There Can Be No Bad Faith Where Policy Was Properly Cancelled

In the case of Chad & Ashley, Inc. v. White Pine Ins. Co., No. 1110-CV-2016 (C.P. Lawrence Co. Dec. 19, 2018 Cox, J.), the court granted an insurance company’s Preliminary Objections seeking the dismissal of a Plaintiff’s claims for breach of contract and bad faith in a property damage case. 

According to the Opinion, the Plaintiff brought this action against the carrier for breach of contract and bad faith due to the carrier’s alleged failure to cover a total loss of the Plaintiff’s property.  

The court confirmed that the record before it established that the carrier had sent the Plaintiff a cancellation notice which confirmed an end date of the insurance policy that was approximately two (2) weeks prior to the date of the loss.  

Plaintiff’s counsel attempted to argue that the cancellation notice could be interpreted to instead provide the Plaintiff with a fifteen (15) day notice such that the policy would still be in effect slightly beyond the date of the loss.  

The court disagreed with the Plaintiff’s reading of the cancellation notice.   The court also noted that the insurance contract itself provided only for a ten (10) day period of notice.   As such, the court granted the Defendant’s Preliminary Objections and dismissed the breach of contract claim.

Relative to the bad faith claim, the court noted that, because the insurance contract was not in effect at the time of the loss, the Plaintiff was unable to show the first element of a bad faith claim, i.e., that the insurer did not have a reasonable basis to deny benefits under the policy.   As such, the bad faith claim was dismissed as well. 

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

 

Source:  “Digest of Recent Opinions.”  Pennsylvania Law Weekly (March 12, 2019).

Nonsuit in Declaratory Judgment Action on Coverage Affirmed Based On Definition of "Occurrence"

In the case of Kiely v. Phila. Contrib. Ins. Co., 2019 Pa. Super. 90 (Pa. Super. March 26, 2019 Ott, J., Dubow, J. Stevens, P.J.E.)(Op. by Dubow, J.), the Pennsylvania Superior Court affirmed a trial court’s entry of compulsory non-suit in favor of the carrier on a coverage question arising out of a homeowner’s policy and/or an umbrella policy. 

According to the Opinion, an insured who was covered a homeowner’s policy and an umbrella policy issued by the same carrier was sued in an underlying litigation by a former domestic employee, who asserted claims of assault and intentional infliction of emotional distress.   The insured had tendered the lawsuit to the carrier for a defense. The carrier denied coverage, asserting that the intentional torts alleged in the underlying Complaint were not “occurrences.” 

The insured then commenced this coverage litigation against the carrier seeking a declaration that the carrier was obligated to defend and indemnify the insured on the claims presented.  The insured also sought damages for bad faith.  

The coverage litigation proceeded to a trial.  At trial, the trial court permitted the insured to introduce evidence that evidence that he (the insured) lacked the mental capacity sufficient to intentionally assault the Plaintiff in the underlying matter.

The trial court entered a nonsuit in favor of the carrier after finding that the insured failed to introduce evidence of an “accident” which was required in order to trigger coverage under the policy for an “occurrence.”  

On appeal, the Superior Court affirmed the trial court’s entry of a compulsory nonsuit.   The court held that the insured’s alleged assault upon the underlying Plaintiff was not an “accident; rather, it was an intentional tort.”   Accordingly, given that the policy defined an “occurrence” as an “accident,” and given that the no accident or occurrence was alleged in the underlying personal injury Complaint, the Superior Court agreed that the carrier did not owe any duty to defend or indemnify under the policy.  

In addition to upholding the trial court’s entry of a compulsory nonsuit, the Superior Court additionally held that it was improper for the trial court to have permitted the insured to introduce evidence that the insured lacked the mental capacity to commit intentional torts.

The Superior Court noted that in a declaratory judgment action concerning insurance coverage issues, the allegations in the underlying personal injury Complaint control the analysis and that extrinsic evidence could not be admitted while the underlying lawsuit was still pending.  Simply put, in a coverage action, the essential analysis required involved comparing the allegations of the underlying Complaint to the insurance policy to determine if the coverage provisions were triggered.

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

I send thanks to Attorney Benjamin P. Novak, Esquire of the Lancaster, Pennsylvania office of Fowler, Hirtzel, McNulty & Spaulding, LLP, for bringing this case to my attention.

Dog Bite Claims Against Landlord Dismissed in Monroe County

In the case of Gallo v. Precise Moments Academy, No. 904-Civil-2018 (C.P. Monroe Co. Jan. 4, 2019 Harlacher Sibum, J.), Judge Jennifer Harlacher Sibum of the Monroe County Court of Common Pleas ruled that a landlord was not liable under state dog law or agency principles where a tenant's dog bit a child at a leased daycare facility.  

The court found that the Plaintiff failed to allege specific facts to support any claims of negligence or punitive damages against the landlord.  

According to the Opinion, the Plaintiffs were parents of a minor child who attended a daycare facility.   A dog owned by one of the tenants who ran the facility bit the minor child while she was at the daycare resulting injuries to the child’s face. 

In addition to suing the tenants, the Plaintiffs sued the landlord who owned the property on which the daycare facility was located.   The Plaintiffs alleged that the landlord negligently and recklessly maintained dangerous dogs on the daycare premises despite the substantial risk of injury to children.  The case came before the court by way of the landlord’s Preliminary Objections.  

Initially, the landlord asserted that the dog law in Pennsylvania did not apply given that the landlord was not an “owner” of the dog as required for the application of that statute which required dog owners to confine, secure or otherwise control their dogs.  

The court agreed with the landowner Defendant in this regard and noted that prior case law had held that a landlord out-of-possession, without more, was not considered the owner of a tenant’s dog under that dog law.   The court stated that the Plaintiffs presented no other facts in support of its legal conclusion assertions in the Complaint that the landlord housed and kept the dog.  

The court also agreed with the landlord Defendant’s argument that the Plaintiffs’ allegations of agency should be stricken because there were no facts to support allegations of vicarious liability.   The court noted that the Complaint did not identify any agency relationship between the landlord and its tenants.  

Judge Harlacher Sibum additionally found that the catch-all phrasing of negligence in the Plaintiff’s Complaint against the landlords was insufficient under Pennsylvania law.  

The court also agreed with the landlord Defendants’ contention that the Plaintiffs’ claims for punitive damages should be stricken for insufficient specificity where the Plaintiff failed to allege that the landlord acted with any bad motive.   The court reiterated that the landlord did not have any control over the daycare premises or any authority to regulate the tenant's pets.   

As such, Judge Harlacher Sibum concluded that the landlord’s conduct was not reckless or wanton as a matter of law.  Accordingly, the Preliminary Objections filed by the out-of-possession landlord Defendant were sustained and the claims against it dismissed.  

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

Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Feb. 5, 2019).

Federal Court Rules That Trial Judges Should Use Common Sense in Evaluating Motions To Dismiss in Bad Faith Cases

In the case of 1009 Clinton Properties, LLC v. State Farm Fire & Cas. Co., No. 18-5286, 2019 WL 1023889 (E.D. Pa. March 4, 2019 Kenney, J.), the court issued a lengthy Opinion addressing a Motion to Dismiss an insured’s bad faith claim in a property damage loss case.  

Among the allegations was that the carrier allegedly falsely represented to the Plaintiff that the loss was not entitled covered under the policy, that the carrier failed to complete a prompt and thorough investigation of the claim before asserting that the claim was not covered, and that the carrier unreasonably withheld policy benefits without a reasonable factual explanation.  

Of note is the court’s analysis indicating that, in reviewing Motions to Dismiss standards under the Federal Rules of Civil Procedure, that the trial court’s “must do away with a robotic reading of Twombly and Iqbal and instead use its common sense when addressing whether a bad faith claim can survive a Motion to Dismiss.  When the Court applies its common sense in analyzing a bad faith claim, here, it becomes apparent that Plaintiff’s bad faith claims survives Defendant’s Motion to Dismiss.”   

After reviewing the steps required in analyzing a Motion to Dismiss along with the basis elements of a bad faith claim, the court ruled that the Motion to Dismiss should be denied under the facts presented in this matter. 

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

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

Judge Leeson of Eastern Federal District Court Gives Lessons on Bad Faith Pleadings

In the case of Krantz v. Peerless Insurance Company, No. 18-CV-3450, 2019 WL 1123750 (E.D. Pa. March 11, 2019 Leeson, Jr., J.), the court granted a Motion to Dismiss a bad faith claim in a UIM case and then remanded the matter back to state court.

In this case, the UIM Plaintiff argued that the insurer improperly interpreted the policy in refusing to pay full policy limits.   The Complaint alleged that the carrier relied upon an invalid and unlawful set-off provision in withholding a substantial amount of the policy limits.  

However, the court found that the Plaintiff failed to plead facts to show that this set-off provision was invalid, “or, more importantly, that [the carrier] knew or should have known that it was denying the full amount of benefits based on an invalid provision.”  

The court also found additional allegations in the Complaint to be conclusory and lacking in other supporting factual allegations to make the averments plausible under the pleading requirements in federal court.   For example, the court faulted the following allegations:

(1)        The insurer did not make any good faith offers to settle despite repeated demands;

(2)        The insurer “failed to objectively and fairly evaluate his claim”;

(3)        The insurer “failed to promptly tender payment of the fair value of the claim”; and,

(4)        The insurer failed to reasonable investigate the claim.

The court concluded that the Plaintiff’s cursory allegations generally asserted that the carrier lacked the reasonable basis for denying the Plaintiff’s claim for benefits, “but do not provide any factual allegations from which the Court could make a plausible inference that Defendant knew or recklessly disregarded its lack of a reasonable basis for denying benefits.”  

After dismissing the bad faith count, the court found the Plaintiff’s claims no longer exceeded $75,000.00 and, as such, the court remanded the case to the Lancaster County Court of Common Pleas.  

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

I send thanks to Attorney Lee Applebaum of the Philadelphia law firm of Fineman, Krekstein & Harris.   This case was found on Attorney Applebaum excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law blog.  

Negligent Hiring/Supervision Claim Against Hospital Allowed To Proceed in Absence of Certificate of Merit

In the case of Joyner v. St. Luke’s Univ. Hosp., No. 2018-C-1033 (C.P. Leh. Co. Oct. 19, 2018 Johnson, J.), the court overruled a hospital’s Preliminary Objections asserting that the Plaintiff’s claims against the hospital for negligent hiring and supervision could not proceed in the absence of a Certificate of Merit.  As such, the Plaintiff was permitted to proceed on the claims presented.

The court ruled in this fashion after finding that the Plaintiff’s claim sounded in ordinary negligence and not professional negligence.  

In this matter, the Plaintiff alleged that she was sexually assaulted by an employee of the hospital while the Plaintiff was a patient at the hospital.   The Complaint asserted a claim against the hospital for negligent hiring, supervision, and training.  

After the Complaint was filed, the hospital filed a Notice of Intention to Enter a Judgment of Non Pros on a professional liability claim because Plaintiff did not file a Certificate of Merit.  

The Plaintiff responded with a Motion to Determine a Necessity of Filing a Certificate of Merit Pursuant to Pa.R.C.P. 1042.6.   The hospital then filed a Preliminary Objection as to the sufficiency of the Plaintiff’s claim against it.  

As stated, the court found that the Complaint asserted an ordinary negligence claim for which a Certificate of Merit was not required.   The court more specifically stated that the Plaintiff’s claim against the hospital did not raise questions of medical judgment, allege substandard medical treatment, or allege that the hospital’s actions fell below a professional or medical standard.   

The court additionally found that a jury could determine whether the hospital allegedly breached its duty to properly hire, supervise, and train its employee without any need for expert opinion.  

Accordingly, the court found that the Plaintiff could proceed in this claim without the necessity of filing a Certificate of Merit.

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

Source:  “Digest of Recent Opinions.”  Pennsylvania Law Weekly (Feb. 26, 2019).  

Summary Judgment Granted in Med Mal Case Where Plaintiff Failed to Produce Expert Report on Causation

In the case of Warrick v. Scranton Quincy Hospital Co., LLC, No. 16-CV-1923 (C.P. Lacka. Co. March 25, 2019 Nealon, J.), the court granted Defendants’ Motions for Summary Judgment in a medical malpractice case where a pro se Plaintiff failed to produce expert reports in support of the claims presented by the expiration of the expert deadline imposed upon the Plaintiff.  

According to the Opinion, the Plaintiff filed this malpractice action against numerous Defendants asserting a failure to timely and correctly diagnose and treat abdominal complaints, which negligence allegedly caused the Plaintiff to develop other issues requiring a surgical repair.  

The Plaintiff was originally represented by counsel who filed Certificates of Merits in support of the claims presented.   Later in the case, the Plaintiff’s attorneys withdrew their appearance.

The pro se Plaintiff then failed to produce any expert report by the time of a court imposed deadline for the production of Plaintiff’s expert’s reports.  

Judge Terrence R. Nealon
Lackawanna County

Relying upon the law that holds that, except in cases of obvious malpractice where a lay juror could recognize negligence just as well as any expert witness, a Plaintiff must present expert testimony to establish the applicable standard of care in a medical malpractice action, the deviation from that standard, medical causation, and the extent of the alleged injuries and damages. 

Given that the Plaintiff had failed to produce an expert medical opinion following the completion of discovery and prior to the expiration of the deadline for the production of expert reports, the court found that the Plaintiff was unable to establish a prima facie case of medical malpractice negligence.   As such, the court granted summary judgment in favor of the Defendants. 

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