Tuesday, November 13, 2018

Low Offer Supported by Record - No Bad Faith

In his recent decision in the case of Newhouse v. GEICO, No. 4:17-cv-00477 (M.D. Pa. Oct. 12, 2018 Brann, J.), Judge Matthew W. Brann granted the carrier’s Motion for Partial Summary Judgment on a bad faith claim asserted in a post-Koken UIM matter.  

According to the Opinion, the Plaintiff was allegedly injured as a result of a rear-end accident caused by an intoxicated driver.  After recovering the $15,000.00 policy limit from the tortfeasor’s carrier, the Plaintiff submitted a claim for UIM coverage for his own carrier.    Although the Plaintiff was seeking to recover the $200,000.00 UIM policy limits, GEICO had offered $10,000.00 based upon the case presented.  

The Plaintiff thereafter filed a Complaint in Clinton County for breach of contract, bad faith, and loss of consortium.   The carrier removed the case to federal court.  The issue of the validity of the Plaintiff’s bad faith claim eventually came before the court by way of a Motion for Summary Judgment.

Judge Matthew W. Brann
M.D. Pa.
In his Opinion, Judge Brann reviewed the current status of Pennsylvania bad faith law as applied against the record before the court.  

In granting the Motion for Partial Summary Judgment on the bad faith claims, the court noted that two (2) doctors, including the Plaintiff’s own medical expert, believed that a pre-existing medical condition of the Plaintiff contributed to the Plaintiff’s current complaints.   

Reviewing the totality of the circumstances, the court noted that, while the UIM carrier’s offer fell short of satisfying a vocational expert’s six-figure loss calculation, the UIM carrier was not prohibited from considering the doctors’ opinions regarding the causation issue.   

Accordingly, the court found that reasonable minds could differ as to the true sum of the Plaintiff’s losses.  More specifically, the court ruled that it could not be said that GEICO’s evaluation was “frivolous or unfounded” as required by bad faith law to support a claim presented under the heightened burden of proof of clear and convincing evidence of bad faith.  As such, the court granted the Motion for Partial Summary Judgment on the bad faith claim.

Anyone wishing to review this decision may click this LINK.  The Court's Order can be viewed HERE.

I send thanks to Attorney Joseph Hudock of the Pittsburgh law firm of Summers, McDonnell, Hudock, Guthrie & Rauch, P.C., for bringing this case to my attention. 

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