DECEMBER 2012 BAD FAITH CASES: COURT DENIES CARRIER’S SUMMARY JUDGMENT MOTION ON TWO BAD FAITH COUNTS, CITING DISPUTED MATERIAL FACTS AS TO THE INVESTIGATION OF AND MOTIVE FOR DENIAL OF INSURED’S CLAIM (Western District)

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In Hall v. Nationwide Mut. Ins. Co., the court heard a carrier’s partial summary judgment motion on the insured’s two bad faith allegations. The case arose after the insured suffered serious injuries in a car accident and sought coverage for personal injuries and damage to his automobile. Upon notifying the carrier of this claim, the insured was told to file a police report, a condition of the insured’s policy. The police provided the insured a form to submit to PennDot, which the insured completed and sent to Harrisburg. However, the carrier claimed that no record of this submission existed, denying coverage. The carrier also denied coverage on the insured’s wage loss claim because the insured allegedly failed to prove his disability.

First, the court denied summary judgment on the bad faith claims arising from the insured’s injuries. Examining language from the Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”), the court reasoned that “report” in the insured’s policy does not mean a formal “police report.” As such, the insured did comply with the policy because he went to the police station to report the accident. The carrier’s failure to contact the local police or PennDot, and its choice to contact only the Pennsylvania State Police, raised an inference of bad faith sufficient to deny summary judgment.

Second, the court denied the carrier’s motion with respect to the insured’s bad faith claim on the denial of wage loss benefits. In the fall of 2009, the carrier made two wage loss payments to the insured. However, the carrier ceased payments when it learned that the insured would miss work because of seasonal lay-offs. In the spring of 2010, the insured returned to work, but had to stop because of his disability. The carrier subsequently failed to render wage loss payments, claiming that it was not notified of the disability. Citing a June 2010 letter from the insured regarding his disability, the court denied summary judgment, finding that the carrier knew about the insured’s disability and may have acted with improper motive.

Date of Decision: October 31, 2012

Hall v. Nationwide Mut. Ins. Co., 2012 U.S. Dist. LEXIS 155739, U.S. District Court for the Western District of Pennsylvania (W.D. Pa. Oct. 31, 2012) (Mitchell, J.)

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