You’ve spent the past several months collecting your client’s medical records and bills, and organizing them into a coherent demand package that takes the uninsured/underinsured adjuster step by step through your client’s damages. Finally, you receive a phone call from the adjuster. But the conversation is not going as expected. The insurer is not properly valuing your client’s claim. Often, the offer is just too low (or, in the case of an underinsured claim, the insurer is of the opinion that your client was fully compensated by the tortfeasor’s bodily injury policy). In other cases, the insurer has obtained a medical record review and insists that none of your client’s treatment was reasonable or necessary. Either way, you now have only one option – you must proceed with arbitration. But what do you do if the insurer wants to take an Examination Under Oath (“EUO”) or subject your client to an Independent Medical Examination (“IME”)? How do you combat the defense’s record review? Should you prepare a written arbitration summary? Are you entitled to pre-arbitration interest? And how do you handle the arbitration itself? Simply put, how do you conduct an arbitration in such a way that your client has the best chance of success? This article is intended to provide you with practical tips and advice, and hopefully help you navigate your uninsured/underinsured motorist (“UM”) claim.[1]
Send a written demand for arbitration.
Although a simple task, sending a written demand for arbitration is important for at least two reasons. It formally documents your intent to seek resolution of the claim through mandatory arbitration, and, more importantly, the written demand starts the clock on arbitration interest (more on this later on). In your demand letter, be sure to include the names of at least three arbitrators you would be amenable to using. Keep in mind that not every arbitrator is ideal for the every case. If you have questions about which arbitrator is the best fit for the specific facts of your case, ask colleagues about their own experiences and their results with a particular arbitrator.
Do Not Assume your client Must submit to an Examination Under Oath/Independent Medical Examination After Arbitration Is Demanded.
We’ve all been through this before. The adjuster has already made a low offer, or no offer at all. You’ve sent your written demand for arbitration. An arbitrator has been agreed upon. Then, you receive a phone call from defense counsel. The insurer is demanding your client submit to an EUO, or an IME. The claimant has a duty to cooperate under the Auto Policy, defense counsel insists. True. Under the Standard Massachusetts Auto Policy Section 32, Part 4, an insured has a duty to cooperate with the insurer’s investigation. This includes a duty to submit an EUO (but not a recorded statement) or a medical examination conducted by a doctor of the insurer’s choosing.
However, this is not the end of the analysis. Massachusetts law is equally clear that an insurer has a duty to conduct a reasonable investigation. G.L. c. 176D, §3(9)(d). Courts have further held that an insured is relieved of his duty to cooperate if the insurer’s request is not made within a reasonable time after receiving notice of the claim. In other words, an insurer has the “reciprocal obligation to exercise good faith and diligence in securing [the insured’s] cooperation.” Lorenzo-Martinez v. Safety Ins. Co., 58 Mass. App. Ct. 359, 365 (2003). In other words, an insurer cannot offer a lowball settlement and then decide to do a full investigation after arbitration is demanded.
Whether you should resist an EUO or IME request depends largely on the specific facts of your case. Factors to consider are: the amount of time between the date the demand package was sent to the insurer and the date the EUO was requested; whether there were any factors that justify a delay between the request for the EUO/IME (such as a request for prior medical records or prior attempts to speak with your client); whether the insurer tried to negotiate a settlement prior to requesting the EUO/IME; whether the insurer indicated they were not accepting treatment; and whether the request was made before or after the demand for arbitration was made.
If, after considering all of the factors, you determine the insurer’s request is unreasonable, inform defense counsel that they will have to file a motion with the arbitrator. Make sure you indicate that your client is not refusing to cooperate. Rather, she believes the request is untimely and therefore, unreasonable. If the arbitrator determines the insurer’s request is reasonable, then your client would be more than happy to submit to appear.
Once defense counsel files the motion, make sure to file an Opposition. The Opposition should be fact specific and include the date the demand package was sent, the date an offer was made, any other dates of investigation, the date arbitration was demanded, and the date the EUO/IME was finally requested. The analysis section should contain a discussion of two cases: Lorenzo-Martinez v. Safety Ins. Co., 58 Mass. App. Ct. 359 (2003) and Knight v. CNA Ins. Co., No. 0011-CV-167, 2003 WL 22962439, at *1 (Mass. App. Div. Dec. 10, 2003).
Lorenzo-Martinez involved two claimants who, due to a perceived time delay in the insurer’s request for statements, refused to attend EUOs. In turn, the insurers refused to arbitrate the claimant’s UM claims, arguing the claimants breached the insurance policy. The insureds filed an action to compel the insurer to submit to arbitration. The insurers counter-claimed, seeking a declaration that the insureds breached the Automobile Insurance Policy by failing to appear for their EUOs. The first insured, Lorenzo-Martinez, failed to appear for an EUO that was requested nine (9) months after receipt of the claim. However, the insurer had attempted to secure Mr. Lorenzo-Martinez’ recorded statement on seven different occasions, with no response from the insured. In that instance, the appeals court found that the insurer acted reasonably and in good faith in investigating the claim, including in its request for the EUO. Therefore, Lorenzo-Martinez’ willful failure to appear resulted in a forfeiture of his coverage.
On the other hand, the court determined that Lorenzo-Martinez’ passenger, Sylvia Suarez, was justified in refusing to submit to her EUO. In that case, the insurer waited thirteen (13) months, without ever attempting to contact Suarez or investigate her claim, before it requested the statement. Additionally, the insurer was also prepared to settle the claim, for a low amount, without a statement from Ms. Suarez. Therefore, the court found the insurer’s request was not reasonable.
In Knight, CNA Insurance waited only four and one-half (4 ½) months before attempting to secure the insured’s EUO. In that case, there was evidence CNA suspected fraud well before it requested its insured’s statement. There was, however, no evidence or explanation as to why CNA waited four and one-half months to request the statement. The appellate division found that, “in the absence of any evidence of a reasonable justification for CNA’s delay from which a finding of its’ good faith and diligence’ could be made, … CNA failed to satisfy its burden of proving that it acted in good faith and with diligence to secure [its insured’s] cooperation.” Knight, 2003 Mass. App. Div. at *5.
The take-away: whether an insured is justified in refusing to attend an EUO or IME is extremely fact specific. If the insurer did not conduct a timely and full investigation prior to the demand for arbitration, and only sought these investigative tools after a failed negotiation, you are more likely to be successful in opposing the Motion. If, however, the insurer is actively investigating the claim, perhaps through requesting recorded statements and prior records, a request for an EUO or IME will likely be granted.[2]
Oppose the Medical Record Reviewer.
More likely than not, the medical examiner is not going to appear for the arbitration. You should, however, confirm this with opposing counsel ahead of time. If opposing counsel refuses to tell you whether they are bringing the medical expert until the last minute, don’t assume they are not bringing the doctor. Instead, assume the doctor will testify and prepare for cross-examination.
There are three main ways to combat a defense medical examiner. First, investigate the expert’s bias by filing a motion with the arbitrator to conduct expert financial discovery. Under Massachusetts law, “[r]easonable cross-examination to show bias and prejudice of a witness is a matter of right.” Commonwealth v. Armstrong, 54 Mass.App.Ct. 594, 600 (2002). If defense counsel intends to use the record review during the arbitration (especially if they do not intend to bring the doctor to testify live), then you are entitled to obtain information which relates to the record reviewer’s bias towards insurance companies. Frequently, the insurer (or defense law firm) will use the same defense medical examiner repeatedly. Therefore, the doctor’s financial records are relevant to prove the doctor’s bias. See e.g., VIP Physical Therapy, Inc. v. Gov’t Emps. Ins. Co., Springfield District Court Civil Action No. 1323CV1030 (Hadley, J.) (“an inquiry as to the number of times [medical experts] have performed independent medical examinations or record reviews for the defendant and the amount of money defendant has paid for these services, is reasonably calculated to lead to the discovery of admissible evidence and is not overly broad, vague, or nonspecific. The inquiry, moreover, does not call for the production of privileged or confidential information.”). Documents to request include at least three years of financials between the defense doctor and the insurer, as well as evidence of the number of times the insurer and defense counsel have used the doctor. If the doctor is conducting the reviews through a third-party vendor, such as Examworks or Scope Medical, you should also request documents evidencing the number of times the vendor assigned work ordered by the specific insurer to the specific doctor, and documents evidencing the amount of money received by the vendor for the work performed by the doctor.
Second, consider bringing your client’s treating medical provider to the arbitration. The treating doctor will help your case in three ways. First, she can explain your client’s injuries in a way your client often cannot; second, she will also explain why the specific treatment provided to your client was necessary to help your client heal; and finally, your doctor can rebut the opinions contained in the record review or IME report.
Finally, move to exclude the record review, just as you would if you were conducting a jury trial. The report itself is hearsay, and does not fall within any of the enumerated exceptions. It is not a business record under G.L. c. 233 §78(b). See Kantorosinksi Chiropractic Inc. v. Commerce Ins. Co., No. 12-ADMS-10020, 2012 WL 6754793, at *1, *4 (Mass. App. Div. Dec. 28, 2012) (“Reports of medical record reviews, conducted by an independent contractor, working for a company regularly retained by [an insurance company] for this purpose, would not appear to fall within the [business record] exception.”). Moreover, the record reviewer never examined your client, and therefore the report does not fall under G.L. c. 233 §79G. Ortiz v. Stein, 31 Mass. App. Ct. 643, 644 (1991). Although legally sound, it is unlikely this motion will be successful. Most arbitrators tend to respond to evidentiary motions with something along the lines of: “I understand your objection, but the rules of evidence are a little more relaxed at an arbitration, so I’ll allow it in but give it the weight it’s due.”
However, you should renew your motion right at the start of the arbitration. This time, bring with you a bulleted list of the main issues or errors with the record review. Examples may include identifying records that the defense doctor did not review; discrepancies between what the defense doctor suggests a medical record says, and what the medical record actually states; and complaints or symptoms which the defense doctor chose to ignore. Although the motion itself will still likely be denied, you have started your arbitration with a solid motion taking apart one of the defenses main pieces of evidence before they have the opportunity to introduce it, and have provided the arbitrator with a list of errors contained within the defense doctor’s report that he or she can refer to when writing the arbitration decision.
Provide a written arbitration summary.
You should prepare a brief, written arbitration summary to the arbitrator in advance of the scheduled arbitration. Do not wait until the day before the arbitration to prepare the written summary. Instead, it is best to prepare the summary at least two weeks ahead of the scheduled arbitration (a month in advance is even better). By preparing the summary in advance, you now have the opportunity to identify and address any outstanding issues with the case. You may realize that a treating provider referred your client to a pain management specialist, but that you are missing those records. Or perhaps your client underwent diagnostic testing and you are missing the medical bill. If this happens, request a continuance of the arbitration so that you can obtain the missing records. Typically, defense counsel will agree to the continuance, but if they refuse, file a motion with the arbitrator. You may also notice other issues, such as unexplained gaps in treatment or that pesky record that states your client was doing 85% better and then decided to go skiing and reinjured themselves. By preparing the summary well in advance, you now have the chance to speak with your client about these issues, instead of trying to come up with an explanation on the eve of arbitration. You might also learn that perhaps the insurer was correct, and that the offer you believed to be low maybe wasn’t so unreasonable after all.
The summary should include a brief description of the facts. Obviously, address any liability arguments defense may make. It is also important to give the arbitrator some background on your client. How old is she? Does she have children? Is she employed, and if so, does the job include physically demanding tasks? All of these facts will provide the arbitrator with a sense of who your client is ahead of the arbitration. This is important because it gives the arbitrator an opportunity to relate to your client in a way they might not otherwise do.
The arbitration summary should also summarize your client’s damages. In this section, include an overview of your client’s medical treatment. Include any complaints your client reported, the medical provider’s diagnosis, and the course and length of treatment. If there are issues with your client’s medical treatment, such as gaps or inconsistent pain levels, it is important to address such issues head on in the summary. By providing the arbitrator with an explanation in the summary, you have effectively addressed defense counsel’s cross-examination and argument ahead of time. Similarly, if defense counsel has an expert, undercut the testimony by pointing out the issues or inconsistencies with the opinion. You should also include the amount of your client’s medical bills, and if appropriate, the amount of your client’s lost earning capacity/wages. If there is a lost earning capacity/wage claim, be sure to explain why your client was unable to perform her job duties.
Finally, you should also consider including an “Activities of Daily Living” section. This will also require you to prepare your client in advance of the arbitration (see below). Ask you client for things they did prior to the collision that they were not able to do for a period of time after the collision. Activities to consider include social activities, exercise, and interactions with their children. If your client is able to identify certain activities, include them in the arbitration summary. However, if your client cannot identify any activities, or the activities are limited to such tasks as household chores, you may want to consider leaving this section out of the summary so you do not appear to be over-reaching.
In the “conclusion” of your summary, make sure to request an award for the amount of medical bills/lost wages, a reasonable amount of money for pain and suffering, and pre-arbitration interest from the date arbitration was demanded. See Bolman v. Plymouth Rock Assurance Corp., 82 Mass. App. Ct. 135 (2012) (finding no reason why pre-award interest should not be added to the arbitrator’s award as part of the damages the plaintiff is legally entitled to recover under G.L. c. 175 §111). Include the formal, written demand for arbitration as an exhibit. However, be aware that whether you will be awarded pre-arbitration interest depends on the arbitrator. Some will award it, some refuse to award it at all, and others will only award it if you can show an unreasonable delay between the date arbitration was demanded and the scheduled arbitration. Conn. Valley Sanitary Waste Disposal, Inc. v. Zielinski, 436 Mass. 263, 271 (2002) (“The entitlement of a party to pre-award interest is a decision that is within the purview of the arbitrators.”). Also make sure to reserve the issue of pre-award interest in case you end up in an appeal. See Bolman, 82 Mass. App. Ct. at 141–42.
A final word of advice as it relates to the arbitration summary: be cautious of overwhelming the arbitrator with hundreds of pages of medical exhibits. Instead, include only those documents which add value to the summary and your client’s claim. You should, of course, include photographs of property damage and/or injuries, the police report, and any and all disability notes, lost wage documentation, and medical bills. While you also want to include your client’s medical records, you do not need to include all of the records. The arbitrator does not need all of the SOAP notes from the three months of chiropractic treatment you client underwent. Instead, include the initial evaluation, any re-evaluations, and the final discharge report. If there are records that you believe are critical, include them as a separate exhibit so that they are easily identified. You should, however, make sure you have all of the records with you at the actual arbitration, in case you need to enter a document to rebut defense counsel’s arguments or refresh your client’s memory.
Prepare your client!
This tip seems obvious, but its importance cannot be overstated. You should schedule at least two preparation sessions with your client prior to the arbitration. The first meeting should be a general conversation about your client’s injuries and how those injuries affected them. You should also briefly go over your client’s medical treatment, as well as any issues that may have come to your attention concerning your client’s medical treatment. Identify any potential witnesses you might want to testify (such as a spouse, friend, or co-worker) to corroborate your client’s claims. Ideally, this conversation would take place more than 30 days before the arbitration.
The second conversation should be a formal preparation, conducted in person. First, explain the logistics of arbitration. Your client doesn’t know who (or what) an arbitrator is. They do not know the sequence of events, or who will be questioning them. You should remind the client that if they do not know or do not remember the answer, they should simply state they do not know or remember, instead of guessing. You should tell the client to ask for the question to be rephrased if they don’t understand what is being asked of them. The client should also know it is important to answer any questions asked directly by the arbitrator.
Additionally, you should take the client through the list of questions you intend to ask during the arbitration, including medical treatment. If your client has difficultly remembering their medical treatment, give them a copy of the arbitration summary to review. Your client should also be prepared for cross-examination. They should be aware of all the issues with their case, and be able to (credibly) provide an explanation when asked about them on direct or cross. The client should also understand that it is important to stay calm throughout the whole process, even if defense counsel insinuates they were are lying or malingering.
Handle the Arbitration Like a Trial.
The way you handle the arbitration itself will vary based on your own personality, as well as the arbitrator you select. You should check with the arbitrator ahead of the scheduled arbitration to see if s/he has her own specific rules. For example, some arbitrators prefer that the parties waive opening statements, especially if they received an overview from each side. Some arbitrators follow the Massachusetts Guide to Evidence more than others. Therefore, don’t be afraid to object to certain documents or lines of questioning if they would not be allowed at trial. Again, even if you are overruled, it may give the arbitrator pause when they consider the amount of weight to assign to a piece of evidence. On the other hand, if the arbitrator is just looking for the information that they need to decide the case, Rules of Evidence be damned, then go with it. If there is some piece of evidence that would be questionable at trial in terms of admissibility, go for it.
There are, however, some general tips for handling the arbitration. Don’t disclose a high-low agreement to the arbitrator. Don’t disclose the policy limits. Don’t disclose previous settlement negotiations with the specific insurer (if it is an underinsured claim, typically both sides agree to disclose the amount of the bodily injury limits previously paid). If you are going to give an opening statement, have one prepared. Address the issues in your case head-on during direct examination, instead of waiting for defense counsel to bring it up on cross-examination. If the arbitrator is interrupting to ask your client a question, make sure the question was properly answered and thoroughly explained, even if it means asking additional questions on re-direct. If your client has before-and-after witnesses that testify well, bring the witnesses to the arbitration. Have an outline of a closing prepared so that your thoughts are organized.[3]
At the end of the day, just like everything else, in order to be successful in an UM arbitration, you must take the time to prepare your case. Read through the medical records in detail, speak to your client multiple times, prepare a summary, and do not simply acquiesce to requests by opposing counsel.
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[1] For purposes of this Article, it makes no difference if the claim is one for underinsurance or uninsured benefits. Therefore, it will just be referred to as “UM” benefits throughout.
[2] If defense counsel is granted an Independent Medical Exam, make sure you request to have the exam video-recorded. See, Amica v. Olmo, No. 1485CV01042, 2017 WL2466110, at *1 (Mass. Supp. Apr. 11, 2017).
[3] One question that has recently arisen is whether you should suggest a number to the arbitrator during closing arguments. The most cautious option is to ask the arbitrator ahead of closings as to whether they would appreciate your input as to the case’s potential value.