Court Dismisses UIM Bad Faith Claims Based Upon Disagreements Over Value of the Claim

In the case of DeLuca v. United Financial Cas. Co., No. 3:19-CV-01661 (M.D. Pa. Sept. 22, 2021 Wilson, J.), the court granted summary judgment to the carrier in this uninsured motorist bad faith claim where the claim was based, in part, on the fact that the settlement offer was a small fraction of the demand.

The court ruled that the record before it only revealed a valuation dispute. The court additionally noted that the records confirmed that the insurance company had conducted a detailed and timely investigation into the claims presented before making its settlement offers, whatever the size of the offers were during the course of the matter.

According to the Opinion, the UM policy had a $300,000.00 limit, which was demanded. During the course of the matter, the carrier offered a small fraction of that amount to settle, while stating that its investigation was ongoing.

The record revealed that the carrier had initially offered the Plaintiff $7,500.00 to settle the UM claim based upon the information secured as of that time. After considering that offer, the insured demanded the policy limits, which demand the carrier reviewed. After a subsequent discussion, the insured then lowered her demand to $100,000.00. However, a month later, the demand was raised back to $300,000.00.

The carrier continued to negotiate and offered $9,000.00 which was rejected. Thereafter, additional medical records were produced, which were reviewed by the carrier, resulting in an increase of the settlement offer to $11,500.00. The Plaintiff’s demand remained at the $300,000.00 policy limits.

Thereafter, additional medical care was completed and medical records were provided to the carrier. The carrier reviewed those additional records. There were no additional demands before suit was filed.

Judge Wilson noted that the Third Circuit and the Middle Federal District Court of Pennsylvania have made clear that disagreements over the value of an insured’s claim and failing to merely offer the policy limits does not equate to bad faith, without more, on the part of the carrier. In the end, Judge Wilson found that the Plaintiff had not provided any evidence that would cause the court to find that the carrier did not have a reasonable basis for denying the benefits claimed.

After reviewing the current status of bad faith law in Pennsylvania, the court granted summary judgment.

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

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