Federal Court Addresses Request to Amend Complaint in a UIM Bad Faith Claim

In the case of Binotto v. Geico, No. 3:22-CV-210 (W.D. Pa. May 30, 2025 Haines, J.), the court denied a Plaintiff’s Motion for Leave to File a Third Amended Complaint in order to allege bad faith against the carrier.

According to the Opinion, the Plaintiffs had previously filed a Second Amended Complaint which included allegations of bad faith against Geico. However, the Plaintiffs opted to withdraw that Second Amended Complaint under an indication that they thought that the case would settle with the resolution of the summary judgment proceedings. 

When the case did not settle after the court’s resolution of the summary judgment motions, the Plaintiffs then presented this Motion for Leave of Court to File a Third Amended Complaint in order to put the bad faith claim back into play.

The court reviewed Federal Rule of Civil Procedure 15(a), which sets out the standard for granting leave to amend a Complaint when a responsive pleading has already been served. Under that rule, a party may amend its pleading only with the opposing party’s written consent or with leave of court. The rule additionally states that the court should freely give leave of court when justice so requires.

However, the court in this matter noted that the policy favoring liberal amendments is not without bounds. The decision on whether to grant or deny a Motion for Leave to Amend still rests within the sound discretion of the district court.

The court noted that a federal district court may deny leave to amend a Complaint where it is apparent from the record that (1) the moving party has demonstrated undue delay, bad faith, or dilatory motives, (2) the amendment would be futile, or (3) the amendment would prejudice the other party.

In this case, the court found that there is no prejudice to the Defendant by the proposed Third Amended Complaint. The court additionally found that, while the Motion for Leave was filed late in the litigation, the court did not find that the Plaintiff acted with any undue delay, bad faith, or dilatory motives. The court also noted that the trial date was still several months away.

Accordingly, the court addressed the element of whether the allowance of an amendment would be futile under the case presented. In this regard, the Plaintiffs asserted that the Defendant carrier never had any intention of fairly and in good faith attempting to negotiate a settlement.

Under the facts presented in this case, the court found that the Defendant carrier’s delay in offering its settlement amount until the summary judgment proceedings were resolved and the Defendant carrier’s subsequent low settlement offer did not amount to clear and convincing evidence of bad faith in any event.

The court also rejected the Plaintiff’s argument that the Defendant acted in bad faith by failing to investigate, allegedly misrepresenting policy provisions, failing to make a reasonable offer in failing to explain the offer. The court found that there were no facts presented in the proposed Third Amended Complaint to support those inferences drawn by the Plaintiff.

Accordingly, the court denied the Plaintiff’s Motion for Leave to File a Third Amended Complaint.

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

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

Motion To Dismiss in UIM Bad Faith Claim Denied

In the case of Debree v. American States Ins. Co., No. 3:20-CV-00247-JKM (M.D. Pa. July 30, 2024 Munley, J.), the court denied a UIM carrier’s Motion for Partial Summary Judgment in a case alleging breach of contract and insurance bad faith.

The Defendant focused its Motion for Partial Summary Judgment on the Plaintiff’s bad faith claims. The Defendants asserted that the Plaintiff could not establish that the Defendant did not have a reasonable basis for denying benefits under the policy or that the Defendant knew or recklessly disregarded its allegedly lack of a reasonable basis in denying the claim.

According to the Defendant, the record before the court established that the parties merely disagreed over the value of the UIM claim and that such agreement does not constitute bad faith.

The Plaintiff argued that factual disputes existed regarding the Defendant’s investigation into the claim, which disputes precluded the entry of summary judgment on the bad faith claim.

The court noted that, after a review of the case before it, and keeping in mind that bad faith claims are very facts-specific, the court denied the Motion for Partial Summary Judgment after finding that the Plaintiff had submitted sufficient evidence to allow the Plaintiff to proceed with the bad faith claim.

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

Federal Court UIM Bad Faith Claim Dismissed Where Plaintiff Did Not Plead Sufficient Facts

In the case of Hampton v. Progressive Insurance Company, 2:24-CV-01011-MAK (E.D. Pa. May 21, 2024 Kearney, J.), the court granted a Motion to Dismiss a Plaintiff’s bad faith claims and claims under the Pennsylvania Unfair Trade Practices and Consumer Protection Law in a UIM case.

According to the Opinion, the Plaintiff secured the $15,000.00 liability limits from the third party tortfeasor and then pursued this UIM claim.

After the UIM carrier offered $1,000.00 in settlement, the Plaintiff filed a breach of contract action that included claims for statutory bad faith and unfair trade practices claims.

The court ruled that the Plaintiff’s bad faith claim failed where the Plaintiff failed to plead sufficient facts alleging any unreasonable conduct by the carrier or any facts that would support an inference of unreasonableness with respect to the carrier’s settlement offer.

The court otherwise stated that the Plaintiff failed to identify specific actual omissions by the Defendant carrier that were unreasonable or indicative of bad faith. Rather, the Plaintiff only made conclusory allegations that the Defendant’s settlement offer below is UIM policy limits demonstrated bad faith. The court stated that the Plaintiff did not pled any specific facts with regards to how the Defendant carrier evaluated the UIM claim or any facts that would support an inference that the $1,000.00 settlement offer was unreasonable.

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


Source: Law.com, “The Legal Intelligencer Federal Case Alert” (June 13, 2024).

Source of image:   Photo by Mikhail Nilov on www.pexels.com.

Court Grants Partial Motion For Summary Judgment in UIM Bad Faith Case

In the case of Childs v. Progressive Preferred Ins. Co., No. 2:22-CV-01318 M.J.H. (W. Pa. June 15, 2023 Horan, J.), the court granted a Defendant’s Motion for Partial Summary Judgment in a bad faith claim and dismissed the bad faith claim where the court found that the Plaintiff failed to present any evidence indicating that additional investigation would have changed the UIM carrier’s evaluation. The court also found that the Plaintiff failed to present any evidence that the insurance company otherwise failed to conduct a diligent investigation on the case presented.

According to the Opinion, the case arose out of a motor vehicle accident and a UIM claim against Progressive.

According to the Opinion, the tortfeasor Defendant tendered its limits. Progressive granted its consent to settle and, after reviewing the record, offered $1,000.00 to settle the Plaintiff’s UIM claim.

Progressive was later advised that the Plaintiff’s physician had recommended surgery for the Plaintiff’s right shoulder but that the Plaintiff had decided not to move forward with the surgery at that time.

Progressive obtained a medical expert to review the Plaintiff’s MRIs. That expert concluded the Plaintiff’s right shoulder complaints were not related to the accident.

Nevertheless, Progressive then increased the settlement offer to $2,500.00 in a case where Plaintiff’s counsel valued the case at $25,000.00 to $50,000.00. The Plaintiff responded with a bad faith and breach of contract lawsuit.

As noted above, the court found that the record failed to reveal evidence to support the bad faith claim which was dismissed by way of this Partial Motion for Summary Judgment. The court noted that Progressive’s expert’s opinion provided a reasonable basis for the carrier to conclude that the right shoulder complaints were not related to the accident.

The court also noted that the Plaintiff lacked a basis to contest the value of Progressive’s settlement offer given that the Plaintiff had dropped his wage loss claim and given that the Plaintiff was not pursuing recommended shoulder surgery.

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


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (July 13, 2023).

Federal Court Finds That UIM Bad Faith Claim Was Plausibly Pled

In the case of Perhosky v. State Farm Mut. Auto. Ins. Co., No. 2:23-CV-00025 (W.D. Pa. May 4, 2023 Lenihan, J.), the court denied a Defendant’s carrier’s Motion to Dismiss a Plaintiff’s bad faith claim over the carrier’s alleged failure to pay UIM benefits after the Plaintiff was injured in a motor vehicle accident.

The court found that, based upon the pleadings in the Complaint, the Plaintiff had pled a plausible bad faith claim.

The court noted that the Plaintiff averred that the Defendant carrier failed to provide any explanation for its offer to settle the Plaintiff’s claim for $25,000.00. The Plaintiff also asserted that the carrier did not conduct any investigation and did not refer the Plaintiff to an independent medical examination.

In so ruling, the court rejected the Defendant carrier’s arguments that the Plaintiff did not take into account that the Defendant had factored into its evaluation and liability credit of $100,000.00 from the Plaintiff’s prior settlement with other insurance carriers. 

The court also rejected the Defendant’s argument that the bad faith claim was simply based upon the Plaintiff’s disagreement with the carrier’s evaluation and that the carrier had not yet completed its investigation.

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


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (June 8, 2023).

Plaintiff's UM/UIM Bad Faith Claim Based on Alleged Low Ball Offer Dismissed

In the case of Robinson v. Geico, No. 21-CV-05059 (E.D. Pa. March 4, 2022 Kenney, J.), the court denied a Plaintiff’s Motion to Amend a breach of contract Complaint to add a bad faith claim.

The Plaintiff is attempting to amend the Complaint to add a claim of bad faith by the carrier in its evaluation and alleged submission of a low ball settlement offer.

The court noted that the proposed Amended Complaint that was attached to the Motion to Amend only contained broad conclusory allegations related to an alleged bad faith claim and was devoid of any facts as to where any medical records would establish at least $50,000.00 worth of damages in the information that had been provided to defense counsel in support of the Plaintiff’s settlement demand in that amount.

As such, the court found that the proposed Amended Complaint failed to state a claim upon which relief could be granted for bad faith and, as such, the Motion to Amend was denied as futile.

In so ruling, Judge Kenney noted that the proposition that the failure to immediately concede to a demand for the policy limits cannot, without more, amount to bad faith on the part of an automobile insurance carrier.

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

In a related decision in the same matter issued by the court five days after this one, the Court sua sponte dismissed the Plaintiff's UM/UIM case where the record confirmed that the subject policy only had $50,000 in limits, which amount of potential damages was less than the $75,000 amount necessary for federal court subject matter jurisdiction.  Click HERE to see that Opinion, and HERE to see the Court's companion Order.

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

Photo by Karolina Grabowska on www.pexels.com.

UIM Bad Faith Claim Allowed to Proceed But UTPCPL Claim Dismissed

In the case of Defuso v. State Farm Mut. Auto. Ins. Co., No. 3:21-CV-507 (M.D. Pa. March 21, 2022), Judge Malachy E. Mannion of the Federal Middle District Court of Pennsylvania found that a Plaintiff had pled sufficient facts to survive a Motion to Dismiss her bad faith claim in a UIM case. However, the Plaintiff’s claims for violations under the Unfair Trade Practices and Consumer Protection law were dismissed.

According to the Opinion, the tortfeasor tendered its $100,000.00 liability limits to the Plaintiff and the UIM carrier agreed to consent to that settlement. The Plaintiff had $50,000.00 in stacked UIM coverage.

The record in the case revealed that the Plaintiff participated in discovery, a statement under oath, and an IME over the first seventeen (17) months of the claim. Following the expiration of that time, the carrier made its first offer of $7,500.00.

Judge Malachy E. Mannion
M.D. Pa.

In his Opinion, Judge Mannion found that the Plaintiff had adequately pled a bad faith claim. Judge Mannion rejected the argument of the defense that the case merely involved a valuation dispute. 

In so ruling, the court pointed to allegations by the Plaintiff that there were delays in the claims handling and that the carrier allegedly failed to entirely and appropriately investigate and evaluate the case presented. The Plaintiff also alleged that the carrier had unreasonably undervalued the Plaintiff’s claims.

The court did, however, dismiss the Plaintiff’s UTPCPL claim after finding that the Plaintiff merely recited the elements of such claim and did not allege facts to support the same. The court additionally noted that a claim of an alleged failure on the part of the carrier to act on an insurance claim in a timely manner was not a valid cause of action under the UTPCPL, as such a claim is a claim for nonfeasance as opposed to a claim of malfeasance.

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


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

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.

UM Bad Faith Claim Regarding Disagreement Over Value of Claim Dismissed

In the case of Brown v. LM Gen. Ins. Co., No. 21-2134 (E.D. Pa. Aug. 24, 2021 Pratter, J.), the court granted a Defendant carrier’s Motion to Dismiss a Plaintiff’s bad faith claim in a UM matter after finding that the Plaintiff could not sustain a bad faith claim against the insurance company where the allegations in her Amended Complaint boiled down to a disagreement between the parties over the amount of a settlement for uninsured motorist benefits.

In this matter, the Plaintiff had alleged that the carrier, among other things, failed to conduct a medical evaluation, review the Plaintiff’s medical records, or otherwise invest the claims presented prior to offering a settlement. The Plaintiff also claimed that the carrier was dilatory in its claims handling practices when it allegedly mispresented that it would resolve the claim and then continuously and endlessly requested documentation before ignoring that documentation.

The defense argued that the Plaintiff had simply recycled the same allegations as in the initial pleading. The carrier also asserted that the Amended Complaint again came down to a claim by the Plaintiff that, because the carrier allegedly failed to offer an amount to which the Plaintiff believed she was entitled, the carrier allegedly acted in bad faith. The carrier also emphasized that there was a serious dispute in this case as to whether or not the Plaintiff was even entitled to coverage under the applicable policy.

After reviewing the current status of Pennsylvania law regarding bad faith claims, the court found that, although the Plaintiff’s Amended Complaint listed thirty-eight (38) ways in which Liberty Mutual allegedly acted in bad faith, the list was a list of conclusions, not facts. The court found that there were no details offered by the Plaintiff that would describe or was supposedly unfair about the process.

Relative to the claim that the carrier acted in a dilatory fashion, the court noted that the Plaintiff failed to meet her requirement of asserting specific facts to support that allegation such as the number of months between a demand and a settlement offer. 

The court noted that, in the end, the Amended Complaint simply reflected a disagreement between the parties over the amount of an appropriate settlement of the claims presented. The court reiterated a well-settled law that an insured must do more than allege an allegedly “low-ball” offer.

The court also emphasized that “a policy limit- -as its name suggests- -is the theoretical maximum that an insured could recover. ‘It is not the de fecto value of a claim.’” See Op. at p. 5.

Given that the Plaintiff had failed to support her claim for bad faith with facts, this claim was dismissed with prejudice.

The court also addressed the carrier’s Motion to Strike all references in the Plaintiff’s Complaint that the carrier’s conduct was reckless, wanton, and willful relative to the declaratory judgment and breach of contract claims.

The court found that, in order to prevail on a Motion to Strike allegations, the allegations must not only be unrelated to the claim presented but the moving party must show how the moving party will be prejudiced if the allegations are allowed to remain in the pleadings.

Given that the carrier failed to explain how it will be prejudiced in this matter if the challenged allegations are not stricken, the court denied the Motion to Strike. The court also noted that a bald assertion that the carrier acted willfully or recklessly is only a legal conclusion that the court need not accept as true.

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


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Sept. 17, 2021).

Claim of Bad Faith Delay in UIM Tender Dismissed in Monroe County

In the case of Sabajo v. Allstate Fire and Cas. Ins. Co., No. 7703-CV-2019 (C.P. Monroe Co. June 22, 2021 Williamson, J.), the court granted the carrier’s Motion for Summary Judgment and dismissed the Plaintiff’s bad faith claim.

According to the Opinion, this case arose out of a motor vehicle accident matter.

The Plaintiff was pursuing a UIM and bad faith claim against the carrier. After the UIM claim was resolved, the Plaintiff continued with the bad faith claim under primary allegations of an unreasonable delay in the tendering of the UIM policy limits for almost a year. The Plaintiffs asserted that the carrier new, or recklessly disregarded that it allegedly lacked a reasonable basis to delay the payment.

After reviewing the record before him, Judge Williamson ruled that, based upon the medical records provided, which included information regarding treatment for pre-existing injuries, it was reasonable for the carrier to request discovery, medical lien amounts, and to eventually subpoena additional medical records to be certain of what was being claimed before the carrier made a settlement offer. The court noted that the record was consistent with the deposition testimony of the Allstate claims representative during which the representative indicated that it was only after the receipt of the additional information requested that he could finalize this evaluation and offer the policy limits.

In so ruling, the court noted that the claims representative’s request for additional information, including medical lien information, was “standard.” See Op. at 6. The court noted that, once the information was received, primarily by the beginning of 2020, the policy limits were tendered in March of 2020.

The court noted that, while the Plaintiffs made a claim for benefits in April of 2019, and eventually filed suit in September of 2019, the court could not say that this represented an unreasonable delay by Allstate in tendering the limits under the facts presented. Rather, the court found that the “steps taken [by the carrier] were prudent under the circumstances.” See Op. at 6. The court noted that, as soon as the confirmation of the diagnoses and causation was made, the carrier tendered the policy limits. As such, the court found that there is no unreasonable delay. This compelled the court to grant the Motion for Summary Judgment filed by the carrier.

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

Source of image: Photo by Karim Manjra on Unsplash.

Uninsured Bad Faith Claim Dismissed But Right To Amend Granted

In the case of Brown v. LM Gen. Ins. Co., No. 21-2134 (E.D. Pa. June 7, 2021 Pratter, J.) (Mem. Op.), the court dismissed statutory bad faith claims asserted against an insurance company after finding that the Plaintiff’s allegations were insufficient, including the failure of the Plaintiff to cite facts to support allegations of an unreasonable delay or to prove entitlement for the full policy limit.

The carrier also moved to strike the references to “recklessness,” “wanton,” and “willful,” conduct in this motor vehicle accident case in which it was alleged that the tortfeasor driver had fallen asleep at the wheel.

According to the Opinion the tortfeasor driver lacked insurance coverage. As such, the Plaintiff filed an uninsured motorist claim against her own carrier.

The carrier denied the Plaintiff's request for the payment of the full stacked limits of her uninsured motorist coverage. The Plaintiff filed suit in response, asserting that the carrier had failed to obtain the additional waivers of stacked coverage when she added new vehicles to her policy, including the vehicle involved in the accident.

As noted above, the court granted the carrier’s Motion to Dismiss finding that the Plaintiff had failed to sufficiently detail the conduct of the carrier in order to support the claims presented.

The Plaintiff was granted the right to amend.

The court also noted that the Plaintiff’s allegations of willful, wanton, recklessness conduct by the carrier in the context of her breach of contract claim were not relevant. Yet, the court held that such adjectives could be relevant to her bad faith claim if the Plaintiff shows to amend that claim.

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


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (June 22, 2021).

Bad Faith Claim Based Upon Delay in Full Payment Dismissed; Right to File Amended Complaint Allowed

In the case of Elansari v. The First Liberty Ins. Corp., No. 2:20-CV-5901-JDW (E.D. Pa. May 6, 2021 Wolson, J.), the court granted a Defendant’s Motion to Dismiss a Plaintiff’s Amended Complaint for bad faith but allowed the Plaintiff to file yet another Amended Complaint.

According to the Opinion, the Plaintiff alleged a breach of contract where the carrier subsequently paid a disputed amount of total liability and lost income coverage. The Plaintiff complained that the carrier failed to make full payment within a certain timeframe and asserted that he suffered damages due to that delay.

The Opinion indicated that the carrier first issued a check to the Plaintiff for approximately $3,700.00 and advised him that it would not pay additional compensation. However, after the Plaintiff filed suit, the carrier then issued an additional payment for another $1,089.00.

The court granted the carrier’s Motion to Dismiss after finding that the Plaintiff’s claim that the carrier had breached the insurance contract by not paying the additional amount failed because the carrier had since sent the Plaintiff a check for that amount in dispute.

The court also found that the Plaintiff failed to establish that the carrier had any contractual or legal duty to process his claims within a certain timeframe or that the Plaintiff had suffered any compensable damages as a result of any purported delay.

The court additionally noted, in this bad faith case, the Plaintiff's claims that the carrier’s purported delay in processing the additional payment failed in that that alleged delay appeared from the record before the court to be the result of negligence rather than any recklessness or bad faith.

Neverthless, the Plaintiff was still granted the right to file an Amended Complaint.

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


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (May 27, 2021).

A Difference of Opinioin on the Value of a UIM Claim Does Not Equal Bad Faith

In the case of Satterfield v. Geico, No. 20-1400 (E.D. Pa. Dec. 8, 2020 Pratter, J.), the Eastern District Federal Court dismissed a bad faith action after confirming the well-settled law that a difference of opinion as to the value of a UIM claim, in and of itself, does not amount to bad faith. 

In this matter, the court found that the Complaint lacked the particularity required to state a claim for bad faith and, given that only conclusory allegations of bad faith were pled, the Complaint was dismissed.

The Plaintiff was allowed to file an Amended Complaint that more specifically identified the carrier’s allegedly unreasonable conduct.

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

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

UIM Bad Faith Claim Dismissed Where No Evidence Found Sufficient To Allow Claims to Proceed

In the case of Bogats v. State Farm Mut. Auto. Ins. Co., No. 2:18-CV-708 (W.D. Pa. Nov. 30, 2020 Cercone, J.), the court dismissed a bad faith claim based upon allegations of poor claims handling in a UIM matter.

In part, the Plaintiff alleged bad faith in that the carrier allegedly failed to disclose that the Plaintiff’s stepson also had an automobile insurance policy with the carrier at the same time, which would considerably increase the potential UIM coverage.

According to the Opinion, the stepson’s policy was listed to a different home address. The stepfather advised the carrier that this was not accurate and an investigation into the stepson’s address ensued. The carrier ultimately agreed that there was additional UIM coverage available under the stepson’s policy. However, the carrier concluded that there was no factual basis to increase the settlement offer based upon the evidence presented.

The court found no support for the Plaintiff’s allegation that the carrier had misled the stepfather-insured into thinking there was less coverage then was actually available. The court also found no support for any reckless or intentional misconduct on the part of the carrier to support a bad faith claim.

The court otherwise found that the carrier’s claims handling was reasonable in that it considered multiple requests by the Plaintiff to re-evaluate the claim and had also agreed to the additional UIM coverage without significant delay once the actual address of the stepson was verified.  

Also, no evidence was found to support the argument that the carrier had engaged in course of conduct with intent to promote the carrier’s financial interests over its fiduciary duties to the Plaintiffs, or that the carrier had recklessly pursued a course of conduct that evidence bad faith towards its insured.

As such, the Plaintiff’s bad faith claims were dismissed.

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


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

First Party and UIM Bad Faith Claims Dismissed in Post-Koken Case; Leave to Amend Granted

 

In the case of Canfield v. Amica Mut. Ins. Co., No. 20-2794 (E.D. Pa. Oct. 2, 2020 Pappert, J.), the court ruled that a Plaintiff could not recover  damages under Pennsylvania's MVFRL or on her bad faith claim  where the allegations in her Complaint suggested nothing more than an ordinary dispute with her carrier over the value of her claims in this post-Koken auto accident matter.

More specifically, the court found that the facts alleged regarding the dispute between the Plaintiff and the carrier over the value of the claim and the payment of first party benefits did not amount to allegations of wanton conduct as required for the relief requested by the Plaintiff relative to her first party medical benefits claims asserted under Section 1797 of the MVFRL.

The court's decision with respect to Section 1797 is also notable in that the court followed prior precedent holding that, unless the carrier's actions fall outside the ambit of Section 1797 and involves bad faith abuses not related to the challenge of the denial of first party medical benefits, the MVFRL preempts the statutory bad faith claim concerning the Plaintiff's request for PIP benefits.

With regards to any separate bad faith claims asserted by the Plaintiff in the Complaint, the court pointed out that the Plaintiff did not aver an unreasonable denial of UIM or first party medical benefits by the carrier, but rather only alleged a delay in the payment of the same and an allegedly unreasonable position taken by the carrier on the value of the case.  

The court found that, while the Plaintiff disagreed with the value put on the file by the carrier, she had not asserted facts in the Complaint to support an allegation that the carrier's evaluation was unreasonable and/or that the carrier knew that it was unreasonable, all as is required to move forward on a bad faith claim.  

The court noted that, to proceed on a bad faith UIM claim in this regard, the Plaintiff must allege more than that the carrier extended "low-ball offers."  The court reaffirmed the rule of law that a carrier is permitted to make low but reasonable offers of settlement without fear of being found in bad faith. 

In the end, the court granted the Plaintiff leave to amend the Complaint to try to assert valid claims with regards to the above issues.

Anyone wishing to review this Opinion may click this LINK.  The court's companion Order can be viewed HERE.

Source: "Digest of Recent Opinions - Most Viewed Opinions."  Pennsylvania Law Weekly (Nov. 3, 2020).

Statutory Bad Faith Claim Dismissed in UIM Matter Where Plaintiff Settled for Substantially Less Than Tortfeasor's Liability Limits

In the case of Fertig v. Kelley, No. 16-CV-4801 (C.P. Lacka. Co. Nov. 5, 2020 Nealon, J.), Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas granted a UIM carrier’s Motion for Summary Judgment with regards to a statutory bad faith claim in a UIM case. 

According to the Opinion, following a motor vehicle accident, the Plaintiff filed a post-Koken action against both the third party tortfeasor driver and the Plaintiff's own underinsured motorist carrier. The Plaintiff also asserted a bad faith claim against the UIM carrier pursuant to 42 Pa. C.S.A. §8371. 

The claim against the third party defendant was settled and, thereafter, the remaining claims against the UIM carrier continued.

In support of a bad faith claim, the Plaintiff asserted that the UIM carrier had a duty to pay UIM benefits “that were reasonably due,” but “failed to promptly offer payment of the reasonable and fair failure” of her claim. 

The court noted that the record before it confirmed that the UIM carrier had promptly addressed and resolved an issue regarding the timing of the named insured’s execution of her limited tort coverage election form, and had also reformed the insurance policy to afford full tort coverage to the Plaintiff in light of the same. 

It was additionally noted that, once the Plaintiff presented a settlement demand for UIM benefits fourteen (14) months after the UIM carrier had granted the Plaintiff full tort status, the UIM carrier denied the Plaintiff’s claim on the grounds that the tortfeasor’s liability insurance coverage of $100,000.00 was sufficient to compensate the Plaintiff for her alleged injuries. 

After the Plaintiff later settled her liability claim against the tortfeasor for only $57,500.00 out of the available $100,000 in liability limits, the UIM carrier eventually filed a Motion for Partial Summary Judgment with regards to the Plaintiff’s statutory bad faith claim. I note that I was the defense attorney for the third part tortfeasor in this matter. 

Judge Nealon noted that, in order to recover damages for bad faith under 42 Pa. C.S.A. §8371, the Plaintiff must demonstrate, by clear and convincing evidence, that the UIM carrier (1) did not have a reasonable basis for denying the request for UIM benefits, and (2) knew or recklessly disregarded its lack of a reasonable basis to deny the UIM claim. 

The court noted that, even viewing the record in a light most favorable to the Plaintiff as required by the standard of review for a summary judgment motion, the court found that the record did not contain sufficient evidence to support a claim that the UIM carrier lacked a reasonable basis for declining to pay UIM benefits to the Plaintiff and/or that it knew or recklessly disregarded any alleged lack of reasonable basis for denying the request for UIM benefits. 

Judge Nealon noted that “[a] dispute between an insurer and a claimant regarding the value of a UIM claim is not uncommon, and, standing alone, does not create a triable issue of fact as to the insured’s bad faith.” 

The court found that the facts before the court not only supported an objective conclusion that a reasonable carrier would have denied the Plaintiff’s UIM claim on the basis that her damages did to exceed $100,000.00, as evidence, in part, by the Plaintiff’s voluntary tort settlement of only $57,500.00 of the available $100,000.00 liability limits, but that the record was also devoid of any evidence that the UIM carrier knew or recklessly disregarded its alleged lack of a reasonable basis for denying the Plaintiff’s claim for benefits.  

As such, while the court ruled that the Plaintiff may still pursue a claim for UIM benefits, subject to a credit owed for the tortfeasor’s liability coverage limit of $100,000.00, the court was granting the UIM carrier’s Motion for Partial Summary Judgment relative to the Plaintiff’s bad faith claim. 

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

UIM Bad Faith Complaint Over Disputed Value Dismissed as Conclusory

In the case of Taylor v. GEICO, No. 2-20-CV-00729-CRE (W.D. Pa. Aug. 4, 2020 Eddy, Chief Mag. J.)(Mem. Op.), the court granted a carrier's Motion to Dismiss a Plaintiff's statutory bad faith claim in a UIM matter but allowed the Plaintiff the right to amend.

In this decision by a Chief Magistrate Judge in the Western Federal District Court, it was ruled that the Plaintiff's Complaint did not hold up against the plausibility standard.  The Court noted that a "formulaic recitation of the elements of a cause of action will not do." Op. at p. 4. 

The Court noted that the Plaintiff's Complaint did not show anything more than a dispute between the Plaintiff and the carrier over the value of the claim.  It was noted that a dispute over the evaluation does not give rise to a bad faith claim;  rather, a plaintiff must plead facts to show that the carrier's evaluation lacked a reasonable basis and that the carrier knew or recklessly disregarded the fact that its evaluation was unreasonable.

This Opinion gives a nice overview of the Rule 12(b)(6) standard of review as well as the elements of a valid bad faith claim.

Anyone wishing to review this decision may click this LINK

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

UIM Bad Faith Complaint Survives Motion to Dismiss

A Plaintiff in a UIM bad faith case was found to have met the federal pleading requirements to survive a Motion to Dismiss in the case of Lowndes v. Travelers Property Cas. Co. of America, No. 19-5823 (E.D. Pa. April 17, 2020 Jones, II, J.).

In this matter, the UIM Plaintiffs alleged that the injured insured suffered serious injuries requiring ongoing treatment. The third party tortfeasor’s carrier had paid $250,000.00. The insureds were seeking the full $1 million dollar UIM coverage limit from the UIM carrier.

According to the Opinion, the UIM carrier’s highest offer was $200,000.00, which offer was made nearly three (3) years after the original claim.

The insureds filed suit and asserted a breach of contract and bad faith claims.

The Complaint asserted that the Plaintiffs had cooperated with the carrier and provided information over a thirty-two (32) month period. The Plaintiffs alleged that they had provided detailed information from which the carrier could have fairly evaluated the information and made a timely and reasonable offer on the claim.

The Plaintiffs alleged that they estimated their claim to be in excess of $1 million dollars based upon the Plaintiff’s alleged unchallenged medical records, narrative reports, vocational loss, and medical prognosis reports, all of which had been provided to the Defendant carrier. The Plaintiffs alleged that the carrier had failed to timely respond or comply with the Plaintiffs’ attorney’s request for the carrier to fairly evaluate the UIM claim.

The Plaintiffs also specifically alleged in their Complaint that the carrier “did not have a reasonable basis for delaying and/or denying underinsured motorist benefits or a partial tender of such under the policy” for nearly three (3) years. In the Complaint, the Plaintiffs characterized the carrier’s refusal to pay as frivolous and unfounded and also pled that the carrier “lacked a legal and factual basis” for its evaluation of the case presented.

The carrier moved to dismiss the claim of bad faith due to the Plaintiffs’ alleged failure to adequately plead the same.

The court reiterated the rule that, while a delay may be evidence of bad Faith, standing alone, a delay does not make out an automatic case for bad faith.

The court noted that, in evaluating whether a delay might constitute bad faith, “‘[t]he primary consideration is the degree to which a Defendant insurer knew it had no basis to deny the Claimant: if delays attributable to the need to investigate further or even to simple negligence, no bad faith has occurred.’” [emphasis in Opinion].

The court, in its Opinion recognized the potential negative impact of an alleged thirty two (32) month delay between the submission of the claim by the Plaintiff and the carrier’s offer. However, the court noted that, standing alone, this delay could not prove bad faith. However, the court found that there are additional factual allegations in the Complaint to support the bad faith delay argument.

With regards to the allegations of bad faith conduct on the part of the carrier, the court pointed out that the carrier had not sought an independent medical examination or a records review within the thirty two (32) month period as part of the effort to properly evaluate the claim presented. It was also noted that the Plaintiffs had argued that the carrier’s Motion to Dismiss did not include any argument that the “delay was attributable to the need to investigate the further or even to simple negligence.”

Based upon the entire record before him, Judge Jones II of the Eastern District found that the Plaintiff had set forth a plausible bad faith claim that focused on an alleged lack of investigation and failure to communicate on the part of the carrier. The court also noted that it was wholly plausible that the carrier did not have a reasonable basis for denying the Plaintiffs’ claims based upon the information that was provided to the carrier by the Plaintiff.

The court additionally stated that, “viewing the time lapse in conjunction with the lack of an independent medical evaluation by Defendant, it is plausible that Defendant knew of, or recklessly disregarded, its lack of a reasonable basis for denying Plaintiffs’ benefits of the policy.”

In the end, the court also disagreed with the defense argument that the matter before him was merely a disagreement over a fair evaluation of the case presented. Rather, the court found that, under the standard of review which required the court to assume the truth of the Plaintiffs’ factual allegations, the allegations were found to have set out a plausible Complaint that the carrier had made an unreasonably low offer, or no offer, which potentially constituted bad faith conduct under Pennsylvania law.

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.   

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.

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.