In this UIM bad faith case, the insured’s complaint alleged that the claim history showed the other driver was at fault, and the other driver’s carrier had paid policy limits. Yet, when the insured sought further damages under his UIM policy, the carrier refused to pay over a period of three years.
In its answer, the carrier asserted the facts showed the insured was at fault, not the other driver. The carrier attached the police report and a deposition from the underlying case in support of that position. It moved to dismiss the bad faith claim, or alternatively for summary judgment based on its factual position that the insured caused the accident.
Magistrate Judge Carlson recommended denying the motion to dismiss, and denying the summary judgment motion without prejudice. The insurer could renew the summary judgment motion after a full factual record was developed in discovery. District Judge Mariani adopted the Report and Recommendation based on Magistrate Judge Carlson’s reasoning.
First, the court denied the motion to dismiss. The complaint provided a detailed chronology of persistent refusals to pay UIM benefits spanning several years. The insured further alleged that the insurer’s position in denying the claim was incorrect, unreasonable, and taken in bad faith. The insurer argued the facts showed it was prudent in its decision making, but the court found these arguments required looking beyond the pleadings, something the court could not do on a motion to dismiss.
On the alternative summary judgment motion, the court observed summary judgment is rarely granted when discovery is incomplete. When this does happen, it is typically only when the missing discovery does not implicate material facts on the issue at hand.
The court found that factual issues around which driver caused the accident, and the carrier’s reasonableness in concluding the insured caused the accident, were open issues of material fact on the bad faith claim. Thus, the summary judgment motion was premature until discovery was complete on these issues.
Dates of Decision: December 11, 2018 (Report and Recommendation), January 7, 2019 (Order adopting Report and Recommendation)
Baltzley v. State Farm Mut. Auto. Ins. Co., U.S. District Court Middle District of Pennsylvania Civil No. 3:18-CV-00959, 2018 U.S. Dist. LEXIS 209672 (M.D. Pa. Dec. 11, 2018) (Carlson, M.J.) (Report and Recommendation), adopted by District Court on January 7, 2019 (Mariani, J.)