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.)