United States District Court, W.D. Kentucky, Louisville Division
MEMORANDUM OPINION AND ORDER
N. Stivers, United States District Court Chief Judge
matter is before the Court on Defendant's Motion for
Summary Judgment (DN 24). The motion is now ripe for a
decision. For the reasons outlined below, the motion is
STATEMENT OF FACTS AND CLAIMS
a bad faith action brought under the Kentucky Unfair Claims
Settlement Practices Act (“KUCSPA”), KRS
304.12-230, by Melissa Gipson (“Gipson”) against
Progressive Casualty Insurance Company
(“Progressive”) for its handling of her
third-party liability claim. On February 16, 2012, Gipson was
rear-ended by Progressive's insured motorist, Bradley
Johnston (“Johnston”), while stopping at a
traffic light in Louisville, Kentucky. (Pl.'s Resp.
Def.'s Mot. Summ. J. 3, DN 39 [hereinafter Pl.'s
Resp.]). The Hertz rental vehicle operated by Gipson at the
time of the collision was totaled, and in the days following
the accident Gipson began experiencing pain in her neck,
lower back, and right hip. (Pl.'s Resp. 3).
sought medical treatment on February 20, 2012, at Norton
Audubon Hospital in Louisville, where she was diagnosed with
neck and lumbar strains. (Pl.'s Resp. 3). Two days later,
Gipson saw her primary care physician, Angela Crone, M.D.
(“Dr. Crone”), who treated her symptoms and
ordered a series of MRIs. (Pl.'s Resp. 3). On February
23, Gipson first discussed her claim with Progressive
adjustor Laura Setters (“Setters”) and informed
Setters of the upcoming MRIs. (Pl.'s Resp. Def.'s
Mot. Summ. J. Ex. G, at 6, DN 39-7 [hereinafter Claim
Notes]).Setters' notes reflect that Progressive
had determined Johnston was 100% at fault for the collision.
(Claim Notes 6).
February 28, 2012, Gipson went to Floyd Memorial Hospital for
an MRI of her cervical and lumbar spine, which showed
degenerative disk disease with a minor bulge at ¶ 5-6
and mild bilateral neural foraminal narrowing in her low
back. (Pl.'s Resp. Def.'s Mot. Summ. J. Ex. E, DN
39-5). On March 2, Setters spoke with Gipson regarding her
MRIs and doctor's visit, noting that Gipson said her
“C-5-6 is now ‘blown out.'” (Claim
Notes 6). Gipson also related to Setters that she had
undergone surgery on her back twelve years earlier. (Claim
March 9, 2012, another Progressive claims adjuster, Stephen
Dant (“Dant”), received Gipson's claim file
after it was transferred to Progressive's Large Loss Lite
division and assigned a $50, 000 reserve. (Claim Notes 8).
Gipson was asked to follow up with Hertz regarding personal
injury protection (“PIP”) coverage on March 12, and
Gipson told Dant she was experiencing some radicular pain
down her left arm down to her thumb. (Claim Notes 9). That
day Dant printed a medical authorization form which he sent
to Gipson to allow Progressive to obtain copies of her
medical records. (Def.'s Mot. Summ. J. Ex. 2, DN 24-3;
Claim Notes 9). Dant noted he would follow up with Gipson in
thirty days. (Claim Notes 9).
spoke with Gipson again on April 5, 2012, and informed her he
still had not received the medical authorization. (Claim
Notes 10). He advised Gipson to speak with a supervisor at
Hertz concerning PIP coverage, and Gipson agreed to contact
Dant again if she did not receive the medical authorization
form in the mail. (Claim Notes 10). On July 5, 2012, Dant
received cervical and lumbar MRI reports from Gipson showing
spinal fusions from prior surgeries and “small
paracentral herniations with minor stenosis and bilateral
foraminal impingement.” (Claim Notes 11).
in the summer of 2012, Gipson moved to Florida and saw Julie
Suddoth, M.D. (“Dr. Suddoth”). (Pl.'s Resp.
3). Dr. Suddoth issued Gipson prescriptions on July 11 and
October 27, 2012, for pain management. (Pl.'s Resp. 3).
Dant did not learn of Gipson's move until he spoke with
her on July 24, 2012. (Claim Notes 11). His notes from this
conversation indicate that Gipson said she never received the
medical authorization form, that she was considering seeking
additional treatment, and that she would follow up in thirty
days. (Claim Notes 11-12).
September 17, 2012, having received Gipson's medical
authorization, Dant submitted a request for records from
prior treatment Gipson had undergone, and faxed the
authorization to Dr. Crone requesting Gipson's medical
records and bills. (Claim Notes 12). On October 16, Dant
received a voicemail from Dr. Crone's office advising
that Gipson's records had been sent to Gipson's
doctor in Florida and that he would need to order her records
from them. (Claim Notes 12). That same day, Dant spoke with
Gipson and told her that he needed the documents from her
physician and potentially a second opinion depending upon
what those records showed. (Claim Notes 12).
missed call in November, Dant next spoke with Gipson on
December 5, 2012, when Gipson indicated she was ready to
settle her claim. (Claim Notes 13). Dant informed Gipson that
the medical authorization she provided limited the release of
medical records to treatment rendered only after the
collision. (Claim Notes 13). Dant told Gipson he wanted her
earlier records to evaluate her claim, and she agreed to
complete and return another form authorizing the release of
those records. (Claim Notes 13). Gipson advised Dant at that
time that she was considering a lost wage claim, for which
Dant said he would need supporting documentation. (Claim
Notes 13). On January 8, 2013, Dant spoke with Gipson and
again advised her that he needed supporting documentation for
her lost wage claim. (Claim Notes 13). Gipson repeated she
was ready to settle, but Dant advised her a settlement would
be based solely on the medical records he had received and
that nothing could be paid for unsupported lost wage claims.
(Claim Notes 13). Gipson agreed to attempt to document her
lost wages and to get back in contact with Dant. (Claim Notes
January 22, 2013, Dant received a letter of representation
from Gipson's attorney, Zachary Taylor
(“Taylor”). (Claim Notes 13). Later that day,
Dant informed Taylor by phone that Gipson seemed to have
completed treatment, appeared ready to settle, and was
gathering documentation for a lost wage claim. Taylor told
Dant that he would submit a settlement demand to Progressive
on behalf of Gipson. (Claim Notes 14). Dant attempted to
contact Taylor twice monthly for the next nine months seeking
Gipson's demand before he finally connected. When he
spoke to Taylor on October 17, 2013, Dant noted that Taylor
seemed unfamiliar with Gipson's claim but said he was
gathering supporting documents to present a demand package to
Progressive. (Claim Notes 16).
meantime, Gipson had begun seeing orthopedic specialist
Jeffrey Fadel, M.D. (“Dr. Fadel”) in March 2013.
(Pl.'s Resp. 4). Dr. Fadel diagnosed Gipson with
post-traumatic sacroiliitis of the right pelvis which he
attributed to the February 2012 collision. (Pl.'s Resp.
4). Dr. Fadel recommended sacroiliac joint injections,
trigger point injections, physical therapy, and continued
pain management. (Pl.'s Resp. 4). Jeffrey Campbell, M.D.,
administered the sacroiliac joint injections on April 3,
2013, which provided some pain relief to Gipson. (Pl.'s
Resp. 4; Pl.'s Resp. Def.'s Mot. Summ. J. Ex. D, at
2-3, DN 39-4).
31, 2013, Gipson was seen by Casey O'Donnell, D.O.
(“Dr. O'Donnell”), who specializes in
rehabilitation and pain management. (Pl.'s Resp.
Def.'s Mot. Summ. J. Ex. F, DN 39-6). Dr. O'Donnell
diagnosed Gipson with right lumbar facet syndrome,
lumbosacral spondylosis and low back pain. (Pl.'s Resp.
4-5). Dr. O'Donnell prescribed sacroiliac joint
injections to the right lumbar facet joints, which were
completed on February 25, 2014, and were noted to have
resulted in a significant recovery. This was the last medical
treatment Gipson received for her low back. (Pl.'s Resp.
Def.'s Mot. Summ. J. at 5, Ex. F)
fourteen months after Dant initially spoke with Taylor, the
first settlement demand on behalf of Gipson was sent to
Progressive on March 12, 2014. (Claim Notes 17). The demand
offered to settle Gipson's claim for $201, 368,
consisting of $19, 092 for medical treatment, $57, 276 for
pain and suffering, $100, 000 for disfigurement or
impairment, and $25, 000 for future medical expenses.
(Pl.'s Resp. Def.'s Mot. Summ. J. Ex. D, DN 39-5).
Dant reached Taylor two weeks later and offered to settle
Gipson's claim for $5, 000. (Claim Notes 19). Dant's
notes reflect that the offer was low due to a gap in
Gipson's treatment and her preexisting spinal fusion. (Claim
Notes 19). Taylor responded to Dant's offer with a demand
of $150, 000, to which Dant counteroffered $7, 000. (Claim
Notes 19). Dant was perplexed as to why Taylor believed
Gipson's claim was worth so much because, even if he
accepted all her medical expenses as related to the accident
(which he did not), the injury consisted of a lumbar strain
with only conservative treatment. (Claim Notes 19). Taylor
responded on April 30, 2014, with a settlement demand of
$120, 000, and Dant replied with an $8, 500 counteroffer the
same day. (Claim Notes 19).
April 30, 2014 and September 4, 2014, Dant made eleven
unanswered phone calls to Taylor and sent numerous letters
requesting a response to the last settlement offer. (Claim
Notes 19-21). When he finally reached Taylor on September 4,
2014, Taylor told Dant that a lawsuit had been filed in state
court against Progressive's insured, Johnston, on June
17, 2014, a copy of which Taylor sent to Dant. (Claim Notes
21). Also that day, Gipson's claim file was transferred
to Adam Luhrs (“Luhrs”), who ...