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Ponzo v. Nationwide Mutual Insurance Co.

Court of Common Pleas of Delaware, New Castle

July 30, 2013

KENNETH PONZO, Plaintiff,
v.
NATIONWIDE MUTUAL INSURANCE COMPANY, d/b/a Victoria Insurance Co., Defendant.

Submitted: June 4, 2013

Richard A. DiLiberto, Jr., Esquire YOUNG CONAWAY STARGATT & TAYLOR, LLP Attorney for Plaintiff

Sean A. Dolan, Esquire LAW OFFICE OF CYNTHIA G. BEAM Attorney for Defendant

DECISION ON CLAIM FOR ATTORNEY FEES

Alex J. Smalls Chief Judge

On October 17, 2012, Plaintiff Kenneth Pon2o ("Pon2o") brought this action against Defendant Nationwide Mutual Insurance Company, d/b/a Victoria Insurance Co. ("Nationwide"), seeking; payment for personal injury protection ("PIP") benefits, including medical expenses; general damages including pain and suffering; punitive damages; attorney's fees; costs; and interest.

On December 27, 2012, the Clerk of the Court entered a default judgment in the amount of $9, 771.19 against Nationwide, pursuant to Court of Common Pleas Civil Rule 55(b)(1), for want of a responsive pleading.[1]

On February 27, 2013, Nationwide filed a Motion seeking to vacate the default judgment. A hearing on the motion was held on March 22, 2013, and the Court heard oral argument from both parties. At this hearing, Nationwide did not provide any facts to justify why it did not file a responsive pleading. In addition, it could not substantiate its position of excusable neglect. Following presentation from both parties, the Court denied Nationwide's Motion and ordered an inquisition hearing on the claim for attorney's fees.[2]

The hearing on the claim for attorney's fees was held on June 4 2013. The Court heard testimony from Pon2o, as well as oral argument from both parties. Pon2o submitted two documents into evidence.[3] It is Pon2o's position that an award of attorney's fees is appropriate under 21 Del. C. 2118B, because Nationwide acted in bad faith when it denied Pon2o's PIP benefits claim. Pon2o argues that blatant errors in the Salt2man Report should have put Nationwide on notice of the document's unreliability. It is Nationwide's position that, based on the assessment in the Salt2man Report, the decision to refuse payments was reasonably justified and not made in bad faith; thus, an award for attorney's fees is not warranted.

At the conclusion of the hearing, the Court reserved decision. This is the Court's decision after consideration of the documents submitted and oral argument.

Facts

Pon2o obtained insurance for his 2004 Ford Explorer X from Nationwide, doing business as Victoria Insurance, for a period effective November 12, 2010 through May 12, 2011. The insurance policy provided PIP benefits in the amount of $15, 000 per person/$30, 000 per accident, with a $1, 000.00 deductible.

On November 14, 2010, Pon2o was involved in an automobile accident where his vehicle was struck in the rear on Interstate 95; his vehicle was totaled, and Pon2o was hospitalized as a result of injuries. As a result of the accident, Ponzo was unable to work for three months.

At Nationwide's direction, Ponzo visited Dr. Donald Saltzman, M.D., for a medical exam and evaluation. Dr. Saltzman prepared a Medical Evaluation Report (the "Saltzman Report"), in which Dr. Saltzman discussed Ponzo's medical condition and rendered an opinion based on his "clinical assessment, patient history, examination findings, review of available documentation, professional standards of medical treatment and, if applicable, disability guidelines." Dr. Saltzman noted that Ponzo complained of pain in his neck and lower back. Dr. Saltzman stated that he did not review records or x-rays from Christiana Hospital. Dr. Saltzman opined that "it is clear that [Ponzo] has not gotten significant relief from his chiropractic treatment and five months of therapy is excessive." Dr. Saltzman concluded that "[Ponzo] has returned to pre-injury status."

There were a number of factual inconsistencies in the Salt2man Report. Specifically, Pon2o is first identified in the report as "a 50-year old black female, " then later as a "60-year old, black male." In fact, Pon2o is a black male, and he was 50-years old at the time he visited Dr. Saltzman. Furthermore, Dr. Salt2man first stated "[Pon2o] is not on any currently not on any medications"; however, on the ...


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