Thursday, April 23, 2020

Summary Judgment Granted to UIM Carrier in Bad Faith Claim

In the case of Bernstein v. Geico Cas. Co., No. 19-1899 (E.D. Pa. March 19, 2020 Robreno, J.), the court granted a carrier’s summary judgment in an UIM bad faith claim that involved allegations of a delayed investigation and a delayed settlement payment.

According to the Opinion, it was the Plaintiff’s argument that the carrier acted unreasonably in taking fifteen (15) months to make a settlement offer.

The court noted that, although bad faith can be proven through unreasonable delays in paying a claim, “‘a long period of time between demand and settlement does not, on its own, necessarily constitute bad faith.’”

The court noted that, if the carrier’s delay is tied to its need for further investigation, there may not be a valid bad faith claim based upon the delay.

The court also noted that any reasonable basis to deny coverage defeats a bad faith claim and that consultation with counsel can establish a reasonable basis for the carrier’s action.

Judge Robreno also reaffirmed the general rule of law that simple negligence or poor judgment on the part of the carrier also does not make out a bad faith case.

The court additionally noted that “[a]n insurer who investigates legitimate questions of insurance coverage is not acting in bad faith, and no insurer is required ‘to submerge its own interest in order that the insured’s interests may be made paramount.’”

In granting the carrier’s Motion for Summary Judgment, the court also emphasized that, during its investigation, the carrier had “repeatedly asked… for additional medical documentation, repeatedly communicated with Plaintiffs’ Counsel, and provided updates on the progress of the investigation.” 

As such, the court found that, even viewing the case in the required light most favorable to the Plaintiffs, “no reasonable jury could find by clear and convincing evidence that Defendant lacked any reasonable basis in its investigation.”  As such, the carrier's summary judgment motion was granted.

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 for bringing this case to my attention. Please be sure to check out Attorney Applebaum’s excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law blog for continuing updates in this area of law.

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