Opinion ID: 2672440
Heading Depth: 2
Heading Rank: 4

Heading: Exhaustion Of Medical Payments Coverage

Text: Geico initially paid for Lockwood’s bills under the medical payments coverage of her insurance policy. Geico paid $2,867 for medical visits and examinations within the first five days of the accident and $7,133 for Lockwood’s chiropractic care from May 22, 2007 to August 17, 2007. By August 2007, about 12 weeks after the accident, these medical payments totaled $10,000, and Lockwood exhausted her medical payments coverage. Geico then informed Lockwood about her uninsured motorist coverage and the settlement process. E. Dispute Over Uninsured Motorist Coverage And Settlement Of Uninsured Motorist Claim Lockwood sought payment for her medical costs under her uninsured motorist coverage. But Geico never paid Lockwood’s medical bills under her uninsured -5- 6904 motorist policy.6 Lockwood paid for $1,000 of her unpaid medical expenses and took out a loan for about $5,000 to cover the rest. Because she could not afford to pay for continuing treatment, Lockwood eventually stopped treatment even though she maintained that she still suffered back pain. By May 2008 Lockwood had retained an attorney to pursue medical payments from Geico. Lockwood’s claim for benefits under her uninsured motorist policy was eventually settled after three years of negotiations and the early stages of litigation of her lawsuit against Geico. Geico had first offered to settle Lockwood’s uninsured motorist claim for $750 in June 2007, before she retained counsel. According to Geico, it based this settlement offer on Lockwood’s request for the cost of her son’s day care while she was in treatment. Lockwood declined the offer. In May 2008 Geico advised Lockwood that it would not consider paying her medical bills “[o]utside [o]f [t]otal [s]ettlement.” A Geico supervisor advised the claims adjuster for Lockwood’s case “to try to move the U[ninsured] M[otorist] claim in a posture to attempt to settle.” In July 2008 Geico advised Lockwood’s attorney that Lockwood’s medical bills seemed “[h]igh.” In April 2009 Lockwood offered to settle 6 Lockwood alleges that, in addition to denying her coverage, the Geico representatives were abusive, rude, and unprofessional in their dealings with her. Lockwood alleges that during phone calls about her claim, a Geico adjuster hung up on her on two occasions. She further maintains that when she called Geico about her claim, the Geico adjuster was “sarcastic,” “abusive,” and “unprofessional” in handling her claim. She stated in her deposition that, because of the adjuster’s negative demeanor, she felt “physically ill.” The Geico adjuster acknowledged that “calls were ended abruptly” but denied hanging up on her. Lockwood alleged in her affidavit that the Geico adjuster’s “rude and unprofessional behavior in handling [her] claim discouraged [her] from working with him to pursue [her] insurance claim after [she] was hit by a drunk driver.” -6- 6904 for the policy limit of $50,000, and a month later Geico responded with an offer to settle for $12,000. Lockwood refused the offer. Lockwood filed her first amended complaint on January 15, 2010, asserting a breach of contract claim under her uninsured motorist coverage and a tort claim for Geico’s “breach of the covenant of good faith and fair dealing” implied in the insurance policy. Faced with a lawsuit, Geico requested for the first time in May 2010, nearly three years after the accident, that a doctor perform an independent medical evaluation of Lockwood. The doctor found that Lockwood experienced “mild discomfort” in her lower back in a range-of-motion test and diagnosed neck muscle and ligament strain or sprain as well as lower back muscle or ligament strain. At the same time, the doctor reported that “[b]ased upon the medical records reviewed, my history taken from Ms. Lockwood, and the physical examination, I could find no objective evidence to support Ms. Lockwood’s contention that she hurt her lower back in the accident of May 21, 2007.” He further concluded that he would have expected the “[s]oft tissue injuries sustained by Ms. Lockwood in the accident of May 21, 2007, [to be] resolved within six to eight weeks following the date of the accident.” His review of her records and medical history “provide[d] no reason to suspect extenuating circumstances which could delay recovery of the soft tissue injuries she sustained.” In August 2010 Geico increased its settlement offer for Lockwood’s uninsured motorist claim to $25,000. Lockwood accepted the offer in October 2010 and signed the $25,000 settlement agreement in return for the release of her contract claim against Geico arising from the May 21, 2007 accident. This release expressly preserved Lockwood’s “claims for alleged extracontractual/bad faith damages.” Lockwood resumed treatment for her back pain after she settled with Geico and reported that resuming treatment “has helped my pain and my condition.” -7- 6904 F. Discovery Dispute In Lockwood’s Bad-Faith Tort Action With the bad-faith tort claim before the superior court, Lockwood requested that Geico “produce all claims handling manuals that GEICO provides to, makes available to, or gives access to Alaska adjusters . . . for their use and reference in handling automobile collision claims.” Geico objected, denying that the manuals were relevant “to any legitimate issue in this case.” Lockwood filed a motion to compel the requested discovery, which the superior court found “exceed[ed] the directive from the court” for “narrowly drafted discovery requests.” The superior court directed Lockwood to “either redraft the discovery, or submit further argument as to why . . . the proposed discovery fits the parameters for which the court allowed the [Alaska Civil Rule] 56(f) continuance.” After additional briefing, the superior court found that Lockwood’s request for the manuals was “still overbroad and requests undiscoverable information and documents” because Lockwood was unable to identify “what specific portions or topics of the materials would be relevant to the very narrow issues before the court.” But the superior court also ordered Geico to produce relevant portions of any training materials for in camera review. In response, Lockwood suggested that the superior court order a “standard, reasonable protective order” providing that “all materials designated ‘confidential’ by the other side may only be used in this litigation; may not be viewed by anyone other than plaintiff’s counsel, their staff, experts and clients in this litigation; must be filed under seal; and must be returned at the end of this litigation.” Geico opposed discovery of the manual but requested that the superior court require a confidentiality agreement and protective order “[i]n the event that the court determines that some portion of the in camera materials should be disclosed to plaintiff.” Geico submitted to the superior court the “Claims Function” chapter of its manual. After the superior court’s in camera review, it concluded: -8- 6904 Generally, there is nothing contained within the reviewed materials that would expand (if they could) any statutory or common law duty owed by GEICO to [its] insured. Specifically, the documents require the GEICO claims examiners to deal with insurance issues ethically, fairly, and promptly. . . . This hardly novel concept does not justify the release of proprietary information contained in the produced documents. The Court found nothing within the materials that would directly lead to any admissible evidence regarding any complaints concerning payments from different available coverages. The documents will remain sealed within the court file available for further review should plaintiff be able to more particularly state her bad faith allegations against GEICO. The Court has been informed there are no letters of reprimand or discipline in the requested personnel file. Lockwood appeals the discovery order, arguing that the Geico’s manuals are relevant and discoverable under Alaska Civil Rule 26(b)(1). G. Summary Judgment On February 5, 2010, Geico moved for summary judgment on Lockwood’s bad-faith claim, and Lockwood opposed. The superior court granted Geico’s motion for summary judgment, reasoning that “none of these facts suffice to raise a factual question as to whether [Geico] lacked a reasonable basis in failing to pay the demanded settlement amount.” The superior court cited several reasonable bases for Geico’s conduct: “GEICO had ample reason to delay further payments to Plaintiff pending further investigation into the medical necessity of further treatment and a determination -9- 6904 regarding causation of her injuries” and the “extent of damages.”7 Lockwood appeals the grant of summary judgment to Geico.