Wednesday, November 28, 2018

Summary Judgment Granted in Federal Middle District Bad Faith Case

In the case of Brugler v. Unum Group & Provident Life & Accident Ins. Co., No. 4:15-cv-01031 (M.D. Pa. Nov. 2, 2018 Brann, J.), the Federal Middle District Court of Pennsylvania granted a carrier’s Motion for Summary Judgment in a bad faith action. 

According to the Opinion, the carrier in this matter stopped making payments under a disability policy on the basis of two (2) independent medical examinations and its interpretation that the results of those examinations placed the claim outside of the policy’s coverage. 

The insured responded by filing a Complaint stating various claims, including bad faith.

In his Opinion, Judge Brann found that the carrier had a reasonable basis to deny the claim.   In so ruling, he reasoned that carriers may “reasonably rely on the findings of an independent medical examination - even in the face of contrary medical opinions.”  

The court rejected the insured’s argument that the carrier unfairly favored its physician/expert opinion over the treating physicians’ opinion. Judge Brann noted that “an insurer is not required to give greater credence to opinions of treating medical providers.”  

The court additionally found that the record did not support any inference that there was any frivolous or unfounded refusal to pay the disability benefits.   The court found that the record instead revealed a thorough investigation by the carrier, including a review of relevant documentation and reports by medical experts, that all served to create a reasonable basis for the carrier’s denial.  

Judge Brann emphasized that “an insurer has a right to evaluate legitimate coverage issues and does not act in bad faith by aggressively protecting its interests.”  

The court additionally stated that merely suggesting a pre-determined intent on the part of the carrier to deny a claim is not sufficient to meet the high burden of actually establishing a bad faith claim under Pennsylvania law.  

The court noted that the Plaintiff’s allegations of claims handling issues that were alleged in this matter to discredit the carrier did not actually show improper claims handling or show that the carrier’s alleged methods went beyond mere alleged negligence, which allegations did not constitute conduct amounting to bad faith.

As such, the summary judgment motion filed by the carrier was granted.

Anyone wishing to review a copy of his decision may click this LINK.  The companion Order can be viewed HERE.

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

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