INSURANCE-RELATED COURT CASES
Digested from case reports published online
Chiropractor under fire
Jean-Luc Henry and Dwayne Smith were injured in an automobile accident. They brought two actions related to the collision: a bodily injury claim against the driver of the vehicle in which Henry and Smith were riding, as well as against the driver of the other vehicle that caused the crash; and a contract claim against Henry and Smith’s insurer, Allstate Property & Casualty Insurance Company, for failure to pay basic reparation benefits as required under the policy. The trial court consolidated the two cases.
As part of their post-crash medical treatment, Henry and Smith sought chiropractic treatment from Dr. David Megronigle and received MRIs taken by E-Town Injury Center. Allstate disputed the charges assessed by Dr. Megronigle for his care and alleged they were not properly compensable under a state statute. To establish the validity of the charges, Allstate served Dr. Megronigle with subpoenas directing him to produce corporate representatives for deposition and for production of documents.
In general, the topics of the deposition and the documents related to Dr. Megronigle’s involvement in the lawsuit, his relationship with Henry and Smith’s attorney, and general financial information for the businesses. Dr. Megronigle objected to the subpoenas as overbroad and moved for a protective order limiting the request to medical information relevant to Henry and Smith’s case and excluding all business practice information.
The court granted the protective order in part, permitting Allstate to obtain business records related to Henry and Smith’s care, as well as the medical records. Allstate sought to depose Dr. Megronigle but was forced to reschedule the deposition on several occasions. Allstate then moved for an order compelling compliance with the subpoenas, which the court granted. Dr. Megronigle sought review from the court of appeals via a writ of prohibition, which was denied. Allstate again moved to compel compliance with the subpoenas and for an award of the costs associated with compelling Dr. Megronigle’s compliance.
Shortly after argument on the second motion to compel, Dr. Megronigle “zeroed out” the accounts of Henry and Smith. With no outstanding medical bills left for Allstate to pay, Henry and Smith filed a notice of voluntary dismissal. No agreed order to dismiss was tendered, however, nor did the trial court enter an order dismissing.
After the notice of voluntary dismissal, Allstate filed a memorandum in support of its motion for attorney’s fees. After conducting a hearing, the court ordered Dr. Megronigle to pay the reasonable fees associated with Allstate’s pursuit of the subpoenaed information, in the amount of $816.
Dr. Megronigle appealed the order to the court of appeals, making two arguments: (1) the trial court was without jurisdiction to enter the order, and (2) the trial court abused its discretion in making the award.
The court of appeals affirmed the trial court. It first found that the court retained jurisdiction because the trial court had not entered an order dismissing the case. Second, it found that Dr. Megronigle’s obstinacy in complying with the subpoenas justified the sanction. Dr. Megronigle moved for discretionary review, which this court granted.
Dr. Megronigle reasserted his prior arguments. He first contended that the trial court was without jurisdiction to sanction him because Henry and Smith had voluntarily dismissed the case prior to the sanctions order being issued. Second, Dr. Megronigle argued that the trial court abused its discretion by sanctioning him for attempting to protect information he believed was undiscoverable.
According to the court, Dr. Megronigle was not a party to the underlying action. He was involved in the case solely by virtue of the subpoenas served on him by Allstate.
The Kentucky supreme court reversed the opinion of the court of appeals and remanded the matter to the Jefferson circuit court for further proceedings.
Megronigle v. Allstate Property & Casualty Insurance Company—Supreme Court of Kentucky—June 15, 2023—No. 2021-SC-0196-DG. n