JULY 2008 BAD FAITH CASES
INSURER’S MOTION FOR PARTIAL SUMMARY JUDGMENT DENIED WHERE UIM CLAIM UNDERVALUED (Western District)

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This bad faith claim brought in the United States District Court for the Western District of Pennsylvania arose from an automobile accident involving Plaintiff-driver and another driver.  Plaintiff sought coverage of $100,000  from his insurer based on an underinsured motorist provision in their policy. The insurer refused to make this payment because it determined that Plaintiff’s claim was worth less than $200,000, which is the amount that triggered plaintiff’s UIM coverage.

However, three years after the insurer refused to pay,  Plaintiff was awarded $650,000 by an arbitration panel.  After this award the insurer  paid plaintiff $100,000 in underinsured motorist benefits.  Plaintiff filed a bad faith claim with regard to the handling and denial of her Underinsured Motorist Claim.

The insurer filed a motion for partial summary judgment and argued that Plaintiff cannot prove by clear and convincing evidence that it acted unreasonably in the handling of her claim.

The court found that a reasonable juror could determine under the clear and convincing standard that the insurer did not have a reasonable basis for denying Plaintiff’s claim.  Plaintiff provided sufficient evidence for a reasonable juror to find bad faith such as insurer’s refusal to assign a monetary value to plaintiff’s claim because it did not know the amount of the first level of UIM coverage.  It is also possible that a reasonable juror could find that the insurer did not act in bad faith, and therefore the matter needs to be submitted to a jury.

Date of Decision: April 7, 2008

McCrory v. State Farm Mut. Auto. Ins. Co.,  2008 U.S. Dist. LEXIS 28397 (W.D. Pa. Apr. 4, 2008) (Lancaster,G.)

J.M.A.

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INSURER’S MOTION FOR PARTIAL SUMMARY JUDGMENT DENIED WHERE UIM CLAIM UNDERVALUED (Western District)”


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