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Austin v. Illinois Farmers Insurance Co.

August 17, 2004


[6] Appeal from the Circuit Court of Madison County No. 02-L-1194. Honorable Phillip J. Kardis, Judge, presiding.

[7] The opinion of the court was delivered by: Justice Kuehn

[8]  This appeal stems from the trial court's August 21, 2003, order denying the defendant's motion to compel arbitration and to stay the plaintiff's claims. The arbitration provision at issue provides as follows:

[9]  "If an insured person and we do not agree[] (1) that the person is entitled to recover for medical services, (2) that the medical services are a result of a covered accident, or (3) as to the nature, frequency, or cost of the medical services, either that person or we may demand that the issue be determined by arbitration.

[10]   ***

[11]   The arbitrator shall determine (1) if the medical services are as a result of a covered accident, (2) if the medical services incurred are reasonable expenses and necessary medical services, and (3) the amount of any payment under this part as determined by this policy."

[12]   The trial court, ruling from the bench, essentially concluded that the arbitration clause at issue was unenforceable because the claims raised by the plaintiff were different from those referenced in the arbitration clause. The court also found that arbitration would be cost-prohibitive. The defendant's appeal is before this court pursuant to Supreme Court Rule 307(a)(1) (188 Ill. 2d R. 307(a)(1)), because the motion that was denied sought injunctive relief.

[13]   FACTS

[14]   On December 23, 1996, Ola Austin (the plaintiff) was in a motor vehicle accident in which she sustained bodily injuries. At the time of the accident, the plaintiff was insured under an automobile policy issued by defendant Illinois Farmers Insurance Company (Farmers). The standard policy contained a medical-payments-coverage section. She sought and received chiropractic treatment, beginning on January 13, 1997. For some reason, her chiropractic physician did not include an initial examination and diagnosis in the plaintiff's records. The first mention of the plaintiff's condition did not occur until March 17, 1997, at which time he diagnosed her with a mild cervical sprain/strain. The plaintiff was seen by her chiropractor a total of 61 times over the course of 71 weeks. She turned the associated medical bills in to Farmers for payment pursuant to the medical-payments coverage.

[15]   The medical-payments-coverage section of the policy stated that Farmers would pay "reasonable" expenses for "necessary" medical services furnished within two years from the date of an accident "arising from" the use of the insured automobile that resulted in "bodily injury." "Necessary medical services" are defined as "medical services which are usual and customary for treatment of the injury, including the number or duration of treatments, in the county in which those services are provided," and which are "necessary for the treatment of the injury." The policy defines "reasonable expenses" as those that are "usual and customary for necessary medical services in the county in which those services are provided."

[16]   Additionally, the policy provides that Farmers has the authority to submit claims for medical expenses to outside evaluation services:

[17]   "At our expense, we may employ or enter into contract with an independent medical consultant(s) to assist us in determining whether all or any portion of any claim is for reasonable expenses or necessary medical services. We may submit to such consultant any medical records, reports, bills, statements, results of tests and examinations, and any other documentation or material we deem appropriate."

[18]   Pursuant to that provision, Farmers submitted the plaintiff's medical file to Terrance Flanagan, D.C. Dr. Flanagan found problems with the documentation of the plaintiff's diagnosis and care. Specifically, Dr. Flanagan noted that given the diagnosis, the plaintiff's course of care should only have endured for about one month and would not have required treatment as frequent as that the plaintiff received. Dr. Flanagan also found fault with ongoing documentation in the plaintiff's progress record. He concluded that the plaintiff's injury should have been resolved on or about March 10, 1997, and that ongoing care was more like maintenance in nature. Maintenance type of care would not "be considered essential to treatment of the injuries" the plaintiff had received. Dr. Flanagan recommended that Farmers deny the charges for the plaintiff's care after March 10, 1997.

[19]   Dr. Flanagan did not examine the plaintiff and based his opinions solely upon the records review he was hired to perform.

[20]   As a result of Dr. Flanagan's recommendations, Farmers declined to reimburse the plaintiff for any expenses ...

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