FEBRUARY 2013 BAD FAITH CASES: COURT DENIES CARRIER’S SUMMARY JUDGMENT MOTION ON BAD FAITH CLAIM, IN PART, BECAUSE CARRIER RELIED ON POLICE REPORT AND DID NOT SEEK ESTIMATE OF DAMAGES (Western District)

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In Schifino v. Geico Gen. Ins. Co., the carrier moved for summary judgment, seeking to dismiss a breach of contract and bad faith claim brought by a third-party insured who was injured as a passenger in a car accident caused by an underinsured motorist (UIM). Following the accident, the third-party insured collected the liability limits of the tortfeasor’s policy and attempted to recover the $300,000 UIM limits of an automobile policy purchased by the driver of the vehicle in which he was injured. The carrier offered $10,000 and $13,000 settlements, which the third-party insured rejected.

He subsequently filed suit for breach of contract and bad faith, alleging that: (1) the carrier’s claims representative relied on a police report which stated that there was minimal damage to the vehicles; (2) the representative never requested photos of the vehicles or damage estimates; (3) the representative did not consider testimony that the tortfeasor was driving 40 miles per hour, causing the victims’ car to spin 90 degrees; and (4) that the accident caused $3,000 worth of damage to the vehicle. Examining these facts, the court denied the carrier’s motion, reasoning that the third-party insured alleged sufficient facts such that a reasonable juror could find that the carrier acted in bad faith.

Date of Decision: December 14, 2012

Schifino v. Geico Gen. Ins. Co., 2: 11-cv-1094, 2012 U.S. Dist. LEXIS 177072, U.S. District Court for the Western District of Pennsylvania (W.D. Pa. Dec. 14, 2012) (McVerry, J.)

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