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Gemini Physical Therapy and Rehabilitation, Inc. v. State Farm Mut. Auto. Ins. Co.

filed: November 16, 1994.

GEMINI PHYSICAL THERAPY AND REHABILITATION, INC., APPELLANT
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY



Appeal from the United States District Court for the Eastern District of Pennsylvania. D.C. No. 91-cv-00013.

Before: Scirica, Roth, and Rosenn, Circuit Judges.

Author: Rosenn

Opinion OF THE COURT

ROSENN, Circuit Judge.

Gemini Physical Therapy and Rehabilitation, Inc. ("Gemini") is a health care provider who treated various individuals who were injured in automobile accidents and insured by State Farm Mutual Automobile Insurance Company ("State Farm"). Gemini and other health care providers who are no longer parties to this action ("the plaintiffs") filed a complaint in the United States District Court for the Eastern District of Pennsylvania.*fn1 The plaintiffs claimed to be the assignees of the insureds' rights under their automobile insurance policies, and alleged that State Farm unreasonably refused to pay the insureds' bills in full in violation of the insureds' contracts and the Pennsylvania Motor Vehicle Financial Responsibility Law, 75 Pa. C.S. § 1701 et seq. ("MVFRL"). The complaint sought payment in full, compensatory and punitive damages for tortious interference with contractual relations, and punitive damages pursuant to 42 Pa. C.S. § 8371.

State Farm filed a motion to dismiss plaintiffs' claims for punitive damages under 42 Pa. C.S.A § 8371 and for intentional interference with contractual relations, which the district court granted. The plaintiffs subsequently filed a first amended complaint which included new claims pursuant to the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S. §§ 201-1, et seq. ("CPL"). The district court granted State Farm's motion to dismiss the plaintiffs' CPL claims for lack of standing.

Plaintiffs filed a second amended complaint. State Farm filed a motion for partial summary judgment seeking dismissal of all breach of contract claims under the MVFRL for reimbursement of medical bills submitted to State Farm after April 15, 1990, because of plaintiffs' alleged failure to exhaust their remedies under the MVFRL. The district court denied the motion. State Farm renewed its motion for partial summary judgment in light of a recent Pennsylvania Superior Court decision in Terminato v. Pennsylvania Nat'l Ins. Co., 422 Pa. Super. 92, 618 A.2d 1032 (Pa. Super. 1993), rev'd and remanded 645 A.2d 1287 (Pa. 1994). The district court granted the motion and dismissed all claims for reimbursement of medical bills submitted to State Farm after April 15, 1990.

In a bifurcated trial, the jury returned a verdict in favor of State Farm, finding that none of the treatment rendered by Gemini to the State Farm insureds was medically necessary. The district court denied Gemini's motion for a new trial. Gemini filed a timely appeal from those parts of the district court's orders dismissing Gemini's claim for punitive damages and intentional interference with contract claims, dismissing its claim under the CPL, and granting partial summary judgment for State Farm. We affirm in part and reverse in part.

I.

As a preliminary matter, State Farm concedes that in light of the Pennsylvania Supreme Court's recent decision in Terminato v. Pennsylvania Nat'l. Ins. Co, 645 A.2d 1287 (Pa. 1994), the order of the district court granting State Farm's motion for partial summary Judgement must be vacated. In Terminato, the court held that exhaustion of Peer Review Organization procedures under the MVFRL is not a prerequisite of bringing suit in a court of law for nonpayment of medical bills. Therefore, we will remand this case for a trial on Gemini's breach of contract claims under the MVFRL for reimbursement of medical bills submitted to State Farm after April 15, 1990.

II

Gemini's challenges primarily involve legal determinations by the district court, and therefore we exercise plenary review. See Louis W. Epstein Family Partnership v. KMart Corp., 13 F.3d 762, 766 (3d Cir. 1994). Gemini first argues that it has a valid claim under the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S. §§ 201-1, et seq. The CPL provides in pertinent part:

Any person who purchases or leases goods or services primarily for personal, family or household purposes and thereby suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment by any person of [unfair or deceptive ...


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