Example of Court Annexed Arbitration Opinion: Five
AUTO ACCIDENT: PERSONAL INJURY PROTECTION
I heard the above captioned case
as duly appointed court annexed arbitrator pursuant to ORS chapter 36.
Plaintiff appeared personally, with her attorney, and defendant Insurance
Company appeared by its attorney.
I treated the hearing as commenced. Plaintiff
was ill and her attorney requested a continuance. Defendant’s
attorney did not object. I granted a continuance. After calendar
consultation the hearing was reset. On that date, Plaintiff appeared
personally with her attorney and defendant appeared by its attorney.
Based on the allegations of Plaintiff’s complaint
which were admitted in defendant’s answer, it is undisputed that defendant
was a corporation authorized to do business in Oregon, presumably an
admitted insurer, and that prior to the date of the accident, it issued
an insurance policy to the Driver that included personal injury protection
coverage as required by ORS 742.520 et seq. [It is clear to me that PIP
coverage must be co-extensive with the minimum requirements of the statutes,
but that the policy can provide more. At the hearing, no one argued
that the policy provided Plaintiff more rights than the statute.
For that reason, my analysis is based on the relevant statute.] It
is further undisputed that the policy provided insurance coverage for
the occupants of the insured vehicle (as was required by statute), and
that Plaintiff was a passenger in the vehicle driven by Driver that was
involved in a collision at an intersection. [It does not concern me that
Plaintiff and Driver were returning from a methadone clinic. It
does not concern me that Plaintiff may have been referred to the chiropractor
by Plaintiff’s Attorney’s office. It does not concern me that the
collision was probably The Driver’s fault.]
Plaintiff claims to have incurred certain medical
expenses as a consequence of the collision, which should have been paid
under the PIP coverage, alleged in the complaint to total $4,093.55.
Plaintiff also claimed $1,800 for the value of care provided by a relative,
but that claim was withdrawn at the hearing.
[The claim was withdrawn on the basis that Plaintiff’s
Attorney believed it was not supported by law, and I concur in and respect
Plaintiff’s Attorney’s view of an attorney’s ethical obligations.
ORS 742.524(1)( c) as presently written would
preclude recovery of those services as a matter of law, because they
were provided by a person related to Plaintiff. The prohibition
in ORS 742.524(1)( c) was added by Oregon Laws 2005, c. 341 § 1
(SB 151), and by section 3 of the statute, the amendments were specifically
applicable to motor vehicle insurance policies issued or renewed on or
after the effective date of the Act. The effective date of the Act
was clearly after the issuance of the insurance policy in question; therefore,
the current version of ORS 742.524(1)( c) does not apply.
However, I would still have trouble, as a matter
of law, with the idea that a relative can recover compensation for “expenses
reasonably incurred by the injured person for essential services in
lieu of services the person would have performed without income during
the period of the person’s disability”. More importantly, I think
my job is to make findings of fact that I believe in, but also similar
to the verdict a jury would return.
This claim is a dead loser before a jury.
It is a claim is for a number of hours of essentially personal care over
the period of ten days between the collision and the first visit with
the chiropractor, by a relative. Assume for the moment that I could
find by a preponderance of the evidence that some services were rendered.
There was no prior medical or health care professional authorization
for these services. They were not provided by a person having any
professional qualification. The person providing the care did not
lose time from other work. The person is closely related to Plaintiff.
I have no qualifications to provide medical
care, but I am a caring person within the bounds of my family.
If my brother is in an auto accident and I visit him in the hospital or
at home, and assist with his care, even for a week, I do not believe that
the law imposes any obligation on me to provide that care or for him to
pay me for it, whether it is essential or palliative. People complain
about the burden of intra-familial obligations all the time, but they don’t
stop performing them. If my brother agrees to pay me for that care,
that is an act of generosity on his part. If I compel payment
from him, that is a somewhat mercenary act on my part.
The situation is no different because the parties
are in the plaintiff’s family, rather than mine. I don’t believe
that there is any legal support for the proposition that intra-familial
services rendered without medical order by an unlicensed provider are compensable.
If they are not compensable as between the parties, they cannot be an
obligation under the policy. Not all injuries, costs or damage
are compensable under liability insurance, whether first party or third
No witnesses actually testified. There
was a stipulation as to the testimony of one employee of the insurer,
which I will address below.
All of the parties’ exhibits were offered and
admitted. [Plaintiff’s Attorney’s office is admonished to number its
exhibits, provide an exhibit list, and serve copies of the exhibits on
the opponent in the next arbitration it has before me, if any. Both
parties are admonished to comply with the provisions of the rules relating
to pre-hearing statements of proof if evidence or proof is expected to
be contested.] One of the exhibits was a report of the chiropractor.
Under UTCR 13.170(2)(f), a written statement of a witness is admissible
if made in the form of a declaration or affidavit. No objection
was made that the report did not meet this standard, i.e., unsworn.
The letter states that his care was ‘reasonable and necessary.’
There was no evidence contradicting the doctor’s ‘testimony.’ On
the basis of that evidence, I find that the care provided by the doctor
was reasonable and necessary, the charges were ‘usual and customary’ which
I infer to also mean reasonable, and were for care directly related to
the injuries sustained in the collision.
From the other admitted exhibits it appears
that Plaintiff told the EMT that she was falling asleep when the collision
occurred. She complained to the EMT of chest, neck and back pain.
At admission to the hospital she had slurred words and was lethargic.
She said she was sleepy and had taken her methadone. At arrival “History
limited by poor comprehension and cooperation and a language barrier.”
She complained of neck and back pain.
I observe that the Hospital records appear to
show that the Hospital services were rendered in a substantial effort
to determine whether Plaintiff suffered a head injury and they were unable
to make such a finding, even in their communications with Plaintiff,
who was at the time having difficulty communicating.
I observe that when Plaintiff went to the chiropractor,
she reported that she had been unconscious for six hours after the collision,
which is inconsistent with the reports of the hospital, and I credit
the hospital reports over Plaintiff’s statements to the chiropractor.
The medical expenses at the hospital were $4,944.70
on the day of admission, mainly because of almost $4,000 of CT scans.
She was released that day.
The insurer payed the Hospital $2,878.64, but
did not pay $2,066.06. The Hospital has filed a Hospital Lien.
A week later, Plaintiff began treatment with
the chiropractor. $279.93 of the chiropractor’s bills were not paid
by the insurer. $35.60 of bills for reading x-rays were not paid by the
All the bills were submitted to Defendant, see
the PIP ledger, lines 1, 2, 3, 5 and 6 and 11.
It was stipulated, as far as I am concerned,
for the purposes of the arbitration only, that:
‒ the insurer’s employee handled this claim for
‒ she would testify that:
‒ when bills come in, they
are reviewed by a third party vendor and then paid consistent with a certain
percentage of ‘usual and customary’ fee for that provider’s community,
‒ exhibit 110 is a document
prepared by or at the direction of the defendant and says ‘change, reduction,
allowance,’ for each claim,
‒ a check is processed consistent
with this documents and the check is sent out to the provider, and
‒ the document itself is sent
out to the provider.
The various pages of Exhibit 110 show that the
payments were made within sixty days of the dates of service. Each
page of Exhibit 110 includes a coding of “01" where there was a reduction
in payment and states below: “Reduction explanations: C 01 The charge for
the procedure exceeds the amount indicated in the fee schedule. * * * Direct
inquiries regarding this review to: [reviewer] [address, telephone, fax and
e-mail address provided].” I take it from common experience and the Ivanov
case that everyone in the industry knows what the ‘fee schedules’ are.
While there was no formal stipulation, it was
agreed that Plaintiff would not have seen any of Exhibit 110 or anything
The maximum damages that I can award in this
case are, with respect to the Hospital, $2,066.06, with regard to the
chiropractor, $279.93, and with respect to . . . , $35.60. I can
only do this if there is proof that the services provided and the amounts
charged were “reasonable and necessary” and causally related to the collision.
I find that the services rendered by all the
providers were causally related to the collision, based on chronology
alone, and on the fact that defendant paid part of each claim. No
services were rejected in toto.
The critical question is: Was evidence presented
from which I may find that the Hospital’s and the chiropractor’s services
and their cost were reasonable and necessary? As mentioned below,
I so find with respect to the chiropractor. While I could easily be
convinced that the services were reasonable and necessary and their cost
was reasonable, that is not enough. Nor is it enough that I think
Plaintiff could get the evidence that would convince to a preponderance,
and that defendant would have a hard time rebutting it. My beliefs
and assumptions are not enough. I need to be presented with proof,
or there must be a reason that proof is obviated, i.e., by a presumption.
Two arguments about presumptions were made:
one under the UTCR, and the other under ORS 742.524. An argument
about an implied presumption under ORS 742.528 was made. Arguments about
presumptions are also considered, and rejected, in the Ivanov
The argument was made that the UTCR provide
that medical bills admitted under UTCR 13.170(2)(f) are presumptively
reasonable and necessary. I could not find that in those rules,
or ORS chapter 36 or the Supplemental Local Rules. The UTCR eliminate
requirements about foundations, but not proof.
The PIP statutes
ORS 742.524(1)(a) provides, in part:
Contents of personal injury protection benefits; deductibles.
(1) Personal injury protection benefits as required by ORS 742.520 shall
consist of the following payments for the injury or death of each person:
(a) All reasonable and necessary expenses of
medical, hospital, dental, surgical, ambulance and prosthetic services
incurred within one year after the date of the person's injury, but not
more than $15,000 in the aggregate for all such expenses of the person.
Expenses of medical, hospital, dental, surgical, ambulance and prosthetic
services shall be presumed to be reasonable and necessary unless the provider
is given notice of denial of the charges not more than 60 calendar days
after the insurer receives from the provider notice of the claim for the
services. At any time during the first 50 calendar days after the insurer
receives notice of claim, the provider shall, within 10 business days, answer
in writing questions from the insurer regarding the claim. For purposes of
determining when the 60-day period provided by this paragraph has elapsed,
counting of days shall be suspended if the provider does not supply written
answers to the insurer within 10 days and shall not resume until the answers
In this case, there is evidence that Dr. . . . received ‘notice
of denial of the charges’ as to $276.54, and there is evidence that
the Hospital received notice of such denial for $2,066.06. As a
consequence, there is no presumption of ‘reasonable and necessary.’
I specifically find that the language on Exhibit
110 satisfies the requirement of notice to a provider.
The argument is made that ORS 742.528 was violated
and that should also result in a presumption of reasonable and necessary.
That statute provides [emphasis supplied]:
Notice of denial of payment of benefits. An insurer who
denies payment of personal injury protection benefits to or on behalf
of an insured shall:
(1) Provide written notice of the denial, within
60 calendar days of receiving a claim from the provider, to the insured,
stating the reason for the denial and informing the insured of the method
for contesting the denial; and
(2) Provide a copy of the notice of the denial,
within 60 calendar days of receiving a claim from the provider, to a
provider of services under ORS 742.524 (1)(a).
In the PIP statutes, the word ‘insured’ is not
defined. In ordinary usage, it means the policy holder. Some
policies include broader definitions, but not this one (to the extent
the policy was provided to me). There are statutory situations where
the word insured is defined to include passengers, for instance, in the
UIM statutes. However, there is no similar definition in the PIP statutes.
ORS 742.528 was enacted as Oregon Laws 1987,
c. 588 § 4. Section 2 of the same act also added the similar
language in ORS 742.524(1)(a) [then ORS 743.805]. ORS 743.800(1)
[now 742.520] requires that policies shall provide PIP benefits “to
the person insured thereunder, . . . , passengers, . . . ,” thus distinguishing
between the person insured, and passengers.
There is no case interpreting this language
in ORS 742.528, and it is poorly drafted. There is no case stating
that a passenger is an insured as a matter of law for purposes of PIP.
It does not make complete sense that notice of denial would go to the Driver;
and notice is already sent to the provider under ORS 742.524(1)(a) and
742.528(2), but I think the statute does not require notice to passengers
whose PIP benefits are denied, whether or not it should.
Even if it does, I do not think that failure
to send the notice to Plaintiff has the same effect of creating a presumption
that ORS 742.524(1)(a) does. The two statutes, ORS 742.524(1)(a)
and 742.528(1), use different language. In ORS 742.524(1)(a), the
insurer must give notice of the denial but it not required to explain
why or provide any other information (though it may be implied and this
insurer did), nor must it explain how to contest the denial, but the penalty
of the creation of a presumption is express. In ORS 742.528, the
notice must give the reason for the denial and explain how to contest the
denial, but no presumption is created.
Again, the language in both statutes was created
in the same act, and the language is different. A cardinal rule
of statutory construction is that where the legislature uses different
language (especially in the same act), it means different things.
Why did the legislature use different language in the two sections in 1987?
We don’t know, but we don’t get to rewrite the statute just because it is
murky. Each of us would rewrite it differently. Rather, we
must do our best to apply what is written.
The Ivanov decision
Finally, on August 9, 2006, after Plaintiff’s
complaint was filed in this action, and even after the day that the
arbitration first began, the Oregon Court of Appeals rendered its decision
in Ivanov v. Farmers Insurance. In Ivanov, the trial court
granted summary judgment against plaintiffs on the basis that they had
failed to prove that their care was reasonable and necessary. On appeal,
the plaintiffs urged various presumptions and arguments as to why there
was a jury issue. The Court of Appeals rejected every argument.
As presented to me, this case is on all fours
with Ivanov. I believe that Plaintiff could have obtained
evidence to satisfy the prima facie and the preponderance standards of
evidence with respect to reasonableness and necessity of the the Hospital
services and their expense. But she did not. In this situation,
what the Court of Appeals said in Ivanov is compelling [footnotes
No provision of the PIP statutes relieves an
insured who challenges an insurer's denial of benefits on the ground that
medical expenses were not necessarily incurred from the burden of producing
prima facie evidence that the claimed expenses were necessarily incurred.
* * *
We agree with plaintiff that an insured can
meet the initial burden to establish that medical expenses were necessary
in a proof of loss submitted for claim processing purposes under ORS 742.520(4)
by submitting no more than evidence that the expenses were incurred. That
is so because, should the insurer fail to deny a claim for medical expenses
within 60 days of receiving the claim, in any ensuing action or arbitration
proceeding, the mere existence of the expenses gives rise to a presumption
that they were necessary. ORS 742.524(1)(a). As discussed, the statutory
presumption does not apply where, as here, the insurer timely denied the
* * *
The term "reasonable medical expenses" has well-established
proof requirements in Oregon common-law personal injury claims. The
plaintiff in a personal injury claim may "recover, as a part of his
damages, his reasonable expenses for medicines and medical treatment,
but there must be some evidence that the charges are reasonable." Tuohy
v. Columbia Steel Co., 61 Or. 527, 532, 122 P 36 (1912) (emphasis
added); see also Pinder v. Wickstrom, 80 Or. 118, 120, 156 P 583
(1916) (holding that in making proof of medical expenses incurred, it
was necessary to show that they were reasonable).
This court recently applied that principle in
Lea v. Farmers Ins. Co., 194 Or. App. 557, 560, 96 P3d 359 (2004).
In Lea, the plaintiff sued his uninsured motorist coverage insurance
carrier to recover medical expenses that he incurred in an accident, caused
by an uninsured motorist. At trial, the plaintiff offered his medical bills
into evidence. Id. at 561. At the close of the evidence, the defendant
moved to strike the plaintiff's claim for medical expenses on the ground
that the plaintiff had failed to prove their reasonableness and necessity.
Relying on Tuohy, we held that Oregon case law was "unequivocal" in requiring
proof of the reasonableness of medical expenses incurred as damages. And,
despite the evidence of the plaintiff's medical bills, we held that there
was no evidence from which a trier of fact could infer that the expenses
were reasonable. Id. at 559-61. We further stated:
"[P]laintiff argues that we should adopt the
rule that evidence of the amount of the expenses is itself evidence of
their reasonableness because modern jurors, unlike those in the Tuohy
era, can be presumed to know what is or is not reasonable because of their
own experience. That argument is also unpersuasive; indeed, given the
proliferation in treatment modalities and the fact that a significant
number of medical expenses today are paid by insurance companies and not
individuals, we would conclude that a contemporary juror may be less capable
of knowing what charges are reasonable than was a juror in 1912. We therefore
conclude that the trial court erred in denying defendant's motion to strike
the claim for damages for medical expenses."
Id. at 560-61. In sum, at common law and, specifically, in personal
injury cases, proof that medical expenses were incurred does not give
rise to an inference that the expenses were reasonable. Logically, the
same principles apply to the determination whether such expenses were medically
* * *
Although the PIP statutes provide for a streamlined
procedure for resolving disputes between insured and insurer, when an
insurer rejects a claim for medical expenses, the claimed expenses are
not "presumed to be reasonable and necessary." ORS 742.524(1)(a). Even
though, as plaintiffs observe, there is a difference between a presumption
and an inference, the statutory framework plainly puts a claimant to his
or her proof in such circumstances and, in so doing, it is logical to
conclude that the legislature had in mind the common law proof requirements
for reasonable and necessary medical expenses. Accordingly, we reject
plaintiffs' argument that, when a PIP insurer denies a claim for medical
expenses on the ground that they were not necessarily incurred, evidence
that the expenses were incurred is sufficient to create a permissible
inference that they were necessary.
* * *
In sum, we conclude that, when a PIP insurer
timely rejects a medical expense claim on the ground that it was not necessarily
incurred, the production of evidence that the expense was incurred does
not, by itself, satisfy the statutory requirement for proof that the expense
Simply because an exhibit is admitted,
does not make it persuasive. Nor does the fact that documents are
admitted without objection fill gaps in proof. There was no evidence
submitted that the expenses at the Hospital were necessary or reasonable.
I personally do not doubt that evidence could have been obtained from the
Hospital that the services provided on the day of admission were reasonable
and necessary, but there was nothing in the documents submitted to me,
pro forma, self serving, or whatever, with the magic words. I am
not authorized to render an award based on what I think could be produced
as evidence; only on what has been produced.
My final award will award Plaintiff $315.53
(the unpaid amounts to Dr. . . . and the chiropractor).
Defendant has contended that Plaintiff is not
the real party in interest. I assume that this is based on the
contention that Plaintiff has not paid her providers. This argument
is wrong. If potential obligors (insurers or defendants in general)
were never liable for damages incurred but not paid by indigent plaintiffs,
there would be an incentive not to pay otherwise valid obligations, and
in some instances, to refuse to pay in order to create financial embarrassment.
While that extreme is not the situation in this case, the bottom line
is that if Plaintiff owes the money for services that are within the PIP
obligation, The insurer should pay it. The insurer has means at
its disposal to ensure that the money reaches the proper hands, such as
honoring PIP liens or paying by joint check.
I also have the authority to order that the
damages be paid jointly to the unpaid providers, and I so order, Wilson
Leasing Co. v. Seaway Pharmacal Corp., 53 Mich App 359, 220 NW 2d
83, 87 (1974).
Finally, I should add that the unfair claims
settlement practices act does not create any rights enforceable by Plaintiff
in this action. Farris v. U.S. Fid. and Guar. Co., 284 Or
453, 458, 587 P2d 1015 (1978). Because it does not, I do not address
the question of whether it was or was not violated.
Pursuant to UTCR 13.210 I enclose a draft form
of award. Plaintiff’s Attorney should present a cost bill and a
petition for attorney fees, on the time lines set forth in ORCP 68, with
the starting date being today. Insurer’s attorney has the time to
object set forth in ORCP 68. Either party having objections to my
proposed form of award should let me know what they think should be changed.
This is not an opportunity to request reconsideration or submit additional
As an aside, given that I believe Plaintiff’s
Attorney can convince a jury to award Plaintiff another $2,066 by presenting
the proper evidence, but that it will cost his client a certain amount
of unrecoverable expense, I recommend that the parties find some way
to settle this case.