A Pennsylvania Federal Court recently dealt with the competing interests of the Pennsylvania No Fault statutes and policy language in respect of an insurers ability to compel IME.  Scott v. Travelers Commercial Insurance Co., arose from a motor vehicle accident in which Scott was injured and subsequently submitted a claim for first-party medical benefits. The policy has a provision that requires Scott, as often as reasonably required by Travelers, to submit to physical examinations by physicians and cooperate with the settlement, investigation, or defense of any suit.

Travelers subsequently scheduled Scott for an IME. Scott responded, through counsel, that he would be willing to consider an IME, in the absence of a court order, if they sent him the name of three proposed doctors. Travelers did not do so and Scott did not attend. Subsequently, Travelers notified Scott’s counsel that they were relying on the policy language and scheduled another IME. Counsel for Scott responded that Scott would not attend unless a panel of three doctors were chosen and then parties could mutually choose one. After Scott did not attend the second schedule IME, Travelers stopped paying benefits, which gave rise to the bad faith and breach of contract actions in this case.

The bad faith claim was booted as the statute of limitations had already tolled. But Scott prevailed on the breach of contract action, with the court holding that Travelers breached the contract by failing to continue to pay medical benefits, notwithstanding Scott’s refusal to attend an IME outside of his chosen procedure. The court relied upon § 796 of the Motor Vehicle Financial Responsibility Law, which requires insurance carriers to obtain a court order, with a showing of good cause, in order to compel an insured to submit to any mental or physical evaluation for any medical, income, or loss claim. The court held that the statute trumped the policy language and because Traveler’s failed to obtain a court order to compel Scott’s attendance to the IME, Traveler’s non-payment of claims was a breach of the insurance policy.

Thanks to Matt Care for his contribution to this post and please write to Mike Bono for more information.