RENDERED: OCTOBER 16, 2020; 10:00 A.M. NOT TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals
NO. 2019-CA-1432-MR
JEROME PEEPLES AND RASHAD LEE APPELLANTS
APPEAL FROM JEFFERSON CIRCUIT COURT v. HONORABLE MITCH PERRY, JUDGE ACTION NO. 19-CI-004056
ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY APPELLEE
OPINION VACATING
** ** ** ** **
BEFORE: CALDWELL, MAZE, AND MCNEILL, JUDGES.
MAZE, JUDGE: Jerome Peeples and Rashad Lee appeal from orders of the
Jefferson Circuit Court granting the petition by Allstate Property and Casualty
Insurance Company (Allstate) to appear for medical examinations by a physician
of its choice as a part of its investigation of their insurance claims. Peeples and Lee argue that Allstate failed to present any evidence showing “good cause” in
support of that order, as required by KRS1 304.39-270(1). We agree, finding that
Allstate presented no evidence meeting its burden of proof under the statute.
Hence, we vacate the orders requiring Peeples and Lee to appear for the
examinations.
On November 23, 2018, Peeples and Lee were involved in a motor
vehicle accident in Jefferson County, Kentucky. The accident occurred when
another vehicle collided with their vehicle in a parking lot. Both vehicles incurred
minor damage, the police were not called, and no accident report was filed.
Shortly after the accident, Peeples and Lee began receiving
chiropractic treatment. They asserted claims against Allstate, the insurer of the
vehicle which they occupied, for payment of medical expenses and any coverage
available under Allstate’s policy for basic reparations benefits (BRB). In response,
Allstate initiated an investigation of the claims. Allstate asserts that the injuries are
inconsistent with the minor nature of the accident, that the medical records are
inconsistent, and that Peeples previously made a claim asserting similar injuries.
During its investigation, Allstate asked Peeples and Lee to submit to
medical examination by a physician of its choice to confirm the claims. After
1 Kentucky Revised Statutes.
-2- Peeples and Lee declined to do so, Allstate filed a petition pursuant to KRS
304.39-270(1) to require them to submit to an independent medical examination
(IME).2 Allstate’s petition stated that no decision had been made regarding
Peeples’ claims and that it needed the IME to complete its investigation of the
claim.
The trial court held a hearing on the petition, at which Allstate’s
counsel summarized the allegations in the petition. Counsel for Peeples and Lee
objected, arguing that the representations were not evidence and could not meet the
“good cause” standard required by KRS 304.39-270(1). Nevertheless, the trial
court entered Allstate’s tendered order directing Peeples and Lee to appear for an
IME “at a mutually convenient date and time no later than thirty days from the
entry of this Order. . . .” After the parties could not agree on a date, the trial court
subsequently entered an order directing Peeples and Lee to appear for the IME on
September 10, 2019.3 Peeples and Lee now appeal from these orders.
2 KRS 304.39-270(1) refers to a “mental or physical examination by a physician.” Previous cases interpreting this section have referred to such an examination as an “independent medical examination” or “IME.” That term has a specialized meaning, particularly within the field of workers’ compensation law. But in the interest of consistency, we will continue to use that term here. In so doing, however, we do not suggest that the results of such an examination should be afforded any presumption of credibility. Rather, the results of such an examination are simply evidence, the credibility of which must be decided by the ultimate finder of fact. 3 The parties do not indicate whether the IMEs were ever conducted.
-3- Peeples and Lee sought coverage under the BRB provisions of
Allstate’s policy. That coverage must be construed in accord with the provisions
of the Motor Vehicle Reparations Act (MVRA), KRS 304.39-010, et seq. See
Countryway Ins. Co. v. United Fin. Cas. Ins. Co., 496 S.W.3d 424, 434 (Ky. 2016).
In pertinent part, KRS 304.39-210 requires Allstate to conduct a reasonable
investigation and to pay claims timely after receiving proof of the fact and amount
of loss realized. As part of the insurer’s investigation, KRS 304.39-270(1)
provides that:
If the mental or physical condition of a person is material to a claim for past or future basic or added reparation benefits, the reparation obligor may petition the circuit court for an order directing the person to submit to a mental or physical examination by a physician. Upon notice to the person to be examined and all persons having an interest, the court may make the order for good cause shown. The order shall specify the time, place, manner, conditions, scope of the examination, and the physician by whom it is to be made.
This statute expressly permits an insurer to require a claimant to submit to a
medical examination to evaluate BRB claims. However, the insurer cannot compel
its insured to submit to an IME simply upon demand without a showing of “good
cause.”
The pivotal case interpreting the “good cause” provision is Miller v.
United States Fidelity & Guaranty Company, 909 S.W.2d 339 (Ky. App. 1995).
The Court in Miller held that an insurer must employ a case-by-case analysis, and
-4- that the insurer must affirmatively demonstrate that such cause exists for a medical
examination to be conducted. Id. at 342. The Court further held that “good cause”
is more than a mere suspicion that the insured’s treatments were unnecessary or
unreasonable. Rather, the insurer must present some proof that it has taken
measures to determine the validity or extent of the insured’s injuries less intrusive
than an unwanted independent medical examination. Id.
In Miller, the insurer submitted an affidavit by its adjuster setting out
its general suspicions about the claim. This Court concluded that the affidavit, by
itself, was insufficient to show good cause to require an IME. Id. The Court in
Miller concluded that the insurer failed to show either good cause or that less
intrusive measures were insufficient. In the absence of any specific evidence
supporting these suspicions, the Court concluded that the insurer failed to establish
good cause to require a medical examination. Id. at 343.
On the other hand, in White v. Allstate Insurance Co., 265 S.W.3d 254
(Ky. App. 2007), this Court held that the insurer had shown good cause to require
its insured to submit to an IME.
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RENDERED: OCTOBER 16, 2020; 10:00 A.M. NOT TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals
NO. 2019-CA-1432-MR
JEROME PEEPLES AND RASHAD LEE APPELLANTS
APPEAL FROM JEFFERSON CIRCUIT COURT v. HONORABLE MITCH PERRY, JUDGE ACTION NO. 19-CI-004056
ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY APPELLEE
OPINION VACATING
** ** ** ** **
BEFORE: CALDWELL, MAZE, AND MCNEILL, JUDGES.
MAZE, JUDGE: Jerome Peeples and Rashad Lee appeal from orders of the
Jefferson Circuit Court granting the petition by Allstate Property and Casualty
Insurance Company (Allstate) to appear for medical examinations by a physician
of its choice as a part of its investigation of their insurance claims. Peeples and Lee argue that Allstate failed to present any evidence showing “good cause” in
support of that order, as required by KRS1 304.39-270(1). We agree, finding that
Allstate presented no evidence meeting its burden of proof under the statute.
Hence, we vacate the orders requiring Peeples and Lee to appear for the
examinations.
On November 23, 2018, Peeples and Lee were involved in a motor
vehicle accident in Jefferson County, Kentucky. The accident occurred when
another vehicle collided with their vehicle in a parking lot. Both vehicles incurred
minor damage, the police were not called, and no accident report was filed.
Shortly after the accident, Peeples and Lee began receiving
chiropractic treatment. They asserted claims against Allstate, the insurer of the
vehicle which they occupied, for payment of medical expenses and any coverage
available under Allstate’s policy for basic reparations benefits (BRB). In response,
Allstate initiated an investigation of the claims. Allstate asserts that the injuries are
inconsistent with the minor nature of the accident, that the medical records are
inconsistent, and that Peeples previously made a claim asserting similar injuries.
During its investigation, Allstate asked Peeples and Lee to submit to
medical examination by a physician of its choice to confirm the claims. After
1 Kentucky Revised Statutes.
-2- Peeples and Lee declined to do so, Allstate filed a petition pursuant to KRS
304.39-270(1) to require them to submit to an independent medical examination
(IME).2 Allstate’s petition stated that no decision had been made regarding
Peeples’ claims and that it needed the IME to complete its investigation of the
claim.
The trial court held a hearing on the petition, at which Allstate’s
counsel summarized the allegations in the petition. Counsel for Peeples and Lee
objected, arguing that the representations were not evidence and could not meet the
“good cause” standard required by KRS 304.39-270(1). Nevertheless, the trial
court entered Allstate’s tendered order directing Peeples and Lee to appear for an
IME “at a mutually convenient date and time no later than thirty days from the
entry of this Order. . . .” After the parties could not agree on a date, the trial court
subsequently entered an order directing Peeples and Lee to appear for the IME on
September 10, 2019.3 Peeples and Lee now appeal from these orders.
2 KRS 304.39-270(1) refers to a “mental or physical examination by a physician.” Previous cases interpreting this section have referred to such an examination as an “independent medical examination” or “IME.” That term has a specialized meaning, particularly within the field of workers’ compensation law. But in the interest of consistency, we will continue to use that term here. In so doing, however, we do not suggest that the results of such an examination should be afforded any presumption of credibility. Rather, the results of such an examination are simply evidence, the credibility of which must be decided by the ultimate finder of fact. 3 The parties do not indicate whether the IMEs were ever conducted.
-3- Peeples and Lee sought coverage under the BRB provisions of
Allstate’s policy. That coverage must be construed in accord with the provisions
of the Motor Vehicle Reparations Act (MVRA), KRS 304.39-010, et seq. See
Countryway Ins. Co. v. United Fin. Cas. Ins. Co., 496 S.W.3d 424, 434 (Ky. 2016).
In pertinent part, KRS 304.39-210 requires Allstate to conduct a reasonable
investigation and to pay claims timely after receiving proof of the fact and amount
of loss realized. As part of the insurer’s investigation, KRS 304.39-270(1)
provides that:
If the mental or physical condition of a person is material to a claim for past or future basic or added reparation benefits, the reparation obligor may petition the circuit court for an order directing the person to submit to a mental or physical examination by a physician. Upon notice to the person to be examined and all persons having an interest, the court may make the order for good cause shown. The order shall specify the time, place, manner, conditions, scope of the examination, and the physician by whom it is to be made.
This statute expressly permits an insurer to require a claimant to submit to a
medical examination to evaluate BRB claims. However, the insurer cannot compel
its insured to submit to an IME simply upon demand without a showing of “good
cause.”
The pivotal case interpreting the “good cause” provision is Miller v.
United States Fidelity & Guaranty Company, 909 S.W.2d 339 (Ky. App. 1995).
The Court in Miller held that an insurer must employ a case-by-case analysis, and
-4- that the insurer must affirmatively demonstrate that such cause exists for a medical
examination to be conducted. Id. at 342. The Court further held that “good cause”
is more than a mere suspicion that the insured’s treatments were unnecessary or
unreasonable. Rather, the insurer must present some proof that it has taken
measures to determine the validity or extent of the insured’s injuries less intrusive
than an unwanted independent medical examination. Id.
In Miller, the insurer submitted an affidavit by its adjuster setting out
its general suspicions about the claim. This Court concluded that the affidavit, by
itself, was insufficient to show good cause to require an IME. Id. The Court in
Miller concluded that the insurer failed to show either good cause or that less
intrusive measures were insufficient. In the absence of any specific evidence
supporting these suspicions, the Court concluded that the insurer failed to establish
good cause to require a medical examination. Id. at 343.
On the other hand, in White v. Allstate Insurance Co., 265 S.W.3d 254
(Ky. App. 2007), this Court held that the insurer had shown good cause to require
its insured to submit to an IME. In White, the insurer retained a medical expert to
perform a peer review of the insureds’ medical records. The expert concluded that
the medical records failed to indicate a nexus between the treatments and the motor
vehicle accident, failed to document the medical necessity of the treatments, and
failed to provide a treatment plan. Id. at 255. This Court concluded that the
-5- expert’s report was sufficient to establish good cause to require the insured to
attend the IME. Id. at 256.
Allstate argues that the holdings in Miller and White have been
modified by the decision of the Kentucky Supreme Court in Government
Employees Insurance Co. v. Sanders, 569 S.W.3d 923 (Ky. 2018). But in Sanders,
the Court merely held that a reparations obligor may not rely solely on a medical-
records review to deny or terminate an insured’s benefits. Id. at 925. The Court
expressly distinguished that situation from the proof necessary for an insurer to
establish good cause under KRS 304.39-270(1). Id.
In Miller, this Court set out the type of evidence which an insurer
must submit to justify an IME: (1) peer review of the insured’s medical records by
an independent health care provider; (2) evidence disputing the credentials of the
insured’s treating physician; (3) a showing that the treating physician failed to
provide further documentation or to answer any specific concerns; (4) an
explanation how another examination could be expected to satisfy the company’s
misgivings; and (5) specific reasons supporting the company’s doubts about the
necessity for treatment were provided. 909 S.W.2d at 342. The Court held that the
insurer is not required to make a showing on all these factors. Id. at 342-43. As
noted above, a peer review of the insured’s medical records by an independent
-6- health provider may be sufficient to establish good cause. White, 265 S.W.3d at
255.
KRS 304.39-270(1) clearly places the burden on the reparations
obligor to demonstrate affirmative proof that “good cause” exists for an IME to be
conducted. Miller, 909 S.W.2d at 342. Until such good cause is shown, the
MVRA creates a statutory presumption of reasonableness of medical bills as
submitted. Id. In the current case, Allstate’s petition merely alleged that
“Respondents’ medical injuries are inconsistent with regard to the severity and
location of pain.” Allstate also alleged that it had concerns about the claims due to
the minor nature of the accident and because “Respondents have a history of motor
vehicle accidents wherein they alleged similar injuries to what they are claiming
resulted from the subject accident . . . .”
The petition was not accompanied by an affidavit supporting these
allegations. Moreover, Allstate’s allegations in its petition are not proof. See
Educ. Training Sys., Inc. v. Monroe Guar. Ins. Co., 129 S.W.3d 850, 853 (Ky.
App. 2003). Likewise, arguments and representations by Allstate’s counsel are not
evidence. Mason v. Commonwealth, 331 S.W.3d 610, 624-25 (Ky. 2011). At the
hearing, Allstate presented no evidence to establish good cause. In fact, the only
proof offered by Allstate consists of the photographs showing the damage to each
of the vehicles. But even that material is questionable because Allstate offered no
-7- foundation to support its admission as evidence. Counsel only presented his
representations of Allstate’s general suspicions that the treatments received by
Peeples and Lee were unnecessary.
Under the circumstances, Allstate failed to satisfy its burden of proof
for an IME under KRS 304.39-270(1). In the absence of any proof by Allstate, the
trial court had no basis for the entry of an order. Therefore, we conclude that the
trial court clearly erred by granting Allstate’s petition. Nothing in this Opinion
precludes Allstate from filing a new petition which the trial court would consider
in light of the evidence presented.
Accordingly, we vacate the orders of the Jefferson Circuit Court
directing Peeples and Lee to appear for an independent medical examination.
ALL CONCUR.
BRIEFS FOR APPELLANTS: BRIEF FOR APPELLEE:
Aaron Michael Murphy Eric C. Rice Louisville, Kentucky Daniel S. Gumm Megan L. Adkins Louisville, Kentucky
-8-