Tuesday, May 23, 2017

Pennsylvania Unfair Trade Practices Act and Consumer Protection Law Does Not Apply to the Handling of Insurance Claims

In his recent decision in the case of Machado v. Safeco Ins. Co., No. 3:16-CV-1685 (M.D. Pa. April 7, 2017 (Munley, J.), Judge James M. Munley addressed a Plaintiff’s claims under consumer protection law for allegedly abusive claims handling practices by the carrier of her insurance claim.  

The court noted that, in the insurance context, Pennsylvania’s Unfair Trade Practices and Consumer Protection law “applies only to conduct related to the sale of an insurance policy, not to the handling of the insurance claims.”  

However, in a footnote, the court noted that, under the case of Berg v. Nationwide Mut. Ins. Co. Inc., 44 A.3d 1164 (Pa. Super. 2012) the Superior Court found that a violation under the Unfair Trade Practices and Consumer Protection law could serve as evidence to support a bad faith claim.

In the end, the court granted in part and denied in part the Defendant's Motion to Dismiss. 

 Anyone wishing to review this decision may click this LINK..

I send thanks to Attorney Lee Applebaum of the Philadelphia law firm of Fineman, Krekstein and Harris.  Please be sure to check out Attorney Applebaum’s excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law blog which you review HERE.  

Friday, May 19, 2017

The Free Law Project Moves to Provide Free Public Access to Federal Court Decisions

The Free Law Project, a non-profit entity dedicated to providing free, public access to legal materials announce plans to download all of the free Opinions and Orders available on PACER, the federal courts' system for electronic access to court records.  The Free Law .Pproject is currently in the process of downloading the documents.  

I send thanks to Attorney Gerald A. Connor, Esquire of the Scranton law office of Margolis Edelstein for bringing this information to my attention.  

Wednesday, May 17, 2017

Western District Magistrate Judge Addressess Facebook Discovery Issues

A Pennsylvania Facebook Discovery decision from last August of 2016 has been brought to my attention.
In the case Hanna v. Giant Eagle, Inc., 2016 U.S. Dist. LEXIS 107253 (W.D.Pa. Aug. 10, 2016 Mitchell, M.J.), a Magistrate Judge in the Western District considered a Defendant's Motion to Compel the production of a Plaintiff's social media information. 

According to the Opinion, the court had ordered Plaintiff to release her social media information to defendants with an Affidavit that her production was all-inclusive.  Plaintiff produced nineteen pages from her social media websites, but failed to include the court-mandated Affidavit. 

The Defendants then filed the Motion to Compel. The Plaintiff then produced the Affidavit and thirty-nine additional pages of new social media entries.  The Plaintiff attested that she provided her attorneys with access to her Facebook, Instagram and Linkedin profiles.  The Plaintiff's attorneys represented to the Court that they reviewed Plaintiff's social media pages and had produced all responsive, discoverable material.

Thereafter, the Defendants requested unfettered access to Plaintiff's social media pages and requested that a third party vendor be permitted review the Plaintiff’s social media pages and provide all relevant material to the parties.  The Defendants also sought sanctions in the form of the dismissal of the action, or fees and costs incurred as a result of having to file the Motion to Compel. 

The Court in Hanna denied the Defendant’s request for the broad third party access and sanctions, relying on the Plaintiff's Affidavit which confirmed that she had provided direct access to the social media pages to her attorneys, and given that Plaintiff's counsel represented to the court that he and his staff reviewed the social media accounts prior to making the production.

As such, some of the Plaintiff’s social media was discoverable, but unrestricted access was denied. 

Anyone wishing to review this decision may click this LINK.

I send thanks to Brian J. Murren, a Dickinson Law student and a law clerk with the Camp Hill, PA office of Marshall, Dennehey, Warner, Coleman & Goggin for bringing this case to my attention.

Monday, May 15, 2017

No Bad Faith Found Where UIM Carrier Demanded Statement Under Oath Even Though Deposition Previously Completed

In the case of Ridolfi v. State Farm Mut. Auto. Ins. Co., No. 15-859 (M.D. Pa. April 10, 2017 Carlson, M.J.), Federal Magistrate Judge Carlson of the Middle District granted a carrier’s Motion for Summary Judgment in a UIM bad faith case.  

The Plaintiff had alleged bad faith based upon several allegations including an alleged misstatement of the policy limits, alleged delays in claims processing, insistence by the UIM carrier on a sworn statement under oath even though a deposition had previously been completed two (2) years before in the third party matter, the carrier's persistence in collecting medical records, and a failure on the part of the carrier to comply with insurance regulations regarding period status notices to the insured.  

The court granted summary judgment finding that, “while both parties indulge in occasional missteps in the process of reviewing and litigating this claim, the essentially uncontested evidence does not meet the demanding, concise and exacting legal standards prescribed under Pennsylvania law for a bad faith insurance processing claim.”  

The court reiterated the “well-established” principle law “that it is not bad faith for any insurance company to ‘conduct a thorough investigation into a questionable claim.’”  

The court additionally noted that a carrier can be successful in defending against the bad faith claims by showing that there were “red flags” warranting further investigation into the claims presented.   Accordingly, the court found that delay alone does not amount to bad faith.   Rather, the court found that an inference of possible bad faith only arises when time passes as a part of pattern of a knowing or reckless delay in processing a meritorious insurance claim.  

As part of the decision, Judge Carlson found that there was nothing wrong with the UIM carrier seeking a sworn statement under oath from the Plaintiff in light of the fact that the medical information previously secured or exchanged was in complete.   The court did not accept the Plaintiff’s argument that no sworn statement was necessary as the insured had been deposed two (2) years earlier in the underlying third party litigation.  

The court also noted that the claim against the third party tortfeasor settled for less than the policy limits, a factor that was properly included in the UIM carrier’s evaluation of the claims presented.   The court also noted that the insured had originally demanded over double the UIM policy limits to settle before coming down a policy limits demand.  

Judge Carlson otherwise rejected the Plaintiff’s allegations of violations of the Pennsylvania Unfair Claims Settlement Practices Act and the Unfair Insurance Practices Act, specifically with respect to the regulatory requirement that a UIM carrier provide 45 day updates on the status of insurance claims.  The court recognized that, while violations of this insurance rules can be considered when examining a bad faith claim under §8371, the violations of these Acts in and of themselves do not amount to a per se violation of the bad faith standard.  

As stated, the court entered summary judgment in favor of the UIM carrier and bad faith claims.  

Anyone wishing to review this decision by Federal Magistrate Judge Carlson may click this LINK.

I send thanks to Attorney Lee Applebaum of the Philadelphia law firm of Fineman, Krekstein & Harris and also the writer of the excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law blog.   


Westmoreland County Court of Common Pleas Severs Post-Koken UIM/Bad Faith Claims But Refuses to Stay Bad Faith Discovery Efforts

In a recent Order of Court out of the Westmoreland County Court of Common Pleas in the case of Madeja v. State Farm Mutual Automobile Ins. Co., No. 5493 of 2016 (C.P. Westmoreland Co. April 11, 2017 Scherer, J.), the court granted in part and denied in part the carrier Defendant’s Motion to Sever and Stay Bad Faith Claims from the UIM claims for both discovery and trial purposes.  

The wrinkle in this case is that the Plaintiff pled both common law bad faith claims and statutory bad faith claims.

The court granted the Defendant’s Motion to Sever in terms of separating UIM claim and the bad faith claims for purposes of trial.   The Court noted that the UIM claim would be tried before a jury first and that, after the return of a verdict on the UIM claim, if necessary, the bad faith claims would be heard with the same jury that determined the UIM claim deciding the common law bad faith claim and with the court deciding the statutory bad faith claim on a non-jury basis. 

The court otherwise denied the Defendant’s Motion to Stay Discovery relative to the bad faith claims.  

Anyone wishing to review this Order only may click this LINK.

I send thanks to Attorney Neil O’Donnell of the Kingston, Pennsylvania O’Donnell Law Offices for bringing this decision to my attention.  

Motion to Bifurcate Trial of Post-Koken UIM/Bad Faith Claims Denied in Eastern Federal District Court of Pennsylvania


In the recent Federal Eastern District Court of Pennsylvania case of Reeves v. Travelers Cos., No. 16-6448 (E.D. Pa. April 11, 2017 Baylson, J.), the court denied an insurance company’s Motion to Bifurcate the UIM Bad Faith and Breach of Contract Claims arising out of a motor vehicle accident. 

The carrier argued that the evidence and testimony regarding the bad faith claim would be irrelevant to the breach of contract UIM claim and would only confuse the jury on the case presented.   

The carrier also asserted that evidence from the bad faith claim would unduly influence the jury’s decision against the carrier in the breach of contract claim.   

The carrier additionally asserted that, if the breach of contract claim was resolved or concluded in favor of the carrier, then the bad faith claim would be rendered moot.  

The Plaintiff asserted, in part, that bifurcation would be inefficient because the carrier’s conduct alleged in the bad faith claim was the very same type of conduct alleged in support of the breach of contract claim. 

The court found that the carrier did not meet its burden of demonstrating that the prejudice it would face from trying both claims together would outweigh the detrimental effects of bifurcation upon the parties in the court in terms of judicial economy.   The court noted that bifurcating the matter would unnecessary prolong the case.   The court additionally stated that, while the two claims were separate, the evidence related to both claims was similar.   The court found that presenting the same evidence to two separate juries would constitute a waste of resources.  

The court also rejected the carrier’s position that a finding for the carrier on the breach of contract claim would automatically render the bad faith claim moot.  In this regard, the court stated that Pennsylvania law allows for the recovery for bad faith due to an undue delay in processing a claim.  

Anyone wishing to read this decision may click this LINK.

I send thanks to Attorney Lee Applebaum of the Philadelphia law office of Fineman, Krekstein & Harris and the writer of the Pennsylvania and New Jersey Insurance Bad Faith Law blog for bringing this decision to my attention.