The insured filed a UIM action against her insurer. Initially, the insured settled with the tortfeasor’s insurer for $85,000.
At the beginning of the litigation, the parties disputed the UIM coverage limits. The insured requested and paid for a policy of $50,000 per person and $100,000 per accident, yet some of the insurer’s documents indicated coverage limits of $100,000/$300,000. The insured’s counsel demanded $700,000 and threatened to bring a statutory bad faith claim against the insurer.
The insurer declined to settle, but clarified that the UIM coverage limits for the insured were $100,000 per person or $300,000 per accident. The parties then engaged in several efforts to clarify the coverage limits, and the insured produced requested medical records. The insured contended that material gaps existed in the disclosed medical records, however, and the insurer further attempted to obtain complete records. The insured sued for breach of contract and statutory bad faith.
The insurer successfully brought a partial summary judgment motion on the statutory bad faith claim. Nevertheless, the insured argued that the facts of the case allow her to bring a claim for breach of the common law contractual duty of good faith and fair dealing.
The insurer argued that such a claim is improper, and the Court agreed. “Pennsylvania law does not recognize a separate breach of contractual duty of good faith and fair dealing where said claim is subsumed by a separately pled breach of contract claim.” The Court reasoned that, for first-party claims of insurance benefits, a claim for breach of the duty of good faith and fair dealing merges with a separately pled breach of contract claim, where both claims arise out of the same facts.
Furthermore, the Court stated that the insured’s argument would lose on the merits. The insurer reasonably investigated the claim and offered coverage in excess of premiums charged to the insured. A disagreement between the parties on the amount of recoverable damages does not constituted bad faith. “[The] bad faith claim should be dismissed because the uncontested facts simply do not permit a reasonable inference of bad faith on the part of [the insurer] in this case.”
As such, the Court ruled that the insurer did not breach its contractual duty of good faith in a way that would support an independent contractual bad faith claim.
Date of Decision: October 5, 2017
Ridolfi v. State Farm Mut. Auto. Ins. Co., 2017 U.S. Dist. LEXIS 165013 (M.D. Pa. Oct. 5, 2017) (Carlson, J.)