What’s “Meaningful Investigation” In A UIM Claim

The Federal District Court for the Western District of Pennsylvania has issued a decision providing insurers with further guidance on what constitutes a meaningful investigation in the context of a UIM claim.

In Mineo v. GEICO, W.D. Pa., Civil Action No. 12-1547 (W.D. Pa. July 15, 2014) the Court denied GEICO’s partial motion for summary judgment on Mineo’s claim that GEICO acted in bad faith because there was sufficient evidence to infer that GEICO failed to conduct a meaningful investigation of Mineo’s UIM claim.

Mineo was injured in an accident that occurred on August 16, 2008. Mineo received emergency medical services of the day of the accident and was then referred to physical therapy. He received physical therapy to his left shoulder from August 27, 2008 through November 24, 2008. Mineo complained from the very beginning of neck and shoulder soreness and complained that his shoulder was “locking”. But, according to the physical therapy records dated September 8, 2008, Mineo complained of increasing shoulder pain after slipping and falling on his left side. However, when he was discharged the physical therapy notes indicated that Mineo’s left shoulder complaints began on August 16, 2008 and according to treatment records Mineo reported to his medical providers that his left shoulder was painful and worse due to the August 16, 2008 motor vehicle accident. On October 13, 2008, Mineo began treating with an orthopedic surgeon, Dr. Schilken, who performed a surgical rotator cuff repair. The surgery did not relieve Mineo’s pain and he continued with treatment and steroid injections.

Mineo notified GEICO of his UIM claim on January 22, 2010. He settled his claims for personal injuries against the tortfeasor for $50,000.00. GEICO granted Mineo consent to settle and offered him $10,000 to settle his UIM claim. GEICO based its offer on the one physical therapy note dated September 8, 2008 and took the position that that Mineo’s shoulder pain started and increased only after a subsequent fall on his left side. On June 25, 2010, the physical therapist wrote a letter to GEICO explaining that Mineo had significant left shoulder dysfunction at the time of the first visit on August 27, 2008 before the subsequent fall. Thereafter, GEICO maintained its $10,000.00 offer continuing to rely on the September 8, 2008 physical therapy note. Mineo rejected GEICO’s offer to settle and eventually filed an action which was removed to Federal Court.

After suit was filed, Mineo’s treating surgeon, Dr. Schilken, provided medical opinions on February 11, 2013 that (1) Mineo’s injuries, including the left rotator cuff tear and surgery, were related to the August 16, 2008 accident, (2) Mineo’s current complaints of pain are chronic and related to the subject accident, (3) Mineo was disabled after his surgery and was then released to return to work on June 15, 2009 with limitations. Four months after Dr. Schilken provided his opinions, GEICO had Mineo submit to an IME that was performed by Dr. Liefeld and a report was issued on June 12, 2013. Dr. Liefeld opined that Mineo was symptomatic for a left shoulder impingement following the subject accident. Dr. Liefeld concluded that even in the absence of the subsequent fall, Mineo sustained a left shoulder impingement syndrome and possible rotator cuff tear necessitating surgery as a result of the August 16, 2008 accident.

Considering GEICO’s motion for partial summary judgment, the Court noted that under 42 Pa.C.S. Section 8371 an insurer’s bad faith is not restricted to just a denial of a claim but may also extend to the insurer’s investigative practices. The Court stated that the insurance company must conduct a meaningful investigation, which may include an in-person interview, examination under oath, medical authorizations, and/or independent medical examinations.

The Court found that GEICO’s claim adjuster relied on just the one physical therapy record to justify her position that Mineo’s left shoulder injury was caused or aggravated by the subsequent fall. The adjuster testified in her deposition that her conclusions were based on her review of the records and that she did not believe an IME was necessary even though there was a dispute over the significance of the September 8, 2008 physical therapy note.   The Court noted that GEICO’s adjuster did not follow its own claims practices when investigating or evaluating a claim. The Court also found it significant that GEICO did not get an IME until June of 2013 and that GEICO claims log made no reference to Dr. Schilken, despite receipt of his records.

The Court stated that GEICO had several options including an in-person interview of Mineo, examination of Mineo under oath, medical authorizations, and/or independent medical examinations. The Court stated that based on the current record, GEICO did not attempt any of the investigative actions that would demonstrate that a meaningful investigation was conducted of Mineo’s UIM claim and the Court denied GEICO’s motion for partial summary judgment. The Bad Faith Claim was allowed to proceed.

Randy T. Burch

Office: Reading
Phone: (610) 568-1410
Email: rburch@forryullman.com
Practice Areas: Commercial Litigation, Coverage, General Liability, Premises Liability, Third Party