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Williamson v. Metropolitan Property and Casualty Insurance Co.

United States District Court, D. New Mexico

September 28, 2017

TERESA WILLIAMSON, Plaintiff,
v.
METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY, Defendant.

          MEMORANDUM OPINION AND ORDER

         This matter comes before the Court on (i) Defendant's Motion in Limine to Exclude Testimony of Plaintiff's Insurance Expert Ray Padilla (ECF No. 111), and (ii) Defendant's Motion in Limine to Limit Testimony of Plaintiff's Expert Brian Shelley, M.D. (ECF No. 112). The Court, having considered the motions, briefs, evidence, and applicable law, will grant in part and deny in part the motions in limine as described herein.

         I. FACTUAL BACKGROUND[1]

         Ms. Williamson was involved in a car collision on April 27, 2012, and at the time, she was insured by Metropolitan Property and Casualty Company (“Metropolitan”), which provided uninsured/underinsured motorist (“UIM”) coverage. After Plaintiff made a claim with Metropolitan for medical payments coverage (“MedPay”), Metropolitan required her to undergo an Independent Medical Examination (“IME”) with Dr. Douglas Slaughter on October 18, 2013. Ms. Williamson reported to Dr. Slaughter that the day after the car collision she began experiencing neck and low back pains and that she had no back and neck pain symptoms prior to the April 2012 collision. Dr. Slaughter reviewed x-rays and a number of medical records, the first of which was dated May 9, 2012. Dr. Slaughter noted that he reviewed medical records from Plaintiff's visit to Dr. Emil Cheng on April 30, 2013 at New Mexico Orthopaedics for neck, mid back, and low back pain, in which Dr. Cheng had stated that Plaintiff reported having a history of right sciatica, she was involved in a motor vehicle accident in April 2012, she noticed pain in May 2012, and she was not sure if her symptoms were related to the accident.

         After completing the IME, Dr. Slaughter reported, as relevant here, that Plaintiff had a pre-existing degenerative condition in her cervical and lumbar spine, and she “has had an exacerbation or a permanent aggravation of her cervical degeneration and lumbar degeneration” from the motor vehicle accident. Dr. Slaughter stated that, if Plaintiff has done relatively well from her single set of facet blocks, radiofrequency ablation may be beneficial to alleviate her pain for much longer periods of time, and that she “may be a good candidate for cervical facet blocks and radiofrequency ablation on a periodic basis.” He noted that Plaintiff might benefit from further lumbar facet blocks and radiofrequency ablation for pain relief two to three times per year based on symptom reduction, as well as similar treatment in the cervical spine, two to three times per year as needed for pain relief.

         Metropolitan subsequently paid Plaintiff $10, 000 for medical payments pursuant to the MedPay benefits in the Policy. Plaintiff settled for $43, 000 her third-party claim against the at-fault driver, who had an insurance policy limit of $50, 000. Subsequently, on July 14, 2015, Thomas Mescall, counsel for Plaintiff, sent Metropolitan a letter notifying it of the settlement of her third-party claim and offering to settle her first party underinsured claim for $207, 000. In the letter, Mr. Mescall stated that the $43, 000 settlement barely covered Ms. Williamson's past medical expenses, and thus, failed to compensate her for past pain and suffering, future pain and suffering and future medical payments. Counsel attached the IME Report and included copies of past medical bills, asserting that the total amount for past medical treatment was $37, 125. In explaining the reasons behind the settlement offer, Mr. Mescall asserted that Dr. Slaughter recommended future medical treatment of cervical facet blocks and lumbar facet blocks, and Plaintiff had a cervical facet block at a cost of $3, 893 and lumbar facet blocks ranging in cost from $4, 132 to $9, 967. Calculating two to three of each block per year for her life expectancy of over 30 years, Mr. Mescall stated her future medical costs would exceed the UIM policy limits.

         Jacob Martinez, a Senior Claims Adjuster employed by Metropolitan, was assigned to Plaintiff's claim and reviewed Plaintiff's settlement demand letter, including the medical bills from May 9, 2012 through December 29, 2014. Metropolitan did not receive any additional medical records or bills about treatments from Plaintiff or her counsel during 2015. Metropolitan asserts it evaluated Plaintiff's claim to be approximately $50, 000 to $56, 000, relying on the assumption that Plaintiff had ended medical treatment in December 2014 and, therefore, it did not consider any future medical costs in the evaluation. By letter dated August 21, 2015, Mr. Martinez informed Mr. Mescall: “As discussed in our conversation of 08/21/2015, we offer a settlement offer of $1, 000 for your client's bodily injury claim, ” without further written explanation justifying the amount. Metropolitan contends that it was a reasonable settlement, because it paid $10, 000 in MedPay to Plaintiff, and she received $43, 000 from the other driver.

         Plaintiff disputes the reasonableness of the offer and filed suit against Metropolitan for breach of its insurance duties. Specifically, Plaintiff asserted claims for breach of contract, breach of fiduciary duty, breach of the covenant of good faith and fair dealing, violation of New Mexico's Unfair Insurance Practices Act, and violation of the Unfair Practices Act. During discovery, Metropolitan discovered past medical records indicating that Plaintiff had back pain and sciatica on and off for years before the accident. Metropolitan submitted additional information to Dr. Slaughter and asked him to prepare an affidavit.

         On January 19, 2016, Dr. Slaughter signed an affidavit stating that in preparing his prior IME Report, he did not intend to imply that Ms. Williamson “required” three injections in either her cervical spine or lumbar spine per year. He explained that his IME was based on information Ms. Williamson provided him at the time; that she reported she had no symptoms in her back or neck prior to the car accident; and that his subsequent review of prior medical records for Plaintiff suggests that she did in fact have a long history of prior back and neck symptoms, dating at least to 2004. He noted the records indicate she has had mechanical symptoms in her low back with radiating pain in the right lower extremity intermittently and a history of neck pain, and that she had been treated with spinal injections in 2006 and 2011. Based upon his review of the additional information, he now believes she does not warrant any further treatment as a result of the April 2012 accident.

         A. Dr. Brian M. Shelley's Report and Deposition Testimony

         Plaintiff subsequently retained Dr. Brian M. Shelley primarily to rebut Dr. Slaughter's affidavit. Dr. Shelley reviewed the IME Report, Dr. Slaughter's Affidavit, the medical records upon which Dr. Slaughter relied, and Dr. Cheng's April 30, 2013 medical record. Def.'s Ex. B, ECF No. 112-1 at 7 of 28. Dr. Shelley concluded that Plaintiff's medical records from July 6, 2004 through November 29, 2011 do not indicate that she received any spinal injections in 2011. He opined that, contrary to Dr. Slaughter's contention in his Affidavit, the records of prior care do not indicate that she had any neck pain or chronic neck pain prior to the motor vehicle crash. Dr. Shelley noted, however, that she reported back pain as far back as 2004 and mentioned back pain only once in her medical records from 2011. Dr. Shelley agreed that Ms. Williamson had intermittent back pain for years, but noted that because Dr. Slaughter had Dr. Cheng's report of a history of sciatica, he had the information about back pain at the time of the evaluation. Dr. Shelley stated that Dr. Slaughter in his IME Report documented a physical exam that was negative for sciatica, indicating that he did not find any objective signs of sciatica on that date. Based on the records Dr. Slaughter reviewed, Dr. Shelley opined in his report that it is reasonable to conclude that Ms. Williamson's low back pain is worse than it was before the accident, and thus constitutes an aggravation. See Def.'s Ex B, ECF No. 112-1 at 8 of 28.

         Dr. Shelley's report contains all the facts and data he considered, the opinions he would express, and the basis and reasons for them. Dep. of Dr. Shelley 14:24-15:9, ECF No. 112-1. Dr. Shelley's role in this case is limited: Dr. Slaughter rendered an opinion on causation, and Dr. Shelley was asked to analyze Dr. Slaughter's responses and different statements, including Dr. Slaughter's changed opinion regarding aggravation of a preexisting condition. See Id. 34:8-14, 76:5-77:17. Dr. Shelley admitted he would want more information to give an opinion on whether the accident of April 27, 2012 caused Plaintiff's symptoms that she is complaining of today. See Id. 34:8-38:16.

         B. Ray Padilla's Report and Deposition Testimony

         Plaintiff disclosed Ray Padilla, an insurance defense attorney, as an expert to testify on the value of her claim for underinsured benefits, to refute Metropolitan's valuation of only $50, 000 to $55, 000, and to explain what underinsurance is. Pl.'s Mot. for Extension 1, ECF No. 57. Plaintiff retained Mr. Padilla to testify that Metropolitan did not make Ms. Williamson a reasonable settlement offer. See Dep. of Ray Padilla 70:11-22, ECF No. 111-1.

         Mr. Padilla has practiced law since 1975; from 1982 to 1997, he worked for a private practice law firm in which 70-75% of his work was representing insureds after an insurance company hired him. See Dep. of Ray Padilla 8:16-22, 9:2-23, 10:12-20, ECF No. 111-1. Less than 5% of his practice involved representing insurance companies in disputes with their insureds. Id. 11:1-6. Since 1997, Mr. Padilla worked in his own private practice in which he continued to represent insureds. See Id. 11:7-17. Mr. Padilla could not recall if he had ever represented an insurance company being sued by an insured for UIM benefits. Id. 12:4-8. Although he has represented insureds in making claims for UIM, he has never had to sue an insurance company for UIM benefits. Id. 12:9-14. Mr. Padilla has only once served as an expert. Id. 13:3-10.

         In preparing his report, Mr. Padilla reviewed Dr. Slaughter's IME Report, Metropolitan's letter granting settlement consent for Plaintiff's bodily injury claim against the tortfeasor, Plaintiff's settlement demand letter to Metropolitan, Metropolitan's settlement offer, the Complaint, the Answer, Plaintiff's first motion for partial summary judgment (ECF. No. 9), Metropolitan's response (ECF No. 118), and Plaintiff's reply (ECF No. 30). See Def.'s Ex. B, ECF No. 111-1 at 16-17 of 23. Mr. Padilla also relied on New Mexico jury instructions and background information verbally provided by Plaintiff's counsel. Id. Mr. Padilla did not review any of Plaintiff's medical records from before or after the accident, other than the IME Report; and he did not review the insurance policy, the claims file, Defendant's sur-reply concerning the motion for summary judgment, or Dr. Slaughter's Affidavit. See Dep. of Ray Padilla 21:9-25, 54:11-56:24, 61:22-25, 64:7-14, 70:2-10, ECF No. 111-1. Mr. Padilla had two or three meetings with Plaintiff's counsel prior to writing his report, id. 26:18-27:5, during which they told him Ms. Williamson had a preexisting condition for which she was asymptomatic for several years prior to the accident, see id. 29:20-31:10, 39:3-6, 40:5-13. Plaintiff's counsel told Mr. Padilla that the claims file did not indicate any substantial investigation by the insurance company, but Mr. Padilla did not examine the claims file or any copies of documents in it. Id. 64:7-14.

         II. ...


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