MAY 2012 BAD FAITH CASES: COURT DENIES INSURED’S MOTION TO REMAND BASED ON REQUEST TO ABSTAIN FROM HEARING DECLARATORY JUDGMENT (Western District)

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In Ackerman v. Geico General Insurance Company, the court heard the insured’s petition for remand after its carrier removed a declaratory judgment action to federal court. The case arose from a 2008 car accident during which the insured was serious injured. In January 2011, the insured allegedly requested that the carrier pay $100,000 in underinsured motorist coverage provided in the insured’s automobile policy. After the insured filed suit, seeking a declaration of coverage under its policy and alleging breach of contract and bad faith, the carrier removed to federal court.

The insured subsequently moved to remand back to state court, arguing that this was a declaratory judgment case involving only issues of state law pertaining to the interpretation of its policy with the carrier. However, the court disagreed, finding that, although the present action did not involve a federal question, it was properly removed on the basis of diversity. The case was in the nature of a breach of contract claim for money damages, since there was no disputed policy language at issue, and there was no pending parallel state court action that was going to determine underlying issues and rights.

Date of Decision: April 19, 2012

Ackerman v. GEICO Gen. Ins. Co., No. 2:12-cv-00005, 2012 U.S. Dist. LEXIS 54622, U.S. District Court for the Western District of Pennsylvania (W.D. Pa. Apr. 19, 2012) (Hornack, J.).

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