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In Clemens v. New York Central Mutual Fire Insurance Company, plaintiff brought a UIM bad faith case, with the chief issues focusing on the 39 month time period between the claim being asserted and the filing of suit.  There were three areas at issue on cross motions for summary judgment as to this lengthy delay and who, if any one side, bore responsibility: the content and provision of medical authorizations, efforts to arbitrate the matter, and efforts to schedule a statement under oath.

The court ultimately concluded that the record was so unclear, it could rule for neither party.

The court stated that “in each of these areas, the parties exhibited a lack of civility and an inability to move this matter forward at a reasonable pace,” and “having reviewed that record, [the court] simply cannot conclude that either party has demonstrated as a matter of law that the other side was unilaterally responsible for the long delay between Plaintiffs’ transmission of its Notice of Intent to file an underinsured motorist claim and the filing of the complaint that initiated this matter.”

Further, the court stated that it could not find “as a fact that, to the extent the long delay was attributable to the Defendant, it was or was not motivated by ‘self-interest or ill will’ as required by Terletsky….”  This statement is noteworthy as some courts have concluded that self-interest and ill will are evidence of bad faith, not elements of bad faith.

The court also stated: “The Court is compelled to note at the outset that the hallmark of this case has been petulant and even acrimonious bickering among opposing counsel. The Court is also confounded that a relatively straightforward claim for underinsured motorist benefits that could not exceed $35,000.00 in value could have produced 83 docket items and more than 7,000 pages of correspondence and medical notes. That said, we turn to the question whether either party to this lawsuit may legitimately claim that no material fact is in dispute and that either one is now entitled to judgment as a matter of law. The Court concludes that the muddled record in this case cannot support summary judgment in favor of either party.”

Thus, the matter had to go to a jury “to make the ultimate determination whether Defendant’s conduct in this matter was so unreasonable as to constitute ‘bad faith’ under 42 Pa.C.S. § 8371.”  The court did observe that because (1) a plaintiff has the burden to prove its case by clear and convincing evidence, and (2) “Plaintiffs’ persistent failures to cooperate in the discovery process and a failure to observe the literal requirements of Rule 56.1 of the local rules of court, Plaintiff escaped a judicial determination that bad faith cannot be determined from this record by the narrowest of margins.”

The court had earlier stated that an insurer did not have to show its conclusions were correct, or “that its conclusion more likely than not was accurate.” “Nor is the insurance company required to show that the process by which it reached its conclusion was flawless or that the investigatory methods it employed eliminated possibilities at odds with its conclusion.”

“Instead, an insurance company must show it conducted a review or investigation sufficiently thorough to yield a reasonable foundation for its action.” As to the plaintiff’s burden under the clear and convincing evidence standard, the plaintiff has to show that “the evidence is so clear, direct, weighty and convincing as to enable a clear conviction without hesitation, about whether or not the defendants acted in bad faith.”

Date of Decision:  January 15, 2015

Clemens v. New York Cent. Mut. Fire Ins. Co., Case No. 3:13-CV-2447, 2015 U.S. Dist. LEXIS 4903 (M.D. Pa. Jan. 15, 2015) (Conaboy, J.)