No. 92-1667.United States Court of Appeals, First Circuit.
March 5, 1993.
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Francis M. Jackson, Portland, ME, for plaintiff, appellant.
Michael S. Wilson with whom Louise K. Thomas and Pierce, Atwood, Scribner, Allen, Smith Lancaster, Portland, ME, were on brief, for defendant, appellee.
Appeal from the United States District Court for the District of Maine.
Before SELYA, Circuit Judge, HIGGINBOTHAM,[*] Senior Circuit Judge, and CYR, Circuit Judge.
CYR, Circuit Judge.
[1] The district court determined that plaintiff Dennis VanHaaren had forfeited coverage under the uninsured motorist policy issued by defendant State Farm Mutual Automobile Insurance Company (“State Farm”) by not complying with State Farm’s requests that he submit to an independent medical examination (“IME”). The district court granted summary judgment in favor of State Farm, and VanHaaren appealed. We affirm. I [2] BACKGROUND
[3] VanHaaren was involved in an automobile collision with an uninsured motorist on July 1, 1989. Alleging permanent back injury, VanHaaren soon exhausted the $5,000 medical payments coverage provided under his State Farm automobile insurance policy, and in March 1991 he submitted a $100,000 claim representing the full amount of the uninsured motorist coverage under the State Farm policy. The State Farm policy contained a provision (“IME clause”) which required VanHaaren to submit to an “examin[ation] by physicians chosen and paid by [State Farm] as often as [State Farm] reasonably may require.”
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an arbitration provision. He requested that VanHaaren’s counsel advise State Farm “where [VanHaaren] will be for a reasonable period of time so I may refer [sic] to the proper State Farm office to make [IME] arrangements.” It is conceded that VanHaaren’s counsel did not respond to the latter request.
[5] On September 13, VanHaaren brought an action in Maine Superior Court, which State Farm promptly removed to federal district court. Counsel to State Farm wrote VanHaaren’s counsel on December 16, requesting confirmation that VanHaaren would attend an IME scheduled for January 14, 1992, in Portland, Maine. One week later, VanHaaren’s counsel declined to confirm VanHaaren’s attendance at the IME, noting that he considered the usual diagnoses of the orthopedist chosen by State Farm too “conservative,” inviting State Farm to propose other orthopedists, and inquiring why the IME could not be conducted in Florida where VanHaaren was again residing. Otherwise, VanHaaren’s counsel suggested, State Farm “may bring a motion for an examination in the [district court].” On January 10, 1992, over VanHaaren’s opposition, the presiding magistrate judge granted State Farm’s motion to compel VanHaaren to attend the IME scheduled for January 14 in Portland. VanHaaren complied. [6] In May 1992 the district court granted State Farm’s motion for summary judgment on the ground that VanHaaren’s conduct before and after filing suit constituted a breach of the IME clause, barring recovery under the uninsured motorist provision in the State Farm policy. II [7] DISCUSSION[8] A. Applicable State Law
[9] We review a grant of summary judgment de novo, employing the same criteria incumbent upon the district court. Pedraza v. Shell Oil Co., 942 F.2d 48, 50 (1st Cir. 1991), cert. denied,
___ U.S. ___, 112 S.Ct. 993, 117 L.Ed.2d 154 (1992). Summary judgment is appropriate where the record, including the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits, viewed in the light most favorable to the nonmoving party, reveals no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); Canal Ins. Co. v. Benner, 980 F.2d 23, 25 (1st Cir. 1992).
(1st Cir. 1992), the Maine Supreme Judicial Court has yet to address the pivotal issue presented by this appeal: what material facts must an insurer establish beyond genuine dispute to warrant summary judgment against a policy holder who breaches an IME clause? Absent controlling state court precedent, a federal court sitting in diversity may certify a state law issue to the state’s highest court, or undertake its prediction “when the course [the] state courts would take is reasonably clear.” Porter v. Nutter, 913 F.2d 37, 41 n. 4 (1st Cir. 1990) (quoting BiRite Enters., Inc. v. Bruce Miner Co., 757 F.2d 440, 443 n. 3 (1st Cir. 1985)) See also American Waste Pollution Control Co. v. Browning-Ferris, Inc., 949 F.2d 1384, 1386 (5th Cir. 1991); S R Metals, Inc. v. C. Itoh Co., 859 F.2d 814, 816 (9th Cir. 1988). The prognostic chore is reasonably straightforward in the instant case. [11] State Farm argues that Maine law would follow established contract law principles, permitting the insurer to avoid all liability under its insurance contract where the policy holder commits an anticipatory breach of a condition precedent to coverage by “refusing” to submit to an IME, irrespective of any prejudice to the insurer. In our view, its assessment is less than prescient. [12] In Ouellette v. Maine Bonding Cas. Co., 495 A.2d 1232
(Me. 1985), the Maine Supreme Judicial Court, sitting as the Law Court, explicitly “abandon[ed] the analysis of a negotiated contract,” under which an insurer’s performance would be
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excused on the bare showing that the insured breached a condition precedent to coverage by inexcusably delaying notification of the policy claim for four years. Id. at 1235. Rather, the Law Court held that the insurer must prove “that the notice provision was in fact breached, and . . . that the insurer was prejudiced by the insured’s delay.” Id. (emphasis added). Ouellette
brought Maine law in line with the growing majority of jurisdictions which acknowledge that a post-occurrence forfeiture of insurance coverage is rarely to be invoked, absent actual prejudice to the insurer, because (1) insurance policies are contracts of adhesion, (2) the insured has prepaid the premiums for coverage, and (3) insurance coverage furthers broader public policy aims. See, e.g., St. Paul Fire Marine Ins. Co. v. Petzold, 418 F.2d 303, 305 (1st Cir. 1969) (applying New Hampshire law to “notice of claim” provision); Johnson Controls, Inc. v. Bowes, 381 Mass. 278, 282-83, 409 N.E.2d 185, 188 (1980) (“notice of claim” provision); cf. Piro v. Pekin Ins. Co., 162 Ill.App.3d 225, 113 Ill.Dec. 220, 223, 514 N.E.2d 1231, 1234 (1987) (“Declaring forfeiture of the benefits of [fire] insurance bought and paid for based solely on events occurring subsequent to the event of the insured-against loss should be avoided.”). As Maine law plainly requires a showing of prejudice for “notice of claim” violations, we can discern no sound reason to anticipate a less stringent requirement for breach of an IME clause in an uninsured motorist policy. Cf. Bankers Ins. Co. v. Macias, 475 So.2d 1216, 1217-18 (Fla. 1985) (breach of “notice of claim” provision raises rebuttable presumption of prejudice to insurer, whereas breach of “cooperation clause” in policy raises no presumption but requires showing by insurer that breach was material and caused substantial prejudice).[1]
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prejudice or failed to do so.[2] In these circumstances, VanHaaren’s failure to move for reconsideration of the district court order should not be excused. See Boston Celtics Ltd. Partnership v. Shaw, 908 F.2d 1041, 1045 (1st Cir. 1990) Brown v. Trustees of Boston Univ., 891 F.2d 337, 357 (1st Cir. 1989), cert. denied, 496 U.S. 937, 110 S.Ct. 3217, 110 L.Ed.2d 664 (1990).
[14] B. Breach of IME Clause[15] VanHaaren nevertheless contends that State Farm failed to establish beyond reasonable disputation the other essential element of its defense — that he breached the IME clause by “refusing” to comply with State Farm’s reasonable IME requests. [16] As a general rule, whether there was substantial compliance with a condition precedent in an insurance contract is a question of fact ill-suited to disposition on summary judgment. See, e.g., Piro, 514 N.E.2d at 1234 (noting that whether the insured provided necessary information “too late” normally is a question for the factfinder). Under Maine law, even if the insurer suffers appreciable prejudice from the breach, the insured may still quell the insurer’s affirmative defense by proffering a valid excuse or justification for the failure or refusal to comply See Ouellette, 495 A.2d at 1234 (noting that if insured’s delay was “unreasonable or unexplained,” insurer may avoid coverage by demonstrating “prejudice”); cf. Hines v. State Farm Fire Cas. Co., 815 F.2d 648, 652 (11th Cir. 1987) (holding that, under Georgia law, asserted justification for failure to provide tax returns foreclosed summary judgment on issue of breach); St. Paul, 418 F.2d at 305 (requiring that jury determine, under New Hampshire law, whether insured’s failure to comply with condition was unexplained, unexcused, unreasonable, or arbitrary); cf. also Matthias v. Government Employees Ins. Co., 132 A.D.2d 534, 517 N.Y.S.2d 540, 541 (1987) (finding that insured failed to defeat insurer’s defense by showing a justification for repeated noncompliance); Pennsylvania Gen. Ins. Co. v. Becton, 475 A.2d 1032, 1035 (R.I. 1984) (using multi-factor test, requiring factfinder to weigh length of delay, reasons for delay, and probability of prejudice to insurer). [17] Even if we were to accord VanHaaren the benefit of every conceivable doubt, allowing that he may have misperceived the intent or urgency of State Farm’s inquiries on April 8, May 2, and June 10,[3] the
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ongoing pattern of noncooperation unmistakably exceeded the bounds of reasonableness by December 16, 1991, when he flatly rejected State Farm’s definitive and objectively reasonable IME request, and invited State Farm instead to pursue a judicial remedy which would compel compliance. Even if Maine law permitted an insured to test the “reasonableness” of an IME request prior to compliance without thereby committing an incurable breach see Kay v. Aetna Cas. Sur. Co., 152 So.2d 198, 199-200
(Fla.App. 1963) (fact that plaintiff seeks “legal ruling as to whether he was required to submit to the [IME]” should not constitute breach of policy condition); cf. Insurance Co. of North America v. Goelz, 4 Ill. App.3d 862, 863, 282 N.E.2d 15, 16 (1972) (good faith refusal based on “honest mistake” will not work forfeiture “without first giving the insured a right to comply”), the insured must act in good faith in asserting a challenge to the IME request.
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cannot qualify as a reasonable basis for failing to accommodate the IME request, unless the clause is to be rendered meaningless See, e.g., Allstate Ins. Co. v. Graham, 541 So.2d 160, 162
(Fla.App. 1989) (holding “unreasonable,” under Florida law, insured’s refusal to submit to IME on counsel’s advice that physician was not sufficiently “independent”); Lockwood v. Porter, 98 N.C. App. 410, 411, 390 S.E.2d 742, 743
(1990) (holding that insurer’s affirmative defense was established as a matter of law where insured refused to submit to IME “because he did not want to waste his time with a doctor who was not going to do anything for him and would report to [the insurer] that nothing was wrong with him when that was not so”).
III [22] CONCLUSION
[23] As no reasonable trier of fact could find that VanHaaren acted in good faith in refusing to comply with State Farm’s December 16 IME request, and VanHaaren inexplicably refrained from raising the prejudice
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issue below, summary judgment for State Farm was proper.[7]
[24] Affirmed.Supp. 1991), by impermissibly constricting the scope of mandated uninsured motorist coverage. First, VanHaaren waived this claim by failing to raise it before the district court. Sandstrom v. Chemlawn Corp., 904 F.2d 83, 87 (1st Cir. 1990). Second, courts quite generally have found that reasonable “proof of loss” obligations serve a legitimate purpose, affording the insurer a more objective accounting of the insured’s injuries or damages See McKimm v. Bell, 790 S.W.2d 526, 528 (Tenn. 1990) (and cases cited therein); cf. Huntt v. State Farm Mut. Auto. Ins. Co., 72 Md. App. 189, 527 A.2d 1333, 1335 (1987) (noting that no-fault personal injury protection (“PIP”) coverage was never “intended to provide a PIP claimant with a blank check”). Third, the IME clause is readily distinguishable from other types of uninsured motorist policy restrictions invalidated by the Maine Law Court See, e.g., Lanzo v. State Farm Mut. Auto. Ins. Co., 524 A.2d 47, 50 (Me. 1987) (statutory term “hit-and-run” does not allow insurer to restrict uninsured motorist coverage to accidents involving physical contact). Given the relative ease of compliance with a “reasonable” IME request, an IME clause does not unduly circumscribe uninsured motorist coverage or remove it beyond the insured’s control. Fourth, the Law Court has suggested, quite clearly, that insurers are entitled to the protection of an IME at “critical stages” in the uninsured motorist claim process. See Home Ins. Co. v. Horace Mann Ins. Co., 603 A.2d 860, 861 (Me. 1992). Finally, the principal case upon which VanHaaren relies is inapposite. Benson v. Nationwide Mut. Ins. Co., 269 S.C. 563, 238 S.E.2d 683 (1977), turns on the peculiar language of the South Carolina uninsured motorist insurance statute (“[T]he uninsured motorist provision shall not require anything not otherwise herein provided for. . . .”), which disallows all proscriptive policy provisions not specifically authorized by statute. Id. 238 S.E.2d at 684.
The plaintiff, however, does not argue that the court must find prejudice resulting from his failure to submit to an IME upon request in order to relieve the defendant of its obligation to him under the uninsured motorist provisions of the policy. Nor does he contest the defendant’s assertion that the amount of time and money spent by State Farm to secure an IME of the plaintiff constitutes prejudice. He simply argues that any expenses incurred by State Farm are a result of its failure to cooperate with him.
(1983) (“sworn examination” clause not a “self-executing” condition precedent, and there can be no noncompliance absent a “demand” by insurer). State Farm posits that it made three reasonable IME requests on April 8, May 2, and June 10, 1991, all prior to the date VanHaaren filed suit. On the other hand, VanHaaren’s attorney characterizes State Farm’s pre-litigation inquiries as exploratory settlement negotiations. Thus, the asserted excuse for VanHaaren’s noncompliance is tantamount to a claim of mutual miscommunication.
Viewed in isolation from the events which followed, these initial communications might reasonably be thought sufficiently indefinite to have excused VanHaaren’s failure to cooperate. Much of the language in the State Farm letters was arguably precatory (e.g., I “would like your agreement . . .” and “I request permission . . .”). The IME clause provides that VanHaaren must submit to an examination “by physicians chosen” by State Farm, conceivably suggesting that the insured might reasonably reserve assent until such time as a doctor was “chosen” by State Farm See Ray v. Blue Alliance Mut. Ins. Co., 594 A.2d 1110, 1111
(Me. 1991) (ambiguous policy language construed against insurer). Finally, State Farm’s initial letters failed to designate specific or comprehensive IME terms (date, place, name of physician). See Ferro v. Gebbia, 252 So.2d 545, 546-47
(La.App. 1971) (insurer must notify insured that it has scheduled doctor’s appointment at specific time and place); cf. Huggins v. Hartford Ins. Co., 650 F. Supp. 38, 42 (E.D.N.C. 1986) (requests for oral examination must specify date, place, examiner, and not leave it up to plaintiff to get in touch with insurer); Saft America, Inc. v. Insurance Co. of North America, 155 Ga. App. 500, 501, 271 S.E.2d 641, 642 (1980) (insurer must designate terms of oral examination; not sufficient to set forth agreeable choices for insured, and ask insured to decide; minimum requirement for valid “request” is identification of examiner) Weber, 10 Ohio App.3d at 307, 462 N.E.2d at 424 (defective “demand” for “sworn exam” contained precatory language and shifted arrangement of details to insured).
Notwithstanding his protestations of “good faith” misunderstanding, however, VanHaaren’s later suit against State Farm sealed the breach since it foreseeably deprived State Farm of the valuable opportunity to assess and settle the claim without the attendant costs and burdens of litigation. Cf. Falagian v. Leader Nat’l Ins. Co., 167 Ga. App. 800, 801-02, 307 S.E.2d 698, 700 (1983) (finding refusal to comply where insurer had scheduled an IME, which the insurer cancelled when the insured’s counsel promised the insurer he would reschedule the IME but instead filed suit).
Fed.R.App.P. 28(a), (c), we deem them waived.
[28] In this case, however, there is no evidence in the record to support the conclusion that VanHaaren failed to act in good faith in refusing to comply with State Farm’s repeated IME requests. All that the record thus far reveals is that VanHaaren’ counsel, rather than VanHaaren himself, failed to act in good faith. [29] In Dunbar v. Triangle Lumber and Supply Co., 816 F.2d 126 (3d Cir. 1987), the Court of Appeals for the Third Circuit, considered the appeal of a plaintiff whose complaint had been dismissed pursuant to Fed.R.Civ.P. 41(b) for failure to prosecute and comply with an order of the court. Plaintiff’s counsel had failed to enter an appearance and had failed to attend a pretrial conference in blatant disregard of numerous orders from the district court. The court finally dismissed plaintiff’s complaint on the ground that plaintiff had failed to prosecute. The Court of Appeals reversed the district court and remanded the case for further proceedings. The court reasoned that dismissal in this context is a “drastic tool” which may appropriately be invoked after careful analysis of several factors:As no reasonable trier of fact could find that VanHaaren acted in good faith in refusing to comply with State Farm’s December 16 IME request, and [that] VanHaaren inexplicably refrained from raising the prejudice issue below, summary judgment for State Farm was proper.
[30] Dunbar, 816 F.2d at 128 (emphasis in original). In plaintiff’s case, the Third Circuit determined that there was no evidence in the record that plaintiff “bore some responsibility for the flagrant actions of her counsel.” Id. at 129. Accordingly, the court concluded that the case should be remanded to permit a hearing based on all the above factors after notice to plaintiff and her counsel. Id. As an example to the district court about the “alternative sanctions”, other than the dismissal, which might be considered, the court of appeals assessed costs personally against plaintiff’s counsel. Id. [31] Similarly in Velazquez-Rivera v. SeaLand Service, Inc., 920 F.2d 1072 (1st Cir. 1990), this circuit considered the appeal of plaintiffs whose case had been dismissed due to counsel’s failure to attend pre-trial conferences and comply with other orders of the district court. Before the district court, plaintiffs’ counsel, in an extraordinary act of contrition, “requested that sanctions be imposed against himself as attorney, but that, the plaintiffs not being at fault, the dismissal of the action be set(1) the extent of the party’s personal responsibility; (2) the prejudice to the adversary caused by the failure to meet the scheduling orders and respond to discovery; (3) a history of dilatoriness; (4) whether the conduct of the party or the attorney was willful or in bad faith; (5) the effectiveness of sanctions other than dismissal, which entails an analysis of alternative sanctions; and (6) the meritoriousness of the claim or defense.
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aside.” Velazquez-Rivera, 920 F.2d at 1074. The district court denied counsel’s requests and dismissed the action. This court reversed the district court and remanded the case for further proceedings. Id. at 1079. We reasoned that “dismissal should be employed only if the district court has determined that it could not fashion an `equally effective but less drastic remedy.'”Id. at 1076. We also reasoned that it was significant that the failure to follow the district court’s orders was due to counsel’s mistakes rather to any bad faith on the part of plaintiffs. Id.
[32] Here, thus far the record reveals that VanHaaren’s counsel, rather than VanHaaren himself, acted in bad faith in refusing State Farm’s repeated IME requests. It seems to me a rather drastic and tragic remedy to dispose adversely of VanHaaren’s claim because of the conduct of his attorney. Of course, it may very well be that VanHaaren himself knew of the IME requests, and himself refused to comply with them. If that is the case, then summary judgment in favor of State Farm would be appropriate. But, at the very least, the district court ought to hold a hearing to determine whether VanHaaren bears personal responsibility for the actions of his counsel. If VanHaaren does not bear personal responsibility, and if failure to respond to the IME requests was due simply to dereliction on the part of his counsel, then the court ought to consider a less drastic remedy than to dispose adversely of his action. One such remedy, pursuant to Velazquez and Dunbar might be in the form of sanctions imposed or personal costs assessed against VanHaaren’s counsel. [33] For the foregoing reasons I respectfully dissent from the judgment of the court.