Pennington v. Allstate Ins. Co.
| Decision Date | 08 December 1998 |
| Docket Number | No. 960524,960524 |
| Citation | 973 P.2d 932 |
| Parties | 358 Utah Adv. Rep. 5 Lorin PENNINGTON, Plaintiff, Appellant, and Cross-Appellee, v. ALLSTATE INSURANCE CO., Burns Chiropractic, Dr. David R. Trimble, D.C., Dr. Dale Bennett, D.C., Dr. Bryson Smith, Dr. Joan Balcome, St. Benedict's Hospital, and Associates in Radiology, Defendants, Appellee, and Cross-Appellant. |
| Court | Utah Supreme Court |
Daniel C. Wilson, Ogden, for Pennington.
Jan Malmberg, Logan, for Allstate.
Plaintiff Lorin Pennington appeals the trial court's ruling dismissing his action and requiring him to pay defendant Allstate Insurance Corp. ("Allstate") $15,000 in attorney fees as a sanction under rule 11 of the Utah Rules of Civil Procedure. See Utah R. Civ. P. 11. Allstate cross-appeals, claiming that the trial court abused its discretion in substantially reducing the amount of attorney fees awarded to it. We affirm.
This case arises from an automobile accident that occurred on June 18, 1993. From that accident, Lorin Pennington suffered an "uncomplicated cervical strain." Pennington did not seek any treatment for his injury on the day of the accident. He did, however, see Dr. Paul R. Taylor, M.D., the following day, Friday, June 19, 1993. During this visit, Pennington complained of neck soreness. An examination of Pennington revealed that he had full range of motion. Based on this examination, Taylor did not feel that x-rays were necessary. Instead, Taylor prescribed flexion exercises, ice, heat, rest, and 800 milligrams of Ibuprofen. Taylor advised Pennington to return to see him if the neck soreness had not resolved itself over the weekend. Taylor told Pennington that if the neck soreness had not dissipated, Taylor might take x-rays; however, Taylor stated that he "doubted" any x-rays would be necessary. Pennington did visit Taylor again on Monday, June 22, 1998. During this second visit, Taylor prescribed more neck and shoulder exercises, ice, heat, and a muscle relaxant. Pennington did not return to see Taylor. Instead, on July 1, 1993, Pennington saw Dr. Joan Balcombe, M.D., at the emergency room at St. Benedict's Hospital. Pennington complained of neck pain and headaches. Balcombe examined Pennington and found some mild tenderness of the cervical muscles. Because of Pennington's neck tenderness, his self-reported persistent pain, and the emergency room setting, Balcombe ordered x-rays. Although Balcombe found that the x-rays were normal, she prescribed additional medication and instructed Pennington to call the hospital the following day to arrange physical therapy.
Pennington did not return to or call the hospital as instructed to arrange for physical therapy. Instead, Pennington, on July 6, 1993, sought treatment from Dr. David Trimble, D.C., at the Burns Chiropractic Clinic. After Trimble examined Pennington, he performed chiropractic treatments on Pennington six times over the next eight days. A few days later, after ending treatment with Trimble, Pennington, on the advice of his father-in-law and attorney, Dan Wilson, sought chiropractic treatment from Dr. Dale Bennett, D.C., a long-time acquaintance of Wilson. Bennett treated Pennington twenty times over the course of the next thirty calendar days. Both Trimble and Bennett provided manipulative treatment of Pennington's entire spine, hips, and ribs. Neither chiropractor provided nonmanipulative care.
On July 23, 1993, Bennett performed a chiropractic manipulation on Pennington. The following day, Pennington reported to the emergency room at St. Benedict's Hospital. Dr. Val Rollins, M.D., examined Pennington, who complained of severe lower back pain. Rollins found no swelling or objective symptoms of injury. However, because Pennington complained of persistent pain and because Pennington's previous examinations and x-rays did not indicate any potential causes of Pennington's complaints, Rollins referred Pennington to Dr. Bryson Smith for a neurological consultation. Based on Pennington's subjective complaints, his treatment history, and negative x-ray results, Smith ordered an MRI scan. Pennington underwent the MRI scan on August 3, 1993, and the MRI results were normal.
After the scan came back normal, physical therapy was again recommended. Pennington went to six physical therapy sessions and three massage therapy sessions. Pennington continued chiropractic treatment with Bennett throughout this time. On some occasions, he received chiropractic treatment on the same day he received physical therapy. Pennington concluded all treatment by August 26, 1993. By this point, Pennington had accrued $4,257.87 in medical expenses.
Pennington had an insurance contract with Allstate providing that Allstate would pay for medical expenses incurred in treating personal bodily injuries caused by an automobile accident. Under the policy, however, Allstate was not required to pay any unreasonable and/or unnecessary medical expenses.
On July 30, 1993, Pennington spoke with Clay Hamblen, an adjustor, at the Ogden Allstate Claims Office and told Hamblen that he suffered a back and cervical strain. During his conversation with Pennington, Hamblen observed that Pennington appeared to have a full range of movement. Based on this observation, the fact that Pennington has seen numerous providers, and the fact that Pennington seemed determined to see additional providers, Hamblen expressed concerns about Pennington's claims to Hal Palmer, a casualty claims manager. Based on this conversation, a decision was made to perform an independent medical examination ("i.m.e.") on Pennington. Pennington's insurance policy required him to submit to medical examination by physicians chosen by Allstate. Hamblen informed Pennington that he needed to submit to an i.m.e.
After Hamblen informed Pennington about the i.m.e., Wilson telephoned Hamblen on August 13, 1993. Wilson represented himself as Pennington's attorney and father-in-law and was antagonistic about having Pennington undergo an i.m.e. Wilson told Hamblen that it was too soon for an i.m.e. and refused to have Pennington submit to it. Finally, after further delays by Wilson, Dr. Nathaniel Nord, M.D., a physician chosen by Allstate, conducted an i.m.e. on Pennington on September 28, 1993. From Nord's examination of Pennington and his treatment history, Nord concluded that Pennington had suffered a cervical strain that appeared resolved. Nord found no other physical ailments related to Pennington's auto accident. Nord concluded that Pennington had "generated undo personal concern as to his condition which led to the involvement of an excessive number of practitioners." Nord further concluded that the "undue personal concern led to his generating some duplicative treatment and expenses which were not necessary."
Based on Nord's report, Allstate concluded that much of Pennington's treatment was unnecessary and/or unreasonable and therefore refused to pay certain expenses. 1 On January 24, 1994, Pennington filed an action against Allstate, Burns Chiropractic, Trimble, Bennett, Smith, Balcombe, St. Benedict's Hospital, and Associates in Radiology. Pennington argued that all of his medical expenses were necessary and reasonable and claimed entitlement to personal injury protection ("PIP") benefits under section 31A-22-308 of the Utah Code. 2 In the alternative, Pennington claimed that if any of the charges were found to be unnecessary or unreasonable, an implied covenant between medical providers and their patients entitled Pennington to relief from the medical providers because the implied covenant required the medical providers to provide only necessary and reasonable care.
On February 19, 1994, Pennington filed a complaint against Brad Beasley, the driver of the automobile that hit him. Pennington did not send a copy of the complaint to Allstate or otherwise inform Allstate of the suit even though Pennington's insurance policy required him to inform Allstate. Approximately a month later, Pennington, in exchange for $11,000, released Beasley from any further liability related to the accident. As with the complaint, Pennington did not inform Allstate of the settlement. Pennington also entered into stipulations with Trimble and Bennett wherein they agreed to release Pennington from any charges the court found were unnecessary or unreasonable and Pennington agreed to dismiss them from the suit. Balcombe filed a motion to dismiss with prejudice, which the court granted. St. Benedict's Hospital and Associates in Radiology filed counterclaims for the amounts owed to them. Allstate settled with both, and the court dismissed them from the lawsuit with prejudice. In a minute entry, the court stated that pursuant to the parties' stipulations, all defendants except Allstate were dismissed with prejudice, thus dismissing the final individual defendant, Smith.
At the conclusion of trial, the court found that the disputed medical expenses were unnecessary and/or unreasonable and therefore dismissed Pennington's claims and entered judgment in Allstate's favor, including costs. The court also found that Pennington intentionally incurred the unnecessary expenses and that both Pennington and Wilson pursued the action with a lack of good faith. Based on these findings, the trial court sanctioned Pennington and Wilson under rule 11 of the Utah Rules of Civil Procedure, awarding Allstate $15,000 in attorney fees.
On appeal, Pennington argues that the trial court erred by imposing sanctions under rule 11 and by not granting his first and second motions for partial summary judgment; his motion for rehearing on the second motion for partial summary judgment; his motion to enter default judgment against Smith; his first, second, and third motions to compel; and his motion for sanctions against Allstate. Allstate cross-appealed, arguing that the trial court abused its discretion by reducing Allstate's attorney fee award. We begin by addressing Pennington and...
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