WHETHER DELAY AMOUNTED TO BAD FAITH MUST GO TO JURY (Middle District)
Middle District Judge Robert Mariani denied the insurer’s summary judgment motion on this UIM bad faith claim.
The court went into a lengthy recitation of the relevant facts, as well as a lengthy summary of statutory bad faith case law in Pennsylvania (though not citing the Rancosky decision). For immediate purposes, we focus solely on the court’s conclusions about whether a delay could amount to reckless indifference.
There was an undisputed delay in opening a file and starting the claim handling process, which the insurer argued amounted to negligence at most. Negligence cannot be the basis for statutory bad faith in Pennsylvania. The insurer cited cases where an internal mix-up in opening a file caused some delay. The court found it could not make a factual determination at this point attributing the delay solely to this level of negligence.
The court cited to facts from which a jury could find recklessness by clear and convincing evidence. The insured’s counsel wrote to the insurer making a claim, but no file was opened and no response was sent to counsel. Counsel sent another letter making a demand and asking for documents. Again, counsel received no response and still no UIM claim file was opened. Only after the insured called directly and asked to speak to an adjuster was a file opened and an adjuster assigned. Between then and the time of suit, the claim log showed no activity concerning the UIM claim. This all occurred over a six month period.
The court found this lack of responsiveness and activity over a six-month period could amount to reckless indifference, and should go to a jury to determine negligence vs. recklessness.
As the bad faith claim was allowed to proceed, the court did not address other allegations concerning alleged bad faith claims handling once the file was being actively adjusted.