Monthly Archive for April, 2013

APRIL 2013 BAD FAITH CASES: THIRD CIRCUIT AFFIRM’S TRIAL COURT’S THRESHOLD FINDING OF NO STANDING TO BRING ASSIGNED BAD FAITH CLAIM OR CONTRACT CLAIM (Third Circuit)

In Feingold v. State Farm Mutual Auto Insurance Company, the Third Circuit, in a non-precedential summary opinion, affirmed the trial court’s decision that an insured could not assign its statutory bad faith claim, and that it was against public policy in this instance to assign the breach of contract claim. The District Court’s decision is described more at length in this entry.
The Third Circuit stated: “The District Court concluded that, as a threshold jurisdictional matter, Feingold had not alleged an Article III injury, and, therefore, lacked standing to pursue his claims against State Farm. We agree, and after review of the briefs and appendices submitted by the parties, we find no basis for disturbing the exceedingly thorough and well-reasoned April 3, 2012 opinion of the District Court. We thus affirm the order of the District Court substantially for the reasons set forth in its opinion.”
Date of Decision: April 23, 2013
Feingold v. State Farm Mut. Auto. Ins. Co., No. 12-2664, United States Court of Appeals for the Third Circuit (3d Cir. April 23, 2013) (Barry, J.)

APRIL 2013 BAD FAITH CASES: COURT DISMISSES VIOLATION OF THE DUTY OF GOOD FAITH AND FAIR DEALING SUIT AS PREEMPTED UNDER FEDERAL ERISA STATUTE (New Jersey Federal)

In MHA, LLC, v. Aetna Health, Inc., a healthcare provider brought ERISA and state law claims against an insurance carrier to recover $39 million in damages after the carrier allegedly underpaid for services that plan beneficiaries had received at one of the healthcare provider’s facilities. Originally, the dispute arose because the carrier continued to pay the healthcare provider at the rates governed by a contract, which the carrier had entered into with an entity later purchased by the healthcare provider in this case. The healthcare provider essentially argued that the contract no longer governed the parties’ current relationship.
The court granted the carrier’s motion to dismiss all counts, including the state law bad faith claim that was preempted by ERISA.
Date of Decision: February 25, 2013
MHA, LLC v. Aetna Health, Inc., No. 12-2984, 2013 U.S. Dist. LEXIS 25743, U.S. District Court for the District of New Jersey (D.N.J. Feb. 25, 2013) (New Jersey Federal) (Chesler, J.)

APRIL 2013 BAD FAITH CASES: COURT RECOMMENDS AFFIRMANCE OF SUMMARY JUDGMENT IN BAD FAITH CASE BECAUSE INSURED WAS NOT LIVING IN THE INSURED BUILDING (Philadelphia County Common Pleas)

In Anderson v. Ins. Placement Facility of Pennsylvania, an insured sued his homeowner’s insurance carrier for bad faith after the carrier denied coverage for wind damage sustained by the insured’s home. After the insured filed his original claim in March 2010, the carrier sent an adjuster to inspect the damage. The adjuster noticed that the home appeared vacant. The insured reported that he had been living with his girlfriend, but went back and forth between properties. The adjuster requested copies of the insured’s water bills to corroborate this story. Shortly thereafter, the carrier issued a reservation of rights. In October 2010, the carrier denied coverage, citing a policy exclusion that barred coverage over buildings that are vacant for over sixty days.
The insured disagreed and filed suit in the Philadelphia County Court of Common Pleas in June 2011. He alleged a single claim for bad faith against the carrier for its allegedly unreasonable denial of benefits under the insured’s policy. The carrier filed summary judgment and the court granted the motion. Afterwards, the insured appealed the court’s grant of summary judgment.
In the court’s Rule 1925 opinion in support of affirmance on appeal, it reasoned that its grant of summary judgment should be affirmed because the carrier properly investigated the loss, hiring an adjuster to examine the property. Once the adjuster recognized that the property was vacant, he inquired with the insured, who admitted that he was living somewhere else most of the time. As such, the insured’s bad faith claim was without merit because the damages incurred by his home were explicitly excluded under the policy.
Date of Decision: February 5, 2013
Anderson v. Insurance Placement Facility of Pennsylvania, June Term 2011, No. 00873, 2013 Phila. Ct. Com. Pl. LEXIS 32, Philadelphia Court of Common Pleas (Pa. C.P. 2013) (Tucker, J.)

APRIL 2013 BAD FAITH CASES: COURT GRANTS SUMMARY JUDGMENT TO CARRIER ON INSURED’S BAD FAITH CLAIM, OBVIATING NEED TO DECIDE CHOICE OF LAW QUESTIONS (Philadelphia Federal)

In Quinn v. Liberty Mut. Group, the court heard an insured’s bad faith claim against its automobile insurance carrier. The suit arose from a car accident with an uninsured motorist in which the insured suffered serious personal injuries. The insured sought uninsured motorist (UM) from the carrier and the parties entered arbitration. However, the carrier rejected the arbitration award and demanded a jury trial.
The insured filed suit for the carrier’s bad faith failure to pay the arbitration award. The carrier filed for summary judgment, countering that it was acting with a good faith belief that New Jersey law applied, which permitted the carrier to reject the arbitration award.
The court reasoned that it did not need to decide whether Pennsylvania or New Jersey law applied because the insured’s opposition brief was merely two-pages and failed to create a genuine issue of material fact that would prevent an award of summary judgment to the carrier.
Date of Decision: March 7, 2013
Quinn v. Liberty Mut. Group, NO. 11-5364, 2013 U.S. Dist. LEXIS 31194, U.S. District Court for the Eastern District of Pennsylvania (E.D. Pa. Mar. 7, 2013) (Bartle III, J.)