Plaintiff's Failure To Uphold His End of The Bargain In An Insurance Contract Results in Dismissal of His Bad Faith Case

In the case of Guerrier v. State Farm, No. 19-2435 (E.D. Pa. June 6, 2022 Pratter, J.) (Mem. Op.), the court granted the carrier’s Motion for Summary Judgment and found that State Farm did not act in bad faith by instituting a subrogation action against its insured when the insured failed to notify the carrier about an auto accident and failed to respond to the carrier’s request for information seeking to confirm the insured’s liability coverage.  In light of this ruling the plaintiff's case was dismissed.

Judge Gene E.K. Pratter of the Eastern Federal District Court of Pennsylvania opened her Opinion by aptly stating that "[a] contract is a legal instrument designed to ensure each party holds up his end of the bargain.  When one party fails to do so, he cannot expect the other party to pick up his slack and then blame that other party for failing to do so."

Here, the Plaintiff-insured was found to have failed to uphold his end of the bargain and, as such, his case was dismissed by the court.

As noted, this matter arose out of a motor vehicle accident. At the time, the Plaintiff in this matter was insured by State Farm, although he was driving a loaner vehicle while his insured vehicle was being repaired. The carrier covering the loaner vehicle had denied coverage.

The court confirmed that, under the terms of the State Farm policy, the Plaintiff was required to give the carrier notice of the accident “as soon as reasonably possible.” The Plaintiff did not report the accident to State Farm.

However, the occupants of the other vehicle, which was also insured by State Farm did file a claim. State Farm then contacted the Plaintiff in this coverage case to confirm whether he had auto liability coverage but the Plaintiff failed to respond. As a result, State Farm initiated subrogation proceeds for the benefits it paid to the occupants of the other vehicle, and the carrier ultimately obtained a default judgment. The Plaintiff later learned of the default judgment when he was denied a renewal of his driver’s license due to nonpayment of the judgment.

The Plaintiff then filed this action for breach of contract and bad faith and other claims. The Plaintiff argued that State Farm had the information it needed to know that he was one of the companies insureds when the occupants of the other vehicle filed their insurance claim.

In this case, the court granted State Farm’s Motion for Summary Judgment. The court found that no reasonable jury could conclude that State Farm acted in bad faith.

Rather, the court held that the Plaintiff breach his obligation under the insurance policy to notify State Farm about the accident as soon as practicable.

The court also found that State Farm acted reasonably under the circumstances by contacting the Plaintiff to confirm his insurance coverage. When the Plaintiff failed to respond, State Farm assumed that he was uninsured and proceeded accordingly.

Moreover, the court noted that, once the Plaintiff did contact State Farm, the carrier promptly investigated the situation and then discontinued the subrogation action after confirming that the Plaintiff’s loaner vehicle qualified as a substitute vehicle under his policy.

Based on these findings, the court granted State Farm's motion for summary judgment and dismissed the Plaintiff's case.    

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


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (July 5, 2022).

Source of image:  Photo by Pedro de Silva on www.unsplash.com.

Federal Court Reviews Statute of Limitations for Insurance Bad Faith Claims

In the case of McAteer v. State Farm Ins. Co., No. CV-20-101 (E.D. Pa. Nov. 23, 2020 Goldberg, J.), the court granted a Motion to Dismiss a UIM bad faith claim but allowed the Plaintiff the right to file an Amended Complaint.  In so ruling, the court addressed statute of limitations issues.

The two year statute of limitations for 42 Pa.C.S.A. Section 8371 bad faith claims was reaffirmed by the court.

The court generally noted that the claim arises when the Plaintiff is harmed and not when the precise amount or extent of damages is determined. The court also noted that a bad faith claim can accrue when a carrier definitively denies coverage.

The court also confirmed that a Plaintiff cannot avoid the statute of limitations period by asserting that a continuing refusal to cover a claim was a another, separate act of bad faith. The court additionally noted that repeated or continuing denials of coverage do not constitute separate acts of bad faith that give rise to a new statutory period.

Applying this law to the case presented, the court found that the Plaintiff’s claim for statutory bad faith  under 42 Pa.C.S.A. Section 8371was barred by the statute of limitations.

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


I send thanks to Attorney Lee Applebaum of the Philadelphia law firm of Fineman, Krekstein & Harris for bringing this case to my attention.  Attorney Applebaum is the writer of the excellent Pennsylvania New Jersey Insurance Bad Faith Case Law blog, which can be viewed HERE.

Summary Judgment Granted on Post-Koken Bad Faith Claim

In the case of Stewart v. Geico, No. 2:18-cv-00791-MJH (W.D. Pa. Feb. 19, 2020 Horan, J.), the court granted the carrier’s Motion for Partial Summary Judgment and dismissed the Plaintiff’s bad faith claim after finding that the Plaintiff failed to produce sufficient evidence for any jury to reach a finding of bad faith by clear and convincing evidence.

According to the Opinion, this matter arose out of a motor vehicle accident during which the Plaintiff was struck as pedestrian.

In its Opinion, the court noted that a $25,000.00 offer was not unreasonably low under the circumstances presented in this matter. The court additionally found that the reserves set by the carrier at $55,000.00 was not inadequate under the circumstances presented. It was additionally held by the court that the carrier’s investigation, which included an IME, was also not inadequate. With regards to any delays in the matter, the court noted that the delays were attributable to the insured and not the carrier.

As such, the carrier's Motion for Partial Summary Judgment on the bad faith claim was granted.

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

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

Summary Judgment Granted in Bad Faith Claim Where Delays in Claims Process Caused, In Part, by Insured

In the bad faith decision of Doherty v. Allstate Indem. Co., No. 15-05165 (E.D. Pa. April 6, 2017 Pappert, J.), the court granted the carrier summary judgment in a claim arising out of allegations of poor investigation and claims handling by the carrier.  

The case arose out of a landlord property insurance policy issued to an insured who owned multiple rental properties leased out to college students.  

In a lengthy Opinion in which the court summarized the current status of bad faith law concerning investigation and claims handling claims, the court granted summary judgment finding that there existed no clear and convincing evidence that the insurer acted in bad faith.  

Rather, the court found that the record made clear that the carrier’s delays were instead attributable to mistakes and possible confusion on the claim, along with, in part, the insured’s obfuscation and refusal to cooperate with the claims representative in the investigation into the claims presented.  

The court otherwise opined that the record revealed that the carrier conducted adequate investigation and had a reasonable basis for denying any coverage.   The court noted that any delays on the part of the insurer were attributable, in part, to the insured’s repeated failure to provide information necessary to open a claim.

Anyone wishing to review this decision may click this LINK.

 

I send thanks to Attorney Lee Applebaum of the Philadelphia law firm of Fineman, Krekstein & Harris.  Attorney Applebaum is the creator and writer of the Pennsylvania and New Jersey Insurance Bad Faith Case Law blog.