Bad Faith filed by Plaintiffs Melissa and Michael Parisi(ECF No. 38), and (2) a Motion for Summary Judgment filed by Defendant State Farm(ECF No. 40).The motions have been fully briefed (seeECF Nos. 39, 41, 55, 58, 63) and are ripe for disposition.For the reasons stated below, the Court will DENY the Parisis' motion and will GRANT in PART, and DENY in PART, State Farm's motion.

II.Jurisdiction

The Court has subject matter jurisdiction under 28 U.S.C. § 1332 because the parties are completely diverse and the amount in controversy exceeds $75,000.Venue is proper under 28 U.S.C. § 1391(b) because a substantial portion of the events giving rise to the claims occurred in the Western District of Pennsylvania.

III.Background

A.Factual History¹

1.Melissa Parisi Files a Claim for Underinsured Motorist Benefits

Melissa Parisi² sustained injuries in a car accident on April 28, 2014.³At the time of the accident, Parisi carried a State Farm insurance policy.⁴Parisi's policy provided $100,000 in underinsured motorist coverage.⁵

Parisi filed an underinsured motorist claim with State Farm via a letter dated May 23, 2014.⁶Parisi's attorney, Douglas Stoehr, drafted and signed the letter.⁷Stoehr stated that the other motorist carried a Met Life insurance policy with a $15,000 limit.⁸Stoehr wrote that, given "the serious nature" of Ms. Parisi's injuries, he had "no doubt" that her claim would exceed the limit of the other driver's policy.⁹

State Farm assigned Parisi's claim to Scott Whiteside, a claims representative.¹⁰Whiteside reviewed Parisi's claim on June 3, 2014, and determined that the other drivercaused the crash.¹¹The same day, Whiteside called Stoehr's office, but did not speak with Stoehr because he was unavailable.¹²

On June 5, 2014, Whiteside wrote to Stoehr.¹³Whiteside asked Stoehr to provide State Farm with "written confirmation" of the other motorist's insurance limits and stated that State Farm would not authorize Stoehr to settle with the other motorist until it received this written confirmation.¹⁴Whiteside also stated that State Farm understood that Parisi continued to seek medical care for her injuries.¹⁵And Whiteside stated that State Farm needed records of "all injuries and all treatment" to finalize Parisi's claim.¹⁶Whiteside requested that "[u]pon your client concluding [her] medical treatment, please advise me regarding the same."¹⁷

Whiteside entered two claims notes on June 15, 2014.¹⁸Whiteside stated that the "CV"(current value) of Parisi's claim was $0.¹⁹Whiteside also noted that he had requested additional information from Stoehr "so that UIM evaluation may be finalized."²⁰

2.State Farm Requests Additional Information

Whiteside sent Stoehr six letters between July 2014 and January 2015.²¹These letters are extremely similar.In each letter, Whiteside requests that Stoehr provide State Farm with written confirmation of the other motorist's third-party coverage.²²The letters either state that State Farm understands that Parisi continues to seek medical treatment for her injuries, or request that Stoehr inform State Farm about whether Parisi continues to receive treatment.²³In each letter, Whiteside asks Stoehr to notify State Farm when Parisi completes treatment and requests that he provide State Farm with Parisi's complete medical records at that time.²⁴

Whiteside also states that Stoehr need not provide documentation of medical treatment that Parisi already submitted for her first-party claim.²⁵This is because Whiteside had access to, and reviewed, the medical records from Parisi's first-party claims file.²⁶These records included: two reports from Parisi's treating neurologist who, on May 13, 2014, diagnosed her with "post-concussion syndrome" and, during Parisi's second office visit on May 27, 2014, noted that she experienced "a lot of memory issues;" two reports from a concussion specialist who, during two appointments in May 2014, confirmed Parisi's diagnoses of a concussion and labyrinthine dysfunction and reported that she experienceddifficulty concentrating and deficits in short-term memory; and records from the forty physical therapy sessions that Parisi completed between May 2014 and August 2014.²⁷

On February 18, 2015, Stoehr submitted another batch of Parisi's medical records.²⁸These included E.R. records; reports from four different doctors who treated Ms. Parisi following the accident; and updated documentation of Parisi's ongoing physical therapy.²⁹In this letter, Stoehr informed Whiteside that he typically "work[s] with the [underinsured motorist] claims representative after [he] settle[s] the underlying claim."³⁰Whiteside confirmed receipt of the records via letter dated March 4, 2015.³¹Whiteside requested that Stoehr provide documentation of any future care that Parisi received so that State Farm could consider all treatment when making a final decision on her claim.³²

3.State Farm Completes an Injury Evaluation

Whiteside completed an injury evaluation on March 17, 2015.³³Whiteside noted that Parisi suffered from post-concussion syndrome and experienced dizziness, headaches, balance problems, and sensitivity to sound and light.³⁴Whiteside confirmed that the automobile accident caused Parisi's injuries and concluded that Parisi's medical treatment appeared "reasonable and necessary."³⁵

Stoehr provided additional medical records on March 18, 2015.³⁶These records included a report from Dr. Michael Drass, who conducted a physical examination of Parisi; two office notes from Dr. Clark, Parisi's neurologist; four months of records from Parisi's ongoing physical therapy; and reports from two visits to Parisi's primary care physician.³⁷Additionally, Stoehr stated that Parisi might receive an evaluation by a neuropsychologist and that he would inform State Farm if that occurred.³⁸Whiteside did not update the injury evaluation after he received these records.³⁹

Stoehr informed Whiteside via letter dated March 19, 2015, that he settled with the other motorist for the $15,000 policy limit.⁴⁰

All told, Stoehr provided State Farm with over 200 pages of medical records in February and March 2015.⁴¹But Whiteside—who handled Parisi's claim until the end of May 2015—never asked to interview Parisi.⁴²He never requested authorization to obtain Parisi's medical records himself.⁴³He never utilized a nurse to evaluate Parisi's claim.⁴⁴And he never asked Parisi to provide a statement under oath or submit to an independentmedical examination.⁴⁵But Whiteside did place a value on Parisi's claim.⁴⁶In April 2015, Whiteside valued Parisi's claim between $0 and $7,500.⁴⁷

Stoehr sent additional medical records on June 1, 2015.⁴⁸These records included two reports from Dr. Clark, Parisi's neurologist, who noted Parisi's worsening "forgetfulness, headaches, and speech problems . . . ."⁴⁹Stoehr also provided a report from Dr. Baker—the concussion specialist—who noted increased symptom severity.⁵⁰Stoehr also submitted letters from Parisi's husband, daughter, and sister that detailed the changes they observed in Parisi since the car accident.⁵¹State Farm never responded to Stoehr's June 1, 2015 letter.⁵²

State Farm reassigned Parisi's claim to Edward Naser in August 2015.⁵³Naser sent Stoehr letters in August and October 2015 that asked Stoehr to submit "your underinsured demand package when complete."⁵⁴Stoehr did not respond to either letter.⁵⁵

Naser called Stoehr on November 11, 2015.⁵⁶Stoehr told Naser that Parisi was still treating with her neurologist and that she had a follow-up appointment with her concussion specialist.⁵⁷Stoehr told Naser that he would submit additional medical records to State Farm.⁵⁸

Naser sent Stoehr a letter on November 11, 2015 that asked Stoehr to submit a demand package for consideration.⁵⁹Stoehr responded on November 19, 2015.⁶⁰In his response, Stoehr provided Naser with a neurological evaluation prepared by Dr. Michelle Arbitell, dated May 14, 2015, which Parisi obtained at her own expense.⁶¹Dr. Arbitell reported that Parisi exhibited impairments in several tests of cognitive functioning.⁶²Stoehr also provided updated treatment records from Parisi's speech language therapist, examination records from a physician, documentation of Parisi's lost wages and medicalexpenses, and an affidavit from a physician-assistant with whom Parisi worked.The physician-assistant testified that Parisi's work performance, attention, and concentration decreased precipitously following the car accident and that she could no longer rely on Parisi at work.⁶³Additionally, Stoehr stated that Parisi scheduled an appointment with her neurologist in late December and that she would also schedule an appointment with her concussion specialist.⁶⁴Stoehr concluded the letter by telling Naser that "[p]erhaps after these upcoming medical appointments we may be in a position to settle this claim."⁶⁵

4.State Farm Completes an Updated Injury Evaluation

Naser interpreted Stoehr's submission of medical records on November 19, 2015 as a demand for settlement.⁶⁶Naser completed an updated injury evaluation for Parisi's claim on December 15, 2015.⁶⁷Naser noted that the car accident caused Parisi's injuries and that her medical treatment appeared to be "reasonable and necessary."⁶⁸Naser set the value range on Parisi's claim between $35,000 and $50,000 for pain and suffering, $1,800 for past medical bills, and $10,000 for past wage loss.⁶⁹Naser's estimate did not account for future pain and suffering.⁷⁰Bill Reed, Naser's supervisor, understood that Naser asked forsettlement authority by placing a value...