author: GARDNER, P.J.,

text:
    Buchman v. Colusso

      C.P. of Lehigh County,
    no 97-C-2876.

      Daniel E. Kleiner, for plaintiffs.

      James F. Swartz III, for defendant.
    March 8, 2000
   GARDNER, P.J.,

This matter is before the court on plaintiffs’ motion for post-trial relief filed March 29, 1999. Immediately after oral argument held March 8, 2000 we dictated the within bench opinion in open court on the record and in the presence of counsel for defendant. For the reasons expressed below, we deny plaintiffs’ motion for post-trial relief.

This is a personal injury action in which plaintiff Ellwood A. Buchman seeks compensation for injuries suffered in an automobile accident on December 12, 1996. Wife, plaintiff Betty Buchman, brought a loss of consortium action.

At the beginning of the trial, counsel and the parties entered into the following stipulation:

“On December 12, 1997 in the late morning hours, the three vehicles involved in this accident were each proceeding westbound on Route 222. At the traffic light at the intersection of Route 222 and Route 100 in Trexlertown, Lehigh County, Pennsylvania, defendant was unable to bring his vehicle to a stop and struck the rear of the vehicle in front of him, which was operated by Craig Swartzendruber, which in turn struck the rear of plaintiff’s vehicle, which was in front of the Swartzendruber vehicle.
“Defendant agrees that his conduct was negligent, but does not concede that his negligence caused the injuries alleged by plaintiffs.
“The parties do not contend that Craig Swartzendruber’s conduct contributed in any way to causing the accident described.”

On March 16 and 17,1999, a jury trial was held. This was a trial de novo as a result of an appeal by defendant from an arbitration award in favor of plaintiffs in the amount of $25,000.

At the conclusion of the jury trial, the jury completed its verdict slip on March 17, 1999, after deliberations. The verdict slip, which was pre-approved by counsel for the parties, contained three questions. Question one stated, “In this case defendant, Angelo A. Colusso, has conceded that he was negligent in the operation of his automobile on December 12, 1996. Was the negligence of defendant a substantial factor in bringing about harm to plaintiff, Ellwood A. Buchman?” The jury was then required to answer “yes” or “no.”

Question two invited the jury to “state the amount of compensatory damages, if any, sustained by plaintiff Ellwood A. Buchman as a result of defendant’s negligence.” Question three invited the jury to “state the amount of damages, if any, sustained by the wife plaintiff Betty Buchman as a result of the accident for loss of consortium.”

The jury answered question number one “no.” As a result of the negative response to question one, the jury, appropriately, did not answer questions two and three. Accordingly, on March 17, 1999, the undersigned trial judge molded the verdict as a finding for the defendant and against the plaintiffs. Because of an error in the wording of the original molded verdict, the undersigned entered an amended molded verdict on October 29, 1999 also finding for the defendant and against the plaintiffs.

On March 29, 1999, plaintiffs filed a timely motion for post-trial relief. In their post-trial motion, plaintiffs argued that a verdict awarding no damages to them was contrary to the weight of the evidence and contrary to the law. For the following reasons, we disagree.

According to the middle driver in this three-car, rear-end collision, Craig Swartzendraber, he was struck in the rear by defendant’s vehicle. He described the initial impact as “a slight jolt” but “enough to push me into the truck in front of me,” operated by plaintiff Ellwood Buchman. He also testified, “It didn’t push my body back and forth.” Mr. Swartzendraber was driving a two-door Ford Escort sedan. He testified that his impact with plaintiff’s vehicle “was not as great as the impact in my rear.”

Mr. Swartzendraber testified that he could not tell whether or not his vehicle sustained any damage. He indicated that he had some scratches on both the front bumper and rear bumper of his vehicle but that he had previously sustained some damage to each end of his vehicle. He was unable to tell whether any of the damage was caused by the within accident. Mr. Swartzendraber testified that he had no injuries. On cross-examination he testified that the first hit was “a good bump.”

Plaintiff Ellwood Buchman contended that he experienced pain in his neck and back as a result of the accident. He was able to drive his vehicle away from the scene. Later that day he visited his family doctor, Dennis Moss D.O. He treated with Dr. Moss for four to five weeks, and then was discharged.

Approximately one month later, plaintiffs contend that Mr. Buchman began to experience pain in his neck which went down his arm and into his left hand. Dr. Moss sent Mr. Buchman to Dr. Zev Elias, a neurosurgeon, in February 1997, because Mr. Buchman’s condition had not improved. Dr. Elias prescribed medication for Mr. Buchman and sent him to physical therapy. After two visits, on May 8,1997 and June 9,1997, with the physical therapist, plaintiff obtained a CAT scan. It revealed no fractures but revealed degenerative arthritic changes in the cervical area of plaintiff’s spine.

Plaintiff also sought treatment from Dr. James Weiss, an orthopedic surgeon, to determine whether he would be amenable to surgery. Dr. Weiss did not feel that plaintiff was a candidate for surgery. Dr. Weiss recommended that plaintiff undergo a magnetic resonance imaging test (MRI), which is a specialized x-ray, to try to determine the cause of his pain. However, because Mr. Buchman is claustrophobic, he was unable to complete the MRI test.

Dr. Weiss concluded that plaintiff suffered from cervical spondylosis which correlates with his degenerative arthritic changes.

Dr. Weiss also concluded that plaintiff’s arthritic condition was aggravated by the motor vehicle accident.

The only expert who testified for plaintiff was Dr. Moss. Neither Dr. Elias nor Dr. Weiss testified.

Nearly two years after the accident, on September 2, 1998, plaintiff was examined by defendant’s expert neurologist, Peter J. Barbour M.D.

Dr. Barbour concluded that plaintiff had a number of preexisting conditions including prostatic cancer, a hernia repair, emphysema, coronary artery disease, and a prior injury to his left shoulder.

Dr. Barbour concluded that plaintiff also had a prior arthritic condition in his neck and a separate arthritic condition in his back.

Dr. Barbour concluded that plaintiff had near full range of motion in his neck, and movement of his neck in all directions did not elicit pain. Dr. Barbour did not find any specific pattern of abnormality that would lead him to believe that there was a specific nerve injury. His examination looked normal.

Dr. Barbour diagnosed plaintiff with dyesthesia, which he described as a “funny feeling.” He attributed this condition to the plaintiff’s preexisting arthritic condition. He found “little objective evidence of neurologic dis-function at this time.” He also opined that plaintiff embellished most of the complaints in his examination, making assessment difficult.

Dr. Barbour attributed plaintiff’s complaints to degenerative joint changes at the cervical spine. On cross-examination he admitted it was “conceivable that the motor vehicle accident could have led to compromising the C-8 root. However, I found no clear imaging study demonstrating a C-8 root compromise.”

Dr. Barbour concluded that plaintiff’s complaints were “largely subjective” and that he could not objectively quantify any of those complaints.

Dr. Barbour also diagnosed an injury to the ulnar nerve at the elbow. He testified, “I don’t see how the motor vehicle accident that day and the mechanism of the injuries described to me would injure the ulnar nerve at the elbow.”

Plaintiffs rely on appellate decisions which grant new trials where a jury awarded no money damages for personal injuries allegedly resulting from an automobile accident. Defendant relies on appellate decisions holding the contrary in similar circumstances. For the reasons expressed below, we find the cases relied upon by plaintiffs to be distinguishable, and the cases relied upon by defendant to be on point.

Defendant relies, in part, upon Livelsberger v. Kreider, 743 A.2d 494 (Pa. Super. 1999). This case is on point. The case arises from an automobile accident where plaintiff Russell Livelsberger was struck from the rear by a vehicle operated by defendant Joy Kreider while Mr. Livelsberger was making a left-hand turn. The jury concluded that the accident had not caused injuries to plaintiff Connie Livelsberger, a front-seat passenger in her husband’s car, and made no award to her.

Defendant presented evidence that Mrs. Livelsberger’s complaints were present before the accident. A photograph of their vehicle after the accident raised questions as to the claimed extent of damage and the severity of the impact. Mrs. Livelsberger was treated and released at a hospital after the accident. All tests were normal. She then began treatment with her family physician for headaches, musculoskeletal pain and forgetfulness.

Plaintiffs’ expert first saw Mrs. Livelsberger two and one-half years after the accident and testified that she had done “well,” had been able to control her symptoms and that her symptoms had not been a major problem for her.

Defendant’s expert orthopedic surgeon testified that Mrs. Livelsberger “may have” sustained a cervical sprain and nothing else. However, he never conceded that she actually had suffered such an injury. He testified that objective testing did not document any injury from the motor vehicle accident or any of plaintiff’s subjective complaints. The medical records indicated that plaintiff had a history of physical complaints including headache, neck pain and low-back pain prior to the accident.

Even though defendant in the Livelsberger case stipulated as to liability, the jury awarded no damages on the ground that defendant’s negligence had not caused the plaintiff harm.

The Superior Court of Pennsylvania in Livelsberger stated that “the jury is free to believe all, part, or none of the evidence.... ‘[The] jury is entitled to reject any and all evidence up until the point at which the verdict is so disproportionate to the uncontested evidence as to defy common sense and logic.’ ” 743 A.2d at 497.

Because defendant’s expert did not concede that Mrs. Livelsberger had suffered damages from the accident and because Mrs. Livelsberger’s credibility was for the jury to determine, and because defendant’s expert unequivocally related all of her complaints to a condition that preceded and was unrelated to the motor vehicle accident, the Superior Court affirmed the trial judge’s decision upholding the jury verdict.

Similarly, defendant relies upon Holland v. Zelnick, 329 Pa. Super. 469, 478 A.2d 885 (1984). In Holland, plaintiff’s vehicle was struck in the rear by defendant’s vehicle while stopped at a traffic control device. Plaintiff alleged various injuries to her neck area. Defendant’s expert medical witness noted that neither he nor any of the physicians who had treated plaintiff found any objective evidence of pain. His opinion was that the accident did not cause plaintiff to have the pain of which she complained. He testified that her pain was subjective and was brought on by the litigation. Plaintiff also admitted that she had suffered an injury to her neck in another automobile accident nine months before the present accident. The evidence at trial indicated that the accident involved in the lawsuit consisted of a mere “thump” or “bump.”

The jury in Holland returned a verdict finding defendant negligent but concluding that defendant’s negligence did not bring about plaintiff’s injuries, and awarded plaintiff no damages. The trial court denied plaintiff’s motion for a new trial limited to the issue of damages.

The Superior Court in Holland ruled that,

“Simply put, the jury rejected the testimony of plaintiff’s expert medical witnesses and accepted the testimony of defendant’s expert. The jury simply did not believe that the headaches and other severe pain described by plaintiff and her parents at her trial were caused by defendant’s negligent action in bumping plaintiff’s vehicle. Thus, the jury found that defendant’s negligence was not the proximate cause of plaintiff’s complaints and the failure of it to find proximate cause was fatal to plaintiff’s claim.” 329 Pa. Super. 474, 478 A.2d at 887.

Plaintiff in Holland argued that because defendant’s expert medical witness admitted that a collision from the rear can cause soft tissue injury to the cervical area and that plaintiff might very well have suffered such an injury, that the jury, having found defendant negligent, was required to award her something. The Superior Court found, however, that the issues as to whether plaintiff was really suffering any pain and whether any such pain was caused by defendant’s conduct was for the jury. The Superior Court found that the jury was not required to award plaintiff any amount, as it obviously believed that any injury plaintiff suffered in the accident was insignificant. 329 Pa. Super. at 475, 478 A.2d at 888.

Plaintiff in the instant case relies upon Neison v. Hines, 539 Pa. 516, 653 A.2d 634 (1995) and Hawley v. Donahoo, 416 Pa. Super. 469, 611 A.2d 311 (1992). We agree with defendant that both of these cases are distinguishable and inapplicable.

In Neison, plaintiff was stopped to make a right-hand turn into a market. As plaintiff waited with her right-hand turn signal on, she was struck from behind by a pickup truck driven by defendant. The impact was so severe that it caused plaintiff’s head to be thrown backward, shattering the rear window of her two-seat sports car. She was treated at the emergency room for a lump on her head and pain resulting from the accident and then released. She was diagnosed with a cervical strain. The force of the impact was so severe that plaintiff’s car was described as having been “wiped out” and looking like “an accordion.” Her car was struck with such force that the glasses which plaintiff was wearing prior to the accident were found by a volunteer fireman on the trunk of the vehicle. The force of the collision caused the trunk to crack and split.

The jury in Neison awarded plaintiff no damages for pain and suffering desite the fact that defendant admitted liability for the accident.

Defendant’s expert in Neison was an orthopedic surgeon who examined plaintiff two years after the accident. He opined that plaintiff sustained a neck sprain and shoulder blade sprain in the accident, that these injuries usually take three-to-five months to heal, and that plaintiff was healed when he examined her.

In sustaining post-verdict motions, the trial judge in Neison found that the award of no damages to plaintiff “shocked the conscience of the court” given the nature and amount of evidence presented. The trial court determined that the defense was “that the injuries lasted a brief period of time, not that there were no injuries or pain and suffering.” Id. at 520, 653 A.2d at 637.

Although the jury is free to believe all, some or none of the testimony presented by a witness, the verdict must bear some reasonable relation to the loss suffered by the plaintiff as demonstrated by uncontroverted evidence presented at trial. “The synthesis of these conflicting rules is that a jury is entitled to reject any and all evidence up until the point at which the verdict is so disproportionate to the uncontested evidence as to defy common sense and logic.” 539 Pa. at 521, 653 A.2d at 637.

The Superior Court agreed with the trial court that, under the circumstances of Neison, the verdict was so disproportionate to the uncontested evidence as to defy common sense and logic. Accordingly, a new trial was granted on the issue of damages.

Plaintiff also relies on Hawley v. Donahoo, supra. In that case, defendant conceded liability in an automobile accident with plaintiff. Defendant also conceded that plaintiff suffered a compression fracture of the L-3 vertebrae as a result of the accident. However, because plaintiff had a prior history of back injuries, the extent of the damage caused by the instant injury was contested.

Defendant asserted that the fractured vertebrae was a minor injury which healed, in most, at six weeks, and that any pain plaintiff was presently suffering was a result of a preexisting condition. Defendant presented no witnesses, expert or otherwise. Plaintiff presented the testimony of himself, his wife, his employer and two of his physicians.

After the jury awarded plaintiff zero damages, the trial court denied plaintiff’s post-trial motion. The Superior Court reversed, citing the general rule that victims must be compensated for all those losses caused by the negligence of another. The court reasoned that the existence of the fractured vertebrae was not questioned by defendant on cross-examination and, therefore, the jury’s refusal to believe in the existence of this injury was unwarranted. Moreover, in closing argument, defense counsel recognized the existence of some pain in plaintiff as a result of the accident for a period of four-to-six weeks until it healed. Accordingly, the case was remanded for a new trial. Hawley, 416 Pa. Super. at 472, 611 A.2d at 312-13.

To reconcile the above opinions, the appellate courts have stated that if the accident is severe and objective injuries are either conceded or uncontested, the jury errs in awarding no damages. This is not the situation in the instant case.

However, where the impact of the accident is slight, plaintiff’s injuries are subjective, there is no objective evidence of such injuries, defendant’s witnesses and attorney do not concede those injuries, and there are preexisting conditions to explain the subjective complaints, then the jury verdict of no damages is appropriate and will be sustained. The jury may find that certain minor injuries result from “transient rub of life and living, a momentary stab of fear and pain, or neither.” Hawley, 416 Pa. Super. at 473, 611 A.2d at 313. There are other, more serious injuries to which human experience teaches there is accompanying pain. These include the broken bone, the stretched muscle, twist of the skeletal system, and injury to a nerve or organ or their function. Such injuries are compensable. Id.

The evidence in the within case, including plaintiff’s preexisting arthritic condition, plaintiff’s complaint of pain in the low-back approximately one month before the accident, and the relatively light impact in this accident, together with the lack of any objective evidence of injury, enabled the instant jury to reject plaintiff’s subjective complaints of pain, to believe defendant’s expert and reject plaintiff’s expert, and to find that any pain resulting from this accident was nothing more than a transient rub of life and living, and, therefore, not compensable.

Accordingly, we deny and dismiss plaintiffs’ post-verdict motion.

ORDER

Now, March 8,2000, upon consideration of plaintiffs’ motion for post-trial relief filed March 26, 1999; upon consideration of the briefs of the parties; after oral argument held this date; and for the reasons expressed in the accompanying bench opinion, we deny and dismiss plaintiffs’ motion for post-trial relief.

      . Because of a prior commitment, plaintiffs’ counsel asked to be excused from the announcing of the bench opinion, and waived his right to be present.


source: Caselaw Access Project

author: SCHMEHL, J.,

license: Public Domain

text:
    Kurtz v. Stamm
    C.P. of Berks County,
    no. 93-0890-00.

      Leonard N. Herb, for plaintiff

      Susan E.B. Frankowski, for defendant.
    April 6, 2001
   SCHMEHL, J.,

This matter comes before this court on defendant’s exceptions to the domestic relations hearing officer’s recommendations and subsequent order of January 17, 2001. The original support petition in this matter was filed by Mother in 1993; since its inception, Mother has petitioned this court once to modify the support order, and Father, twice. This is Father’s second petition to modify.

Father and Mother are the parents of two children, Rodney Warren Stamm Jr., born January 23, 1987, and Ashley Stamm, born July 9,1988. The parties separated in 1992 and were divorced in 1993; since the parties’ separation the minor children have primarily resided with Mother. By this court’s order of March 25, 1999, in the custody action docketed to no. 97-9978, Father’s period of physical custody was expanded to include, not only one long weekend per month, but the entire school summer vacation period, with the exception of two weeks when Mother has custody of the children for vacation. It is this change in the custody arrangements that occasions Father’s petition to modify. Father has requested that the support order be suspended during the summer vacation period when he has custody of the children. Mother was not agreeable to such suspension. Father has advanced the argument that, since he is solely responsible for the children for all but two weeks of the summer vacation period, his support obligations payable to Mother should be suspended for that period. At the hearing before the domestic relations hearing officer on November 1,2000, Father estimated his period of physical custody of the children had increased to 31 percent of the year. The support hearing officer, Pamela DiMartino, Esq., issued a report and proposed order dismissing Father’s petition as not founded in law. Father excepts to the report and proposed order.

At argument Father’s counsel contended that, while Father’s custody amounts to 31 percent of the entire year, it amounts to nearly 100 percent of the summer vacation period. If the summer vacation period were to be viewed separately from the academic year, and support calculated for the summer months with Father as primary custodial parent, Father would, so the argument goes, receive a credit to be applied against his support obligations payable to Mother.

But counsel for Father has offered no precedential authority for his argument. The explanatory comment to Pa.R.C.P. 1910.16-4 states that it is only when one party has physical custody for 40 percent or more of the time that a court should deviate from the recommended support:

“Subdivision (c) sets forth the method for calculating the presumptively correct amount of support in cases where the obligor spends a substantial amount of time with the children. The method is essentially this: when the obligor spends 40 percent or more time with the children, his or her percentage share of the combined basic support obligation is reduced by the percentage of time spent over and above the routine partial custody/visitation arrangement. For purposes of applying this method, the committee has designated 30 percent time as the routine arrangement and 40 percent time as the level at which the parties’ expenses begin to change significantly enough to warrant a reduction in the basic support obligation ...Explanatory comment—1998, Pa.R.C.P. 1910.16-4 (West 2001).

Father has presented no evidence of extraordinary expenses; nor has Father’s counsel argued that more expenses are incurred when children reside with a parent for a continuous and extended period of time than when children spend the same period of time in weekends and holidays over the year.

The case law prior to 1998 cited by counsel predates the rule change and offers no guidance to this court; indeed, according to the explanatory comment of 1998 to Pa.R.C.P. 1910.16-1, it was the number of inconsistent decisions being rendered regarding the reduction of child support obligations that motivated the rules committee to take discretion out of the hands of judges:

“(4) Shared Custody. Under the prior guidelines, there was no formula or procedure for deviating from the basic support guidelines when custody is shared equally or the non-custodial parent has substantial partial custody. The guidelines provided that the obligor’s support obligation should be reduced only if he or she spent ‘an unusual amount of time with the children.’ Yet, there have been several decisions rejecting deviation even if the obligor spends almost 50 percent of the time with the children. See e.g., Anzalone v. Anzalone, 449 Pa. Super. 201, 673 A.2d 377 (1996) (40 percent time was not ‘unusual’); Dalton v. Dalton, 409 Pa. Super. 258, 597 A.2d 1192 (1991) (43 percent time did not justify deviation).
“It is generally agreed, however, that there should be some reduction in the support obligation in these cases to reflect the decrease in the obligee’s variable expenses and the increase in obligor’s fixed and variable expenses as a result of the children spending substantially more time with the obligor. As part of its four-year review of the guidelines, the committee examined seven different methods being used by other states but found that none of them met these objectives without producing a substantial reduction in the support obligation at some income levels or income differentials for relatively small increases in custodial time. As a result, the committee initially recommended the alternative solution of no reduction at all for time spent with the children. Based on the comments received, however, the committee reconsidered this recommendation and ultimately selected a method which gives some recognition to the shift in child-related expenditures that occurs when the obligor spends a substantial amount of time with the children.
“This method is set forth in Rule 1910.16-4(c) and has been built into the formula used to calculate the presumptively correct amount of the support obligation. While not a perfect solution to the problem of establishing support obligations in the context of substantial or shared custody, it is better than the previous void and preferable to the many offset methods developed by local courts which effectively reduced the support obligation out of proportion to the increase in custody time. Its chief advantage is that there is no sharp reduction in the obligation at the 40 percent threshold. It also provides statewide uniformity____” Explanatory comment—1998, Pa.R.C.P. 1910.16-1 (West 2001).

This court can understand that it may seem illogical and annoying to Father to be required to make child support payments while he has full physical custody of the children, and while Mother contends through counsel in her pleading that she needs such child support payments to pay the mortgage on the home she shares with her new husband. However, Pennsylvania law provides no relief to Father. The commentary to Rule 1910.16-4 specifically states that it is assumed that one parent will have custody of the child or children 30 percent of the time, and that this is the “routine” arrangement. Father stated at the hearing before the domestic relations hearing officer that he has physical custody for 31 percent of the children’s time. The commentary provides no support for making a distinction between physical custody for short non-consecutive periods scattered throughout the year and the same total number of consecutive days of physical custody over an extended vacation period. With no precedent to support Father’s position, this court finds it cannot draw such a distinction where the rules committee has declined to do so.

For the foregoing reasons, this court enters the following order:

ORDER

And now, April 6, 2001, it is hereby ordered and decreed that defendant’s exceptions to the findings of fact, conclusions of law and recommendation of the domestic relations hearing officer dated January 17, 2001, are hereby dismissed.


author: ALEJANDRO, J.,

text:
    Liberty Mutual Insurance Co. v. Pennsylvania Property and Casualty Insurance Guaranty Association

      Brian L. Calistri, for plaintiffs.

      Lise Luborsky, for defendant.
    May 7, 2001
   ALEJANDRO, J.,

INTRODUCTION

This matter commenced as a declaratory judgment action on a matter of first impression seeking to determine whether the Pennsylvania Property and Casualty Insurance Guaranty Association is entitled to offset workers’ compensation benefits received in 1992 from a medical malpractice action which was settled in 1998. Both Liberty Mutual Insurance Company and Catherine O’Brien, plaintiffs, and PPCIGA filed separate motions for summary judgment. These pleadings were assigned to the undersigned motion judge. By orders dated December 19, 2000, plaintiffs’ motion for summary judgment was granted; defendant’s motion for summary judgment was denied. Dissatisfied, defendant filed this appeal.

FACTUAL AND PROCEDURAL HISTORY

In December 2000, this motion judge carefully reviewed the pleadings and exhibits filed in this matter, as well as the memorandum of law submitted in support of the respective pleadings. Briefly, the factual and procedural record, defined by these pleadings, is as follows:

On June 6, 1990, plaintiff Catherine O’Brien, while in the course and scope of her employment with Ports of the World, fell and suffered injuries to her right anide and foot. Plaintiff Liberty Mutual Insurance Company, the workers’ compensation insurance carrier for the employer, paid her benefits in the amount of $58,985.

For her injuries, plaintiff O’Brien sought treatment from Gary Muller M.D., at Academy Industrial and Occupational Heath Services Inc. Believing these providers breached their duty of care and responsibility, plaintiff O’Brien sued Dr. Muller and Academy Industrial in the Philadelphia Court of Common Pleas, in a matter entitled Catherine O’Brien v. Muller, March term 1993, no. 0491. At the time of the alleged malpractice, Dr. Muller was insured by the Physician Insurance Company. Under the terms of Dr. Muller’s policy, PIC provided primary coverage of $200,000 for any loss. Thereafter, an excess coverage of $1 million insurance was provided by the Pennsylvania Medical Catastrophic Loss Fund (commonly known as the CAT Fund). By order of the Commonwealth Court dated January 21, 1998, PIC was ordered into liquidation due to its insolvency, and its covered claims, as defined by statute, were assumed by Pennsylvania Property and Casualty Insurance Guaranty Association, the defendant in this instant matter. See 40 P.S. §991.1803.

On November 6, 1998, plaintiff O’Brien agreed to settle her medical malpractice civil action for a gross amount of $107,500. As part of the settlement agreement, plaintiff O’Brien and defendant PPCIGA reserved the right to litigate the issue of whether defendant PPCIGA was required to pay the full amount of the settlement or was entitled to offset the amount plaintiff O’Brien received in workers’ compensation benefits ($58,985). Consequently, defendant PPCIGA forwarded, and plaintiff O’Brien accepted, a partial settlement payment of $48,515. Thereafter, the declaratory action was filed and this motion judge was presented with the parties’ respective motion for summary judgment.

ISSUE

In response to an order issued on January 22, 2001, in accordance with Pennsylvania Rules of Appellate Procedure 1925(b), defendant PPCIGA on February 7,2001, filed of record a concise statement of matters complained of on appeal, and essentially contends that:

“The order granting summary judgment against defendant PPCIGA is contrary to the clear statutory language of the Pennsylvania Property and Casualty Insurance Guaranty Association Act, 40 P.S. §991.1801 etseq.”

LAW AND DISCUSSION

The standard for ruling on motions for summary judgment is set forth in Pennsylvania Rules of Civil Procedure 1035.1 through 1035.5. In their pertinent part, these rules provide that summary judgment shall be rendered:

“[Ajfter the relevant pleadings are closed... any party may move for summary judgment... whenever there is no genuine issue of any material fact as to a necessary element of the cause of action ....”

A grant of summary judgment is proper where the record [pleadings, depositions, answers to interrogatories, admissions of record, and affidavits] supports the lower court’s conclusion that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Doe v. Philadelphia Community Health Alternatives AIDS Task Force, 745 A.2d 25, 27 (Pa. Super. 2000); Krause v. Great Lakes Holdings Inc., 387 Pa. Super. 56, 563 A.2d 1182 (1989), alloc. denied, 524 Pa. 629, 574 A.2d 70 (1990). A trial court must accept as true all well-pleaded facts relevant to the issues in the non-moving party’s pleadings, and give the non-moving party the benefit of all reasonable inferences to be drawn from the facts. Id.; Rybas v. Wapner, 311 Pa. Super. 50, 457 A.2d 108 (1983). The court must ignore controverted facts contained in the pleadings and restrict its review to material filed in support of and in opposition to a motion for summary judgment and to those allegations in the pleadings that are uncontroverted. Overly v. Kass, 382 Pa. Super. 108, 554 A.2d 970 (1989). Summary judgment should not be entered unless the case is clear and free from doubt. Nationwide Mutual Insurance Co. v. Nixon, 453 Pa. Super. 70, 75, 682 A.2d 1310, 1313 (1996), alloc. denied, 548 Pa. 613, 693 A.2d 589 (1997). (citations omitted)

An appellate court will overturn a trial judge’s order granting a motion for summary judgment only if there has been a clear abuse of discretion or an error of law. Accu-Weather Inc. v. Prospect Communications Inc., 435 Pa. Super. 93, 644 A.2d 1251 (1994). An abuse of discretion exists when, in reaching a conclusion, the trial court misapplies or overrides a law, or when the judgment exercised is manifestly unreasonable or lacking in reason. In re Deed of Trust of Rose Hill Cemetery Association, 527 Pa. 211, 590 A.2d 1 (1991).

Here, there are no disputes as to the material facts. What was in dispute is whether defendant PPCIGA is entitled to offset the workers’ compensation benefits plaintiff O’Brien received prior to filing her medical malpractice action in 1993.

This motion judge in December 2000, ruled on the parties’ motion for summary judgment, approximately four months prior to the issuance of Panea v. Isdaner, 2001WL 347831 (Pa. Super.). At said time, this motion judge was persuaded by plaintiffs’ argument and granted plaintiffs’ motion for summary judgment. However, in light of the Panea decision, this motion judge acknowledges that the ruling is inconsistent with the appellate court’s decision. In Panea, the appellate court held that: “the provisions of the PPCIGA statute are triggered when an order of liquidation with a finding of insolvency is entered against an insurer after the effective date of the Act. See 40 P.S. §991.1802.... The key determinant of whether or not the claim is covered under the Act is whether the liability remains unpaid at the time the Act is triggered.”

When addressing the issue of the cause of action arising prior to the effective date of the PPCIGA Act and its non-duplication of recovery provision, the Panea court further held that the time of the underlying injury upon which suit is brought is not the determinative factor. What is controlling is when the Act is triggered. The fact that the cause of action arose prior to the effective date of the Act is irrelevant and does not exempt the applicability of the amended Pennsylvania Insurance Guaranty Association statute. Mc Carthy v. Bainbridge, 739 A.2d 200 (Pa. Super. 1999).

Instantly, when plaintiff O’Brien suffered her work-related injuries and subsequent malpractice injuries, the PIGA Act was in effect. The Act then specifically excluded from its definition of property and casualty insurance policy any coverage provided by workmen’s compensation benefits. See section 1701.103(3)(viii).

The PIGA statute was repealed and replaced by the Pennsylvania Property and Casualty Insurance Guaranty Act, effective February 10,1995. See 40 PS. §991.1801-1820. The purpose of the new Act is, in part, to provide a means for payment of covered claims under certain property and casualty insurance policies. Section 991.1801(1). The Act defines covered claims as “an unpaid claim... which arises out of and is within the coverage ... issued by an insurer if such insurer becomes an insolvent insurer after the effective date of this article . ...” Section 991.1802. The Act further defines property and casualty insurance policy as “any contract ... which provides coverage enumerated in section 202, (40 P.S. §382) except:... (10) workmen’s compensation and employer’s liability insurance.” The Act further provides that PPCIGA shall be obligated to pay covered claims existing prior to the determination of the insolvency. Section 991.1802. Pursuant to the Act, any person recovering from PPCIGA shall be deemed to have assigned his rights under the policy to the association to the extent of his recovery from the association. Section 991.1816(a). The non-duplication of recovery provision of the Act provides that “a claim under an insurance policy shall include a claim under any kind of insurance . . . and shall include . . . workers’ compensation. Any amount payable on a covered claim under this Act shall be reduced by the amount of any recovery under other insurance.” Section 991.1817.

As stated, at issue here was whether the PPCIGA Act of 1995 applies retroactively to plaintiff O’Brien requiring an offset of her workers’ compensation benefits received in 1992 for injuries suffered in 1990, and when her medical malpractice action, filed in 1993, was settled in 1998 (after the effective date of the PPCIGA Act). In light of the holding in Panea, the answer is yes and, therefore, in this motion judge’s revised opinion, defendant PPCIGA is entitled to offset plaintiff O’Brien’s workers’ compensation benefits. Consequently, this motion judge acknowledges that the rulings on the motions for summary judgment do not conform with the appellate court’s holding in Panea.

CONCLUSION

In light of the foregoing, this trial judge acknowledges and incorporates the recent appellate decision, and respectfully recommends that this matter be either remanded to reflect this motion judge’s reconsidered opinion, or in the alternative, that this appeal be granted, and that the entry of summary judgment in favor of plaintiffs and that against defendant be reversed.


author: NEALON, J,

text:
    Olsofsky v. Progressive Insurance Co.

      C.P. of Lackawanna County,
    no. 01-CV-666.

      Christopher J. Osborne, for plaintiff.

      Glenn A. Ricketti, for defendant.
    August 23, 2001
   NEALON, J,

Defendant, Progressive Insurance Company, has filed preliminary objections seeking to dismiss those claims which have been filed by plaintiff, Michael Olsofsky, charging Progressive with bad faith liability pursuant to 42 Pa.C.S. §8371 and wanton misconduct under 75 Pa.C.S. §1797. Progressive contends that it cannot be held liable for punitive damages under 42 Pa.C.S. §8731 or treble damages under 75 Pa.C.S. §1797 since it denied first-party benefits to Olsofsky based upon a “medical record review” rather than a “peer review.” Progressive also argues that the remedies available under section 8371 are irreconcilably inconsistent with and pre-empted by sections 1716 and 1797 of the Motor Vehicle Financial Responsibility Law, 75 Pa.C.S.

For the reasons set forth below, we hold that a fatal conflict does not exist between section 8371 and sections 1716,1798(b) ofthe MVFRL as those statutes regulate distinct forms of insurer conduct and prescribe compatible remedies as sanctions. Furthermore, since a “peer review” under section 1797(b) is based upon a paper review of medical records and bills, see 31 Pa. Code §69.52(c), (k), Progressive’s contention that a medical record review is distinguishable from a peer review is devoid of arguable merit. We further find that a peer review organization exceeds its statutory and regulatory authority under section 1797(b)(1) of the MVFRL and 31 Pa. Code §69.51 if it concludes that medical treatment is not causally related to an accident since “causation” issues are addressed in sections 1712 and 1796(a) of the MVFRL rather than section 1797(b). Therefore, if an insurer rejects a medical expense benefits claim in reliance upon a “causation” finding by a PRO, it may be subject to bad faith liability and section 8371 and section 1797(b) are reconcilable in that event. However, inasmuch as the treble damages provisions of section 1797(b)(4) are applicable only if the insurer acts wantonly in refusing to honor a medical expense benefits claim without first securing a peer review, Olsofsky is not entitled to recover treble damages in this case as we deem Progressive’s “medical record review” to be the same as a “peer review.” Thus, Progressive’s preliminary objections will be granted as to Olsofsky’s claim for treble damages, but denied in all other respects.

I. FACTUAL BACKGROUND

The well-pleaded allegations of the complaint reflect that Olsofsky was seriously injured in an automobile accident on July 24,1998, while he was insured by Progressive under an automobile insurance policy which afforded first-party benefits coverage in accordance with the MVFRL, 75 Pa.C.S. §1701 et seq. (See plaintiff’s complaint, ¶¶3-5.) Although the terms of the policy obligated Progressive to pay for the cost of all “necessary medical treatment and rehabilitative services” received by Olsofsky as a result of the accident, Progressive forwarded correspondence to Olsofsky’s treating physician and legal counsel on February 15, 1999, advising them that it would no longer pay for Olsofsky’s medical treatment. Specifically, Progressive represented that “a medical records review has been performed regarding treatment rendered to [Olsofsky]” which “reveal[ed] that there is no causal connection between the injuries sustained and a motor vehicle accident.” (Id., ¶¶6-10, exhibit A.) Progressive further advised Olsofsky’s treating physician and counsel that it would no longer “provide coverage for injuries as noted above.” (Id.)

On February 7, 2001, Olsofsky filed a three-count complaint against Progressive asserting: (1) a cause of action for breach of contract based upon the terms of the insurance policy and the provisions of sections 1712(1) and 1716 of the MVFRL; (2) claims for punitive damages, counsel fees and statutory interest (3 percent above the prime rate) pursuant to 42 Pa.C.S. §8371; and (3) a demand for treble damages and counsel fees under 75 Pa.C.S. § § 1797(b)(4) and 1798(b), as a result of Progressive’s “wanton conduct.” (Id., ¶¶12-23.) On March 1, 2001, Progressive presented preliminary objections, alleging a “lack of jurisdiction over a non-legal entity” and maintaining that Olsofsky has erroneously sued “Progressive Insurance Company” rather than “Progressive Northern Insurance Company.” (See defendant’s preliminary objections, ¶¶1-10.) Progressive also avers that Olsofsky’s bad faith claims premised upon 42 Pa.C.S. §8371 should be dismissed since that statute “does not apply to an action seeking recovery of first-party benefits under the Pennsylvania MVFRL.” (Id., ¶17.) Last, Progressive posits that Olsofsky’s request for treble damages under section 1797(b)(4) of the MVFRL must be stricken as 75 Pa.C.S. §1797 “only applies when an insurance carrier challenges the reasonableness or necessity of a medical bill and could [have] made that challenge by way of a peer review and opted not to do so.” (Id., ¶22.) According to Progressive, its denial of benefits to Olsofsky was predicated upon “a ‘medical record review’ which determined that [Olsofsky’s] treatment with [his treating physician] was not causally related to the motor vehicle accident of July 24,1998,” rather than a “peer review” under section 1797. (Id., ¶¶28-29, 35.)

Relying upon Williams v. State Farm Mut. Auto. Ins. Co., 163 F. Supp. 121 (E.D. Pa. 1991), and Baren v. Nationwide Ins. Co., 24 Phila. 42 (1991), Progressive submits that the statutory interest and counsel fee provisions of section 1716 of the MVFRL are in conflict with the language of 42 Pa.C.S. §8371 which provides for the recovery of interest, attorney’s fees and punitive damages. Progressive reasons that “[i]n light of the time and effort the legislature developed [sic] to codifying the scheme for payment of first-party benefits, the clear legislative intent is that the Financial Responsibility Law will apply to claims for first-party benefits and that section 8371 will apply to other actions.” (See defendant’s memorandum of law, p. 7.) In addition, citing Barnum v. State Farm Mut. Auto. Ins. Co., 430 Pa. Super. 488, 635 A.2d 155 (1993), rev’d and remanded, 539 Pa. 673, 652 A.2d 1319 (1994) and Gemini Physical Therapy & Rehabilitation Inc. v. State Farm Mut. Auto. Ins. Co., 40 F.3d 63 (3d Cir. 1994), Progressive argues that section 8371 is irreconcilably inconsistent with the peer review procedures contained in 75 Pa.C.S. § 1797(b) such that Olsofsky’s bad faith claims must be dismissed. (Id., at pp. 10-11.)

In response, Olsofsky notes that the Lackawanna County courts have concluded post -Barnum that an insurer may be liable for bad faith under 42 Pa.C.S. §8371 if it misuses the PRO process by making a “causation” denial rather than attempting to determine whether the treatment and services “conform to the professional standards of performance and are medically necessary” under 75 Pa.C.S. §1797(b)(l). Olsofsky asserts that a “medical record review” is the equivalent of a “peer review” which cannot be employed by Progressive to make “causation” determinations. The parties have filed their respective memoranda of law, and following the completion of oral argument on August 1,2001, this matter was submitted for a decision.

II. DISCUSSION

(A) Standard of Review

A preliminary objection in the nature of a demurrer tests the legal sufficiency of the complaint. Constantino v. University of Pittsburgh, 766 A.2d 1265, 1268 (Pa. Super. 2001); Nazar v. Clark Distribution Systems Inc., 46 D.&C.4th 28, 31 (Lacka. Cty. 2000). The question presented by a demurrer is whether, on the facts averred, the law says with certainty that no recovery is possible. Viglione v. Pennsylvania Dept. of Corrs., 781 A.2d 248, 250 n.3 (Pa. Commw. 2001). When considering preliminary objections, all material facts set forth in the complaint, as well as all inferences reasonably deducible therefrom, are accepted as true, Tyler v. Motorists Mut. Ins. Co., 779 A.2d 528, 530 (Pa. Super. 2001), while conclusions of law, unwarranted inferences from facts, argumentative allegations, or expressions of opinion need not be regarded as such. Wagner v. Waitlevertch, 774 A.2d 1247, 1250 (Pa. Super. 2001).

Preliminary objections may only be granted in cases where it is clear and free from doubt that the facts alleged are legally insufficient to establish a right to relief. Stair v. Turtzo, Spry, Sbrocchi, Faul & LaBarre, 564 Pa. 305, 309, 768 A.2d 299, 301 (2001). For that reason, a demurrer should not be sustained simply because of the novelty of a claim. Denton v. Silver Stream Nursing and Rehab. Center, 739 A.2d 571, 575 (Pa. Super. 1999); Oven v. Pascucci, 46 D.&C.4th 506, 511-12 (Lacka. Cty. 2000). Furthermore, if there is any doubt as to whether a demurrer should be granted, it should be resolved in favor of overruling the preliminary objections. Lennon v. Wyeth-Ayerst Laboratories Inc., 2001 WL 755944, *1 (Pa. Super. June 14, 2001).

(B) History of 75 Pa.C.S. §§1716, 1797 and 42 Pa. C.S. §8371

In 1984, the Pennsylvania Legislature repealed the former No-fault Motor Vehicle Insurance Act, 40 P.S. §1009.101 et seq. (repealed), and replaced it with the MVFRL. See Ronca, J.R. et al., Pennsylvania Motor Vehicle Insurance: An Analysis of the Financial Responsibility Law, §1.1 (2d ed. 2000). The repealed No-fault Act and the MVFRL both contain provisions governing the assessment of interest on overdue medical expense benefits and the recovery of counsel fees against non-compliant insurers. Whereas the No-fault Act provided for the assessment of interest on overdue benefits at the rate of 18 percent per annum, see 40 RS. §1009.106(a) (repealed), section 1716 of the MVFRL reduces the statutory interest rate to 12 percent. See 75 Pa.C.S. §1716. Moreover, while the old No-fault Act authorized an award of counsel fees if the insurer denied a first-party benefits claim “without reasonable foundation,” see 40 P.S. §1009.107(3) (repealed), the MVFRL entitles a claimant to recoup counsel fees “[i]n the event the insurer is found to have acted in an unreasonable manner in refusing to pay the benefits when due.” 75 Pa.C.S. §1716. See also, McNally v. Maryland Casualty Co., 89 Lacka. Jur. 33, 38-39 (1987); Arenberg v. State Farm Mut. Auto. Ins. Co., 88 Lacka. Jur. 1, 8-9 (1986). Section 1798(b) of the MVFRL also provides for the recovery of interest and “a reasonable attorney fee based upon actual time expended” if the insurer “acted with no reasonable foundation in refusing to pay the [first-party] benefits.” 75 Pa.C.S. § 1798(b).

In 1990, the MVFRL was amended by the Act of February 7, 1990, P.L. no. 6 (Act 6), which, inter alia, created a peer review system to regulate health care providers’ charges for services rendered and to enable insurers to retain qualified peer review organizations to review an insured’s medical records in an effort to determine whether the treatment provided was medically necessary. See Pennsylvania Motor Vehicle Insurance, supra at section 1.1(c). Specifically, the Act 6 amendments established a peer review mechanism “for the purpose of confirming that such treatment, products, services or accommodations conform to the professional standards of performance and are medically necessary.” 75 Pa.C.S. § 1797(b)(1). In the event that an insurer has not challenged the reasonableness or necessity of certain treatment or services before a PRO, section 1797(b)(4) entitles an insured or provider to challenge the insurer’s refusal to pay before a court of competent jurisdiction. To that end, “[cjonduct considered to be wanton shall be subject to a payment of treble damages to the injured party.” 75 Pa.C.S. § 1797(b)(4). Additionally, regardless of whether the insurer’s conduct was wanton, it must pay 12 percent interest on the outstanding bills and reimburse the insured or provider for their counsel fees if the court determines that the treatment or services “were medically necessary.” 75 Pa.C.S. §1797(b)(6).

Prior to the passage of Act 6, Pennsylvania recognized a cause of action for third-party bad faith, see Cowden v. Aetna Casualty and Surety Co., 389 Pa. 459, 134 A.2d 223 (1957), but declined to acknowledge a claim for first-party bad faith beyond the administrative remedies set forth in the Unfair Insurance Practices Act, 40 P.S. §§1171.1-1171.4. See D’Ambrosio v. Pennsylvania National Mutual Casualty Ins. Co., 494 Pa. 501, 508, 431 A.2d 966, 970 (1981) (“[sjurely it is for the legislature to announce and implement the Commonwealth’s public policy governing the regulation of insurance carriers [and] it is equally for the legislature to determine whether sanctions beyond those created under the [UIPA] are required to deter conduct which is less than scrupulous.”). However, in the same amendatory legislation which promulgated the peer review provisions in75Pa.C.S.§1797, the General Assembly enacted 42 Pa.C.S. §8371,which established a private cause of action against an insurer that has acted in bad faith towards its insured. Section 8371 was adopted in response to the D ’Ambrosio court’s refusal to create a common-law action for first-party bad faith, see O’Donnell ex rel. Mitro v. Allstate Ins. Co., 734 A.2d 901, 905 (Pa. Super. 1999), and states:

“In an action arising under an insurance policy, if the court finds that the insurer has acted in bad faith toward the insured, the court may take all of the following actions:
“(1) Award interest on the amount of the claim from the date the claim was made by the insured in an amount equal to the prime rate of interest plus 3 percent.
“(2) Award punitive damages against the insurer.
“(3) Assess courts costs and attorney’s fees against the insurer.” 42 Pa.C.S. §8371.

The placement of section 8371 in title 42 of the Judicial Code indicates “that the legislature did not intend to limit the statute’s application to motor vehicle insurance policies.” Boring v. Erie Ins. Group, 434 Pa. Super. 40, 46, 641 A.2d 1189, 1192 (1994). By its plain language, the bad faith statute applies broadly to any actions “arising under an insurance policy” and has been found to govern insurer-insured disputes regarding various types of insurance coverage. See e.g., Terletsky v. Prudential Property and Casualty Ins. Co., 437 Pa. Super. 108, 649 A.2d 680 (1994), app. denied, 540 Pa. 641, 659 A.2d 560 (1995) (auto insurance); Birth Center v. St. Paul Companies Inc., 727 A.2d 1144 (Pa. Super. 1999), app. granted in part, 560 Pa. 633, 747 A.2d 858 (2000) (malpractice insurance); O’Donnell, supra (homeowner’s insurance). Compare Winterberg v. Transportation Ins. Co., 72 F.3d 318, 324-25 (1995) (workers’ compensation insurer cannot be held liable for bad faith under section 8371 since a workers’ compensation claim is predicated upon a contract of hire between the employer and employee, not an insurance policy, and the more specific provisions of the Workers’ Compensation Act take precedence over the general provisions of 42 Pa.C.S. §8371). Because of the bad faith statute’s use of such comprehensive terminology, several commentators have concluded that it should be applied to first-party benefits claims inasmuch as “[a] suit for first-party medical benefits is an action arising under an insurance policy.” See e.g., Pennsylvania Motor Vehicle Insurance, supra at section 4.4(e).

The remedial sanctions prescribed in sections 1716 and 1798(b) of the MVFRL are addressed to insurer conduct which is different from that type of activity which is regulated by 42 Pa.C.S. §8371. Section 1716provides for the assessment of 12 percent interest on overdue benefits regardless of whether the insurer denied the claim without a reasonable basis. Sections 1716 and 1798(b) entitle a successful insured to recover counsel fees if the insurer has denied a claim “in an unreasonable manner” or without a “reasonable foundation.” In contrast, section 8371 prescribes statutory interest at a rate different from that set forth in section 1716 and enables an insured to recover interest, attorney’s fees or punitive damages only “if the court finds that the insurer has acted in bad faith toward the insured.” For an insurer to be found chargeable with bad faith, the insured must not only establish by “clear and convincing evidence” that the insurer did not have a reasonable foundation for denying benefits, but must further prove that the insurer knew or recklessly disregarded its lack of a reasonable basis in denying the claim. See Klinger v. State Farm Mut. Auto. Ins. Co., 115 F.3d 230, 233-34 (3d Cir. 1997); Terletsky, supra at 125, 649 A.2d at 688. Thus, the burden of proof for a bad faith claim under section 8371 is more demanding than that governing interest and fees under sections 1716 and 1798(b). As such, sections 1716, 1798(b) of the MVFRL and 42 Pa.C.S. §8371 regulate distinct conduct by insurers and provide diverse forms of redress.

The 1990 amendments to section 1797(b) of the MVFRL authorize an automatic award of statutory interest (12 percent) “and all attorney’s fees” if the court determines that health care treatment was “medically necessary” and the insurer has refused to pay for the medical care without first challenging the reasonableness or necessity of such treatment before a PRO. See 75 Pa.C.S. §§ 1797(b)(4), (6). As indicated above, section 8371 likewise provides for the recovery of interest and counsel fees, but only if the insurer has acted in bad faith. Moreover, although section 1797(b)(4) exposes an insurer to treble damages if it engages in “wanton” conduct while refusing to pay medical expense benefits without first seeking a peer review, section 8371 permits an award of punitive damages for “bad faith,” which amount may be more or less than treble damages. Compare Mid-West Paper Products Co. v. Continental Group Inc., 596 F.2d 573, 582-83 (3d Cir. 1979) (treble damages are three times the actual damages), with Kirkbride v. Lisbon Contractors Inc., 521 Pa. 97, 103-104, 555 A.2d 800, 803 (1989) (punitive damages do not have to bear a reasonable relationship to compensatory damages awarded in a case); Paves v. Corson, 765 A.2d 1128, 1137 (Pa. Super. 2000) (same); Sprague v. Walter, 441 Pa. Super. 1, 72, 656 A.2d 890, 925 (1995), app. denied, 543 Pa. 695, 670 A.2d 142 (1996) (“[o]ur Supreme Court has ruled that a mathematical proportionality requirement between punitive and compensatory damages would actually defeat the purpose of punitive damages, which is to punish tort-feasors for outrageous conduct and deter them and others from similar conduct.”). Therefore, while both section 1797 and section 8371 allow for the recovery of interest and counsel fees, they do so based upon different forms of conduct. Conversely, although section 1797(b)(4) and section 8371 are designed to curtail comparable conduct (i.e., wanton versus bad faith), they authorize diverse damages (i.e., treble versus punitive) to sanction such activity.

The coexistence of sections 1716 and 1797 and 1798 of the MVFRL and 42 Pa.C.S. §8371 is dependent upon well-settled rules of statutory interpretation, including section 1933 of the Statutory Construction Act which states:

“Whenever a general provision in a statute shall be in conflict with a special provision in the same or another statute, the two shall be construed, if possible, so that effect may be given to both. If the conflict between the two provisions is irreconcilable, the special provisions shall prevail and shall be construed as an exception to the general provision, unless the general provision shall be enacted later and it shall be the manifest intention of the General Assembly that such general provision shall prevail.” 1 Pa.C.S. §1933. See generally, Hazleton Area School District v. Zoning Hearing Board of Hazle Township, 778 A.2d 1205, 1214 (Pa. 2001).

In that regard, it is important to note that section 8371 was adopted six years after the enactment of sections 1716 and 1798 of the MVFRL and that section 31 of Act 6 which promulgated the bad faith statute distinctly states that it “repealed all other acts and parts of acts insofar as they are inconsistent with this Act.”

Additionally, section 1935 of the Statutory Construction Act governing “[irreconcilable statutes passed by the same General Assembly” states that whenever the provisions of two statutes enacted during the same General Assembly are irreconcilable, the statute with the later date of final enactment shall control, unless the statutes were passed on the same date, in which event the statute bearing the highest number shall prevail from the time it becomes effective. See 1 Pa.C.S. §1935. The bad faith statute and the peer review provisions of the MVFRL were adopted in 1990 by the same General Assembly. As to their effective dates, section 8371 was contained in section 3 of Act 6 and became effective July 1,1990, whereas section 1797(b) was set forth in section 18 of Act 6 but became effective on April 15, 1990.

(C) Interplay Between MVFRL and 42 Pa.C.S. §8371

With the advent of the bad faith statute, insureds who commenced litigation based upon a denial of first-party benefits invariably included claims for statutory interest, counsel fees and extra contractual damages under sections 1716 and 1797(b) of the MVFRL and 42 Pa.C.S. §8371. In response, insurers asserted that a fatal conflict existed between the broad remedies in section 8371 and the more particularized first-party benefits procedures in sections 1716 and 1797. Insurance carriers further argued that under 1 Pa.C.S. §1933, the more specific provisions of the MVFRL should prevail in a first-party benefits context.

The judicial responses to these statutory construction disputes were less than uniform. Some courts concluded that the relief provided by section 8371 was irreconcilably inconsistent with the remedies afforded by sections 1716 and 1797 and that the bad faith statute did not apply to first-party benefits claims since the more specific provisions of the MVFRL were controlling. See Riddell v. State Farm Mut. Auto. Ins. Co., 1992 WL 209971, *3 (M.D. Pa. 1992); Williams v. State Farm Mut. Auto. Ins. Co., 763 F. Supp. 121, 126-27 (E.D. Pa. 1991). Others reasoned that no such conflict was present and that sections 1716 and 1797(b) of the MVFRL were reconcilable with 42 Pa.C.S. §8371 ifthe insurer abused the peer review process in denying benefits. See Advanced Chiropractic Inc. v. Pennsylvania Nat’l Ins. Co. 112 Dauph. Co. Rep. 405, 409 (1993); Milton S. Hershey Medical Center v. State Farm Ins. Co., 21 D.&C.4th 62, 69-72 (Franklin Cty. 1992); Mitrick v. State Farm Mutual Automobile Ins. Co., 13 D.&C.4th 540, 543 (York Cty. 1991). Another line of cases found that an irreconcilable inconsistency existed between section 8371 and section 1797(b), but that the putative conflict between section 8371 and section 1716 could be reconciled. See e.g., Seeger v. Allstate Ins. Co., 776 F. Supp. 986, 990-91 (M.D. Pa. 1991).

Other jurists adopted a more fact specific approach in determining whether the statutes were discordant. For example, in Grove v. Aetna Cas. & Surety Co., 855 F. Supp. 113, 115 (W.D. Pa. 1993), the district court concluded that the peer review provisions of section 1797(b) generally pre-empt section 8371 in first-party benefits cases, except in those instances in which an insurer has denied benefits based upon a “causation” determination by a PRO since section 1797(b) clearly restricts the PRO’S authority to “confirming that such treatment, products, services or accommodations conform to the professional standards of performance and are medically necessary.” Similarly, Judge R. Stanton Wettick fashioned an even more particularized analysis and held that: (1) an insured could simultaneously seek interest and counsel fees under sections 1716 and 1797 of the MVFRL and punitive damages under section 8371 “for claims involving medical bills denied on the ground that the treatment was not for injuries sustained in the automobile accident;” (2) if an insurer denies a claim without first submitting it to a PRO, “the insured is entitled to recover either punitive damages under section 8371 or triple damages under section 1797 upon establishing that the insurance company acted wantonly and in bad faith;” (3) an insured cannot seek punitive damages under section 8371 if the insurer submits the bills to a PRO which determines “that the treatment was not medically necessary or that it failed to conform to accepted professional standards;” and (4) punitive damages can be recovered by an insured under section 8371 if the insurer refuses to pay for treatment based upon a “causation” determination by a PRO. Knox v. Worldwide Ins. Group, 140 P.L.J. 185, 187-89 (1992).

The Pennsylvania Superior Court first addressed the application of section 8371 to first-party benefits claims in Okkerse v. Prudential Property and Casualty Ins. Co., 425 Pa. Super. 396, 625 A.2d 663 (1993). In that case, the insured sought to recover counsel fees and interest under sections 1009.106(a)(2) and 1009.107(3) of the former No-fault Act which were the predecessors to sections 1716 and 1797(b) of the MVFRL. The insured further asserted that the insurer had acted in bad faith and, therefore, he sought to recover punitive damages pursuant to 42 Pa.C.S. §8371. The trial court dismissed the bad faith claim on the grounds that the counsel fee and interest provisions of the No-fault Act were irreconcilably inconsistent with section 8371. In reversing the lower court, the Superior Court observed:

“The two statutes do not conflict. Attorney’s fees are assessed under the No-fault Act if there is no foundation for a denial. Similarly, section 8371 provides for an award of attorney’s fees for a bad faith insurance denial. Both statutes provide for the payment of interest on overdue claims—section 8371 requires that the claim be denied in ‘bad faith’ before interest accrues. Section 1009.107(3) requires the absence of reasonable foundation for the denial. The fact that both statutes provide the same remedy for similar actions can hardly be viewed as a conflict. Finally, the imposition of punitive damages in section 8371 does not conflict with any provision of the No-fault Act....
“Section 1716 is a reenactment of the provisions of the No-fault Act at issue herein....
“The allowance of punitive damages does not irreconcilably conflict with the allowance of attorney’s fees and interest under the relevant provisions of the No-fault Act. Furthermore, [the insured] may be determined to be entitled to interest and attorney’s fees under sections 1009.106 and 1009.107 of the No-fault Act since he supplied ‘reasonable proof of damages while not being entitled to damages under section 83-71 if no bad faith conduct is present. The fact that [the insured] has the potential for recovering under both sections is not a reason for dismissing the count under section 8371.” Id. at 402-404, 625 A.2d at 667.

The Okkerse court further reasoned that to the extent that both statutes were found to be applicable and provided for different calculations of interest and counsel fees, section 8371 would prevail since it “was enacted later than the No-fault Act and [Act 6’s] repealer section indicates that the General Assembly intended it to prevail over any inconsistent statutes.” Id. at 404, 625 A.2d at 667.

Approximately four months later, another panel of the Superior Court considered the applicability of the bad faith statute to medical expense claims premised upon a PRO denial. In Barnum v. State Farm Mut. Auto. Ins. Co., 430 Pa. Super. 488, 635 A.2d 155 (1993), rev’d and remanded, 539 Pa. 673, 652 A.2d 1319 (1994), the insured filed suit to recover unpaid medical bills, interest, counsel fees and punitive damages under section 8371 after his insurer refused to pay for certain treatment that a PRO had concluded was unnecessary. The lower court dismissed the action on the bases that (a) the insured had failed to exhaust his statutory remedy by neglecting to request reconsideration of the PRO denial and (b) section 8371 was inapplicable to peer review claims under the MVFRL. On appeal, the Superior Court cited with approval its earlier ruling in Terminato v. Pennsylvania National Ins. Co., 422 Pa. Super. 92, 618 A.2d 1032 (1993), rev’d, 538 Pa. 60, 645 A.2d 1287 (1994), and opined that “an insured cannot proceed in the courts until reconsideration of an unfavorable PRO evaluation has been sought.” Barnum, 430 Pa. Super. at 494, 635 A.2d at 157. With respect to the applicability of section 8371, the Barnum court concluded that section 1797’s “remedies clearly are at variance with and in conflict with the general remedies set forth in 42 Pa.C.S. §8371.” Id. at 495, 635 A.2d at 158. Finding the two statutory provisions to be inharmonious, the court reasoned that “the specific provisions of75 Pa.C.S. §1797 must be deemed an exception to the general remedy for bad faith contained in 42 Pa.C.S. §8371.” Id. at 496, 635 A.2d at 159.

Less than eight months after the Superior Court ruling in Barnum, the Supreme Court of Pennsylvania decided the first issue addressed in Barnum, to wit, whether an insured is foreclosed from commencing litigation if [s]he fails to request reconsideration of a PRO denial. Noting that “[t]he doctrine of exhaustion of administrative remedies has no application to the peer review proceduref,]” the Supreme Court in Terminato v. Pennsylvania National Ins. Co., 538 Pa. 60, 67, 645 A.2d 1287, 1290 (1994), held that an insured is not obligated to seek reconsideration of an adverse peer review decision under section 1797(b) of the MVFRL before instituting litigation to recover unpaid benefits. In support of its conclusion that PROs should not be afforded the same deference as administrative agencies, the Terminato court found that “the PRO does not have the characteristics of an independent body for which the legislature would seek judicial deference.” Id. at 68, 645 A.2d at 1291.

Three months after the Terminato decision, the Third Circuit Court of Appeals followed the Superior Court ruling in Barnum and stated that “[w]e find [Barnum fr] statutory construction to be convincing and predict the Pennsylvania Supreme Court would similarly rule on this matter.” Gemini Physical Therapy & Rehab. Inc. v. State Farm Mut. Auto. Ins. Co., 40 F.3d 63, 67 (3d Cir. 1994). However, within two weeks of the Gemini Physical Therapy holding, the Supreme Court of Pennsylvania did just the contrary and reversed the Superior Court decision in Barnum. See Barnum v. State Farm Mut. Auto. Ins. Co., 539 Pa. 673, 652 A.2d 1319 (1994).

(D) The Post-Barnum Era

Following the Supreme Court reversal in Barnum, the Pennsylvania courts continue to reach conflicting interpretations of 42 Pa.C.S. §8371 and75 Pa.C.S. § 1797(b). Based upon the assumption that the Superior Court holding in Barnum has no precedential value, several courts have concluded that section 8371 and section 1797(b) are reconcilable in a peer review case since the bad faith statute addresses wrongful conduct by insurers in connection with peer review denials whereas the treble sanctions in section 1797(b) are confined to instances in which the insurer has not submitted medical bills to a PRO. See Bacstrom v. State Farm Ins. Co., 40 D.&C.4th 330, 336-38 (Franklin Cty. 1998) (bad faith statute can be applied to “sham” peer reviews); McIntyre v. State Farm Auto Ins. Co., 47 Cumb. 206, 210-11 (1998) (same); Slaby v. Nationwide Ins., 39 D.&C.4th 98, 102 (Northum. Cty. 1997) (“public policy requires that the insurer can be held liable'for damages under section 8371, including punitive damages, if they abuse the very [peer review] process that was enacted to shield them.”); Cool v. Dobrowalski, 86 Luz. Reg. Reports 28, 30 (1996) (“[c]learly insureds must have an avenue open to them to protect against abuses in the use of peer review organizations” and “[i]t is clear to this court that section 8371 was enacted to address just those allegations detailed by plaintiff.”); Milton S. Hershey Medical Center v. State Farm Ins. Co., 13 Franklin Cty. L.J. 88, 90 (1994) (“[bjecause there is no provision in 75 Pa.C.S. §1797 which would rectify bad faith on the part of an insurer once a claim is submitted to a PRO, this court sees no conflict between 75 Pa.C.S. §1797 and 42 Pa.C.S. §8371.”). Those courts which have regarded section 8371 as applicable to certain peer review claims in which PROs have exceeded their statutory authority under section 1797(b) have reasoned that an insurer exposes itself to bad faith liability if it attempts to deny medical expense benefits on the basis of a PRO determination that the insured’s injuries are not causally related to the covered accident. See Hice v. Prudential Ins. Co., 34 D.&C.4th 97, 102 (Westmoreland Cty. 1997) (“[a]n insurance company cannot declare itself harmless by insulating itself from a bad faith claim, or by claiming it relied upon a peer finding which delves into matters of which the peer review organization has no statutory authority.”); Abbazio v. Nationwide Ins. Co., 34 D.&C.4th 385, 390 (Monroe Cty. 1996) (same). A few jurists have opined that while it is acceptable for a PRO to address causation under section 1797(b), insurers may nevertheless be subject to bad faith liability if they otherwise abuse the peer review process. See e.g., Stavish v. Integon Ins., 87 Luz. Reg. Reports 65, 67 (1997) (although PRO properly decided causation, if the insurer deliberately selected that PRO “because of its history of high rate of denials for such review,” it could be found liable for bad faith); Murphy v. Progressive Ins. Co., 27 Mercer Cty. L.J. 373, 377-78 (1994) (section 8371 and section 1797 are not irreconcilable if some misconduct is alleged, but an insurer does not commit misconduct by retaining a PRO to address causation).

A separate school of judicial thought still regards the MVFRL as the exclusive recourse for insureds aggrieved by peer reviews and deems section 8371 as subservient to section 1797(b) in that context. See Grissinger v. Nationwide Mutual Ins. Co., 39 D.&C.4th 209, 214-16 (Dauph. Cty. 1998) (en banc); Evans v. State Farm Ins. Co., 39 D.&C.4th 193, 200-201 (Elk Cty. 1997); Kuropatwa v. State Farm Mutual Automobile Ins. Co., 29 D.&C.4th 494, 504 (Bucks Cty. 1995) aff’d mem., 454 Pa. Super. 714, 685 A.2d 1050 (1996), rev’d on other grounds, 554 Pa. 456, 721 A.2d 1067 (1998) (rejecting contention that insurer engaged in bad faith by intentionally selecting a biased PRO with “a low percentile approval rate” for medical expense reviews). The federal courts likewise appear to be less than unanimous in their interpretation of the bad faith statute and the MVFRL. Flowever, the Lackawanna County courts have consistently held that section 1797(b) does not pre-empt a bad faith claim under section 8371 if the insurer denies payment of medical bills based upon a “causation” finding by a PRO. In Lutkowski v. State Farm Mut. Auto. Ins. Co., 96 Lacka. Jur. 4 (1994), Judge S. John Cottone concluded that an “insurer may not use the PRO to determine whether or not the medical treatment was causally related to a particular accident” and permitted a bad faith claim to continue by remarking:

“In closing we believe that plaintiff should be allowed to proceed under both section 8371 and the MVFRL. Disallowing plaintiff to go forward under section 8371 because her medical claims were given to a PRO for review, would remove from the courts its responsibility of providing the insured (and medical service professionals) a forum for bad faith claims whenever the PRO system is involved—even if the PRO system is invoked improperly. The net effect of this would be that the PRO system would serve as an umbrella under which insurance companies could always be insulated from 8371 sanctions. Section 8371 is designed to protect the insured from bad faith on the part of the insurance providers irrespective of whether or not the bad faith action occurs after the insurance company chooses to use the PRO system.” Id. at 7, 8. Accord Pierce v. State Farm Ins. Co., 27 D.&C.4th 464, 469-70 (Lacka. Cty. 1994) (Cottone, J.).

Judge Cottone’s reasoning has been followed on each occasion that a Lackawanna County court has considered this issue. See DeFazio v. Nationwide Mutual Ins. Co., 35 D.&C.4th 221, 226 (Lacka. Cty. 1997) (Munley, J.); Burgette v. Selective Ins. Co., 38 D.&C.4th 362, 365-66 (Lacka. Cty. 1998) (Corbett, J.); Pisarchick v. Progressive Companies, 102 Lacka. Jur. 491, 497 (2001) (Minora, J.). For the reasons set forth in section II (E) below, we will do the same.

(E) Causation Denials by PROs

The MVFRL requires insurers who sell motor vehicle insurance policies in Pennsylvania to provide medical benefits coverage “with respect to injury arising out of the maintenance or use of a motor vehicle____” 75 Pa.C.S. §1712. The “maintenance and use” requirement in section 1712 was enacted in 1984 and governs the question of whether the injury suffered is causally related to the use of a motor vehicle. See Huber v. Erie Ins. Exchange, 402 Pa. Super. 443, 446-47, 587 A.2d 333, 334-35 (1991). Neither the original version of section 1797 of the MVFRL nor the 1990 amendments thereto address the issue of causation. Section 1797(b)(1) merely empowers insurers to retain PROs to conduct evaluations “for the purpose of confirming that such treatment, products, services or accommodations conform to the professional standards of performance and are medically necessary.” Moreover, the regulations which have been promulgated by the Insurance Department to implement the peer review process further clarify the scope of a PRO’S jurisdiction and distinctly state that “[a] PRO has the authority to evaluate the reasonableness and medical necessity of care, and the professional standards of performance including the appropriateness of the setting where the care is rendered, and the appropriateness of the delivery of the care rendered.” 31 Pa. Code §69.51.

Hence, the clear language of the MVFRL and applicable regulations confine a PRO’S authority to matters involving the reasonableness, appropriateness and necessity of treatment. Nothing in the Act 6 amendments to section 1797 or the Insurance Department regulations suggests that PROs are vested with the discretion to determine whether an injury is causally related to a particular accident. Rather, questions of causation are addressed in section 1712 which does not regulate or govern the authority of PROs.

In fact, insurers themselves have acknowledged that they may be chargeable with bad faith if they deny coverage based upon a PRO report which concludes that injuries and treatment are not causally related to the covered accident. See State Farm Mutual Automobile Ins. Co. v. Veltri, 424 Pa. Super. 612, 614 n.2, 623 A.2d 849, 850 n.2 (1993) (“[bjecause State Farm interprets the peer review medical report as having found that treatment was not related to appellee’s automobile accident, it fears that reliance on this report would be an act of bad faith.”). However, in Bodtke v. State Farm Mutual Automobile Ins. Co., 432 Pa. Super. 31, 637 A.2d 648 (1994), rev’d on other grounds, 540 Pa. 540, 659 A.2d 541 (1995), the majority opinion indicated that causation denials are appropriate. In Bodtke, the Superior Court affirmed the dismissal of a first-party benefits action on the grounds that the insured had failed to exhaust her administrative remedy by seeking reconsideration of the PRO denial. Although the majority found it “not necessary to entertain [insured’s] second claim that the [causation] decision of the PRO was outside the scope of section 1797(b),” it nonetheless quoted with approval the lower court’s observation “that [the PRO’S determination that] certain injuries treated were not related to the accident is simply another way of stating that they were not medically necessary.” Id. at 34, 637 A.2d at 649. In her concurring opinion, Judge Kate Ford Elliott disagreed with the majority’s dictum regarding the causation determination and stated:

“Section 1797(b)(1) specifically provides that the evaluation of a PRO ‘shall be for the purpose of confirming that such treatment, products, services or accommodations conform to the professional standards of performance and are medically necessary.’ I do not equate either of these functions with causation and coverage under an insurance policy. Whether treatment is medically necessary for a specified injury is an entirely different issue from whether that injury is causally related to the accident and therefore covered under the applicable policy of insurance. On this latter issue, I believe appellant is still entitled to her day in court.
“Any further discussion of this issue would be premature at this stage, given that the matter was only addressed in dictum by the majority. The scope of the language of section 1797(a) is certainly an issue that this court will soon have to address once the proper procedural steps are taken to bring the issue squarely before us.” Id. at 35-36, 637 A.2d at 650 (Ford Elliott, J., concurring).

Any precedential value ascribable to the dictum in Bodtke was later negated by the Supreme Court reversal based upon its decision in Terminato. See Bodtke v. State Farm Mut. Auto. Ins. Co., 540 Pa. 540, 659 A.2d 541 (1995). On two subsequent occasions, the Supreme Court has declined the opportunity to consider the propriety of a causation determination by a PRO. See Kuropatwa, supra at 462 n.4, 721 A.2d at 1070 n.4 (‘Kuropatwa also asserts that a peer review organization is not permitted under the MVFRL to determine the causation of the injuries of an insured. This issue has not been addressed by this court, and will not be addressed in this appeal because of the limited grant of Kuropatwa’s petition for allowance of appeal.”); Terminato, supra at 68 n.1, 645 A.2d at 1291 n.1 (“Terminato has also challenged whether a PRO is authorized to review treatment for its causal connection to an automobile accident. We need not address the issue at this time, however, because our resolution of the issue of exhaustion of statutory remedies necessitates a remand to the common pleas court.”). Although the Superior Court has yet to revisit this issue, several trial courts and commentators have concluded post-Bodtke/Barnum that an insurer exposes itself to bad faith liability if it rejects a medical expense benefit claim based upon a “causation” assessment by a PRO. See Schwartz, supra at n.5; Taylor v. Nationwide Ins. Co., 35 D.&C.4th 101, 109-10 (Allegheny Cty. 1997) (holding “that there are no appellate court rulings that are inconsistent with my ruling in Knox v. Worldwide Ins. Group permitting a section 8371 claim based on the denial of first-party benefit claims in those situations which the insurance company has not obtained a PRO evaluation supporting a denial of coverage on the ground that the treatment was not medically necessary or that it failed to conform to accepted professional standards.”); Erhard, G.D., “The Peer Review Masquerade: Disguising HealthCare Rationing Under the Pennsylvania Auto Insurance Law, ” 57 U. Pitt. L. Rev. 959, 973-77 (1996); Oberdorf, T.M., “BadFaith Insurance Litigation in Pennsylvania: Recurring Issues Under Section 8371, ”33 Duq. L. Rev. 451, 470 n.134 (1995).

The statutes, regulations and better reasoned case law discussed above reflect that Olsofsky should be entitled to pursue certain remedies under the MVFRL and the bad faith statute as a result of Progressive’s denial of medical expense benefits based upon a causation determination by a PRO. Since sections 1716 and 1798(b) of the MVFRL and 42 Pa.C.S. §8371 sanction different types of insurer conduct and prescribe varying forms of relief, they are reconcilable and can both be applied in this case. See Okkerse, supra; Seeger, supra. With respect to a denial of benefits predicated upon a peer review, if the insurer legitimately rejects a claim in reliance upon a PRO finding that the treatment was not reasonable or medically necessary, a fatal conflict would exist between section 1797(b) and section 8371 and the more specific provisions of section 1797(b) would prevail. However, if the PRO exceeds its statutory and regulatory authority by formulating a causation finding, the insurer may be subject to bad faith under section 8371 if it bases its denial upon such an unlawful review.

If the legislature had intended to vest PROs with the capacity to address causation issues, it would have expressly included that authority in section 1797(b)(1) where the PRO’S powers are delineated. Instead, the General Assembly inserted “causation” language only in section 1712 of the MVFRL dealing with injuries “arising out of the maintenance or use of a motor vehicle.” The judiciary should not attempt to assume the role of the legislature by inserting language into a statute which the General Assembly has seen fit to exclude. See Key Savings and Loan Association v. Louis John Inc., 379 Pa. Super. 226, 232, 549 A.2d 988, 991 (1988), app. denied, 523 Pa. 632, 564 A.2d 1260 (1989), app. dismissed, 529 Pa. 573, 605 A.2d 1223 (1992) (courts are without authority to insert a word into a statutory provision where the legislature has failed to supply it).

An insurer is not without recourse if it wishes to challenge the causal connection between an accident and an insured’s injuries and treatment under the “maintenance or use” requirement of section 1712. In that event, the insurer may seek to have the insured submit to a “mental or physical examination” under section 1796(a) of the MVFRL. See State Farm Ins. Companies v. Hunt, 390 Pa. Super. 620, 624, 569 A.2d 365, 367 (1990) (finding that medical examination was warranted under section 1796 since it would “substantially aid the insurer in evaluating [the insured’s] claim, in determining the nature of her injuries, and in assessing the need for continuing treatment.”). If the insured refuses to submit to an examination voluntarily, the insurer may petition the court to order such an examination “for good cause shown.” See State Farm Ins. Companies v. Swantner, 406 Pa. Super. 235, 245, 594 A.2d 316, 321 (1991), app. denied, 530 Pa. 633, 606 A.2d 903 (1992) (holding that the “for good cause shown” requirement “does not relate to the existence of a controversy but to the continued necessity for treatment and requirement of payment” such that a “motion [under section 1796] may arise out of a lack of knowledge rather than a controversy....”). Indeed, it is difficult to conceive how an insurer could conclude, for example, that an insured’s symptoms are attributable to a pre-existing degenerative condition rather than accident-related trauma based solely upon a review of medical records and without the benefit of a physical examination of the insured. Cf. Elliott v. State Farm Mut. Auto. Ins. Co., 786 F. Supp. 487, 490 (E.D. Pa. 1992) (allegation that insurer denied first-party benefits without a voluntary or court-ordered physical examination is sufficient “to state a cognizable claim for unreasonable denial of benefits.”). By declining to grant PROs the authority to make decisions regarding causation, the legislature apparently recognized that while the necessity and reasonableness of medical treatment can be adequately addressed by a mere review of medical records, a “causation” determination can only be accomplished by way of an actual examination of the patient/insured. Therefore, the most logical interpretation of the MVFRL is that PROs are not empowered to make “causation” assessments and that insurers may be subject to bad faith liability under 42 Pa.C.S. §8371 for denying first-party benefit claims based upon a PRO’S causation determination.

(F) “Medical Record Review ”

In apparent recognition of the fact that PROs cannot address causation, Progressive contends that it cannot be held accountable for punitive damages under section 8371 or treble damages pursuant to section 1797(b) since its causation finding was premised upon a “medical record review” rather than a peer review. Progressive has not cited any case law or other authority in support of its assertion that a “medical record review” and a “peer review” are mutually exclusive procedures. Our analysis of the applicable law leads us to conclude that a “medical record review” and a “peer review” are one in the same.

When conducting its initial determination, a PRO obtains and reviews the insured’s medical records and bills to evaluate the reasonableness and necessity of care. See 31 Pa. Code §69.52(c). If an insured, insurer or health care provider requests reconsideration of an initial PRO determination, the reconsideration is likewise “based upon the information that led to the initial determination, new information found in medical records or additional evidence submitted by the requesting party.” 31 Pa. Code §69.52(k). Additionally, in every appellate decision involving PRO denials, the peer review has been based solely upon the insured’s medical records and bills. See e.g., Frey v. State Farm Mutual Automobile Ins. Co., 429 Pa. Super. 425, 428, 632 A.2d 930, 931 (1993) (“[a] peer review organization subsequently reviewed Frey’s medical records and bills and issued a report on February 6, 1992.”); Veltri, supra at 613-14, 623 A.2d at 849 (“State Farm, then submitted [the] bills and corresponding medical records to the Tri-State Rehabilitation Group for a peer review pursuant to 75 Pa.C.S. § 1797(b).”). In aptly describing the mechanics of a peer review, one commentator has remarked:

“It is critical in the understanding of this process to note that the peer reviewer does not personally examine the patient. Rather, the peer reviewer conducts a paper review, i.e., he reviews only the provider’s records and documentation involving the patient.” The Peer Review Masquerade, 57 U. Pitt. L. Rev. at 960 n.3.

There is no reported precedent addressing the “medical record review”-“peer review” dichotomy proffered by Progressive. However, in an unreported memorandum opinion, a federal court flatly rejected the argument currently being advanced by Progressive. In Bubb v. Nationwide Mut. Ins. Co., civil no. 1:CV-99-1852 (M.D. Pa. August 10, 2000) (Rambo, J.), the insurer sought to have an insured’s bad faith claim dismissed and asserted that it had conducted a “records review” as opposed to a “peer review.” Id. at p. 2. In refusing to dismiss the bad faith claim, U.S. District Judge Sylvia H. Rambo concluded:

“Nationwide asserts that the ‘records review’ conducted by the same doctor is a reasonable basis for denying coverage. However, Nationwide fails to present any evidence that this ‘records review’ was in any way different from the ‘peer review’ or to present any legal justification why a ‘records review’ should present a reasonable basis to deny coverage based on causation while a ‘peer review’ pursuant to section 1797 cannot. Instead, Nationwide merely offers the court a conclusory unsupported statement: ‘The insurer retains the right to use the procedures, which pre-dated the Motor Vehicle Responsibility Act, such as a records review, to determine if the medical bills are for treatment necessitated by an injury arising from the motor vehicle accident.’ (Def.’s mem. of law at 5.) The court finds such an unsupported statement wholly unpersuasive.
“A jury could reasonably find that the ‘records review’ conducted by Dr. Kenny which found that the automobile accident did not cause Bubb’s TMJ dysfunction was not a reasonable basis for denying coverage. Dr. Kenny did not conduct a medical exam of Bubb, but made his causation determination solely by reviewing the medical records. This ‘records review’ is therefore based on the same materials as the ‘peer review’ and section 1797 does not permit the ‘peer review’ to make determinations on causation.” Id. at pp. 5-6.

We agree with the Bubb court’s analysis that a “peer review” and so-called “medical record review” have identical features and purposes. Progressive’s semantical argument is simply a distinction without a difference and regardless of the label that Progressive attempts to affix to its denial in this case, a “medical record review” is nothing more than a “peer review” and vice versa. Progressive simply cannot utilize a peer review of medical records as a basis for denying benefits on the grounds that the injury is not related to the accident.

CONCLUSION

Based upon the foregoing, we find that the provisions of 42 Pa.C.S. §8371 do not conflict with 75 Pa.C.S. §§1716 and 1798(b) as those statutes address different categories of insurer conduct and provide compatible remedies. Similarly, we conclude that section 8371 and section 1797(b) are reconcilable in those instances in which an insurer has denied first-party benefits in reliance upon a “causation” determination by a PRO. However, since we regard Progressive’s purported “medical record review” as a “peer review,” Olsofsky’s claim for treble damages must be stricken as treble damages are only available under section 1797(b)(4) if the insurer has not challenged an insured’s medical bills before a PRO. An appropriate order will follow.

ORDER

And now, August 23,2001, upon consideration of the preliminary objections of defendant, Progressive Insurance Company, the memoranda of law submitted by the parties, and the oral argument of counsel on August 1, 2001, and based upon the reasoning set forth in the foregoing memorandum, it is hereby ordered and decreed that:

(1) Within 20 days of the date of this order, plaintiff shall file an amended complaint in response to defendant’s preliminary objections asserting a lack of jurisdiction and shall duly amend the complaint to change the designation of the defendant from “Progressive Insurance Company” to “Progressive Northern Insurance Company;”

(2) The preliminary objections in the nature of a demurrer to plaintiff’s claims for interest, counsel fees and punitive damages under 42 Pa.C.S. §8371 and 75 Pa.C.S. §§1716 and 1798(b) are denied; and

(3) The preliminary objections in the nature of a demurrer to plaintiff’s claims for interest, counsel fees and treble damages pursuant to 75 Pa.C.S. § 1797(b)(4), (6) are granted since those remedies are available only if the insurer has not challenged medical treatment and bills before a peer review organization.

      . In the Eastern District of Pennsylvania, although a few jurists have found after the Supreme Court reversal in Barnurn that the bad faith provisions of section 8371 are applicable to peer review denials in which the PRO exceeds its statutory power by formulating a “causation” finding, see Neun v. State Farm Ins. Co., 1996 WL 220980, *3 (E.D. Pa. 1996) (Hutton, J.) (because “the plaintiff has alleged that the defendant abused the peer review process by employing a PRO to determine causation, the bad faith claim in Count II is reconcilable with the remedies provided in section 1797”), Schwartz v. State Farm Ins. Co., 1996 WL 189839, **5-8 (E.D. Pa. 1996) (Rendell, J.) (remarking that the legislature did not “believe that PROs should address causation issues and abuse the PRO process with impunity”), the majority of the remaining members of that court consider section 8371 to be irreconcilably inconsistent with section 1797(b). See Panameno v.

        State Farm Mut. Auto. Ins. Co., 1999 WL 320916, *1 (E.D. Pa. 1999) (Ludwig, J.); Cardwell v. State Farm Mut. Auto. Ins. Co., 1999 WL 239363, *1 (E.D. Pa. 1999) (Buckwalter, J.); Gargiulo v. Allstate Ins. Co., 1997 WL 551794, *1 (E.D. Pa. 1997) (Fullam, S.J.); Seasor v. Liberty Mut. Ins. Co., 941 F. Supp. 488, 492-93 (E.D. Pa. 1996) (Broderick, J.); Stewart v. State Farm Mut. Auto. Ins. Co., 1996 WL 153546, *2 (E.D. Pa. 1996) (Kelly, J.); Grevy v. State Farm Ins. Companies, 1996 WL 107851, **3-5 (E.D. Pa. 1996) (Reed, J.); Cohen v. American Int’l Ins. Co., 1996 WL 103793, **3-4 (E.D. Pa. 1996) (Yohn, J.); Mahnke v. Maryland Casualty Co., 1995 WL 574371, *2 (E.D. Pa. 1995) (Padova, J.); Bennett v. State Farm Fire & Casualty Ins. Co., 890 F. Supp. 440, 443 (E.D. Pa. 1995) (Joyner, J.); McGrane v. Liberty Mut. Ins. Co., 1994 WL 649353, *3 (E.D. Pa. 1994) (Bechtle, J.); The Middle District courts have been more evenly divided with respect to their construction of sections 8371 and 1797(b). Compare Bubb v. Nationwide Mut. Ins. Co., civil no. 1:CV-99-1852 (M.D. Pa. August 10, 2000) (Rambo, J.) (allowing bad faith claim to continue on the basis that “section 1797 does not permit the ‘peer review’ to make determinations on causation.”), and Garvey v. State Farm Ins. Co., civil no. 3:99-CV-1081 (M.D. Pa. October 21, 1999) (Munley, J.) (same) with Nationwide Ins. Co. v. Agway Ins. Co., 845 F. Supp. 252, 257 (M.D. Pa. 1994) (McClure, J.), rev’d mem., 77 F.3d 463 (3d Cir. 1996) (a plaintiff may not seek punitive damages under section 8371 for denial of medical benefits under an auto insurance contract). The only reported decision from the Western District of Pennsylvania predates Barnum and applied the bad faith statute to peer review denials predicated upon a “causation” adjudication. See Grove, supra.

      . If the insurance policy between the insurer and insured requires the insured to “[s]ubmit to [a] physical examination by a physician of [the insurer’s] choice,” the first-party benefits insurer does not have to establish “good cause” under section 1796 as a condition precedent to compelling the insured to undergo a medical examination. Fleming v. CNA Ins. Companies, 409 Pa. Super. 285, 288, 597 A.2d 1206, 1208 (1991). (emphasis omitted)

      . Progressive’s argument is internally inconsistent in this regard. Section 1797(b)(4) exposes an insurer to treble damages for wanton conduct if the reasonableness or necessity of medical treatment has not been “challenged before a PRO.” Thus, accepting Progressive’s position and assuming arguendo that its denial was predicated upon a “medical record review” which cannot be regarded as a “peer review,” then Progressive has refused to pay for treatment without first challenging its reasonableness or necessity before a PRO. In that event, Progressive would, in fact, be subject to treble damages under section 1797(b)(4).

      . With respect to Progressive’s contention that this action should be dismissed since Olsofsky sued “Progressive Insurance Company” rather than “Progressive Northern Insurance Company,” Olsofsky will be directed to amend the complaint to correct Progressive’s designation as “Progressive Northern Insurance Company.” See Paulish v. Bakaitis, 442 Pa. 434, 441, 275 A.2d 318, 321 (1971) (permitting amendment to change the named defendant from Bart Bertocci Inc. to the partnership Bertocci Construction Company even though the statute of limitations had expired); Powell v. Sutliff, 410 Pa. 436, 438-39, 189 A.2d 864, 865 (1963) (allowing complaint to be amended to substitute “Sutliff Chevrolet, a corporation” as the party defendant in place of “Ellis Sutliff and Leo E. Sutliff, individually and as partners of Sutliff Chevrolet” after the limitations period had elapsed). Accord, Richards v. May Dept. Stores, 100 Lacka. Jur. 334, 341 (1999).