Opinion
J-A21034-16 No. 3420 EDA 2015
11-15-2016
FREEDOM MEDICAL SUPPLY, INC., Appellant v. ALLSTATE FIRE AND CASUALTY INSURANCE COMPANY
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
Appeal from the Judgment entered December 11, 2015 in the Court of Common Pleas of Philadelphia County, Civil Division, No(s:) 2268 October Term 2013 BEFORE: BENDER, P.J.E., DUBOW and MUSMANNO, JJ. MEMORANDUM BY MUSMANNO, J.:
Freedom Medical Supply, Inc. ("Freedom Medical"), appeals from the Judgment entered in favor of Allstate Fire and Casualty Insurance Company ("Allstate"). We affirm.
Initially, Freedom Medical filed a Notice of Appeal following the denial of its Post-Trial Motions. On December 7, 2015, this Court entered a per curiam Order directing Freedom Medical "to praecipe the trial court Prothonotary to enter judgment on the decision of the trial court." Order, 12/7/15. This Court further stated that "[u]pon compliance with Pa.R.A.P. 301, the [N]otice of [A]ppeal previously filed in this case will be treated as filed after the entry of judgment." Id. A judgment in favor of Allstate was entered on December 11, 2015, and Freedom Medical's appeal properly lies from that Judgment.
The trial court set forth the relevant underlying facts as follows:
On June 2, 2011, Pablo Santos [("Santos")] was injured in a car accident. At the time, [] Santos was the named insured on an automobile insurance policy issued by [Allstate]. On September 21, 2011, [] Santos saw Dr. Maurice Singer ("Dr. Singer") for his injuries. The next day, [Freedom Medical] received a prescription from Dr. Singer on Freedom Medical's pre-made prescription form dated September 22, 2011. The
prescription prescribed various durable medical equipment ("DME") for [] Santos[,] including a lumbosacral support, a portable home whirlpool, electric moist heat pad, cervical pillow, and a portable muscle stimulator. On November 2, 2011, Freedom Medical logged a work order, signed by [] Santos, indicating delivery of all the prescribed DME to his address on 12003 Bustleton Avenue in Philadelphia.
On November 12, 2011, Freedom Medical submitted a bill to Allstate for reimbursement for the DME. On November 29, 2011, Allstate sent a letter to Freedom Medical denying its claim for reimbursement and indicat[ing] that the claim was under investigation. [On] April 29, 2013, Allstate sent a letter to Freedom Medical again denying payment[,] explaining that [] Santos was unable to confirm receipt of DME from the prescribing doctor.
April Mathis-Bush ("Mathis-Bush"), a claims service adjustor in the special investigation unit for Allstate, was assigned to investigate Freedom Medical's claim for reimbursement. On April 26, 2012, Mathis-Bush took a statement from an individual who claimed to be [] Santos. The individual presented a driver's license with the name Pablo Santos. The individual stated that he received the DME from Freedom Medical. [] Mathis-Bush did not find the individual to be credible and denied the claim for reimbursement. After suit had been filed, [] Mathis-Bush attended an arbitration hearing where [] Santos was present. [] Mathis-Bush confirmed that the individual who gave the statement in April[] 2012 was not [] Santos. At trial, [] Mathis-Bush also testified that the individual who gave the statement was not the same [] Santos who appeared at trial.
At trial, [] Santos testified that after he went to Dr. Singer[,] he received some medical equipment, but he did not know on what date he received it. [] Santos described the equipment he received as "the thing for the chest, the bracelet that is hot, and something for the feet." About a week after he received the equipment, he gave it to his son because he [did not] need the equipment. [] Santos was subpoenaed to bring the medical equipment he received to trial. Instead of bringing the equipment, [] Santos brought pictures of equipment taken by his son. [] Santos testified that he did not remember ever giving a
statement about the equipment and indicated that the first time he ever met [] Mathis-Bush was at the arbitration hearing.Trial Court Opinion, 12/29/15, at 1-3 (citations omitted).
* * *
[Freedom Medical] brought this action[,] which arose from [Allstate's] denial of reimbursement for certain medical equipment. On May 12, 2014, after an arbitration hearing, there was a finding for [Freedom Medical] against [Allstate] in the amount of $13,309.51. On June 2, 2014, [Allstate] appealed the arbitrators' award. On November 14, 2014, [Freedom Medical] filed three Motions in Limine[,] and on January 9, 2015, [Allstate] filed its responses. The case was tried in front of th[e trial c]ourt[,] sitting without a jury[,] on January 12, 2015[,] and January 13, 2015. On July 14, 2015, th[e trial c]ourt found for [Allstate] and against [Freedom Medical]. On October 22, 2015, after [P]ost-[T]rial [M]otions were denied, [Freedom Medical] filed a Notice of Appeal to the Superior Court of Pennsylvania. On November 6, 2015, [Freedom Medical] filed a timely Statement of Matters Complained of on Appeal pursuant [to] Pa.R.A.P. 1925(b). [Thereafter, following this Court's per curiam Order, Judgment was entered in favor of Allstate on December 11, 2015.]
On appeal, Freedom Medical raises the following questions for our review:
1. Did the [t]rial [c]ourt improperly conclude that [Santos] did not receive [DME] from [Freedom Medical], where Freedom Medical presented "reasonable proof" pursuant to § 1716 of the Pennsylvania Financial Responsibility Motor Vehicle Act ["MVFRL"] of its receipt at trial?
2. Did the [t]rial [c]ourt improperly conclude that Santos was required to bring the DME to trial to demonstrate that it had been delivered to him by Freedom Medical?
3. Did the [t]rial [c]ourt improperly conclude that the refusal of [Allstate] to pay for the DME was not limited to the one reason it asserted prior to the suit for denying Freedom
Medical's claim, namely that the patient could not confirm receipt of the DME?Brief for Appellant at 4.
4. Did the [t]rial [c]ourt improperly conclude that Allstate's refusal to pay Freedom Medical's medical bills was reasonable?
Our appellate role in cases arising from non-jury trial verdicts is to determine whether the findings of the trial court are supported by competent evidence and whether the trial court committed error in any application of the law. The findings of fact of the trial judge must be given the same weight and effect on appeal as the verdict of a jury. We consider the evidence in a light most favorable to the verdict winner. We will reverse the trial court only if its findings of fact are not supported by competent evidence in the record or if its findings are premised on an error of law. However, where the issue ... concerns a question of law, our scope of review is plenary.Stephan v. Waldron Elec. Heating & Cooling LLC , 100 A.3d 660, 664-65 (Pa. Super. 2014) (citation and brackets omitted).
The trial court's conclusions of law on appeal originating from a non-jury trial are not binding on an appellate court because it is the appellate court's duty to determine if the trial court correctly applied the law to the facts of the case.
In its first claim, Freedom Medical contends that the evidence demonstrated that Santos received the DME, and that Allstate's payments were overdue. Brief for Appellant at 18, 19-20, 22-23; see also id. at 18 (wherein Freedom Medical cites to section 1716 of the MVFRL to demonstrate that it presented "reasonable proof" of the delivery of the DME). Freedom Medical argues that Allstate had the following information demonstrating that Santos had received the DME: (1) a prescription received on November 21, 2011, for the DME; (2) Santos's medical records; (3) a Health Care Financing Administration form that detailed Santo's address, phone number, date of birth, date of the accident, the treating doctor, the medical provider, the diagnosis, the DME, and the amount charged for the DME; (4) a recorded statement by Santos confirming receipt of the DME; and (5) a signed work order. Id. at 19; see also id. at 22-23 (averring that the testimony of Jeffery Bonn, a former collections manager at Freedom Medical, and Santos was sufficient to demonstrate that the DME was delivered). Freedom Medical asserts that, despite Allstate's admission that Santos had receive some of the DME equipment, the trial court erroneously found that Santos had not received the DME. Id. at 22. Freedom Medical further asserts that the trial court should not have relied upon Mathis-Bush's speculative testimony that an imposter, not Santos, gave the statements regarding delivery of the DME. Id. at 21-23. Freedom Medical also claims that Allstate failed to question the receipt of the DME until a demand for payment had been made, approximately 1½ years following the delivery of the DME. Id. at 20. Freedom Medical argues that this delay hampered its ability to provide more testimony regarding the delivery of the DME. Id. at 21.
The trial court addressed Freedom Medical's first claim and determined that it is without merit. See Trial Court Opinion, 12/29/15, at 16-19. Specifically, the trial court weighed the evidence and made credibility determinations against Santos regarding the delivery of the DME. See id. at 17-19; see also Stephan , 100 A.3d at 664. We will not re-weigh the evidence. Accordingly, we adopt the trial court's sound reasoning, and affirm on this basis. See Trial Court Opinion, 12/29/15, at 16-19.
In its next claim, Freedom Medical contends that the trial court erred in finding that Santos was required to produce the DME at trial to support the claim that the DME had been delivered. Brief for Appellant at 23. Freedom Medical claims that it served a subpoena on Santos to testify at trial and bring the DME; however, Santos stated that he no longer had the DME and only had photographs of the DME taken by his son. Id. at 23-24. Freedom Medical argues that the trial court should not have drawn an inference against Santos for failing to produce the DME, and instead should have relied upon photographs of the DME taken by Santos's son. Id. at 23, 24-25. Freedom Medical also asserts that the trial court erred in finding that Freedom Medical waived this issue by failing to object to the absence of the DME because it introduced the testimony. Id. at 24.
The trial court addressed this claim as follows:
Freedom Medical incorrectly asserts that because [] Santos did not comply with the subpoena issued by Freedom Medical, [the trial c]ourt was precluded from considering this fact. Freedom Medical does not contend that the subpoena was not lawfully issued nor that [] Santos was under an obligation to bring the DME to trial. [] Santos testified regarding the subpoena and why he did not bring the DME to court. [The trial c]ourt considered the evidence presented. [The trial c]ourt properly permitted evidence that [] Santos failed to comply with the subpoena and produce the DME at trial.Trial Court Opinion, 12/29/15, at 11; see also N.T., 1/13/15, at 20-22 (wherein Santos testified that he did not comply with the subpoena requiring him to bring the DME to trial).
Upon our review, we conclude that the trial court was free to consider the fact that Santos failed to produce the DME, in contravention of the subpoena, because the trial court was required to determine whether the DME was delivered to Santos, and whether Freedom Medical properly billed Allstate. See Pa.R.C.P. 234.1(a) (noting that "[a] subpoena is an order of the court commanding a person to attend and testify at a particular time and place. It may also require the person to produce documents or things which are under the possession, custody or control of that person."). Thus, we agree with the trial court's sound reasoning, and conclude that the trial court was free to consider the fact that Santos failed to produce the DME. See Trial Court Opinion, 12/29/15, at 11.
In its third claim, Freedom Medical contends that the trial court erred in failing to acknowledge that this case involved an insurance policy, "which required consideration of a higher standard of care by an insurer towards its insured or medical provider than in other situations." Brief for Appellant at 25. Freedom Medical argues that Allstate violated the MVFRL by failing to pay the first party medical benefits on behalf of Santos within 30 days of the receipt of reasonable proof of the benefits. Id. at 25, 28.
The trial court addressed Freedom Medical's claim and determined that it is without merit. See Trial Court Opinion, 12/29/15, at 19. We affirm on the sound reasoning of the trial court for the purposes of this appeal. See id.
Freedom Medical also argues that even if it had failed to provide reasonable proof under the MVFRL, Allstate violated the Unfair Claims Settlement Practices Regulations ("UCSPR") and the Unfair Insurance Practices Act ("UIPA"). Brief for Appellant at 25-26, 28. Freedom Medical specifically asserts that Allstate failed to complete the investigation within a reasonable amount of time; failed to advise Freedom Medical when the investigation would be completed; failed to acknowledge the work order sent by Freedom Medical; failed to notify Freedom Medical of the results of the investigation; and misrepresented the reasons for denying the claim. Id. at 25-27. Freedom Medical claims that the trial court does not dispute that Allstate violated the USCPR and UIPA. Id. at 27-28.
Freedom Medical acknowledges that the UIPA and UCSPR do not create private causes of action. See Reply Brief for Appellant at 6; see also Smith v. Nationwide Mut. Fire Ins. Co., 935 F. Supp. 616, 620 (W.D. Pa. 1996) (applying Pennsylvania law and concluding that "there is no private cause of action under the UIPA or the [UCSPR]."); Albert v. Erie Ins. Exch., 65 A.3d 923, 931 (Pa. Super. 2013) (stating that "[t]he authority to enforce the [UIPA] is vested in the Pennsylvania Department of Insurance. In light of the fact that the Act does not create a private cause of action, the regulations promulgated thereunder do not create a private cause of action.") (citation omitted).
Initially, the regulations cited by Freedom Medical that were purportedly violated only apply to claimants. See , e.g., 31 Pa. Code § 146.7(a)(1) (stating that "[w]ithin 15 working days after receipt by the insurer of properly executed proofs of loss, the first-party claimant shall be advised of the acceptance or denial of the claim by the insurer. ... The denial shall be given to the claimant in writing and the claim file of the insurer shall contain a copy of the denial.") (emphasis added); 31 Pa. Code § 146.7(c)(1) (stating that "[i]f the insurer needs more time to determine whether a first-party claim should be accepted or denied, it shall so notify the first-party claimant within 15 working days after receipt of the proofs of loss giving the reasons more time is needed. ...") (emphasis added); 31 Pa. Code § 146.6 (stating that "[e]very insurer shall complete investigation of a claim within 30 days after notification of claim, unless the investigation cannot reasonably be completed within the time. ... [T]he insurer shall provide the claimant with a reasonable written explanation for the delay and state when a decision on the claim may be expected.") (emphasis added). Santos, the purchaser of the insurance policy with Allstate, not Freedom Medical, is the claimant. See 31 Pa. Code § 146.2 (defining claimant as "either a first-party claimant, a third-party claimant, or both, and including the claimant's attorney and a member of the claimant's immediate family designated by the claimant."); id. (defining first-party claimant as "[a]n individual, corporation, association, partnership or other legal entity asserting a right to payment under an insurance policy or insurance contract arising out of the occurrence of the contingency or loss covered by such policy or contract."); see also 31 Pa. Code § 69.3 (defining "provider" as "[a] person or institution which provides treatment, accommodations, products or services."). Further, Allstate regularly communicated with the claimant, Santos, and his attorney during the investigation. See Trial Court Opinion, 12/29/15, at 21. Based upon the foregoing, Freedom Medical is not entitled to relief on their UIPA and UCSPR claims.
Finally, Freedom Medical contends that Allstate could not assert new reasons for the denial at trial, i.e., that the person who gave the recorded statement in 2012 was not the same person (Santos) who testified at arbitration in 2014 and trial in 2015. Brief for Appellant at 28-29.
Here, Allstate initially denied payment to Freedom Medical because Santos was unable to confirm the receipt of the DME. See Trial Court Opinion, 12/29/15, at 2, 19. Following the filing of Freedom Medical's action, Allstate learned that Santos had not provided the statement to Mathis-Bush in April 2012. See N.T., 1/13/15, 42-43; see also Trial Court Opinion, 12/29/15, at 3. The fact that Allstate learned new information following the institution of the action does not preclude it from raising the new information as a defense. See Trial Court Opinion, 12/29/15, at 12 (stating that "[a]lthough Allstate only provided a single reason for denial of the claim in 2013[,] that does not mean that it is precluded from raising additional reasons at trial); 16 (stating that "[a]lthough Allstate denied the claim for a specific reason, this does not preclude Allstate from defending itself in court and challenging the reliability of the evidence presented by Freedom Medical."). We conclude that Freedom Medical's claim in this regard is without merit.
In its fourth claim, Freedom Medical contends that Allstate's conduct in denying the claim was unreasonable. Brief for Appellant at 29-30. Freedom Medical argues that Allstate's failure to respond to evidence of the delivery of the DME forced Freedom Medical to file the instant action. Id. at 29. Freedom Medical asserts that under section 1716 of the MVFRL, Allstate should have paid Freedom Medical the amount of its unpaid bills plus 12% interest, and counsel fees and costs. Id. Freedom Medical claims that Allstate purposefully makes it difficult for medical providers, such as Freedom Medical, to pursue meritorious claims by "making misleading statements, filing repeated appeals, and presenting frivolous defenses that were never communicated to Freedom Medical prior to suit." Id. at 30; see also id. at 29-30.
Here, Freedom Medical again attacks the trial court's credibility findings and denial of the claim. As noted above, the trial court was free to make credibility determinations against Freedom Medical regarding the delivery of the DME. See Trial Court Opinion, 12/29/15, at 17-19; see also Stephan , 100 A.3d at 664. We will not re-weigh the trial court's credibility determinations, and conclude that Allstate did not act unreasonably in denying the claim. See Trial Court Opinion, 12/29/15, at 17-19. Furthermore, we adopt the trial court's sound reasoning and determination that Freedom Medical's counsel fees and costs claims are without merit. See id. at 23-24.
Judgment affirmed. Judgment Entered. /s/_________
Joseph D. Seletyn, Esq.
Prothonotary Date: 11/15/2016
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