In H.L. Libby Corporation v. Fireman’s Fund Insurance Company, two underlying lawsuits resulted from the alleged pollution of a collection pond following a heavy rain.  In this action, the insured alleged that the carrier acted in bad faith by covering only approximately one-third of the alleged overall legal costs in the first underlying case (Specialty I).  The insured also alleged that it was bad faith for the carrier to deny coverage altogether for the second underlying case (Specialty II).  The basis for denial in Specialty II was that it was it was an action for injunctive relief only, and therefore not covered by the policy.  The United States District Court for the Western District of Pennsylvania was presented with the carrier’s Partial Summary Judgment Motion.  When looking at the factual allegations contained in the Specialty II Complaint, the Court agreed that Specialty II was indeed an action for injunctive relief only.  The Court rejected the argument that the boilerplate phrase, “costs, attorney's fees and other and further relief as the Court deems just and proper,” is in itself a claim for monetary damages.  In similarly rebuffing the argument that a brief in opposition to dismissal had alluded to monetary relief, the Court followed well-settled Pennsylvania law that the “four corners” of the Complaint determines whether coverage is triggered.  Since the Complaint requested only equitable relief, it did not trigger the carrier’s duty to defend or indemnify.  The insurer’s action in denying coverage in Specialty II did not constitute bad faith.  The Court, without detailed elaboration, denied summary judgment on the bad faith claims for failure to pay costs in Specialty I. 

Date of Decision:  July 24, 2006

H.L. Libby Corp. v. Fireman’s Fund Ins. Co., United States District Court for the Western District of PA, Civil Action No. 03-601, 2006 U.S. Dist. LEXIS 50433 (W.D. Pa. Jul. 24, 2006) (Cercone, J.)

 

In Psonak v. Peoples Benefit Life Insurance Company, the United States District Court for the Middle District of Pennsylvania denied Plaintiff’s request to compel the production of information and documents from the carrier.  Specifically, Plaintiff requested documents and information regarding lawsuits and claims under unrelated insurance policies, claiming that such discovery was relevant to Plaintiff’s bad faith claims.  Following a conference with the parties, the Court found that Plaintiff had not demonstrated the relevance of the requested information and documents, and that the request was overly broad and burdensome.  The Court cited a number of cases on the points of relevance, and overly broad and unduly burdensome requests:  McCrink v. Peoples Benefit Life Ins. Co., No. 04-cv-1068 (E.D. Pa. Nov. 29, 2004) ; Cantor v. Equitable Life Assurance Soc'y, No. 97-5711, 1998 WL 306208 (E.D. Pa. June 9, 1998); Hyde Athletic Indus., Inc. v. Cont'l Cas. Co., 969 F. Supp. 289 (E.D. Pa. 1997); Zimmerman v. Harleysville Mut. Ins. Co., 860 A.2d 167 (Pa. Super. Ct. 2004). 

Date of decision:  July 21, 2006

Psonak v. Peoples Ben. Life Ins. Co., United States District Court for the Middle District of Pennsylvania, No. 06-CV-0420, 2006 U.S. Dist. LEXIS 49893 (M.D. Pa. 2006) (Conner, J.).

 

And see Recent Developments and Trends in Insurance Bad Faith Litigation, in “Links of Note” on this site, discussing cases from January 1, 2003 through July 2005, including McCrink and Zimmerman.

In Jackson v. Allstate Insurance Company, the insured was injured when her car was struck by an underinsured motorist’s vehicle.  After recovering part of her damages from the underinsured motorist’s insurer, up to that coverage limit, the plaintiff filed a claim for the remainder of her damages with her insurer.  In denying her underinsured motorists claim (“UIM”), the carrier produced a waiver of UIM coverage document signed by plaintiff.  Plaintiff contended that her signature on the document was a forgery.  The Court ruled that plaintiff had not produced any credible evidence to support that the signature was a forgery, and therefore granted summary judgment in favor of the defendant carrier. 

Date of Decision: July 12, 2006

Jackson v. Allstate Insurance Company, United States District Court for the Eastern District of Pennsylvania, No. 05-cv-1480, 441 F. Supp. 2d 728, 2006 U.S. Dist. LEXIS 46898 (E.D. Pa. July 12, 2006) (Brody, J.)