Bad Faith Claim Dismissed Where Delays Found To Be Caused by Insured

In his recent decision in the property loss bad faith case of Turner v. State Farm Fire & Cas. Co., No. 3:15-CV-906, 2017 U.S. Dist. LEXIS 81922 (M.D. Pa. May 30, 2017 Conaboy, J.), Judge Richard P. Conaboy provides an excellent summary of the current status of bad faith law and reviews the validity of bringing a bad faith claim where the insured's own conduct allegedly led to the delays at issue.

Judge Richard P. Conaboy
M.D. Pa.

In the end, the court granted the carrier's motion for summary judgment and dismissed the bad faith claims presented. Anyone wishing to review this decision may click HERE.


I send thanks to Lee Applebaum of the Philadelphia, PA law firm of Fineman, Krekstein & Harris, and writer of the excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law Blog, for bringing this case to my attention (Click HERE to check out that Blog).

Diversity Minimum Dollar Amount Found to be Met in Federal Court UIM Bad Faith Action

In the case of Koerner v. GEICO, No. 17-455 (M.D. Pa. May 18, 2017 Conaboy, J.), the court refused to remand a post-Koken UIM/bad faith litigation to state court.  

In part, the court found that the diversity minimum dollar amount was met because the Complaint sought punitive damages for bad faith which the court found, in theory, makes the amount controversy in excess of $75,000.00.   The court therefore found that federal court jurisdiction was proper regardless of the amount of uninsured motorist coverage available under the policy. 

Anyone wishing to review the Koerner decision may click this LINK.

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

Judge Conaboy of Federal Middle District Court Rules On Punitive Damages Issues In Commercial Motor Vehicle Accident Case

In his recent decision in the commercial motor vehicle accident case of Kane v. DG Express, No. 3:16-CV-216 (M.D.Pa. May 18, 2017 Conaboy, J.), Judge Richard P. Conaboy denied the defendants’ Motion in Limine seeking to preclude Plaintiff’s punitive damages claim. The decision held that a Motion in Limine is an inappropriate vehicle for an effect -- the preclusion of a claim – that should have been the subject of a case dispositive motion, such as a motion to dismiss at the pleadings stage, or a motion for summary judgment after the conclusion of discovery. 

Judge Conaboy also denied the Defendants’ Motion in Limine which sought to preclude the testimony of Plaintiff’s liability expert witness. In so doing, the Court noted that it was persuaded that expert testimony regarding what level of competence and care a professional driver should exhibit, and what risks such a driver must necessarily anticipate, may assist the jury in determining whether the negligence already admitted by the Defendants rose to the level of reckless indifference that is necessary to support an award of punitive damages.

Anyone wishing to review this decision may click this LINK.

I send thanks to the prevailing Plaintiff's Attorney Richard A. Russo of the Wilkes-Barre, PA law firm of Rosenn, Jenkins & Greenwald for bringing this case to my attention.

Amount in Controversy for Federal Court Jurisdiction Found in Bad Faith Punitive Damages Claim

In the case of Koerner v. GEICO, No. 17-455 (M.D. Pa. May 18, 2017 Conaboy, J.), the court refused to remand a post-Koken UIM/bad faith litigation to state court.  

In part, the court found that the diversity minimum dollar amount was met because the Complaint sought punitive damages for bad faith which the court found, in theory, makes the amount controversy in excess of $75,000.00.   The court therefore found that federal court jurisdiction was proper regardless of the amount of uninsured motorist coverage available under the policy. 

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, and the writer of the Pennsylvania and New Jersey Insurance Bad Faith Case Law blog, for bringing this case to my attention.  

Bad Faith Claim Allowed to Proceed in Fire Loss Case

In his recent decision from a few months back in the case of Turner v. State Farm Fire & Cas. Co., Case No. 15-CV-906, (M.D. Pa. January 14, 2016 Conaboy, J.), Judge Richard P. Conaboy of the  Federal Middle District Court allowed a bad faith claim to proceed beyond a motion to dismiss in a first party fire loss case.

 The insurer had moved to dismiss a bad faith count under Twombly/Iqbal standards for federal court Complaints.  The court denied the motion and found that the bad faith claim was adequately pled.

Judge Richard P. Conaboy
M.D. Pa.

The insureds alleged the property at issue was insured for contents coverage and other miscellaneous coverages in the amount of $159,060.00. The complaint alleged that despite repeated demands, the carrier did not make payment on claims subject to these coverages.

Anyone wishing to review this case may click this LINK.

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

Judge Conaboy Addresses Application of Rejection of UIM Stacking Form to Renewal Policies

In the case of Connolly v. Progressive Northern Ins. Co., 3:13-CV-2717 (M.D. Pa. Feb. 4, 2015 Conaboy, J.), Judge Richard P. Conaboy of the Federal Middle District Court for the Middle District of Pennsylvania addressed a carrier's motion for summary judgment in a case involving a challenge to the carrier's rejection of stacking form in an underinsured (UIM) motorists benefits matter.

 Before the court were insurance application documents concerning an underinsured motorist claim (UIM) and the applicability of a rejection of stacking form signed when the policy was first purchased in 1998.   The UIM limits under the policy were $100,000 per person.  The stacking issue was important as there were three vehicles on the policy.

The Plaintiff asserted that, since there was only a rejection of stacking form signed at the inception of the policy, then stacking should apply because the policy numbers were different every time the policy was renewed.  According to the Plaintiff's argument, this represented the creation of a new policy, which, in turn, arguably required the need for the carrier to obtain a new rejection of stacking form. 

The insurance company argued that the last numbers were only changed but that the policy remained the same. 

Judge Conaboy agreed with the defense position that, under the Sackett line of cases, once a valid rejection of stacking form was secured, the carrier need not secure a rejection of stacking form every time the same policy came up for a renewal or when a car was added to the policy.

According to the Opinion, however,  the carrier never explained in its argument why the suffixes were different or why the company periodically modified the final number on the policy.  In other words, the court was unable to state, as a matter of law, that there were not any substantive differences in the policy over the course of the 21 renewals in 10 years.  Simply put, based upon the record before the court, Judge Conaboy could not state that the policy at issue was identical to the one originally issued at the inception of the policy back in 1998 when the rejection form was signed.

As such, the Connolly court ultimately held that.“[d]ue to uncertainty in the record, the Court must deny the Defendant’s Motion for Summary Judgment.”

Judge Conaboy also allowed the Plaintiff's bad faith claim to proceed.


Anyone wishing to read Judge Conaboy's Memorandum Opinion in Connolly v. Progressive may click this LINK.


I send thanks to Attorney Scott Cooper of the Harrisburg, PA law office of Schmidt Kramer for bringing this case to my attention.

 

Corrected LINK To "Bad-Faith Setup" Defense Decision

Several readers noted difficulty with yesterday's Link to the "Bad-Faith Setup" affirmative defense decision in the case of Shannon v. New York Central Ins. Co. by Judge Conaboy of the Federal Middle District Court of Pennsylvania.

I apologize for any inconvenience in that regard and note that I have fixed the link.  You can get to an online copy of the Shannon decision HERE. 

Federal Middle District Judge Conaboy Addresses Superseding Intervening Cause Issue In MVA Case

In his recent decision in the case of Bushta v. Hilton, Civil Action No. 3:12-CV-473 (M.D. Pa. Oct. 9, 2013 Conaboy, J.), Judge Richard P. Conaboy of the United States Federal Middle District Court of Pennsylvania issued an interesting case regarding the issues of causation and superseding intervening cause.  

According to the Opinion, the subject lawsuit arose out of a two distinct motor vehicle accidents and the Defendants asserted that the Plaintiffs could not satisfy the causation element of the negligence claims against the Defendants based upon the one-vehicle accident that actually involved the moving Defendants.

More specifically, the Plaintiff was a Pennsylvania State Trooper, who was called to assist with traffic on Interstate 81 in New Milford Township, Pennsylvania after the initial accident on Interstate 81 northbound involving a tractor trailer in which Defendant James Hilton was driving.   That accident occurred when Defendant Hilton failed to negotiate a right curve in the roadway, ended up traveling off the roadway, and rolled his tractor trailer onto its side.  
 
The Plaintiff-State Trooper stopped in a middle crossover of the median on Interstate 81 approximately ¾ of a mile to the south of the accident.   The Plaintiff was completely off the roadway.  The Plaintiff remained in his car.  The State Trooper Plaintiff did not put out any flares or sound his siren.  

The Plaintiff-State Trooper was in the crossover of the median for less than five minutes with his overhead red and blue lights on and flashers when his vehicle was struck by a tractor trailer driven by Defendant Winston J. Whitney in the second accident at issue in this matter.  

The court noted in its Opinion that approximately 30 minutes separated the initial accident involving Defendant Hilton, and the second accident involving Defendant Whitney and the Plaintiff.  

It was also noted that the Plaintiff-State Trooper never went to the scene of the accident involving Defendant Hilton and admitted that he knew nothing about that accident and was not part of that investigation.  

The Plaintiff filed a lawsuit against all Defendant drivers involved.  The Defendant, James Hilton, the person involved in the first accident, filed a Motion for Summary Judgment after the completion of discovery.

The moving Defendant asserted that he was entitled to summary judgment because his initial accident was not a proximate cause of the Plaintiff-State Trooper’s injuries.  

The court in this Bushta case provided a detailed description of the basic elements of a cause of action of negligence, including the all-important factor of proximate causation.   The court thoroughly reviewed the numerous factors involved in the determination of proximate causation, including but not limited to, the place of the accident(s), the timely involved, and the particular conduct of the Defendants involved.  

Judge Conaboy also stated that, “[w]hether an intervening act is a superseding cause of the injury which would provide insulation from liability for one whose actions have been determined to be substantial factor in bringing about the harm is governed by Restatement (Second) of Torts §447 (1965).   The court cited the case of Taylor v. Jackson, 643 A.2d 771 (Pa. Cmwlth. 1994).   

Judge Conaboy also noted that the issue of whether proximate cause is for a court or a jury to decide was addressed in Taylor, supra., in which that court stated that “our Supreme Court…observed that determination of whether an actor’s conduct was a substantial cause of the injuries complained of should not be taken from the jury if the jury may reasonably differ about whether the conduct of the actor has been a substantial factor in causing the harm.”  Id. at 776-777.  Judge Conaboy stated that the Taylor case also confirmed that the issue of whether a third person’s conduct should be considered a superseding/intervening cause of a Plaintiff’s injuries is for a jury to determine where disputed issues of material fact exist.   Id. at 778.

Applying the above law to the record before him, Judge Conaboy ruled that genuine issues of material fact existed to preclude the entry of summary judgment. 

 

Anyone wishing to review this interesting Opinion may click this LINK.

 

I send thanks to Attorney Bruce Zero of the Powell Law Firm in Scranton, PA for bringing this decision to my attention.

LOOK OUT!! - Claim by Injured Skier Against Reckless Fellow Skier Allowed to Proceed

While there have been a number of recent decisions limiting the rights of injured skiers to recover under Pennsylvania law, it appears that such claims will be allowed to proceed against a fellow skier where the injury results from the reckless acts of that other skier.

In a June 14, 2011 decision, Judge Richard P. Conaboy of the United States District Court for the Middle District of Pennsylvania entered an Opinion and Order in the case of Smith v. Demetria, et al., No. 3:11-CV-773 (M.D.Pa. June 14, 2011, Conaboy, J.) denying the motion to dismiss and allowing the tort and punitive damages claims to go forward in a skiing accident case.

In this matter, the Plaintiff, who was injured while skiing, filed a claim against a snowboarder alleging that the snowboarder was acting recklessly at the time of the incident.  It was alleged that the snowboarder was coming down the hill at approximately 35 mph and made no effort to avoid the Plaintiff prior to the impact.  Punitive damages were claimed.  The snowboarder filed a Rule 12(b)(6) Motion to Dismiss.

In his memorandum, Judge Conaboy held that, under the facts before the court of a skier having been injured by another reckless skier, while the the Skier Responsibility Act may preclude a claim involving a collision between skiers as a result of ordinary negligence, the Act did not preclude claims against someone who skiing abnormally, recklessly, or out of control.

The Court also ruled that the punitive damages claim would be allowed beyond the Rule 12(b)(6) motion to dismiss stage as adequate facts had been alleged to support the filing of a claim for exemplary damages.

I thank the prevailing Plaintiff's Attorney, Stephen Seach, of Seach Law Offices in Drums, PA for bringing this case to my attention.

Anyone desiring a copy of this Opinion may contact me at dancummins@comcast.net.



Source of photo:   Image: Salvatore Vuono / FreeDigitalPhotos.net

Add Another Case to the String Cite of Federal Court Cases Declining Jurisdiction on Insurance Coverage Questions

My partner, Timothy E. Foley, Esquire prevailed on a Motion to Dismiss for an insured defendant in the Federal Middle District Court Case of Founders Ins. Co. v. Garofalo, No. 03:10-CV-1114 (M.D.Pa. Aug. 30, 2010, Conaboy, J.) in which Judge Conaboy was convinced by a long string cite of similar decisions to decline to exercise his discretionary jurisdiction over an insurance coverage question posed by the Plaintiff carrier.

The underlying case involved a fatal car accident. The tortfeasor driver was allegedly intoxicated and the underlying suit was against that driver and the bar that allegedly served alcohol to the driver. The tortfeasor driver also happened to be the president of the corporation that owned the bar (i.e. he allegedly served himself). The carrier at issue, Founders Insurance Company, covered both the defendant driver and the corporation that owned the bar.

In this Federal Court declaratory judgment action, the carrier sought a judicial declaration that it need not provide a defense or coverage under the circumstances presented. The insureds filed a motion to dismiss.

Without reaching the merits of the declaratory judgment action, Judge Conaboy relied upon a string cite of cases presented by Attorney Tim Foley all standing for the proposition that the Federal Court had the discretion to decline to hear such cases as the Complaint did not involve any federal question and dealt strictly with contract interpretation under well settled Pennsylvania law. In the face of this overwhelming precedent, Judge Conaboy declined to take jurisdiction over the case and granted the motion to dismiss.

This decision adds another notch to the string cite of cases in this regard and furthers the notion that the Federal Courts are not interested in addressing these issues where they do not have to. An analysis of the other similar cases, and their impact on Post-Koken cases can be seen in my Pennsylvania Law Weekly article "Here Comes Hurricane Koken" 31 PLW 1165 (Oct. 27, 2008), which can b read by clicking on this link: http://www.jdsupra.com/post/documentViewer.aspx?fid=ef090f48-d1fa-4e1c-8569-3538ec1fd556.

Anyone desiring a copy of the case of Founders Ins. Co. v. Garofalo may contact me at dancummins@comcast.net