Tuesday, June 12, 2018

Cross Motions for Summary Judgment Denied in a Federal Court UIM Bad Faith Case

In the case of Parisi v. State Farm Mut. Auto. Ins. Co., No. 16-179 (W.D. Pa. May 7, 2018 Gibson, J.), the court denied cross-motions for summary judgment in a UIM bad faith case given the court’s finding of genuine issues of material fact with respect to the claims handling and settlement negotiations in the case. 

According to the Opinion, this UIM action was commenced after the insured allegedly suffered a serious head injury in a motor vehicle accident.

The UIM claims-handling process covered a time period of approximately 2 ½ years.  

According to the Opinion, the insured demanding the payment of the $100,000.00 policy limits and the carrier’s initial settlement offer was $17,000.00.   The carrier later ended up paying the policy limits on the claim.  

The insured filed a bad faith suit in which it was alleged that there was a bad faith delay in the payment of the UIM benefits.  

After both parties moved for summary judgment on the bad faith issues, the court denied both motions after finding genuine issues of material fact.  

The court in Parisi found that the insured’s attorney did not demand settlement of the claim for nearly two (2) years after the filing and, once he did, the evidence revealed that the carrier acted promptly in response.  

The court additionally noted that a jury could conclude that the initial offer by the carrier was reasonable given the evidence presented at that stage of the proceedings.   The court also pointed to testimony in the record indicating that head injuries are particularly difficult to evaluate.   Based on at least these reasons, the court denied the Plaintiff’s Motion for Summary Judgment on the bad faith issues.

As noted, the court additionally denied the carrier’s Motion for Summary Judgment on the bad faith claims.   In this regard, the court found that a jury could find that there was an unreasonable delay in the payment of the benefits and that the initial offer by the carrier was an unreasonable low ball offer.   The court also noted that the record revealed that a jury could find that the carrier failed to conduct a meaningful investigation or attempt settlement between the time of the filing and the time when the insured’s attorney demanded settlement almost two (2) years later.  

Anyone wishing to review a copy of this decision may click this LINK.

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

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