Benscoter v. Nationwide Mutual Insurance Company

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

JOHN BENSCOTER, No. 4:22-CV-01142

Plaintiff, (Chief Judge Brann)

NATIONWIDE MUTUAL :

INSURANCE COMPANY, :

Defendant.

MEMORANDUM OPINION

AUGUST 22, 2023

In 2019, Plaintiff John Benscoter, insured through an auto insurance policy

issued by Defendant Nationwide Mutual Insurance Company, was involved in a

motor vehicle accident in which he suffered injuries. Benscoter received, and

Nationwide paid for, treatment for those injuries until, after eighteen months,

Nationwide required Benscoter to attend an Independent Medical Examination

(“IME”) to determine whether further treatment was reasonable. Relying on the

results from that IME, Nationwide determined that Benscoter had recovered from

the accident and informed him that he was no longer entitled to medical benefits.

However, between the time Nationwide requested the IME and Benscoter

attended it, the Supreme Court of Pennsylvania held contractual provisions requiring

IMEs to be void. Benscoter filed suit, bringing several claims alleging that

Nationwide improperly denied him benefits based on an IME it had no right to

compel.

Before the Court are the parties’ cross-motions for summary judgment, in

which Nationwide argues that Benscoter failed to allege he was entitled to further

benefits and Benscoter argues Nationwide cannot cut his benefits based on an

improperly procured IME. Though the majority of Benscoter’s claims are

improperly pled or untimely, there exists a dispute of material fact as to whether

Benscoter was improperly denied benefits. Therefore, Nationwide’s Motion is

granted in part and Benscoter’s Motion is denied.

I. BACKGROUND

A. Undisputed Facts

Benscoter, who at all relevant times held an auto insurance policy issued by

Nationwide, was involved in a motor vehicle accident on April 13, 2018 in which he

sustained injuries to his neck, lower back, right knee, and head.! He subsequently

received medical treatment for those injuries.? After paying for Benscoter’s medical

treatment for a year and a half, Nationwide decided that Benscoter should undergo

an IME to determine whether he had recovered to his pre-accident status.* On

October 8, 2019, Nationwide advised Benscoter that “given [the] time since [the

1 Doe. 26 2: Doc. 36-3 at 129, 152; Doc. 38 $f 1, 3: Doe. 44 $f 1, 3.

2 Doc. 38 9 4; Doc. 44 § 4.

Doc 36-3 at 85; Doc. 38 § 7; Doc. 44 § 7.

accident, Nationwide] will be having someone reach out to him to schedule an exam

by an independent doctor ... [as] part of his policy agreement.”* The IME was

conducted on November 21, 2019 by a physician selected by Nationwide. In the

IME report, the examining physician found that, though “there is ongoing left

shoulder pain due to calcific tendinitis,” the “calcific tendinitis is not causally related

to the motor vehicle accident” and concluded that Benscoter “has fully recovered

from his motor vehicle injuries [and] returned to pre-accident status.”° Based on the

findings of the examining physician, Nationwide terminated Benscoter’s medical

benefits effective January 10, 2020.’

Meanwhile, on November 20, 2019, the day before Benscoter’s IME, the

Pennsylvania Supreme Court issued its opinion in Sayles v. Allstate, holding that “an

automobile insurance policy provision, which requires an insured seeking first-party

medical benefits under the policy to submit to an independent medical exam

whenever the insurer requires and with a doctor selected by the insurer” conflicts

with 75 Pa. C.S. § 1796(a) of the Pennsylvania Motor Vehicle Financial

Responsibility Law (“MVFRL’”) and is void as against public policy.® Benscoter’s

policy contained such a provision: “The Insured will . . . if injured, submit to

4 Doc. 36-3 at 84.

> Doc. 36-3 at 151; Doc. 38 § 12; Doc. 44 § 12.

© Doc. 36-3 at 158-59.

7 Doc. 38917; Doc. 44 § 17.

8 Sayles y. Allstate Ins. Co., 219 A.3d 1110, 1110 (Pa. 2019).

examinations by company-selected physicians as often as the company reasonably

requires.”® The policy also contains a provision that states: “Any terms of this policy

which may be in conflict with the statutes of the state in which the policy is issued

are hereby amended to conform.”?°

On December 27, 2019, Nationwide discussed the findings of the IME with

Benscoter and advised him that Nationwide would pay for his treatment through

January 10, 2020.'' On February 11, 2020, Benscoter informed Nationwide that he

was going to continue with his current course of physical medicine and rehabilitation

treatment and Nationwide reminded him that, due to the IME, it would no longer

cover this treatment but that it may consider referrals for different types of

treatment.!* Nationwide further advised Benscoter that any non-covered medical

expenses would need to go through his health insurance carrier.'°

In late April 2020, Sandra Kisailus, an attorney representing Benscoter (not

affiliated with Benscoter’s counsel here), requested Benscoter’s policy documents,

which Nationwide sent on May 15, 2020.'* Two months later, Kisailus requested

that Nationwide keep Benscoter’s claim open and said that she needed to follow up

° Doc. 36-3 at 32 (emphasis in original).

10 Td.

Td. at 81.

12 Td. at 79.

13 Td. at 78

14 Td. at 77-8.

with Benscoter to obtain an update regarding his ongoing treatment.'* No update

would be forthcoming—despite monthly calls from Nationwide—until December 3,

2020, when Kisailus informed Nationwide that her lack of response was due to a

lack of response from Benscoter to her own calls until that day.’ Kisailus told

Nationwide that Benscoter had continued to follow up with his primary care

physician, had plans to see a pain management doctor, and that he believed his

ongoing treatment to be related to his April 2018 accident.!” Nationwide reaffirmed

that, while his follow-up care with his primary care physician was not covered, it

would be willing to consider a whether care by a pain management doctor would fall

within the IME.'® In April 2021, a representative from Kisailus’ office confirmed

that Benscoter was continuing to receive treatment and that he had not started any

new treatment.!? Between January 2020 and April 2021, Nationwide advised

medical providers providing treatment to Benscoter of the IME and denied bills

submitted on that basis.”°

15 Td. at 75.

16 Td. at 72-75.

17 Td. at 72.

18 Td.

19 Td. at 71.

20 See id. at 72-79.

B. Procedural History

Benscoter initiated this lawsuit on June 17, 2022 and filed the operative

Amended Complaint on February 2, 2023.7! In his Amended Complaint, Benscoter,

on behalf of himself and a class of those similarly situated, requests a declaratory

judgment regarding insureds’ rights with respect the disputed contractual obligation

that they undergo a medical examination; equitable relief requiring Nationwide to,

among other things, update all of its Pennsylvania policies in light of the Sayles

decision; the repayment of certain medical benefits; attorneys’ fees; treble damages;

and punitive damages.”

Nationwide moved to dismiss the Amended Complaint.?*? Benscoter moved

for partial summary judgment on his claims brought under 75 Pa. C.S. § 1796.74 In

support of his motion, Benscoter attached a copy of his policy, a claims log, and

records of the IME, which is the extent of the factual record before the Court.?°

During a status conference with the Court, the parties consented to converting

Nationwide’s motion to dismiss into a motion for summary judgment under Federal

Rule of Civil Procedure 12(d) and the Court treating the parties as having

21 Docs. 1-1 and 26.

22 Doc. 26 Ff 95-99, 130, 155, 171(B)-(E).

Nationwide Mot. to Dismiss, Doc. 29.

74 Mot. for Summ. J., Doc. 36.

2° Doc. 36-3.

cross-moved for summary judgment.*° Both motions are now fully briefed and ripe

for disposition.

IT. LAW

Under Rule 56(a) of the Federal Rules of Civil Procedure, summary judgment

is appropriate where “the movant shows that there is no genuine dispute as to any

material fact and the movant 1s entitled to judgment as a matter of law.” As expressed

by the Supreme Court of the United States in Celotex Corp. v. Catrett, summary

judgment is required where a party “fails to make a showing sufficient to establish

the existence of an element essential to that party’s case” on an issue that the “party

will bear the burden of proof at trial.’””’ Material facts are those “that could alter the

outcome” of the litigation, “and disputes are ‘genuine’ if evidence exists from which

a rational person could conclude that the position of the person with the burden of

proof on the disputed issue is correct.”?®

The party requesting summary judgment bears the initial burden of supporting

its motion with evidence from the record.” When the movant properly supports its

motion, the nonmoving party must then show the need for a trial by setting forth

“genuine factual issues that properly can be resolved only by a finder of fact because

26 Doc. 42.

27 Celotex Corp. v. Cartrett, 477 U.S. 317, 322 (1986).

78 EBC, Inc. v. Clark Bldg. Sys., Inc., 618 F.3d 253, 262 (3d Cir. 2010) (quoting Clark v. Modern

Grp. Ltd., 9 F.3d 321, 326 (3d Cir. 1993)).

29 Celotex Corp., 477 US. at 323.

they may reasonably be resolved in favor of either party.”30 The United States Court

of Appeals for the Third Circuit explains that the nonmoving party will not withstand

summary judgment if all it has are “assertions, conclusory allegations, or mere

suspicions.”31 Instead, it must “identify those facts of record which would contradict

the facts identified by the movant.”32

In assessing “whether there is evidence upon which a jury can properly

proceed to find a verdict for the [nonmoving] party,”33 the Court “must view the

facts and evidence presented on the motion in the light most favorable to the

nonmoving party.”34 Moreover, “[i]f a party fails to properly support an assertion of

fact or fails to properly address another party’s assertion of fact as required by Rule

56(c),” the Court may “consider the fact undisputed for purposes of the motion.”35

Finally, although “the court need consider only the cited materials, . . . it may

consider other materials in the record.”36

30 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986).

31 Betts v. New Castle Youth Dev. Ctr, 621 F.3d 249, 252 (3d Cir. 2010).

32 Port Auth. of N.Y. and N.J. v. Affiliated FM Ins. Co., 311 F.3d 226, 233 (3d Cir. 2002) (quoting

Childers v. Joseph, 842 F.2d 689, 694-95 (3d Cir. 1988)).

33 Liberty Lobby, 477 U.S. at 252 (quoting Schuylkill & Dauphin Imp. Co. v. Munson, 81 U.S.

442, 448 (1871)).

34 Razak v. Uber Technologies, Inc., 951 F.3d 137, 144 (3d Cir. 2020).

35 Fed. R. Civ. P. 56(e)(2); see also Weitzner v. Sanofi Pasteur Inc., 909 F.3d 604, 613-14 (3d

Cir. 2018).

36 Fed. R. Civ. P. 56(c)(3).

“This standard does not change when the issue is presented in the context of

cross-motions for summary judgment.’”*’ “When both parties move for summary

judgment, ‘the court must rule on each party’s motion on an individual and separate

basis, determining, for each side, whether a judgment may be entered in accordance

with the Rule 56 standard.’”*®

Il. CLAIMS FOR RELEIF

In his Amended Complaint, Benscoter brings claims for relief (1) under

Section 1796 of the Pennsylvania MVFRL (Count IID), (2) breach of contract (Count

IV), and (3) under 42 Pa. C.S. § 8371 for denial of insurance benefits in bad faith

(Count V).*° Benscoter also requests a declaratory judgment (Count I) and injunctive

relief (Count IT) relating to Nationwide’s alleged violations of and obligations under

Section 1796.*° Because a party may only seek a declaratory judgment or injunctive

relief in connection with a substantive claim, the Court will treat Counts I and II as

requested relief under Count III as appropriate.*!

37 Auto-Owners Ins. Co. v. Stevens & Ricci Inc., 835 F.3d 388, 402 (3d Cir. 2016) (quoting

Appelmans v City of Phila, 826 F.2d 214, 216 (3d. Cir. 1987)).

38 Td. (quoting 10A Charles Alan Wright et al., Federal Practice & Procedure § 2720 (3d ed.

2016)).

39 Am. Compl. §§ 110-70.

40 Td. JF 95-109.

41 See Tripicchio v. UPS Store, Inc., 2023 WL 3182915, at *6 (D.N.J. Apr. 30 2023) (observing

that the Declaratory Judgment Act “is not a standalone source of rights, but a procedural

vehicle for litigants to seek a declaration of their rights under some other law’) (collecting

cases); In re Shop-Vac Mktg. and Sales Practices Litig., 964 F.Supp.2d 355, 365 (M.d.Pa.

2013) (observing that “injunctive relief is a remedy, not a in independent cause of action).

IV. ANALYSIS

Nationwide requests summary judgment with respect to all claims.”

Benscoter requests summary judgment on the “issues” of (1) whether Nationwide

was required to comply with Section 1796, (2) whether Nationwide’s failure to

comply with Section 1796 was a breach of contract which harmed Benscoter, and

(3) whether a private cause of action is available under Section 1796.** Because Rule

56 does not allow for summary judgment on only a portion of a claim, the court will

evaluate Benscoter’s motion as having moved for summary judgment with respect

to the entirety of his Section 1796 and breach of contract claims.”

A. Section 1796 of the MVFRL.

“Section 1796(a) requires an insurer who wishes to compel a claimant for

first-party medical benefits to undergo an IME to file a petition with a court of

competent jurisdiction, and, also, to show good cause for the IME. In addition, any

court order for an IME must give the insured ‘adequate notice of the time and date

of the examination,’ as well as ‘state the manner, conditions and scope of the

examination.’”4°

42 See Doc. 30.

4 See Doc. 37.

4 See Avaya, Inc. v. Telecom Labs, Inc., 2009 WL 2928929, at *2 (D.N.J. Sept. 9, 2009) (“Third

Circuit precedent is clear . . . that nothing in [Rule] 56 can be read to allow partial summary

judgment on only one portion of a claim.”) (collecting cases).

45 Sayles, 219 A.3d at 1125 (quoting 75 Pa. C.S. § 1796(a)).

10

1. Declaratory Relief.

Benscoter requests a judgment declaring:

a) Nationwide must comply with Pennsylvania Motor Vehicle

Financial Responsibility Law 75 Pa. C.S. § 1796;

b) That whenever the mental or physical condition of an insured is

material to any claim for medical benefits, Nationwide must Motion a

Court of competent jurisdiction for an Order directing the insured to

submit to a mental or physical examination;

c) That any such motion must be for good cause shown;

d) That only if a person fails to comply with an order by the Court to

be examined, that the Court may order that the person be denied

benefits until compliance.

e) That Nationwide be prohibited from enforcing, or attempting to

enforce, any policy terms which state, or purport to authorize,

Nationwide to demand Plaintiff to attend a physical exam without

having demonstrated good cause to a court and without having secured

a Court Order compelling Plaintiffs attendance at a physical exam;

f) That Nationwide is legally liable for the damages caused by

defendant’s improper actions relative to medical exams of insureds in

violation of law;

g) Along with all other relief requested throughout the Complaint.*°

“[W |hen a plaintiff seeks prospective (forward-looking) relief in the form of

an injunction or a declaratory judgment, they must show they are ‘likely to suffer

future injury.””*’ “The future injury must also be ‘imminent,’ meaning that it is

46 Am. Compl. § 99.

47 Yaw v. Delaware River Basin Comm’n, 49 F Ath 302, 318 (3d Cir. 2022) (quoting McNair v.

Synapse Group Inc., 672 F.3d 213, 223 (3d Cir. 2012)).

11

‘certainly impending’ rather than merely ‘possible.’”48 “[A]s a result of the

immediacy requirement, ‘past exposure to illegal conduct does not in itself show a

present case or controversy’” regarding forward looking relief.49 “In the class action

context, th[e] requirement [of certain, immediate injury] must be satisfied by at least

one named plaintiff.”50

Benscoter essentially asks the Court for a declaratory judgment that

Nationwide must comply with Section 1796(a). However, Benscoter has not alleged

any facts, nor are there any in the record, which indicate that he is likely to suffer

any imminent harm from a future violation of Section 1796. Benscoter alleges that

he “suffered harm” because Nationwide “refused to pay” for medical expenses

resulting in him being “denied . . . access to medical care.”51 The language of the

requested declaratory relief—“Nationwide is legally liable for the damages caused

by defendant’s improper actions”—further underscores the backward-looking nature

of the harm at issue.52 Benscoter’s allegations of past injury may be sufficient to

establish standing for a claim of damages, but they are insufficient to support a

request for declaratory or injunctive relief.53

48 Id. (quoting Clapper v. Amnesty Intern. USA, 568 U.S. 398, 409 (2013)).

49 McNair, 672 F.3d at 223 (quoting O’Shea v. Littleton, 414 U.S. 488, 495-96 (1974)).

50 McNair, 672 F.3d at 223.

51 See Am. Compl. ¶¶ 68-73.

52 Id. ¶ 99(f).

53 Yaw, 48 F.4th 317-18.

Even if Benscoter did allege future harm, his request for a declaratory

judgment would still fail. Paragraph (b) of Benscoter’s requested declaration goes

beyond the requirements of Section 1796 by placing an affirmative obligation on

Nationwide to seek a court order for an IME “whenever the mental or physical

condition of an insured is material to any claim for medical benefits.”54 Section 1796

does not require an insurer to seek an IME in every case where the mental or physical

condition of an insured is material to a claim.55 There will certainly be cases in which

an IME is not appropriate or necessary. Benscoter himself received treatment for

eighteen months following his accident without undergoing an IME. Further, as

Nationwide argues, there will be cases in which the insured voluntarily complies

with the insurers request. Benscoter says any discussion about voluntary compliance

is a red herring because he did not voluntarily submit to an IME himself, therefore

his claims do not implicate how Section 1796 applies in such cases.56 Again, the

equitable relief Benscoter seeks is forward, not backward, looking. Whether

Benscoter voluntarily complied in the past is immaterial to Nationwide’s obligations

under Section 1796 in the future. Therefore, paragraph (b) of Benscoter’s requested

declaratory relief goes too far.

54 Am. Compl. ¶ 99(b).

55 See Sayles, 219 A.3d at 1124 (“[I]nsurers are required to follow Section 1796(a) when seeking

to compel an insured to submit to an IME [and] when the insured has refused to voluntarily

comply with such a request.”)

56 Doc. 34 at 2.

Rewriting the offending language in paragraph (b) would not save Benscoter’s

request for a declaratory judgment. A declaratory judgment “must be of some

practical help to the parties” so that they can “make responsible decisions about the

future.”°’ As Benscoter has not alleged that he expects Nationwide to request that he

submit to a second IME, his requested relief in paragraphs (a)-(e) is no more than a

request for an advisory opinion exhorting Nationwide to follow the law, and

therefore not ripe for judicial resolution.°* Further, Benscoter’s requested relief in

paragraphs (f)-(g)—whether he is entitled to damages or other relief—are

duplicative of his other claims and not appropriately resolved through declaratory

relief.°°

2. Damages

Nationwide argues that Benscoter’s claims for damages under Section 1796

should be dismissed because the statute does not provide for a cause of action.

Benscoter agrees that Section 1796 does not explicitly set forth a private cause of

action but argues that an implied right exists “when an insurer violates § 1796 and

denies benefits based on the illegally-procured medical exam.’””°!

NE Hub Partners, L.P. v. CNG Transmission Corp., 239 F.3d 333, 345 (3d Cir. 2001) (citations

omitted).

°8 Rose v. Bank of America, 2018 WL 443451, at *2 (D. Mass. Jan. 16, 2018)

°° See Butta v. GEICO Cas. Co., 400 F.Supp.3d 225, 234-35 (“Declaratory judgments are not

meant simply to proclaim that one party is liable to another.”’) (quoting Andela v. Admin. Office

of U.S. Courts, 569 Fed. Appx. 80, 83 (3d. Cir. 2014)).

6° Doc. 30 at 8-11.

61 Doc. 34 at 9; see also Doc. 37 at 4-14.

14

The Pennsylvania Supreme Court has adopted a three-prong test to determine

whether a statute creates a private cause of action: “(1) whether the plaintiff is one

of the class for whose especial benefit the statute was enacted; (2) whether there is

any indication of legislative intent, explicit or implicit, either to create such a remedy

or to deny one; and (3) whether it is consistent with the underlying purposes of the

legislative scheme to imply such a remedy for the plaintiff.”62

While Benscoter may be one of the class for whose benefit Section 1796 was

enacted,63 this alone is insufficient to find a private cause of action.64 Analysis of the

statute under the second factor, “recognized as the ‘central inquiry,’” reveals that no

private cause of action exists.65

The authority Benscoter cites in support of his argument, Schappell v.

Motorists Mutual Insurance Co., underscores the lack of any indication that the

General Assembly of Pennsylvania intended to provide for a private cause of action.

At issue in Schappell was another provision of the MVFRL, Section 1716, which

provides for the payment of overdue benefits by insurers to healthcare providers.66

62 Schappell v. Motorists Mut. Ins. Co., 934 A.2d 1184, 1189 (Pa. 2007) (citing Estate of Witthoeft

v. Kiskaddon, 733 A.2d 623, 626 (1999)).

63 See Sayles, 219 A.3d at 1125 (observing that the Pennsylvania General Assembly enacted

Section 1796 to protect insureds from unnecessary inconvenience and invasion of privacy

imposed by IMEs required at the unilateral direction of the insurer).

64 Solomon v. U.S. Healthcare Sys. of Pennsylvania, Inc., 797 A.2d 346, 352-3 (Pa. Super. Ct.

2002).

65 Id. at 353.

66 Schappell, 934 A.2d at 1189.

With regard to Section 1716, the court noted that the statute provides for reasonable

attorney’s fees if it “is found” that the insurer was found to have acted unreasonably

in refusing to pay benefits.67 The court held that the term “is found” contemplated

that a court could make such a finding and award attorney’s fees as provided by the

statute.68 Section 1796 contains no such language.

Though Section 1796 does not contemplate any remedy for a failure by an

insurer to follow the procedures outlined in the statute, it does contemplate remedies

for the failure by an insured to comply with a court order to be examined and for the

failure to provide the insured with a copy of an IME report.69 Further, other sections

of the MVFRL explicitly recognize a right to seek a remedy in court.70 As the

legislature included language providing for causes of action and remedies in certain

circumstances both in Section 1796 itself and other sections of the MVFRL, it would

be improper for this Court to insert that language where it has been excluded.71

Benscoter does not fare any better under the third factor. The purpose of

Section 1796 is to “balance[] the right of the insurer to obtain needed information

67 Id. at 1190.

68 Id.

69 See 75 Pa. C.S. § 1796(a) (“If a person fails to comply with an order to be examined, the court

or the administrator may order that the person be denied benefits until compliance.”); § 1796(b)

(“Upon failure to promptly provide copies of [IME] reports, the court or the administrator shall

prohibit the testimony of the examining physician in any proceeding to recover benefits.”).

70 See, e.g., 75 Pa. C.S. § 1797(b) (providing right to sue to challenge peer review organization’s

findings that benefits be denied and specifying awards for enhanced damages, interest, and

attorney’s fees).

71 Doe v. Franklin Cty., 174 A.3d 593, 608 (Pa. 2017) (citing Fonner v. Shandon, Inc., 555 724

A.2d 903, 907 (1999)).

for the payment of first-party medical claims with the right of the insured not to be

subject to unwarranted intrusions on his or her privacy by being subject to repeated

and unnecessary medical examinations.””* Benscoter’s requested damages—the

payment of denied benefits—is not related to the harm the statute was designed to

protect against, nor is it consistent with Nationwide’s countervailing right to obtain

needed health information.

Benscoter argues that Section 1796 must provide for a cause of action

because, without one, an insurer could violate the law and the insured would have

no remedy. This concern is unfounded, as an insured in Benscoter’s situation could

file a claim for breach of contract, just as Benscoter himself has done in this case.

Courts are bound to interpret the laws as they are written. Absent any indica

of an intent to create a private cause of action, courts cannot create one, no matter

how desirable it may be as a policy matter. The Court therefore declines Benscoter’s

invitation to do so here.

3. Injunction.

Count II of Benscoter’s Complaint includes a request for injunctive relief

requiring Nationwide to update its Pennsylvania auto insurance policies to reflect

the Sayles decision and to notify insureds of Nationwide’s obligations under and

alleged violations of Section 1796.” In response to Nationwide’s argument that

2 Sayles, 219 A.3d at 1124.

73 Am. Compl. §§ 100-09.

17

Count II should be dismissed because a plaintiff can seek injunctive relief as a

remedy, not an independent cause of action, Benscoter concedes that he has not

moved for an injunction.”* That alone is sufficient to dismiss Count II.” Further, an

injunction is a remedy which requires a cause of action.”° As discussed above,

Section 1796 does not provide for a cause of action, so Benscoter cannot seek an

injunction under the statute.

For the foregoing reasons, Nationwide’s Motion is granted as to Counts I-III.

B. Breach of Contract

Benscoter also alleges that Nationwide’s failure to follow the procedure

outlined in Section 1796 when it compelled him to undergo an IME and then denying

benefits based on that IME constitutes a breach of contract.”

In its Motion, Nationwide argues that it is entitled to summary judgment

because Benscoter “has not alleged a causal connection between the breach (failing

to obtain a court order compelling his IME) and the claimed loss (the denial of

benefits under his policy).”’® Benscoter responds that, but for the IME, Nationwide

would have continued to pay for his benefits.”? In reply, Nationwide emphasizes that

™ Docs. 30 at 14; 34 at 23.

7 See Cook v. General Nutrition Corp., 2017 WL 4340664, at *8 (W.D. Pa. Sept. 29, 2017) (“It

is well settled that injunctive relief is not a separate type of claim, but rather a form of relief,

and as such, should not be designated as a separate count in the Complaint.”) (collecting cases).

78 Birdman v. Office of the Governor, 677 F.3d 167, 172 (3d Cir. 2012).

Am. Compl. §§ 131-155.

8 Doc. 30 at 11.

7 See Doc. 34 at 13-14.

18

Benscoter is only entitled to payment of benefits “if the treatment was reasonable,

necessary, and causally related to the motor vehicle accident.”80 Nationwide also

asserts that Benscoter does not dispute “the results of the IME, or the conclusion that

[Benscoter] is no longer entitled to medical benefits.”81

In his Motion, Benscoter repeats his argument that “but for Nationwide’s

illegal procurance of the medical exam in violation of § 1796 . . . there was no other

basis (and none in the record) to deny benefits and Nationwide would have been

required to continue paying [Benscoter’s] medical benefits.”82 In response, in

addition to its argument that Benscoter has not demonstrated causation, Nationwide

also argues that it was not required to comply with Section 1796 at all because

Benscoter was not compelled to attend an IME.83 In reply, Benscoter argues that the

IME required by Nationwide was exactly of the sort that Section 1796 was enacted

to prohibit and therefore cannot be the basis on which to deny benefits. Benscoter

also asserts that he was in fact compelled to attend the IME.84

The facts required to plead a breach of contract “are simple: there was a

contract, the defendant breached it, and plaintiffs suffered damages from the

breach.”85 It is not disputed that there was a contract here, but the parties do dispute

80 Doc. 35 at 7.

81 Id. at 8.

82 Doc. 37 at 14.

83 Doc. 43 at 6-8, 13-18.

84 Id. at 5-7.

85 McShea v. City of Philadelphia, 995 A.2d 334, 340 (Pa. 2010).

whether Nationwide breached the contract and, if so, whether Benscoter was harmed

by that breach. The Court addresses those issues in turn.

1. Breach.

It is undisputed that Nationwide did not seek the IME pursuant to the

procedure set forth in Section 1796,°*° or that a failure to do so to compel an IME

may constitute a breach of contract.*’ The question is then whether Benscoter was

compelled to attend the IME or if he did so voluntarily. There are insufficient record

facts to compel either conclusion at this stage.

In support of their arguments, Benscoter and Nationwide rely on the same

conversation between a Nationwide adjuster and Benscoter.*® Following that

conversation, the adjuster noted:

Called [Benscoter] — confirmed he is going to be getting a test and see

a neurologist for some of the pain — that is the current plan — advised of

IME — advised given time since loss, we will be having someone reach

out to him to schedule an exam by an independent doctor — advised this

is part of his policy agreement — he understood — will FWP in about 30

days or sooner if IME results received — he understood — no further

questions.*?

8 Doc. 449 15.

87 See Doc. 35 at 6 (“An alleged harm related to the failure to follow IME procedures set forth in

Section 1796 could be remedied by existing causes of action, such as breach of contract.”’)

88 See Doc. 37 at 14-15 (asserting that Nationwide told Benscoter that his policy required him to

do so); Doc. 43 at 3. Nationwide argues, correctly, that Benscoter cannot rely on his attorney’s

affidavit to support his motion for summary judgment. Jd. at 43 at 3-4. However, the Court

need not rely on the affidavit for the relevant facts here as it merely refers to the claims log

Nationwide itself cites. See Doc. 36-3 at 2.

8° Doc. 36-3 at 85.

20

Nationwide attempts to contrast this case with the underlying facts in Sayles,

where the plaintiffs were denied benefits after they refused to attend an IME.90

Nationwide asserts that Benscoter is not compelled to attend an IME until Benscoter

refuses or fails to attend an IME and benefits are discontinued.91 This argument—

that an insured is not compelled to attend an IME unless they do not actually attend

the IME—is untenable. The adjuster’s notes state that Nationwide was requesting

Benscoter attend an IME as “part of his policy agreement.”92

The question then is which part of the policy agreement. Benscoter’s position

is that it must have been the IME provision which provides, as part of the insured’s

duties, that “[i]njured persons must submit to examinations by company-selected

physicians as often as the company reasonably requires.”93 A reasonable juror could

conclude that a contractual provision that an insured must submit to an IME is

sufficient to compel an insured to attend the IME.

Conversely, Benscoter’s policy also provides that an insured is only entitled

to medical benefits beyond eighteen months if “it is determined with reasonable

medical probability that further expenses may be incurred as a result of the injury.”94

At the time Nationwide requested the IME, Benscoter was not entitled to continued

90 Doc. 43 at 2-3.

91 Id. at 5-6.

92 Doc. 36-3 at 85.

93 Id. at 23, 32 ¶ 1(h).

94 Id. at 19.

benefits unless it was determined he was had not yet recovered from his accident.

Among the ways this requirement could be fulfilled is via a voluntary IME, a

possibility acknowledged by the court in Sayles.°° Though Benscoter attaches an

affidavit to his reply asserting that he would not have attended the IME if Nationwide

“had been honest and relayed Section 1796 specified a procedure that Nationwide

had to follow in order to force [Benscoter] to attend the exam,” this is insufficient

to support summary judgment at this stage.*”

2. Causation.

The gravamen of Benscoter’s claims is that because the IME was improperly

procured, the IME is void as a matter of law and Nationwide’s denial of benefits

based on that IME is improper.®* Benscoter does not allege, nor does he supply any

facts showing that the IME findings are actually incorrect. Nationwide maintains

that, even if it did miss a “procedural hoop,” this does not change the fact that

Benscoter is not entitled to continued benefits.””

°° See Sayles, 219 A.3d at 1124 (observing that Section 1796 sets forth requirements insurers

must follow “to compel their insured to submit to an IME when the insured does not voluntarily

comply with the insurer’s request to do so”).

% Doc. 4696.

97 See Metro Container Group v. AC&T Co., Inc., 2023 WL 2955888, at *2 (E.D. Pa. Apr. 14,

2023) (observing that summary judgment is premature “[w]here discovery relevant to a

particular issue has not been completed” or “where critical witnesses have not yet been

deposed”) (citing Sames v. Gable, 732 F.2d 49, 51-52 (3d Cir. 1984); Miller v. Beneficial

Memt. Corp., 977 F.2d 834, 846 (3d Cir. 1992)).

% See Am. Compl. § 54 (“Because Nationwide’s conduct to require an exam illegally based on

an illegal policy provision was unlawful, and was not done in accordance with law and the

lawfully required procedure, the exam Nationwide derived from that conduct is null, void,

invalid, and illegal.”).

Doc. 43 at 16.

22

In support of his argument that the IME is void as a matter of law, Benscoter

relies on Thompson v. Workers’ Compensation Appeal Board (Exelon Corp.), in

which a workers compensation claimant challenged the revocation of benefits based

on an Impairment Rating Evaluation.100 Observing that an earlier decision by the

Pennsylvania Supreme Court “essentially struck the entire IRE process from the

[Worker’s Compensation] Act” and “no other provision of the Act allows for

modification of benefits based on an IRE,” the Thompson court ordered the

claimant’s benefits reinstated.101 Benscoter suggests that the Sayles decision had the

same effect and that he is similarly entitled to the reinstatement of his benefits.

However, the Sayles decision did not prohibit the use of IMEs, even absent a court

order, to determine what, if any, medical benefits are due to an insured.102 The Court

therefore cannot conclude that the IME is void as a matter of law and must deny

Benscoter’s motion for summary judgment as to Count IV.

Despite this and Benscoter’s failure to allege that the IME’s findings are

incorrect or otherwise unreliable, the record suggests that Benscoter may have been

denied benefits he was entitled to. In February 2020, Nationwide advised Benscoter

100 168 A.3d 408, 410 (Pa. Commw. 2017).

101 Id. at 413.

102 See R&R Den. Class Certification, Sayles v. Allstate Ins. Co., No. 3:16-cv-1534, 19 n.5 (M.D.

Pa. Oct. 19, 2022) (observing, on remand, the possibility some claimants in the proposed class

“were properly denied benefits” because of an IME).

that it would no longer cover his PM&R103 treatment due to the IME but that it may

consider “referrals for different type[s] of [treatment].”104 Nationwide subsequently

offered to review bills for later treatments and evaluate whether they fell within the

scope of the IME.105 Though the Court cannot “ignore the possibility (perhaps

likelihood) that [Benscoter’s] injuries in fact no longer warranted payment of

medical benefits,” it also cannot ignore the possibility that they did.106 Nationwide’s

statements to Benscoter suggest that the IME did not completely foreclose the

availability of future benefits, and the record is insufficient to permit the Court to

evaluate what, if any, treatments Benscoter received that may have been outside the

scope of the IME.

Therefore, the Court denies Nationwide’s motion as to Benscoter’s breach of

contract claim and permits Benscoter to seek leave to amend regarding that claim.107

The Court notes that Benscoter has already amended his complaint once and failed

to allege facts demonstrating that he was improperly denied benefits, despite

Nationwide raising this issue in its motion to dismiss the initial complaint,108 which

103 The Court assumes PM&R treatment to mean Physical Medicine and Rehabilitation treatment.

See Doc. 36-3 at 31.

104 Id. at 79.

105 See id. at 27, 29, 33.

106 Cf. Doc. 30 at 14.

107 See TFB Midatlandic 4, LLC v. Local Car Wash, Inc., 2023 WL 4138259, *2 (M.D. Pa. June

222, 2023) (denying partial motion for summary judgment and permitting non-movant to seek

leave to amend).

108 See Doc. 25 at 12-15.

would ordinarily militate in favor of granting summary judgment.'” However, the

Court is also mindful that Benscoter instead relied on the position that the IME was

void as a matter of law, which would have likely been sufficient to overcome

Nationwide’s arguments.

Given the Third Circuit’s liberal policy of allowing amendments to ensure

claims are resolved on their merits, the Court will allow Benscoter, now armed with

the Court’s ruling clarifying the issues of the case, the opportunity to amend his

pleadings. !!°

C. Bad Faith

Nationwide moves for summary judgment on Benscoter’s bad faith claims

arguing that they are time-barred by the statute of limitations which began to run

when Nationwide first informed Benscoter it would no longer pay benefits in

December 2019.!!! Benscoter argues in response that Nationwide’s denial of benefits

109 See Long v. Bristol Tp., 2012 WL 3517347, *3 n.4 (E.D.Pa. Aug. 14, 2012) (“The Third Circuit

has previously recognized that ‘a District Court has discretion to deny a plaintiff leave to

amend where the plaintiff was put on notice as to the deficiencies in his complaint, but chose

not to resolve them.’”’) (quoting Rolo v. City Investing Co. Liquidating Trust, 155 F.3d 644,

654 (3d Cir. 1998)).

110 The denial of Nationwide’s Motion as to Count IV is without prejudice to Nationwide’s right

to bring a subsequent motion to dismiss or for summary judgment following an amendment by

Benscoter.

The Court will not require Benscoter to seek leave to file an amended pleading; he is advised

that any amended pleading should otherwise comply with Local Rule 15.1. In particular,

Benscoter is reminded that any amended pleading shall be filed with “a copy of the original

pleading in which stricken material has been lined through and any new material has been

inserted and underlined or set forth in bold-faced type.” LR 15.1(b). Benscoter should also take

care to ensure that any amended pleading is free of needlessly duplicative statements. See, e.g.,

Am. Compl. 54, 119, 140, and 143.

111 Doc. 30 at 16-17.

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is an ongoing course of conduct that continued until October 2021 and that the statute

of limitations may be tolled by Nationwide’s misrepresentations.112

“Statute[s] of limitations begin to run when the cause of action accrues.”113

For a claim of bad faith under 42 Pa. C.S. § 8371, that is “when the refusal to pay

first occurred.”114 At the latest, this is January 10, 2020.115 Though the statute of

limitations may be tolled “where a defendant ‘causes the plaintiff to relax vigilance

or deviate from the right of inquiry’ concerning the cause of an injury,” that is not

the case here.116 Not only was Benscoter aware of the facts of his injury in January

2020, he retained counsel in the Spring of 2020, which is antithetical to a claim that

Nationwide caused him to relax vigilance or deviate from the right of inquiry.117

Even if Benscoter’s bad faith claim was timely, it would still fail. “Bad faith

cannot be found where the insurer’s conduct is in accordance with a reasonable but

incorrect interpretation of the insurance policy and the law.”118 Prior to Sayles, it was

unsettled whether IME provisions such as the one in Benscoter’s policy were void

as a matter of law.119 The reasonableness of Nationwide’s position that it could rely

112 Doc. 34 at 18-20.

113 Dubose v. Quinlan, 643 173 A.3d 634, 643 (Pa. 2017).

114 Sikirica v. Nationwide Ins. Co., 416 F.3d 214, 225 (3d Cir. 2005) (citing Adamski v. Allstate

Ins. Co., 738 A.2d 1033, 1042 (Pa. Super. Ct. 1999).

115 Doc. 36-3 at 81.

116 Bariski v. Reassure America Life Ins. Co., 832 F.Supp.2d 233, 239 (M.D. Pa. 2011).

117 Doc. 36-3 at 78.

118 Loughery v. Mid-Century Ins. Co., 2022 WL 17821613, at *3 (W.D. Pa. Dec. 20, 2022)

(quoting Bostick v. ITT Hartford Grp., Inc., 56 F. Supp. 2d 580, 587 (E.D. Pa. 1999)).

119 Id.

on the IME provision despite Section 1796 is highlighted by the Third Circuit taking

the step to certify the question to the Pennsylvania Supreme Court.’”? Even though

Nationwide’s position was later found to be incorrect, reliance on that position was

not unreasonable and is insufficient to support a claim for bad faith.!*!

Because Benscoter did not file suit until June 17, 2022, more than two years

after the statute of limitations began to run on a potential claim of bad faith, the Court

grants Nationwide’s Motion as to Count V.

V. CONCLUSION

For the reasons stated, the Court grants Nationwide’s motion in part and

denies Benscoter’s motion in its entirety.

An appropriate Order follows.

BY THE COURT:

sf Matthew W. Brann

Matthew W. Brann

Chief United States District Judge

120 Tq (citing Sayles y. Allstate Ins. Co., 2019 WL 11317938 (3d Cir. Dec. 27, 2019).

121 Td.

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