No Duty on UIM Carrier to Advise Plaintiff of Change in the Law

In the case of Devine v. Geico General Ins. Co., No. 5:21-CV-02679-JMG (E.D. Pa. Jan. 7, 2022 Gallagher, J.), the court addressed claims of breach of contract, breach of the implied covenant of good faith and fair dealing, statutory bad faith claims and claims of a violation of the Unfair Trade Practices and Consumer Protection Law (UTPCPL) in a UIM case in which the household exclusion was relied upon by the carrier.

At issue before the court was a Motion to Dismiss the Complaint filed by the carrier. This motion was largely based on statute of limitation arguments.

The court found that the event triggering the running of the statute of limitations was the original denial of the claim and not a later refusal to pay after a renewed demand was submitted by the Plaintiff.

The court applied the four (4) year statute of limitations on the contract claims, including a breach of the covenant of good faith and fair dealing. The court found that these claims were barred based upon the allegations on the face of the Complaint.

The court also noted that the statutory bad faith claims asserted by the Plaintiff was subject to a two (2) year statute of limitations. As such, those claims were also found to be time-barred.

Relative to the Plaintiff’s bad faith claims, the court found that the Plaintiff had failed to allege any specific facts to support these claims, even if they were not barred by the statute of limitations.

Notably, the Plaintiff also asserted that the carrier had violated the UTPCPL because the carrier allegedly breached a duty to notify the insured that the Pennsylvania Supreme Court had changed the law regarding the household exclusion by way of the Supreme Court’s decision in the case of Gallagher v. Geico.

The court in this Devine case found “no support in Pennsylvania law for such an extraordinary duty” as alleged by the Plaintiff.

Judge Gallagher also noted in the Devine case that the “Courts that have addressed the issue of whether a company has a duty to inform its customers of a change in the law have uniformly held that no such duty exists.”

Given that the court found that any effort to amend their Complaint would be futile, the Complaint in this matter was dismissed with prejudice by the court.

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

I send thanks to Attorney Lee Applebaum of the Philadelphia law office of Fineman Krekstein & Harris for bringing this case to my attention. Please check out Attorney Applebaum’s excellent blog entitled The Pennsylvania and New Jersey Bad Faith Case Law blog.