DAVIS v. STATE FARM INSURANCE
MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE J. CURTIS JOYNER ON 2/28/13. 3/1/13 ENTERED AND COPIES EMAILED.(rf, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
STATE FARM INSURANCE,
MEMORANDUM & ORDER
Joyner, C. J.
February 28, 2013
Before this Court are Plaintiff’s Motion Requesting
Amendment of the Court’s 12/13/2012 Order to Contain Language
from 28 U.S.C. § 1292(b) Allowing Plaintiff to Petition the
United States Court of Appeals for the Third Circuit for
Immediate Interlocutory Appeal (Doc. No. 55), and Defendant’s
Response thereto (Doc. No. 56).
For the reasons set forth in
this Memorandum, the Court will deny the Plaintiff’s motion.
The Plaintiff filed this action on April 28, 2011 in the
Court of Common Pleas for Philadelphia County, alleging that the
Defendant, State Farm Insurance, had acted in bad faith in
denying her insurance claim, had breached a contract with her,
and had defamed her.
The Defendant removed the action to this
Court on May 26, 2011 based on diversity jurisdiction.
In her Complaint, the Plaintiff asserted the following
claims: in Count I, an insurance bad faith claim; in Count II, a
claim under Pennsylvania’s Unfair Insurance Practices Act; in
Count III, a claim for libel; and in Count IV, a claim for breach
State Farm filed an Answer to the Complaint, and
the parties conducted discovery.
The Defendant filed a Motion
for Summary Judgment on all counts of the Complaint on October 5,
The Plaintiff filed a Cross-Motion for Summary Judgment on
Counts I, III and IV on October 19, 2012.
The Court issued a
Memorandum and Order on December 13, 2012 granting the
Defendants’ request for summary judgment on Counts I, II and III
of the Complaint, and denying their request on Count IV.
Court also denied the Plaintiffs’ cross-motion for summary
(Memorandum and Order of Dec. 13, 2012, Doc. No. 53)
A full account of the facts of this case is contained in the
Court’s December 13, 2012 Memorandum and Order.
Plaintiff had an insurance plan with State Farm that covered
theft, and reported a claim for the theft of her vehicle on
January 27, 2011.
While the initial investigation into the theft
claim raised no red flags, the Special Investigation Unit at
State Farm was advised on February 2, 2011 that the police had
surveillance footage of the insured vehicle entering a tow yard
prior to the date the theft was reported.
The photographs showed
the Plaintiff’s vehicle being towed into Tow Decision, and the
date and time stamp reflected that the photos were taken on
January 25, 2011, two days prior to the Plaintiff’s report of the
theft and before the time she said that she had last driven her
State Farm commenced an investigation that lasted from
February 2, 2011 until March 3, 2011.
In the course of this
investigation, State Farm attempted to discover how the car had
ended up at Tow Decision and whether it had arrived there on
January 25th as the photos reflected.
After the investigation
was discontinued, the State Farm investigator spoke with the
Plaintiff and informed her that he was going to recommend a
denial of her claims because the results of the investigation
showed her vehicle arriving at a tow facility two days prior to
the date she said she last drove it.
The Plaintiff denied that
this was possible, but State Farm prepared a claim denial memo
and sent it to her, terminating the claim.
In the Court’s December 13, 2012 Memorandum and Order, we
observed that there was clearly a genuine issue of fact as to
whether the Plaintiff’s car was towed into Tow Decision on
January 25th, or on a later date, as the Plaintiff claimed.
(Memorandum and Order of Dec. 13, 2012, at 5-6, Doc. No. 53).
However, the Court concluded that this genuine issue of fact was
not material to the insurance bad faith and defamation claims and
granted summary judgment on these two claims.1
The Court found
The Plaintiff also had a claim under the Pennsylvania Unfair Insurance
Practices Act in Count II of the Complaint. However, as the Court noted in
the Memorandum and Order, this Act does not provide a private cause of action.
Fay v. Erie Ins. Group, 723 A.2d 712, 714 (Pa. Super. Ct. 1999). The
that this issue of fact was material to the breach of contract
claim, and denied summary judgment on that Count.
In deciding that there were no genuine issues of material
fact precluding judgment as a matter of law on the insurance bad
faith claim, the Court concluded that State Farm had a reasonable
basis for denying the Plaintiff’s claim, and therefore the
Plaintiff could not prevail.
(Memorandum and Order of Dec. 13,
2012, at 8-11, Doc. No. 53).
For a plaintiff to recover for an
insurance bad faith claim, she must show by clear and convincing
evidence that the insurer did not have a reasonable basis for
denying benefits under the policy, and the insurer knew or
recklessly disregarded its lack of a reasonable basis.
v. Prudential Prop. and Cas. Ins. Co., 649 A.2d 680, 688 (Pa.
Super. Ct. 1997).
The Court concluded that by performing an
investigation lasting more than a month, tracking down and
interviewing individuals who might have information relevant to
the insured vehicle’s whereabouts, and obtaining photographs that
contradicted the Plaintiff’s report of theft, State Farm had a
reasonable basis for denying the claim.
The photograph was
clearly stamped with the date of January 25th, and State Farm
uncovered nothing over the course of the investigation that
contradicted the date stamp aside from the Plaintiff’s own
With such information and evidence, State Farm had a
Plaintiff acknowledged as much, and does not seek interlocutory appeal of the
Court’s grant of summary judgment on this claim.
reasonable basis in denying the claim.
In opposing summary
judgment, the plaintiff did not “make a showing sufficient to
establish the existence of [every] element essential to [her]
case on which [she] will bear the burden of proof at trial.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
In granting summary judgment on the Plaintiff’s defamation
and/or libel claim, the Court concluded that under either of two
theories, the Plaintiff did not have a claim.
Order of Dec. 13, 2012, at 12-15, Doc. No. 53).
Under the theory
presented in the Plaintiff’s Complaint - that the Defendant had
publicized the denial of her claim on a loss information system the Plaintiff failed to make a showing to establish the existence
of all elements of defamation/libel.
Specifically, the Plaintiff
did not put forth any evidence of publication.
Under the theory
that the Defendant published the denial of her claim to the
Philadelphia District Attorney’s Office, the Court concluded that
the statements were privileged.
We explained that under
Pennsylvania law, “statements made by judges, attorneys,
witnesses and parties in the course of or pertinent to any stage
of judicial proceedings are absolutely privileged and, therefore,
cannot form the basis for liability for defamation.”
v. Smorto, 588 A.2d 36, 41 (Pa. Super. Ct. 1991).
the Pennsylvania Superior Court had found that this absolute
privilege encompassed statements amounting to an accusation of a
crime made to law enforcement officials for the purpose of
bringing criminal charges.
Id. at 42.
This Court concluded that
the absolute privilege applied to the Defendant’s communication
to the District Attorney’s Office, and therefore, the Plaintiff
could not prevail on her defamation/libel claim as a matter of
Now, the Plaintiff requests the Court’s leave to seek
interlocutory appeal on the dismissal of these two claims from
the Court of Appeals from the Third Circuit.
STANDARD OF REVIEW
A partial denial of a motion for summary judgment is not a
final judgment; therefore, it is only appealable as an
interlocutory appeal under 28 U.S.C. § 1292(b).
See 28 U.S.C.
§ 1292(b); In re City of Philadelphia Litig., 49 F.3d 945, 956
(3d Cir. 1995) (“Generally, this court does not have jurisdiction
to review the denial of summary judgment because such decisions
are not final as required by 28 U.S.C. § 1291.”).
1292(b) provides that when a district judge is of the opinion
that an order, not otherwise appealable, involves a controlling
question of law to which there is substantial ground for
difference of opinion and that an immediate appeal from the order
may materially advance the ultimate termination of the
litigation, he or she may certify that order for immediate
28 U.S.C. § 1292(b).
In determining whether to certify an order for immediate
appeal, the Court must determine that: (1) the order involves a
controlling question of law; (2) there are substantial grounds
for difference of opinion as to the correctness of the issue
under consideration; and (3) an immediate appeal will materially
advance the ultimate termination of the litigation.
Carte Blanche Corp., 496 F.2d 747, 754 (3d Cir. 1974).
If all of
these factors are present, the court may certify an issue for
If the district court judge approves the
interlocutory appeal by written order, the Court of Appeals then
has the discretion to permit the appeal.
28 U.S.C. § 1292(b).
The Third Circuit has observed that Congress intended for
Section 1292(b) to be used sparingly. “[Section 1292(b)] is to be
used only in exceptional cases where an intermediate appeal may
avoid protracted and expensive litigation and is not intended to
open the floodgates to a vast number of appeals from
interlocutory orders in ordinary litigation.”
Milbert v. Bison
Laboratories, Inc., 260 F.2d 431, 433 (3d Cir. 1958).
“not to act routinely” in allowing interlocutory appeals.
In determining which orders should be immediately appealable,
judges should consider the policies underlying Section 1292(b),
which include “the avoidance of harm to a party pendente lite
from a possibly erroneous interlocutory order and the avoidance
of possibly wasted trial time and litigation expense.”
F.2d at 756.
Finally, granting certification for immediate
appeal is within the district court judge’s discretion, even if
all three criteria are present.
Bachowski v. Usery, 545 F.2d
363, 368 (3d Cir. 1976).
The Plaintiff seeks the Court’s leave to immediately appeal
the Court’s decision on the insurance bad faith claim and the
(Pl.’s Mot. Requesting Amendment, at ¶ 5, Doc.
The Court will therefore analyze whether there is “a
controlling question of law as to which there is substantial
ground for difference of opinion,” and whether allowing immediate
appeal will materially advance the ultimate termination of the
litigation on both of those claims.
Controlling Question of Law
A controlling question of law encompasses “every order
which, if erroneous, would be reversible error on final appeal.”
Katz, 496 F.2d at 754.
The Court’s conclusions in our pervious
opinion on both the insurance bad faith claim and the defamation
claim are both controlling questions of law under this standard.
Substantial Grounds for Difference of Opinion
Substantial grounds for difference of opinion arise when the
matter involves “one or more difficult and pivotal questions of
law not settled by controlling authority.”
Knipe v. SmithKline
Beecham, 583 F. Supp. 2d 553, 599 (E.D. Pa. 2008) (quoting
McGillicuddy v. Clements, 746 F.2d 76, 76 n.1 (1st
“A party may establish that substantial grounds for
difference of opinion exist by demonstrating that different
courts have issued conflicting and contradictory opinions when
interpreting a particular question of law.”
Miron v. Seidman,
05-968, 2006 WL 3742772, at *3 (E.D. Pa. Dec. 13, 2006).
disagreement with a ruling does not constitute substantial ground
for difference of opinion.”
In re Powell, 06-4085, 2006 WL
3208843, at *2 (E.D. Pa. Nov. 3, 2006).
The Court finds that there is no substantial ground for
difference of opinion on either the bad faith insurance issue or
the defamation issue.
The Plaintiff has put forth virtually no
argument as to why there are substantial grounds for difference
of opinion on the two issues and has offered no conflicting or
contradictory opinions from other courts.
It appears as though
the Plaintiff merely disagrees with the Court’s determination on
those two issues.
On the bad faith insurance issue, there is no substantial
ground for difference of opinion because the Plaintiff failed to
carry her burden - a heightened burden of clear and convincing
evidence - to make a showing sufficient to establish that the
insurer did not have a reasonable basis for denying her claim,
and the insurer knew or recklessly disregarded the lack of basis.
At the time it made the decision on her claim, the Defendant had
undergone a substantial investigation and had facts that called
into question the Plaintiff’s narrative of the car theft.
Therefore, there was a reasonable basis for the claim’s denial.
Given the evidence before the Court and the unequivocal
controlling Pennsylvania case law setting forth the standard for
a bad faith insurance claim, there is little, if any, room for
disagreement with the Court’s conclusion that the Plaintiff’s bad
faith insurance claim fails as a matter of law.
has put forward no arguments to make the Court question this
While the defamation issue is slightly less clear than the
bad faith insurance issue, the Court likewise concludes that
there is no substantial ground for difference of opinion over
whether the absolute privilege to defamation applies in this
First of all, the Plaintiff has pointed to no
contradictory opinions to disavow the Court of its previous
Second, although the Pennsylvania Supreme Court does not
appear to have spoken on precisely the scenario here - absolute
privilege for accusation of a crime made to law enforcement
officials for the purpose of bringing criminal charges - the
Pennsylvania Superior Court concluded that the privilege applies
to such a scenario.
The Pennsylvania Supreme Court has held that
statements made in the course of or pertinent to any stage of
judicial proceedings are absolutely privileged.
underlying this privilege support the finding of privilege in the
scenario at issue here.
Although the Third Circuit could
disagree, advisory authority from the Superior Court and policy
support the Court’s conclusion.
Therefore, the Court finds no
substantial room for disagreement.
Advance the Termination of Litigation
Although the Court finds that interlocutory appeal is not
warranted because there are no substantial grounds for difference
of opinion on either issue, we will nevertheless analyze whether
interlocutory appeal would materially advance the termination of
“The burden is on the moving party to show that
certification may materially advance the ultimate termination of
Piazza v. Major League Baseball, 836 F. Supp.
269, 272 n.6 (E.D. Pa. 1993).
An interlocutory appeal materially
advances litigation if it eliminates the need for trial or
complex issues, or eliminates issues to make discovery easier and
See L.R. v. Manheim Twp. Sch. Dist., 540 F. Supp.
2d 603, 613 (E.D. Pa. 2008); Orson, Inc. v. Miramax Film Corp.,
867 F. Supp. 319, 322 (E.D. Pa. 1994).
“Certification is more
likely to materially advance the litigation where the appeal
occurs early in the litigation, before extensive discovery has
taken place and a trial date has been set.”
New Jersey Prot. &
Advocacy, Inc. v. New Jersey Dept. of Educ., 07-2978, 2008 WL
4692345 (D.N.J. Oct. 8, 2008).
Again, the Plaintiff provides the Court with virtually no
argument as to why this requirement for interlocutory appeal is
The Plaintiff merely states that because she intends
to appeal the dismissal of the two claims regardless of the
outcome on the remaining breach of contract claim, immediate
interlocutory appeal “would materially advance the ultimate
termination of the litigation by avoiding an unnecessary second
appeal after a trial on the only remaining count/claim.”
Mot. Requesting Amendment, at ¶ 4, Doc. No. 55).
Even if the
Court were convinced that there was substantial grounds for
difference of opinion on either or both of the two issues, the
Court would conclude that immediate appeal would not materially
advance the termination of litigation.
occurred in this case.
Discovery has already
Immediate appeal would not eliminate the
need for trial, nor would it eliminate any complex issues at
Although it would allow for all of the claims to be tried
together, if the Court of Appeals were to find error in denying
either the bad faith insurance claim or the defamation claim,
neither presents complex issues that would require a lengthy or
The Plaintiff’s motion does not convince the
Court that this is one of the “rare case[s] where an immediate
appeal would avoid expensive and protracted litigation” that
would justify deviation from the “strong policy against piecemeal
Orson, 867 F. Supp. at 321.
Therefore, for this
reason also, the Court denies the Plaintiff’s motion seeking
leave for an interlocutory appeal.
For the foregoing reasons, the Court denies the Plaintiff’s
There are no grounds for substantial difference of
opinion on the issues raised and immediate appeal would not
materially advance the termination of this litigation.
separate order follows.
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