Opinion
C.A. No. 99C-02-210-JOH.
Submitted: February 4, 2000.
Decided: June 12, 2000.
Upon Motion of Peninsula Indemnity Company to Alter or Amend a Judgment Pursuant to Rule 59 and/or Relief from an Order Pursuant to Rule 60 — GRANTED .
Fred Barakat, Esq., of Wilmington, Delaware, attorney for plaintiff.
Mary E. Sherlock, Esq., of Brown, Shiels, Beauregard Chasanov, attorney for defendant.
MEMORANDUM OPINION
Peninsula Indemnity Company has moved to amend or alter this Court's decision of January 12, 2000. In that decision, the Court denied Peninsula's motion for summary judgment holding that it could not interpose the defense of a two-year statute of limitations on Marie Carriere's PIP claim. The Court held that Peninsula had failed in the statutory duty to inform Carriere of the new three-year statute of limitations established in Harper v. State Farm Mut. Auto. Ins. Co.
Del.Supr., 703 A.2d 136 (1997).
Peninsula correctly points out, however, that the Court did not address two other issues it raised which it asserts bar or limit Carriere's PIP claim. One issue is the time frame within which Carriere was to present her claims for PIP coverage, namely, no later than two years and ninety days after Carriere's September 4, 1995 accident. The other issue is whether Carriere's non-attendance at an IME bars her claim.
The Court will alter or amend its earlier decision to address these issues. First, the Court holds that Carriere had two years and ninety days from her accident within which to submit to Peninsula any request for payment of PIP payments. Two, in the circumstances of this case, Peninsula has waived and cannot interpose any defense arising out of Carriere's failure to attend the one scheduled IME.
FACTUAL BACKGROUND
These facts are abbreviated to only include the relevant facts considered in this motion. The full factual background of this case is set forth in Carriere v. Peninsula Indem. Co., Del.Super., C.A. No. 99C-02-210, Herlihy, J. (January 12, 2000).
Carriere was injured in an automobile accident on September 4, 1995. On September 7, 1995, the insurer, Peninsula's claims adjuster, Joseph O'Donnell, sent her a letter enclosing an application for PIP benefits and releases allowing it to get medical and wage information. This letter also informed Carriere that she had up to two years from the date of the accident to present claims for medical expenses and lost wages. Carriere did not return any of the forms.
Carriere was notified by letter dated October 6, 1995 that Peninsula had arranged for her an IME on December 11, 1995 at 11:30 a.m. and gave the doctor's name and address. She neither appeared for the IME nor contacted the doctor's office. Carriere argues that she did not receive the letter, although it was sent to the same address as the original letter from O'Donnell, as was other subsequent correspondence, none other of which she denies receiving.
After Carriere missed her IME on December 11, 1995, O'Donnell wrote to her on December 26, 1995. A discussion of Carriere's contractual duty to cooperate with Peninsula was included. He went on to state:
You failed to attend the examination as scheduled in breach of your policy obligation.
Please be advised that it is our position that during the period of time that you are in breach of the policy contract, no benefits would be available to you to the extent your breach has prejudiced our right to verify the claimed expenses as being reasonable, necessary and incurred for the treatment, evaluation of an injury or condition alleged to have been sustained thru [sic] the use, ownership or maintenance of the covered auto.
O'Donnell letter (December 26, 1995).
No new IME was scheduled, however,
Carriere's counsel wrote to O'Donnell on June 25, 1996 sending some information and forms. When one of Carriere's treatment providers asked counsel why it had not been paid, counsel wrote O'Donnell on August 23, 1996 asking why. O'Donnell promptly replied stating reasons but never mentioned that payment was being denied due to her failure to attend an IME.
APPLICABLE STANDARD
The disposition of a Superior Court Civil Rule 59(d) motion to alter or amend the judgment is within the sound discretion of the trial court. A motion to alter or amend the judgment shall be served and filed no later than ten days after the entry of judgment. The Superior Court's power to entertain Rule 59(d) motions is jurisdictional.
Bennett v. Andree, Del.Supr., 252 A.2d 100, 103 (1969).
Superior Court Civil Rule 59(d).
Preform Bldg. Components, Inc. v. Edwards, Del.Supr., 280 A.2d 697, 698 (1971).
DISCUSSION
The Court finds that Peninsula's motion to alter or amend should be granted. First, as noted, the Court did not address in its earlier decision the two issues covered in Peninsula's current motion. Peninsula had raised them before. Second, the Court unwittingly sowed the seeds of some confusion in addressing the statute of limitations issue, as it related to the period within which Carriere could file this lawsuit, following denial of coverage in light of Harper, overturning Nationwide Ins. Co. v. Rothermel. Third, in its earlier decision, the Court brushed off the statutory issue which Peninsula now seeks to revisit.The statutory issue revolves around 21 Del. C. § 2118(a)(2)i.2., which provides:
Payments of expenses under subparagraph a. of this paragraph shall be made as soon as practical after they are received during the period of 2 years from the accident. Expenses which are incurred within the 2 years but which have been impractical to present to an insurer within the 2 years shall be paid if presented within 90 days after the end of the 2-year period.
21 Del. C. § 2118(a)(2)i.2.
Carriere argues that this section is inconsistent with 21 Del. C. § 2118(a)(2)i. 1., which states:
Expenses under subparagraph a. of this paragraph shall be submitted to the insurer as promptly as practical, in no event more than 2 years after they are received by the insured.
Del. C. § 2118(a)(2)i.1.
Peninsula argues that it need honor only those requests for PIP expenses which were submitted within two years and ninety days of Carrier's September 4, 1995 accident. But, she argues that subsection (1)(2)a. 1. allows a longer period for submission of PIP expenses for which Peninsula would be liable. That subsection, read in isolation, would appear to allow an insured two years to submit expenses from the date of receipt with no cap on when that two years ended.
The Court is required to read these two apparent contradictory subsections in pari materia. Also, the Court should interpret statutes in a way to avoid an absurd result. The Court need only look to the introductory sentences of § 2118 (a) for the answer:
Watson v. Burgan, Del.Supr., 610 A.2d 1364, 1368 (1992).
Coastal Barge Corp. v. Coastal Zone Ind. Control Bd., Del.Supr., 492 A.2d 1242, 1246 (1985).
No owner of a motor vehicle registered in this State, other than a self-insurer pursuant to § 2904 of this title, shall operate or authorize any other person to operate such vehicle unless the owner has insurance on such motor vehicle providing the following minimum insurance coverage: ***
(2)a. Compensation to injured persons for reasonable and necessary expenses incurred within 2 years from the date of the accident for:
21 Del. C. § 2118(a).
In addition to these two subsections, another subsection provides:
Where a qualified medical practitioner shall, within 2 years from the date of an accident, verify in writing that surgical or dental procedures will be necessary and are then medically ascertainable but impractical or impossible to perform during that 2-year period, the cost of such dental or surgical procedures, including expenses for related medical treatment, and the net amount of lost earnings lost in connection with such dental or surgical procedures shall be payable. Such lost earnings shall be limited to the period of time that is reasonably necessary to recover from such surgical or dental procedures but not to exceed 90 days. The payment of these costs shall be either at the time they are ascertained or at the time they are actually incurred, at the insurer's option.
21 Del. C. § 2118(a)(2)a.3.
In short, the insurer shall pay expenses which are incurred within two years of the date of the accident or ninety days more, where impractical to present them within two years. The only exception to this is in subsection 3 above and it is not applicable to this case. Peninsula is required to honor only those expenses Carriere incurred and submitted to it within two years and ninety days of September 4, 1995, the accident date.
See dicta Harper, 703 A.2d at 139-140.
While the time frame of Peninsula's liability to pay PIP expenses is thus circumscribed, it cannot avoid liability on the IME defense. Peninsula scheduled Carriere for an IME on December 12, 1995. The insurance policy states under the section titled "Insured Person's and Claimant's Obligations" that the insured may be required to submit to physical examinations by physicians selected by the insurer at the insurer's expense. Carriere failed to attend the IME appointment in breach of the policy requirement obligating her to do so.
Peninsula states that in the Court's previous decision, it held that Carriere was notified of her scheduled IME by letter, but she failed to appear for the appointment. Peninsula argues that her failure to appear for the scheduled IME was a material breach of the policy which denied Peninsula an opportunity to investigate this PIP claim; therefore, Peninsula should not be required to pay Carriere's medical bills and wage losses.
Carriere argues, and this Court agrees, that Peninsula has waived its defense of failure to attend the IME as basis for non-payment. Denial of a claim on the basis of the missed IME was presented to Carriere in a reservation of rights' letter dated December 26, 1995. The missed IME is not mentioned by Peninsula in any following correspondence. More importantly, Peninsula did not assert this as a defense in O'Donnell's August 27, 1996 letter to plaintiffs counsel when counsel specifically requested information on the basis of denial. Furthermore, there was no apparent immediate need for an IME nor was one rescheduled. There were no pressing medical issues that made the December 1995 IME imperative. Peninsula could have rescheduled the missed IME at a later time and accomplished the same objective, which was to have Carriere evaluated by an independent physician of Peninsula's choice. Indeed, Peninsula said Carriere would be in breach until an IME was conducted, suggesting it saw nothing urgent. This Court holds that it was Peninsula's responsibility to set forth in the correspondence to Carriere's counsel the basis of denial and, because that was not done, Peninsula has waived its right to rely on that defense.
The Court is not saying that, as a general rule, missing one IME does not breach the duty to cooperate. It is also not saying that denial of coverage will not be upheld for missing only one IME or that there always is a duty to reschedule a missed IME. The totality of circumstances in this case, especially Peninsula's failure to continue coverage denial on a missed IME, removes its ability later to successfully inject that defense.
CONCLUSION
Based upon the foregoing reasons, the motion of Peninsula Indemnity Company to alter or amend a judgment pursuant to Rule 59 and/or relief from an order pursuant to Rule 60 is GRANTED.
IT IS SO ORDERED.