Shea v USAA, 2018, U.S. Dist. LEXIS 234750 (July 25, 2018), Surrick, J. This case involves failure to pay first party medical benefits. Instead the insurance company demanded peer review. Viewing the allegations in the light most favorable to Plaintiff, the pleading raises a reasonable expectation that discovery will produce evidence that an insurance contract existed between Plaintiff and Defendant, Defendant breached the contract, and that breach caused Plaintiff to incur ascertainable losses. The breach of contract claim survives dismissal.
We join the growing majority of federal and state courts that have followed the rationale of Schwartz. “Whenever a general provision in a statute shall be in conflict with a special provision in the same or another statute, the two shall be construed, if possible, so that effect may be given to both.” Schwartz, 1996 WL 189839, at *5 (citing 1 Pa. C.S.A. 1933). Where an insurer has not complied with Section 1797’s specific provisions, there is no reason to limit the damages recoverable from the insurer to those damages set out in Section 1797. Id. In those situations, as alleged here, Section 1797 and Section 8371 are not irreconcilable. Id. Both statutes can be given full effect. Section 1797 is the exclusive remedy when it applies; Section 8371 applies in all other cases. Id.
It is alleged that Defendant knew Plaintiff’s insurance claim was legitimate, but still submitted the medical bills for her treatment to a favored and financially self-interested PRO. Defendant did so, it is alleged, planning or at least fully expecting to procure evaluations that were biased, false and misleading as to the necessity for Plaintiff’s treatment, in order to support Defendant’s preordained decision to preserve its own coffers by denying Plaintiff insured medical benefits. Taking these alleged facts as true, Defendant has acted not only outside the scope of Section 1797, but also in bad faith by refusing to pay Plaintiff’s insurance claim without a reasonable basis for the denial of insured medical benefits. Accordingly, the Count IV claim for bad faith under Section 8371 survives dismissal.
In the context of this case, the pleading contains sufficient factual mater to state a plausible claim for deceptive conduct under the UTPCPL’s catchall provision. Viewing those allegations in the light most favorable to Plaintiff, malfeasance is pled. Defendant it is alleged, deceptively misused the peer review proceed in order to procure sham medical opinions to supports its preordained denial of insured medical benefits. This shows more than a “[m]ere refusal to pay a claim or failure to investigate or take other action.” Nordi, 989 A.3d at 385. For the foregoing reasons, USAA’s Motion pursuant to Rule 12(b)(6) to dismiss Counts I, IV and V of the First Amended Complaint will be denied.
