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Gipson v. Progressive Casualty Insurance Co.

United States District Court, W.D. Kentucky, Louisville Division

March 20, 2019



          Greg N. Stivers, United States District Court Chief Judge

         This 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 GRANTED.


         This is 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).

         Gipson 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]).[1]Setters' notes reflect that Progressive had determined Johnston was 100% at fault for the collision. (Claim Notes 6).

         On 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 Notes 7).

         On 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[2] 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).

         Dant 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).

         Sometime 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).

         On 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).

         After a 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 13).

         On 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).

         In the 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).

         On July 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)

         Almost 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[3] 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).

         Between 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 ...

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