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In Amica Mutual Insurance Company v. Fogel, the dispute centered on whether Pennsylvania or New Jersey law should apply to a policy that the insurer issued to the insured.  The policy was negotiated and delivered in New Jersey, but a fatal accident had occurred in Pennsylvania after the insureds had moved there.  The insureds had not changed their driver’s licenses, registration, and insurance to reflect their new status as Pennsylvania residents when the accident occurred.

The magistrate judge assigned to the case applied a Pennsylvania choice of law analysis, which led to his recommendation that (1) New Jersey law be applied to the insurance policy at issue, and (2) the insurer’s Motion for Summary Judgment be granted with respect to the insureds’ counterclaim for bad faith.  The insureds filed an objection to the recommendations.

The insureds had claimed that there was bad faith in handling the claim for their insurance benefits.  If Pennsylvania law applied, the insureds could get stacked benefits, but could not do so if New Jersey law applied.  The insureds argued that the carrier failed to conduct an adequate investigation into their position that Pennsylvania law applied, and that this constituted bad faith. 

In adopting the Magistrate Judges’ Report and Recommendation, the District Judge observed that the insureds asserted that it was impossible to follow the insurer’s procedure to obtain drivers licenses and register vehicles when moving from New Jersey to Pennsylvania, but in fact it was definitely possible for that to occur.  The Magistrate Judge found that New Jersey law did apply, thus undermining the insureds claim that there could be bad faith in connection with the adequacy of investigating the application of Pennsylvania law. 

Further, the Magistrate Judge had stated that: “The very existence of questions regarding the proper application of law in this case, and the fact that there are extant judicial decisions that have considered the very legal questions raised in this case and have reached mixed results, substantially undermines the [insureds’] bad faith claim in this case.” The District Court therefore accepted the magistrate judge’s recommendations, granting the insurer’s Motion for Summary Judgment on the bad faith claim while denying the insureds’ cross-Motion for Summary Judgment.

Date of Decision:  July 29, 2010


Amica Mut. Ins. Co. v. Fogel, Civil Action No. 1:09-cv-674, United States District Court for the Middle District of Pennsylvania,  2010 U.S. Dist. LEXIS 76744 (M.D. Pa. July 29, 2010) (Jones, III, J.)