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GLP Attorneys Washington Court of Appeals Case Raises Stakes for PIP and UIM Insurance Carriers That Deny Benefits Solely on the Basis of Own “Independent” Medical Experts

GLP Attorneys represented a victim of an automobile collision in a case that was taken up on appeal to the Washington Court of Appeals in May 2018.  Our client, Shannon Leahy, was dealing with her own auto insurer, State Farm, following a car crash. State Farm agreed she was not at fault, but then refused to pay her claim, arguing her medical treatment was unrelated to the crash. Ms. Leahy’s doctors opined her treatment was reasonable, necessary, and related to the crash, but State Farm ignored Ms. Leahy’s doctors in favor of the opinions of State Farm’s “independent” medical expert who opined Ms. Leahy’s treatment was unrelated. The issue on appeal asked if an insurance carrier can reasonably do that to its insured?

In Ms. Leahy’s case, the answer from the Court of Appeals was “no.” The Washington Court of Appeals clarified that insurers may not ignore the opinions of their insureds’ physicians when making coverage determinations in Leahy v. State Farm Mutual Automobile Insurance Company, No. 76272-9-I (read a copy of the opinion:

Ms. Leahy was injured when her vehicle was struck hard from behind by another driver. The other driver was at fault, but had insufficient insurance to cover Ms. Leahy’s injuries. Accordingly, Ms. Leahy made a claim with her auto insurance carrier State Farm, with whom she had paid for coverage for Personal Injury Protection (“PIP”) and Underinsured Motorist coverage (“UIM”).

Ms. Leahy was still receiving medical treatment from her injuries two years after the crash, as directed by her own doctors. State Farm asked her to undergo an “independent” medical examination with a third party doctor chosen by State Farm to determine whether her ongoing treatment was reasonable and medically necessary. State Farm’s third party doctor opined that Ms. Leahy’s treatment was excessive. Thereafter, State Farm denied coverage of Ms. Leahy’s ongoing treatment under her PIP coverage. State Farm also disputed whether Ms. Leahy’ UIM policy covered her injuries because she had some pre-existing conditions before the crash. State Farm’s adjuster concluded Ms. Leahy’s injuries were not caused by the collision. Ms. Leahy, through her attorneys at GLP Attorneys, argue that the crash aggravated her pre-existing medical condition and thus that the aggravated injury was covered under the State Farm policy.

The dispute went to trial, at which the jury found in favor of Ms. Leahy. State Farm paid the policy limits. GLP Attorneys, on behalf of Ms. Leahy, then asserted new claims for bad faith premised on State Farm’s handling of her claim. The trial court dismissed Ms. Leahy’s claims and she appealed.

On appeal, the Court of Appeals reinstated Ms. Leahy’s claims. The court determined State Farm violated the law by failing to consider the opinions of Ms. Leahy’s treating physicians that her injuries were aggravated by the crash. Ms. Leahy’s physicians were both board-certified rheumatologists and University of Washington faculty. The court determined there was a reasonable dispute whether State Farm could simply ignore their opinions. At minimum, Ms. Leahy was entitled to have a jury decide whether State Farm’s conduct was reasonable.

The court also determined State Farm’s low offer compared to Ms. Leahy’s recovery at trial could potentially show State Farm acted in bad faith. The court emphasized the proper analysis was what State Farm knew at the time it made the offer, not after trial. Given the evidence showed a legitimate conflict between State Farm’s position that Ms. Leahy’s injuries were mostly unrelated to the crash and the opinions of Ms. Heahy’s treating physicians, the court determined Ms. Leahy was entitled to a trial on this issue.

GLP Attorneys is proud of its appellate advocacy in this case, and the Leahy decision is an important win for Washington policyholders because it emphasizes insurers may not categorically ignore the opinions of the insured’s treating physicians in order to deny coverage.


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