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Johnson v. State Farm Mutual Automobile Insurance Co.

Court of Appeals of Arkansas, Division II

January 18, 2017

TYLER CARTER JOHNSON APPELLANT
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY APPELLEE

         APPEAL FROM THE CRAIGHEAD COUNTY CIRCUIT COURT, WESTERN DISTRICT [NO. 16CV-15-584] HONORABLE JOHN N. FOGLEMAN, JUDGE

         AFFIRMED

          Henry Law Firm, PLC, by: Megan Henry, for appellant.

          Snellgrove, Langley, Culpepper, Williams & Mullally, by: J. Chad Owens, for appellee.

          WAYMOND M. BROWN, Judge

         Appellant appeals from the circuit court's order granting appellee's motion to dismiss. His sole argument on appeal is that the circuit court erred in granting appellee's motion to dismiss after finding a policy provision valid when that provision's requirement is not part of the statutorily-mandated coverage. We affirm.

         I. Facts

         On May 27, 2014, appellee issued a policy of automobile insurance to appellant's grandmother, Sue Johnson. Appellant lived with his grandmother and therefore was covered by her policy with appellee.[1] On November 27, 2014, appellant was a passenger in an uninsured vehicle that was involved in an accident. Appellant did not immediately seek treatment, though he did eventually seek treatment.

         On March 20, 2015, appellant made a claim for medical benefits under the medical-payments coverage of the policy. Appellee responded on March 26, 2015, advising appellant that it could not determine whether the treatment initiated with Curtis Chiropractic "almost 4 months [after the accident] is reasonable, necessary and solely related to the accident." Accordingly, it advised appellant that the "terms of the policy require participation in an exam by physicians chosen and paid by us as often as we reasonably may require" and that "[r]efusing our request impairs our ability to determine what benefits are payable[, ]" so it could not consider benefits under the medical-payments coverage without appellant's recorded statement about the accident and an independent medical examination (IME).[2] In a letter dated March 30, 2015, appellant advised appellee that he would be submitting medical bills to be reimbursed.

         In a letter dated April 8, 2015, appellee stated of appellant's actions that:

It is questionable whether there has been compliance with the provision of the policy requiring the assistance and cooperation of the insured, by reason of allegations or evidence of
• insured's refusal to give pertinent information to the company
• insured's refusal to assist in investigation
• insured's refusal to cooperate in giving and securing evidence[.]

         Appellant was notified by letter dated May 5, 2015, that an IME had been scheduled for him on May 19, 2015. Appellant objected to the IME by letter dated May 11, 2015, asserting that such an examination "is not required under Arkansas' med pay statute." He also enclosed a medical authorization to obtain records from his service providers. Appellee responded in a letter dated May 12, 2015, and advised that the "[s]tatute is silent on the issue of [IMEs], thus not allowing or disallowing them." It further stated that appellant's refusal to attend the exam or to delay its scheduling would impair appellee's ability to determine what benefits were payable and that appellant's failure to cooperate may cause appellee to deny his medical-payments claim. Appellant did not attend the scheduled IME; therefore, appellee notified him by letter on May 20, 2015, that it was unable to consider any outstanding or future benefits from appellant related to the November 27, 2014 accident.

         On August 18, 2015, appellant forwarded medical bills totaling $1, 542.00 to appellee for payment. The medical bills were for a visit to NEA Baptist Clinic on December 14, 2014;[3] and visits to Curtis Chiropractic & Wellness Center between March 23, 2015, and May 12, 2015.[4]

         Appellant filed a complaint against appellee on September 15, 2015, for breach of contract.[5] The policy was not attached to the complaint. Appellee filed a combined motion to dismiss and answer to appellant's complaint on October 15, 2015. Therein, appellee sought dismissal of appellant's complaint as "premature" because he had failed to perform conditions precedent to filing the lawsuit; specifically, appellant had failed to submit to an IME. Appellee also pled affirmatively that appellant had failed to comply with the provisions of the policy to allow appellee to consider reimbursement of claimed medical expenses.

         Appellant responded to appellee's motion to dismiss on October 29, 2015, asserting that

Arkansas Code Annotated § 23-89-205 explains that an insurer may exclude the medical payment benefits to an insured when the insured's conduct contributed to the injury he or she sustained by causing injury to himself intentionally or causing injury while in the commission of a felony or while seeking to elude lawful apprehension or arrest by a law enforcement official. The legislature set forth only these specific exclusions.[6]

         Appellant argued that appellee's policy "provides an additional requirement that the insured must be examined as reasonably often as State Farm may require by physicians chosen and paid by State Farm. This policy was not entered into by plaintiff, but rather by Sue Johnson, plaintiffs grandmother. Thus, plaintiff did not contract this additional term of the policy with defendant:'[7] He therefore argued that appellee's policy provision created a requirement not found in the statute, that was contrary to legislative intent, and which did not apply to him.

         Appellee replied to appellant's response on November 5, 2015, and noted therein that the policy agreement provided that an insured had a duty to cooperate with appellee and that a person making a claim under medical-payments coverage must be examined as reasonably often as appellee may require by physicians chosen and paid by appellee; that appellee requested an examination of appellant on May 19, 2015, which appellant failed to appear for; and that it subsequently notified appellant that it was unable to consider payment of any outstanding or future claims based on appellant's refusal to submit to an IME. Appellee asserted that though appellant was contending that he did not enter into the contract and did not bargain for the IME provision, appellant had the same obligations to cooperate with the terms of the policy as if he were a named insured.

         On December 15, 2015, appellee filed a motion for summary judgment in which it stated that it was "convert[ing] its Motion to Dismiss into a Motion for Summary Judgment."[8] In its separate brief in support, filed contemporaneously, appellee restated its arguments from its motion to dismiss, namely that appellant's complaint should be dismissed as premature where appellant had failed to cooperate with appellee's investigation. Appellee attached a copy of the policy to its brief in support of its motion for summary judgment. This was the only copy before the circuit court. It further asserted that appellant should not be allowed to seek benefits under its policy of insurance while at the same time arguing that he should not be bound by the provisions of the policy.

         Appellant responded on December 23, 2015, by restating his previous argument that the IME requirement was an additional requirement imposed by appellee in its policy, which was contrary to legislative intent, and that his documentation of his medical bills, which he submitted to appellee, was sufficient and "reasonable proof of the amount of medical expenses[.]" He also reasserted that he did not enter into the contract and did not contract for the additional requirement of the policy, with the implication appearing to be that the provision should not apply to him.[9]

         A hearing was held on the matter on January 16, 2016, at the conclusion of which, the circuit court granted appellee's motion to dismiss. On January 19, 2016, the circuit court entered an order dismissing the matter without prejudice "as premature due to [appellant's] failure to cooperate with [appellee's] investigation of [appellant's] claims pursuant to the terms of the policy." This timely appeal followed.

         II. Stand ...


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