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April 2009 Bad Faith Cases Peer Review Organization And Independent Medical Examinations Provide Reasonable Basis To Deny Additional Income Loss Payments (Western District)

In Ingraham v. Liberty Mutual Insurance Company, the district court adopted the Report and Recommendation of the Magistrate Judge in granting summary judgment to the insurer on the bad faith claim.  Summary Judgment was granted because the results of a Peer Review Organization evaluation and several Independent Medical Examinations provided a reasonable basis on which to deny additional payments of income loss benefits.
The insured was injured in a car accident and submitted bills to his automobile insurer for extensive medical and psychological treatment and for loss of income.  The insurer paid bills it determined were reasonable and necessary, after obtaining the results of a Peer Review Organization and several Independent Medical Examinations.  It refused to pay medical or income loss benefits beyond a certain date so the insured filed for breach of contract and for bad faith under the Pennsylvania Motor Vehicle Financial Responsibility Law (PMVFRL) and under the bad faith statute.
The parties agreed that the PMVFRL precluded bad faith claims regarding the first-party medical benefits but the court addressed the bad faith claim for income loss benefits under the bad faith statute.  It determined that the report results from the independent physicians constituted a reasonable basis for the insurer to deny additional income loss benefits so the Magistrate Judge recommended granting summary judgment, which recommendation the District Court adopted after its review of the report and the pleadings.
Date of Decision:  January 7, 2009
Ingraham v. Liberty Mut. Ins. Co., CIVIL ACTION No. 06-1419, 2009 U.S. Dist. LEXIS 3025 (W.D. Pa. Jan. 7, 2009)(Ambrose, C. J. adopting December 9, 2008 Report and Recommendation of Lenihan, M.J.)