Archive for the 'PA – Claims Handling Procedures' Category

JANAURY 2017 BAD FAITH CASES: A “LOW-BALL” OFFER TO SETTLE, WITHOUT MORE, IS INSUFFICIENT TO SHOW BAD FAITH (Philadelphia Federal)

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This first-party Uninsured/Underinsured Motorist Coverage claim involved allegations that the insurer acted in bad faith by making a “low-ball” offer to settle the insured’s personal injury claims. The case arose out of a car accident where the insured was rear ended in a hit and run and incurred medical bills totaling $8,232.00. The Insurer made an initial offer of $1,000 to settle the Insured’s UIM claim. This offer was rejected, and the Insurer refused to pay the full value of the Insured’s medical bills.

The Insured’s bad faith claim was based solely on the premise that the $1,000 offer, acting alone, was facially unreasonable in light of the $8,000 in medical bills and $25,000 policy limits. The Insured argued that a facially unreasonable offer is itself bad faith. The Court disagreed. According to the Court, a “low-ball” offer, without any other allegations of wrongful conduct, is insufficient to maintain a claim of bad faith. To prove bad faith, an insured must point to some action or inaction taken by the insurer which shows that the offer was not made negligently or as a negotiation strategy, but made as a result of bad faith conduct on the part of the insurer. Entirely missing from the Insured’s Complaint were any allegations that the Insurer failed to conduct a reasonable investigation or failed to have the medical records reviewed by an in-house doctor or nurse.

Date of Decision: August 11, 2016

West v. State Farm Ins. Co., No. 16-3815, 2016 U.S. Dist. LEXIS 106783 (E.D. Pa. Aug. 11, 2016) (Jones, II, J.)

JANUARY 2017 BAD FAITH CASES: NO BAD FAITH ON RECORD SHOWING REASONABLE INVESTIGATION AND CLAIMS HANDLING; AND COURT OBSERVES THAT WHERE PARTY DOES NOT IDENTIFY AND PROVIDE SUPPORTING FACTS, JUDGES ARE NOT LIKE PIGS, HUNTING FOR TRUFFLES BURIED IN THE RECORD (Middle District)

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The court granted summary judgment to the insurer in this bad faith case arising out of a fire at the insureds’ home. While the insurer provided a detailed factual recount from the record to makes its case, the court stated that the insureds “relied upon bare allegations and narrative argument that does little more than summarize bad-faith law in Pennsylvania, without showing how the facts of this particular case could support a claim under the statute.”   The insurer had paid nearly $150,000 after investigating the fire and losses therefrom, but it argued the items put in dispute by the insured were not connected to the fire, which the insured failed to factually refute.

The court observed that “It is not bad faith for an insurance company to ‘conduct a thorough investigation into a questionable claim.’” The insurer will be successful in defending a bad faith claim based on its investigation of the matter by “showing ‘a reasonable basis’ for investigating a claim, and is … entitled to judgment as a matter of law, where it demonstrates the existence of certain ‘red flags’ which prompted it to further investigate an insured’s claim.”

Red flags existed in this case where “the insurance policy had been purchased immediately prior to the fire and the determination by two fire experts that it had been caused by arson. The record also reveals that, rather than wasting time, [the insurer] began an investigation immediately, while at the same time advancing money to the plaintiffs for immediate needs such as clothing and hotel expenses.” Further, the insurer “promptly undertook investigation into the fire’s cause, the plaintiffs contributed directly to the duration of the investigation by delaying their examinations under oath, which State Farm had requested, roughly two months earlier.” And, “during this investigation, [the insurer] continued to pay the plaintiffs’ housing and living expenses, despite the ongoing nature of the investigation and the possibility that at the end of that process coverage would not be offered.” The insurer ultimately concluded that the matter was not arson, but as stated did not pay every claim the insureds made in connection with the loss.

The insurer routinely and appropriately sent correspondence in response to the insureds, and delays in the process were “not solely or even principally attributable to” the insurer.

Finally, the court rejected the notion that it should review evidence provided by the moving insurer, and “wade into that evidence in order to find some evidence that could rise to the level needed for the plaintiffs to carry their burden on this claim. This invitation is antithetical to good summary judgment practice, and the plaintiffs would do well to remember that “‘[j]udges are not like pigs, hunting for truffles buried in the record.’”

Date of Decision: November 16, 2016

Hoffman v. State Farm Fire & Cas. Co., No. 4:14-1978, 2016 U.S. Dist. LEXIS 158795 (M.D. Pa. Nov. 16, 2016) (Carlson, M.J.)

DECEMBER 2016 BAD FAITH CASES: VIOLATION OF UNFAIR CLAIMS SETTLEMENT PRACTICES REGULATIONS ALONE CANNOT FORM THE BASIS OF A BAD FAITH CLAIM (Philadelphia Federal)

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In this homeowners’ case, the insured alleged breach of contract and bad faith. On the contract claim, the court focused on the contractual limitations period for bringing suit. The insured argued, among other things, that the insurer had a duty under the Unfair Claims Settlement Practices Regulations (UCSPR) to give notice of the suit limitation period, and failure to do so tolled that period. The court rejected this argument as a basis to toll the contract claim, as well as a basis for the bad faith claims.

As to the bad faith claim, the court further observed that a violation of the UCSPR standing alone does not establish clear and convincing evidence of bad faith. The court also rejected an argument concerning negotiations over a boiler’s repair or replacement as the basis for a bad faith claim.

Date of Decision: November 9, 2016

Pecko v. Allstate Ins. Co., No. 16-1988, 2016 U.S. Dist. LEXIS 155355 (E.D. Pa. Nov. 9, 2016) (Pratter, J.)

NOVEMBER 2016 BAD FAITH CASES: MISREPRESENTATION ALONE CANNOT VOID POLICY WITHOUT PROOF OF INTENT AND MATERIALITY; ISSUE OF INSURER BAD FAITH IN CLAIMS HANDLING WAS FOR JURY (Philadelphia Federal)

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This case involved accusations of bad faith running in both directions. The insurer sought to void numerous life insurance policies on the deceased insured, based on claims that the insured made material misrepresentations in his insurance applications (he had multiple life insurance policies). The insured’s estate brought claims of bad faith based on the insurance investigation (alleging that the insurer at different times claimed the insured was not dead, had committed suicide and/or had been the victim of foul play, in addition to arguing that the policy should be voided on the basis of misrepresentations in the applications). Summary judgment was sought all around.

There was no issue that misrepresentations were made on the insurance application. However, there were genuine issues regarding both the insured’s intent in making those misrepresentations, and whether they were material, i.e., whether the policies still would have been issued if the truth were known to the carrier. Thus, summary judgment was denied to the insurer, since determination of the insured’s intent and how the insurer would have handled the true information were jury questions.

The court denied summary judgment to both parties on the insured’s bad faith claim. This being a federal action, plaintiff’s statutory bad faith claim was subject to a jury trial. The issue was the manner in which the insurer investigated the death of the insured, and a delay in paying benefits. The court found that the jury had to decide issues regarding whether the estate provided sufficient proof of death, and whether the insurer’s investigation “demonstrated a reasonable basis for questioning and refusing the claims.”

Date of Decision: October 20, 2016

Lincoln Benefit Life Company v. Bowman, No. 15-6697, et al., 2016 U.S. Dist. LEXIS 145327 (E.D. Pa. Oct. 20, 2016) (Savage, J.)

NOVEMBER 2016 BAD FAITH CASES: NO BAD FAITH FOR FILING DECLARATORY JUDGMENT ACTION; AND WHERE RECORD SHOWS GENUINE INVESTIGATION AND NOT PUTATIVE PREDISPOSITION TOWARD DENIAL (Third Circuit, Pennsylvania) (Not precedential)

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This non-precedential Third Circuit opinion affirmed the trial court’s opinion granting summary judgment to the insurer on a statutory bad faith claim. (We will not repeat the facts, but instead link to our previous summary of the trial court opinion).

In reciting the elements of bad faith, among other things, the appellate panel stated that because the carrier “ultimately paid the full policy limit, Appellants’ bad faith claim is based on the company’s investigation of [the] claim.” The court cited the Superior Court’s decision Rancosky v. Wash. National Ins. Co., for the proposition that “Bad faith conduct includes lack of good faith investigation into the facts.” The court does not address the issue of whether poor claims handling alone, without the denial of a benefit, can be bad faith. The trial court had noted that a long enough delay in handling the claim can be treated as the equivalent of a denial of a benefit, but the Third Circuit did not address this nuance.

(Pennsylvania’s Supreme Court has taken up Rancosky to give address to the elements of what constitutes a statutory bad faith claim.)

In addressing the merits, the appellate court first looked at plaintiff’s assertions that there was a “predisposition toward denial” and that the insurer “focused upon exclusion and accepted no facts contrary to its initial conclusion” (theories that harken bank to the 2003 Luzerne County Corch decision). However, the Third Circuit agreed that “the claims file showed that [the insurer] evaluated [the]claim, consulted with legal counsel, and tried to determine” the key issue of employment status.

Moreover, the insurer did not deny the claim, but filed a declaratory judgment action to determine this key issue and how it affected coverage. The insurer’s ultimately paying the policy’s liability limit demonstrated its willingness to consider new evidence and adjust its position. The court added that: “In any event, [the insurer] had the right to investigate [the]claim and determine whether it was covered under the policy, regardless of whether [the insurer] initially sought to exclude the claim. Citing its own prior precedent: “[A]n insurer does not act in bad faith by investigating and litigating legitimate issues of coverage.”

The appellate court agreed that there was no bad faith under Pennsylvania law in filing a declaratory judgment action to seek a coverage determination, to resolve legal ambiguities after it had investigated the facts of the claim. The court observed that the insurer had consulted with in-house counsel before the decision to file the declaratory judgment action, showing that the insurer was still considering the insured’s claim.

The court affirmed the grant of summary judgment on the bad faith claim.

Date of decision: October 4, 2016

Bodnar v. Nationwide Mut. Ins. Co., No. 15-3485, 2016 U.S. App. LEXIS 17903 (3d Cir. Oct. 4, 2016) (Hardiman, McKee, Rendell, JJ.)

 

NOVEMBER 2016 BAD FAITH CASES: ALLOWING REINSURER TO IMPROPERLY HANDLE CLAIM EXPOSES INSURER TO BAD FAITH CLAIMS; REINSURER CANNOT BRING DIRECT CLAIMS AGAINST INSURED FOR REVERSE BAD FAITH OR INSURANCE FRAUD (Western District)

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This factually complicated case involved reverse bad faith and 18 Pa.C.S. § 4117 insurance fraud claims by an insurer and reinsurer, and bad faith claims by the insured against its insurer.

The court first ruled that a reinsurer could not void an insurance policy to which it was not a party, since it had no contractual privity with the insured. It then concluded that the reinsurer could not be considered an insurer for purposes of section 4117(g) fraud claims. Finally, after discussing the state of the law on “reverse bad faith”, the court again found this to be a contractually based claim, and the reinsurer simply did not have a contract with the insured. Summary judgment was granted against the reinsurer on all of these issues.

The insured claimed that the insurer breached the insurance contract by allowing the reinsurer to adjust the claim and to take the lead in decision making on claims handling. The court ruled this was an issue for the jury to decide and would not grant summary judgment. However, the court also left it to the jury whether the insured could recover if the insured’s conduct also breached the insurance agreement.

As to the insurer’s summary judgment motion on the insured’s counterclaims, the court found that in electing to affirm the contract and pursue money damages, rather than to seek rescission, the insured cannot argue that a breach of its own obligations under the policy can somehow be ignored in addressing the insurer’s defense.

As to the alleged fraud claim against the insured, the insured took the position that the alleged fraud was carried out by a third party. The insurer argued apparent authority, and the court concluded that the issue of apparent authority in making out a fraud claim against the insured was a jury issue. There was also extensive and detailed discussion of the particulars of the alleged fraud, which will not be addressed here.

The insured also brought claims for common law and statutory bad faith against its insurer. [In looking at the statutory bad faith case law, the court cited authority reiterating the questionable theory that the bad faith statute was intended to address conduct beyond the denial of a benefit.] The court found that the both claims survived summary judgment.

The insured’s basic theory was that the insurer “essentially abandoned its insured during the claims adjustment process by turning [the insured’s] fate over to an unrelated third party that, as a practical matter, was not subject to [the insurer’s] control, had no contractual accountability to [the insured], and had a financial incentive to minimize the amount of payments that would be made to [the insured] under the Policy.” The third party is the reinsurer, and evidence was presented to the court that the reinsurer “was given the final say on various issues that were important, if not critical, to the adjustment of [the] loss and the continuation of [the insured’s] business, including the valuation of [the insured’s] daily revenue value (which were important for purposes of calculating its business income losses), the determination that business income payments would cease upon [the insured’s] relocation to the new … facility, and the ultimate decision to cancel the Policy. [The insured] has also produced evidence from which a factfinder could infer that [the reinsurer], in exercising its discretion, placed its own financial interests ahead of [the direct carrier’s] insured.

The court also cited to conflicts in claims handling mandates of the reinsurance treaty, and evidence suggesting that the insurer disagreed with the reinsurer’s “course of action in important respects, yet failed to take any corrective action for the benefit of its insured.” The court stated that the direct insurer “may be held liable … for the acts committed by [the reinsurer] in connection with the investigation and adjustment of its claim.” Thus, the court concluded that the evidentiary record construed in the non-movant insured’s favor “could support a finding of bad faith on the part of [the insurer] as it relates to the investigation and adjustment of [the insured’s] loss.” Summary judgment was thus denied to the insurer on the bad faith claims.

Date of Decision: September 29, 2016

Hartford Steam Boiler Inspection & Insurance Company v. International Glass Products, LLC, No. 2:08cv1564, 2016 U.S. Dist. LEXIS 135045 (W.D. Pa. Sept. 29, 2016) (Cercone, J.)

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NOVEMBER 2016 BAD FAITH CASES: BAD FAITH IMPOSSIBLE WHERE INSURER COMPLIED WITH ALL COVERAGE TERMS (Pennsylvania Superior Court) (Not Precedential)

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In a short unpublished opinion, the Superior Court affirmed a trial court’s finding of no bad faith. The dispute centered around replacement value vs. actual cash value, policy language capping damages, and policy exclusions. Both the trial and appellate courts found the policy unambiguous, that coverage was for actual cash value, and that other claims were capped or excluded. Thus, the insurer acted in accordance with the policy language and there could be no bad faith.
Date of Decision: September 13, 2016
Rogers v. Harleysville Ins., No. 289 MDA 2016, 2016 Pa. Super. Unpub. LEXIS 3339 (Pa. Super. Ct. 2016) (Bowes, Gantman, Platt, JJ.) (not precedential)

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NOVEMBER 2016 BAD FAITH CASES: FOR CHOICE OF LAW PURPOSES IN BAD FAITH CASE, PLACE OF LOSS IS INSURED’S BUSINESS LOCATION; INSURER’S TREATING SIMILAR CLAIMS DIFFERENTLY IS NOT A PER SE BASIS TO SHOW BAD FAITH (Middle District)

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The insured failed to allege a plausible bad faith claim in this case.

The insurer had defended the insured under a reservation of rights in two state actions. The insurer brought suit for declaratory relief in Pennsylvania on those two claims, seeking a ruling that it had no duty to defend or indemnify. It denied coverage in a third state (Vermont) action, apparently without any agreement to defend under a reservation of rights, and amended its Pennsylvania declaratory judgment action to cover this third case as well. The insured brought a counterclaim for bad faith for this last denial of coverage, focusing on the different treatment between the third action and the first two actions.

The Court first had to address a choice of law analysis. Although the states’ bad faith laws at issue were likely not in conflict, the court carried out the analysis to be thorough. The Court found that a key element was where the insurance benefit was denied, in cases where an insured is claiming breach of contract and bad faith. The denial is located at the insured’s place of business, since this is where the economic impact of the denial occurs. In this case, that was Pennsylvania. Further, there were other factors favoring application of Pennsylvania law.

The Court then addressed the insurer’s motion to dismiss the bad faith claim. The following allegations failed to set out a plausible claim under Pennsylvania bad faith law:

 

The insurer does not have a good faith basis for its denial of a defense to [the insured] in the Vermont Action.

The insurer agreed to defend the New York and Massachusetts Actions based on similar allegations as those contained in the Vermont Action and has at all times continued to defend the New York and Massachusetts Actions.

The insurer’s decision to deny a defense to [the insured] in the Vermont Action while agreeing to defend the New York and Massachusetts Actions is arbitrary, capricious and/or frivolous.

The Vermont Plaintiff’s claim for property damage and/or bodily injury falls within the Policy’s coverage and the products completed operations coverage and [the insured] is entitled to a defense for the claims asserted by the Vermont Plaintiff.

The insurer’s denial of coverage for the Vermont Plaintiff’s claim was made in bad faith.

The insured is entitled to recover damages for the insurer’s bad faith handling of the Vermont claim regardless of the law that applies.

 

The Court found that, even where claims are similar, denying some claims and covering others is not per se bad faith. The court gave the example that there could be 5 similar claims, none of which the insurer believed in good faith merited coverage. However, it might offer coverage for a subset of those cases “based upon a calculated business judgment, risk avoidance, litigation forecasts, etc.” Thus, “’similarity’ among claims is a poor predictor of bad faith denials in cases where either the claims’ alleged similarity or the claims’ coverage under the policy is not clearly established.”

The Court went on to observe that the insured “points out that coverage of the prior two claims to which [insured] compares the instant action was actually made under a reservation of rights. I consider it a poor use of judicial resources to create judicial rules that make it costlier for insurers to offer initial coverage under a reservation of rights letter. Were Defendant’s argument accepted, insurers would be less willing to offer coverage while a claim was initially being investigated for fear that one coverage decision might be viewed as an admission as to that claim or a comparable one in related litigation. Similar policy justifications underlie determinations by the Federal Rules of Evidence mandating that subsequent remedial measures and offers to pay initial medical or hospitalization costs be deemed irrelevant in associated legal proceedings.”

Finally, the Court found that “most damning for Defendant’s bad faith counterclaim, [the insurer] has provided the Court a copy of its coverage denial letter. Plaintiff has accurately characterized its declination letter as ‘detailed.’ The ten-page, single-spaced letter sets forth, from Plaintiff’s perspective, the applicable choice-of-law analysis, the pertinent policy definitions, the facts surrounding the claim, the justifications that it provides for why those facts do not trigger coverage, and various legal decisions that it suggests support its denial of the claim.”

The Court referenced the fairly debatable standard from other jurisdictions, in observing this was not a basis for bad faith. It looked at Pennsylvania case law on the existence of the insurer’s “reasonable basis” to deny a claim, to the same effect. As stated, it found that the insured had not met the Twombly/Iqbal pleading standards.

Unlike many dismissals for failure to plead a plausible action, however, this bad faith claim was dismissed with prejudice, the Court finding that amendment would be futile.

Date of Decision: August 29, 2016

Westfield Insurance Company v. Icon Legacy Custom Modular Homes, 2016 U.S. Dist. LEXIS 115214 (M.D. Pa. Aug. 29, 2016) (Brann, J.)

We also remind you of Judge Brann’s decision of the same date, as one of the relatively few cases in the last 9 years addressing the Supreme Court of Pennsylvania’s important bad faith decision in Toy v Metropolitan.

 

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OCTOBER 2016 BAD FAITH CASES: COURT APPLIES PENNSYLVANIA SUPREME COURT DECISION IN TOY TO LIMIT SCOPE OF STATUTORY BAD FAITH CLAIMS, WHILE STILL FINDING A CLAIM HAD BEEN STATED (Middle District)

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This is one of the seemingly rare cases since 2007 recognizing that the Pennsylvania Supreme Court’s decision in Toy V. Metropolitan Life exists and is controlling case law. This will be discussed in more detail below.

In this case, the insured alleged he purchased a death and dismemberment policy that required no medical questions or examinations to obtain coverage. The insured alleged that he was a Type I diabetic and was injured in an accident resulting in an amputation due to infection. The carrier denied coverage, with issue apparently being whether the amputation was the result of his fall or his diabetes. The insured sued for breach of contract and bad faith.

After allowing the breach of contract claim to proceed, the court addressed the insurer’s motion to dismiss the bad faith claim. In carrying out its Rule 12(b)(6) analysis, the court disregarded the plaintiff’s conclusory allegations, focusing only on the factual pleadings, which it found adequate to allow the case to proceed. Specifically, the plaintiff pleaded that the carrier “1) … failed to conduct a proper investigation of the claim as evidenced by the fact that [it] failed to obtain [the insured’s] podiatric and family physician records; 2) [it] inaccurately denied [the] claim based upon his death and not the loss of his limb; 3) [it] made a finding that [the insured] suffered from Type II diabetes when he actually suffered from Type I diabetes; 4) [it] made a finding that [the insured] had previously had a toe amputated due to his diabetes, a fact that [the insured] alleges is not correct; 5) [it] relied only on medical records that supported [the insurer’s] decision to deny coverage and ignored medical records that did not support denial; 6) and [it] referred to [the insured] as Robert … instead of Ronald ….”

The Court did find, however, that the insured could not bring statutory bad faith claims based upon violations of Pennsylvania’s Unfair Insurance Practices Act (UIPA). In doing so, it recognized the fundamental place the Pennsylvania Supreme Court’s decision in Toy v. Metropolitan Life holds in bad faith case law. The decision will be quoted at length below.

The District Court itself stated:

“Each party cites a case in support of its argument. Hartford cites Toy v. Metropolitan Life Insurance Company, in which the court held that a plaintiff may not recover under § 8371 against an insurer who engages in unfair or deceptive practices in soliciting the purchase of an insurance policy. Mr. Long cites Hayes v. Harleysville Mutual Insurance Company, for the contention that ‘an insurer may be liable for bad faith conduct if the insurer has violated the [UIPA].'”

The holding in Toy, however, is controlling in this case. Toy was decided by the Supreme Court of Pennsylvania, whereas Hayes was decided four years earlier by the Superior Court of Pennsylvania. Furthermore, in Toy, the Pennsylvania Supreme Court engaged in a thorough review of the legislative and common law history of § 8371 and that of other states with similar provisions. In doing so, it explained [quoting two paragraphs from Toy]:

Presently, Toy adopts the trial court’s perspective, arguing that the Legislature did not articulate the reach of a bad faith claim under § 8371, and intended the statute to remedy any act that is prohibited to insurers under Pennsylvania’s common or statutory law. Thus, Toy argues, if an insured alleges that an insurer violated a provision of the UIPA, as she has, the insured necessarily states a bad faith claim under § 8371.

We disagree. In 1990, at the time that the General Assembly enacted § 8371 to provide a remedy to an insured when his insurer “‘acted in bad faith toward [him],’ the term ‘bad faith’ had acquired a ‘peculiar and appropriate meaning’ in this context.” When we incorporate that meaning into § 8371, as the Act instructs, and also consider that § 8371 speaks to an action “arising under an insurance policy,” and grants an award based on the “amount of the claim from the date the claim was made by the insured,” we need go no further than the words of the statute to ascertain that the Legislature did not intend to provide Toy with a remedy under § 8371 for the deceptive or unfair practices in which she alleges Metropolitan engaged in soliciting her purchase of the Policy.”

The District Court then concluded that the section 8371 bad faith claim “must be dismissed, with prejudice, to the extent that it rests on violations of the UIPA.”

Date of Decision: August 29, 2016

Long v. Hartford Life & Accident Ins. Co., No. Case No. 4:16-cv-00138, 2016 U.S. Dist. LEXIS 115328 (M.D. Pa. Aug. 29, 2016) (Brann, J.)

Long v. Stonebridge Life Ins. Co., No. Case No. 4:16-cv-00139, 2016 U.S. Dist. LEXIS 115324 (M.D. Pa. Aug. 29, 2016) (Brann, J.)

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JULY 2016 BAD FAITH CASES: NO BAD FAITH BECAUSE OF EXCLUSION ON SOME CLAIMS, AND NO FACTS OF BAD CLAIMS HANDLING ON OTHERS (Middle District)

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Myerski v. First Acceptance Ins. Co., involved the most common form of bad faith litigation, UM/UIM claims, as well as other claims. There was an issue in the case about whether the injured driver was excluded under his mother’s policy because he lived in the same house and/or used her car frequently. The record showed the insurer reasonably asserted the exclusion’s application.

The court then looked at the claims handling. There was no bad faith in the back and forth between the insured’s counsel and the carrier, with the court going through the details of each communication; the rapidity in which suit was filed; and the ongoing nature of the investigation. The court then stated: “The question remains whether bad faith may be found in Defendants’ initial handling of the case.” The above cited exclusion did not apply to either PIP or UM/UIM claims. The plaintiff argued that the insurer had “arbitrarily denied coverage without any justification and delayed in allegedly opening a pip claim until 4 months after the accident,” and had “made verbal affirmations that they were denying all of the Plaintiff’s claims based on an exclusion which does not apply to such claims and cannot be relied upon by the Defendants to deny coverage.” However, under the facts of record, the case did not “support the conclusion that any refusal to pay the property damage claim constituted bad faith.

After another detailed analysis, the court further rejected the insured’s argument to have stated a claim for wrongful refusal to pay claims for first party medical benefits and uninsured motorist benefits. However, the communications from the insured to the insurer did not establish a clear and convincing case that demand had been made specifically on these two issues and then been denied in bad faith.

Finally, the court denied a distinct breach of the contractual covenant of good faith and bad dealing claim, as “Plaintiff’s claim for a breach of the covenant of good faith and fair dealing is properly dismissed because Plaintiff also asserts a breach of contract claim seeking PIP and UM benefits.”

Date of Decision: June 10, 2016

Myerski v. First Acceptance Ins. Co., 3:16-CV-488, 2016 U.S. Dist. LEXIS 76201 (M.D. Pa. June 10, 2016) (Conaboy, J.)

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