Case Title: Bushey v. Allstate Insurance Co.

Citation: 164 Vt 399, 670 A.2d 807

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 1995-10-27T00:00:00Z

Document:
BUSHEY_V_ALLSTATE_INSURANCE_CO.95-069; 164 Vt 399; 670 A.2d 807

[Opinion Filed 27-Oct-1995]

[Motion for Reargument Denied 5-Dec-1995]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                           No. 95-069


Timothy Bushey                               Supreme Court

                                             On Appeal from
     v.                                      Chittenden Superior Court

                                             June Term, 1995
Allstate Insurance Company


Linda Levitt, J.

       Gareth H. Caldbeck of Caldbeck & Schweitzer, Shelburne, for
  plaintiff-appellant

       Bret P. Powell and Christopher O'Brien of Wilson Powell Lang & Faris,
  Burlington, for defendant-appellee 


PRESENT:  Gibson, Dooley, Morse and Johnson, JJ.



       GIBSON, J.   Plaintiff sued his insurer, defendant Allstate Insurance
  Company, for bad-faith failure to pay his underinsured motorist claim,
  following an automobile accident in which the other driver's insurance
  covered only part of plaintiff's damages.  He appeals from an order of the
  Chittenden Superior Court granting defendant's summary judgment motion.  We
  affirm.

       Plaintiff was in a two-car accident in December 1989.  The other
  driver's insurance company paid plaintiff its policy limit of $20,000 in
  settlement of his claim, to which defendant, plaintiff's insurer,
  consented.  Defendant's insurance policy covered plaintiff for underinsured
  motorist (UIM) claims, with a limit of $100,000, and provided that if
  plaintiff and defendant could not agree on the amount of damages, either
  party had the right to demand arbitration.  The policy also provided
  medical payments coverage with a limit of $10,000.

       Following the accident, plaintiff did not immediately seek medical
  attention, but five days thereafter went to a chiropractor, who noted that
  plaintiff's symptoms were severe neck and back 

   

  pain and headaches.  In January 1990, the chiropractor noted that
  plaintiff was 50% improved and that muscle strength in the upper
  extremities was normal.  Later that month, he reported an 80% improvement
  over plaintiff's original condition and found muscle strength in the upper
  extremities was normal and symmetrical.  

       Plaintiff continued to experience pain and reported his claim to
  defendant, which began paying medical bills under the medical payments
  coverage.  The intake report in defendant's file described the injury as
  "whiplash."  Next, plaintiff sought treatment from a second chiropractor,
  who referred him to an orthopedist, who at first suspected that plaintiff's
  pain resulted from a low-grade separated shoulder, but thereafter suspected
  a more serious, partial tear of the rotator cuff.  Several tests, including
  one surgical procedure, failed to reveal the existence of a rotator cuff
  tear, but a surgical procedure in January 1991 detected a one centimeter
  tear.

       In April 1991, plaintiff's counsel advised defendant that plaintiff's
  injuries were not just the "whiplash" first experienced, but that
  plaintiff's rotator cuff had been torn in the accident.  In June 1991,
  counsel advised defendant that plaintiff sought the UIM policy limit of
  $100,000, including compensation for medical expenses, pain and loss of
  income.  In August, defendant requested copies of plaintiff's medical bills
  and tax returns, and informed plaintiff's counsel that it wanted to have an
  independent medical examination performed on plaintiff.  Although
  plaintiff's doctors were unanimous that the rotator cuff tear and the
  resultant pain were related to the accident, defendant's medical expert,
  who examined plaintiff in October 1991, disagreed. 

       In November 1991, defendant offered plaintiff $5000 over and above the
  $10,000 medical payments.  Plaintiff rejected the offer and filed suit in
  December 1991 for full policy coverage, alleging that defendant had denied
  his claim in bad faith.  Defendant moved to compel arbitration in
  accordance with the policy terms, and the trial court ultimately granted
  this motion.  The arbitrators issued their award in May 1993, which, after
  offsets for the liability payment of $20,000, medical payments of about
  $10,000, and an advance under the UIM coverage for medical bills requested
  by plaintiff, resulted in a net award to plaintiff of $67,361.44. 

   

  Defendant paid the full amount of the award within a month of the
  arbitration decision. 

       Thereafter, defendant moved for summary judgment as to plaintiff's
  bad-faith claim, which the trial court granted, concluding that the
  question of defendant's liability had been "fairly debatable" within the
  meaning of the test set forth in Booska v. Hubbard Ins. Agency, Inc., 160
  Vt. 305, 312,