Koerner v. GEICO Casualty Company
Filing
57
MEMORANDUM (Order to follow as separate docket entry)For the reasons discussed above, the Court concludes Defendants Motion for Summary Judgment (Doc. 51) is properly granted and judgment will be entered in Defendants favor on the claims remaining in the Third Amended Complaint (Doc. 26). An appropriate Order is filed simultaneously with this Memorandum. re 51 MOTION for Summary Judgment filed by GEICO Casualty Company Signed by Honorable Richard P. Conaboy on 3/6/18. (cc)
UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
JUDITH KOERNER,
:
:CIVIL ACTION NO. 3:17-CV-455
Plaintiff,
:
:(JUDGE CONABOY)
v.
:
:
GEICO CASUALTY COMPANY,
:
:
Defendant.
:
:
___________________________________________________________________
MEMORANDUM
Here the Court considers Defendant’s Motion for Summary
Judgment (Doc. 51) filed on January 19, 2018.
The action arises
from an automobile accident and the subsequent uninsured motorist
claim brought by Plaintiff Judith Koerner (“Plaintiff”) against
GEICO Casualty Company (“GEICO” “Defendant”).
As outlined in the
Court’s September 29, 2017, Order, only Plaintiff’s statutory bad
faith claim, Count IV of her Third Amended Complaint (Doc. 26),
remains before the Court.
(Doc. 38 at 3-4.)
I.Background1
A.
Procedural Background
This case was filed in the Court of Common Pleas of Pike
County, Pennsylvania, on May 19, 2016.
(Doc. 51-2 ¶ 1.)
The
action stems from a May 4, 2016, motor vehicle accident and
Plaintiff seeking damages under her Uninsured Motorists (“UM”)
1
For the most part, internal citations in Defendant’s, GEICO
Casualty Company, Statement of Material Facts (Doc. 51-2) are
omitted from this Background recitation.
coverage in her contract of automobile insurance with GEICO.
(Id.)
On February 22, 2017, Plaintiff filed an Amended Complaint, adding
a second count for Breach of Contract and a third count for Bad
Faith–-Common Law and Statutory.
(Doc. 51-2 ¶ 3.)
Defendant filed a Notice of Removal on March 13, 2017.
1.)
(Doc.
On April 5, 2017, Plaintiff filed a Motion for Remand (Doc.
10) which the Court denied by Memorandum and Order of May 18, 2017
(Docs. 20, 21).
Defendant filed Defendant’s, GEICO Casualty Company, Motion to
Dismiss Counts I, II and III (common law bad faith) of the Amended
Complaint on March 20, 2017.
(Doc. 3.)
On March 30, 2017,
Plaintiff filed a Second Amended Complaint.
(Doc. 8.)
Defendant filed Defendant’s, GEICO Casualty Company, Motion to
Dismiss Counts I, II and III (compensatory and consequential
damages) of the Second Amended Complaint on April 13, 2017.
12.)
(Doc.
By Memorandum and Order of June 14, 2017, the Court granted
Defendant’s motion and determined that Counts I and II were
dismissed without leave to amend and Count III was dismissed as to
Plaintiff’s request for compensatory and consequential damages but
otherwise Count III went forward, and Plaintiff was granted leave
to amend.
(Doc. 23 at 24; Doc. 24 at 1-2.)
Plaintiff sought
reconsideration of this determination on June 21, 2017, which the
Court denied on September 29, 2017.
(Doc. 27.)
Plaintiff filed her Third Amended Complaint on June 27, 2017.
2
(Doc. 26.)
Defendant filed Defendant’s, GEICO Casualty Company,
Motion to Strike and/or Dismiss Plaintiff’s Third Amended Complaint
on July 14, 2017.
(Doc. 32.)
The Court granted the motion in part
and denied it in part by Order of September 29, 2017.
(Doc. 38.)
Following the Court’s Order, the only claim surviving is a claim
for statutory bad faith based on allegations which survived
Defendant’s motion.
(Doc. 38 at 4.)
The pending summary judgment motion seeks dismissal of the
remaining statutory bad faith claim.
(Doc. 51.)
Defendant’s,
GEICO Casualty Company, Statement of Material Facts (Doc. 51-2) and
the Brief in Support of Summary Judgment (Doc. 52) were filed on
January 19, 2018.
Plaintiff filed the Answer of Plaintiff to
Motion for Summary Judgment of Defendant (Doc. 55) on February 2,
2018, with attachments including a Memorandum of Law (Doc. 55-1).
Plaintiff did not file the required response to Defendant’s
statement of facts and, therefore, the facts set out by Defendant
are deemed admitted.
See L.R. 56.1.
The Answer of Plaintiff to
Motion for Summary Judgment of Defendant (Doc. 55) is not a
recognized filing in response to a summary judgment motion under
the Local Rules of Court of the Middle District of Pennsylvania.
See L.R. 7.4, 7.6, 56.1.
Therefore, the Court considers only
Plaintiff’s Memorandum of Law as the response to Defendant’s
motion.
A.
Factual Background
As noted above, the accident underlying this action took place
3
on May 4, 2016.
(Doc. 51-2 ¶ 1.)
At the time of the accident,
Plaintiff was insured by Defendant.
(Doc. 51-2 ¶ 15.)
The policy,
which had coverage for the period of December 9, 2015, through June
9, 2016, provided for “Uninsured Motorists/With Stacking Each
Person/Each Occurrence” limits of “$15,000/$30,000.”
16.)
(Doc. 51-2 ¶
The Uninsured Motorists Coverage Pennsylvania (Stacked
Limits) Amendment to Plaintiff’s policy under DEFINITIONS defines a
Hit-and-Run Motor Vehicle as
a motor vehicle that causes an accident
resulting in bodily injury to an insured and
whose operator or owner is at fault and
cannot be identified provided the accident:
(a) is reported to the police or proper
government authority; and
(b) the insured, or someone on his
behalf, files with us within 30 days, or
as soon as practicable thereafter, a
statement setting forth the facts of the
accident and claiming that he has a
cause of action for damages arising out
of the accident.
(Doc. 51-2 ¶ 17.)
The Uninsured Motorists Coverage Pennsylvania
(Stacked Limits) Amendment to Plaintiff’s policy under CONDITIONS,
Section 4, PROOF OF CLAIM-MEDICAL REPORTS states in part:
As soon as possible, the insured or other
person making the claim must give us written
proof of claim, under oath if required. This
will include details of the nature and extent
of injuries, treatment, and other facts which
may affect the amount payable. Proof of
claim must be made on forms furnished by us
unless we have not furnished these forms
within 15 days after receiving notice of
claim.
(Doc. 51-2 ¶ 18.)
4
The GEICO Claims Note, dated 5/4/2016 05:26 PM, stated in part
“PH/DR RPTS*** VI TRVLING ON RT 2887 WHEN RUG FELL FROM TRUCK IN
FRT AND VI SWERVED AND STRUCK GUARDRAIL.
OUT.”
(Doc. 51-2 ¶ 34.)
PH STT THAT SHE BLACKED
The GEICO Claims Note, dated 5/4/2016
05:42 PM, stated in part “PH PASSED OUT WHEN AX OCCURRED AND DOES
NOT REMEMBER EXACTLY HOW IT OCCURRED.
WHEN AVAILABLE FOR FAO.”
SHE ADV WOULD SUBMIT P/R
(Doc. 51-2 ¶ 35.)
According to Plaintiff’s responses to Interrogatories, the
accident “occurred as a result of matter falling out of the back of
a motor vehicle in front of Plaintiff, thereby causing the
Plaintiff to swerve and striking a guardrail.”
She believed the debris was carpeting.
(Doc. 51-2 ¶ 21.)
(Doc. 51-2 ¶ 22.)
She also
stated in response to Interrogatories that she was “unsure if she
lost consciousness.”
(Doc. 51-2 ¶ 26.)
A doctor’s report on the day of the accident states Plaintiff
said “she doesn’t remember the entire accident.”
(Doc. 51-2 ¶ 27.)
Other medical records indicate memory impairment regarding the
accident: a May 12, 2016, doctor’s report states “Pt does not
recall accident–-Lost control of car.”
(Doc. 51-2 ¶ 28.)
A May
27, 2016, MRI included a diagnosis of “Concussion with < 1 hr loss
consciousness” and “Memory loss or impairment” (Doc. 51-2 ¶ 29 ); a
June 6, 2016, doctor’s report noted that Plaintiff stated “she was
involved in a motor vehicle accident on 5/4/16 and sustained a
concussion[,] [s]he was unconscious and has no recollection of the
5
accident” (Doc. 51-2 ¶ ); a June 16, 2016, doctor’s report stated
in part that “Pt was involved in an accident on 5-4-16 while
driving a rug fell out of truck and pt swerved to miss and hit
guardrails[,] Pt lost consciousness and had a concussion” (Doc. 512 ¶ 31); a June 23, 2016, doctor’s report stated in part “May 4
2016 motor vehicle accident in New Jersey patient was driving she
does not recall the accident brief memory is sliding into the guard
rail nothing else” (Doc. 51-2 ¶ 32); an August 31, 2016, doctor’s
report stated in part that “[t]he patient admitted that she lost
consciousness and when first responders tried to talk to her, she
could not answer her name and did not understand what happened”
(Doc. 51-2 ¶ 33).
On or about May 10, 2016, Defendant sent Plaintiff a letter
which stated in part:
I need your help to begin processing your
claim. I need you to complete the
“Application for PIP Benefits” form and the
HIPAA Compliance Authorization form, which
have been sent to you under separate cover.
These forms are essential to begin processing
your claim. . . . We also need information
regarding the facts of the accident, nature
and cause of the injury, the diagnosis, and
the anticipated course of treatment as
promptly as possible after the accident, and
periodically thereafter.
(Doc. 51-2 ¶ 36.)
On or about May 12, 2016, Plaintiff’s attorney, Charles
Kannebecker, sent a letter to GEICO, which stated in part:
6
Please be advised that this office has been
retained by Judith Keorner. . . . The
accident was caused by an automobile which
did not stay at the scene. The vehicle which
left the scene had content fall out of the
vehicle causing the accident. . . . Please
accept this letter as a notification of claim
for UM benefits under Ms. Koerner’s coverage
with GEICO Insurance Company. . . . Further,
you should undertake any investigation which
you elect as a result.
(Doc. 51-2 ¶ 37.)
On or about May 16, 2016, Defendant sent a letter to the Law
Office of Charles Kannebecker which stated in part:
We received your letter of representation.
Please have your client complete the enclosed
PIP and HIPAA Compliant Authorization forms
and promptly return them to us. Also, please
send us any bills and/or documentation to
support this claim.
I have not yet obtained a recorded statement
from your client and would ask that you
contact me to schedule a time at which this
can be accomplished.
(Doc. 51-2 ¶ 38.)
On the same day, the claim was transferred to
Paul Brunskole for handling.
(Doc. 51-2 ¶ 39.)
The next day, Mr.
Brunskole ordered a copy of the police report and sent a letter to
and called Mr. Kannebecker.
(Doc. 51-2 ¶ 40.)
Kannebecker returned the call.
Later that day, Mr.
(Doc. 51-2 ¶ 41.)
A recording of the May 17, 2016, phone conversation is
contained in the Statement of Material Facts.
(Doc. 51-2 ¶ 43.)
There was discussion about the theory of recovery and lack of
supporting documentation to that date.
7
(Id.)
Neither party had
received a police report at the time, Mr. Brunskole noted that he
had only Plaintiff’s word about what had happened, and he said he
needed more to find there was a UM claim.
(Id.)
Several times
during the conversation, he expressed skepticism, said he had some
follow-up questions and stated he wanted to take a recorded
statement.
(Id.)
Mr. Kannebecker told Mr. Brunskole it seemed he
had decided that there was no UM claim and he was intent on denying
the claim.
(Id.)
Mr. Brunskole said he had not made a
determination and reiterated his need for more information.
(Id.)
Mr. Kannebecker made numerous similar allegations during the call
and, on each occasion, Mr. Brunskole reiterated that he had not
made a decision but needed more information.
(Id.)
The phone call
ended abrubtly when Mr. Kannebecker ended the call after Mr.
Brunskole said “So then – I am trying to help you out with this
claim.”
(Id.)
After the call ended, Mr. Kannebecker faxed Mr. Brunskole with
the “demand” that he preserve the recording of the phone call,
adding that Mr. Brunskole “relayed that Mrs. Koerner told GEICO
that she lost consciousness and that loss caused the accident.”
(Doc. 51-2 ¶ 44.)
Mr. Kannebecker repeated these requests with a
fax on May 20, 2016, and May 25, 2016.
(Doc. 51-2 ¶¶ 49, 52.)
On or about May 18, 2016, Mr. Brunskole sent Mr. Kannebecker a
letter requesting medical documentation and lost wage verification
8
as well as Plaintiff’s signature on an enclosed authorization “so I
may assist you in obtaining the documentation necessary to support
your client’s claim.”
(Doc. 51-2 ¶ 45.)
He added that he had not
yet obtained a recorded statement from Plaintiff.
(Id.)
On or
about the same date, Mr. Brunskole sent another letter to Mr.
Kannebecker stating that GEICO was still investigating the claim.
(Doc. 51-2 ¶ 47.)
He requested that Mr. Kannebecker forward the
police accident report, a copy of all medical and hospital records
and authorizations permitting the release of same, an uninsured
motorist application, and any other documentation.
(Id.)
As noted previously, Plaintiff filed suit in the Court of
Common Pleas of Pike County on May 19, 2016.
(Doc. 51-2 ¶ 48.)
On May 23, 2016, GEICO received the Police Report from the New
Jersey State Police.
(Doc. 51-2 ¶ 50.)
The claim log sets out the
following summary:
PH stated was driving and a piece of rug or
something fell off truck in front of me and I
tried to avoid it and I spun out in the the
g/rail. CL did not stop. Police invest
revealed PH and CL in I-287 n/b near MM 58.5
in Oakwood Boro; due to debris falling off CL
veh and onto hwy, PH ran off the road right,
lost control of veh and hit g/rail. Green
Pieces of artificial grass were observed in
right lane and on shoulder of hwy consistent
with PH statement. Per diagram, PH in
center-right lane 2/4 prior to losing
control. No CL info G/Rail listed as
damaged.
(Doc. 51-3 at 42.)
9
On June 3, 2016, GEICO called and left a message for Mr.
Kannebecker to discuss the claim and request a statement from
Plaintiff.
(Doc. 51-2 ¶ 55.)
On the same date Mr. Kannebecker
spoke with GEICO and reiterated his request for a copy of the phone
conversation.
(Doc. 51-2 ¶ 56.)
On or about July 8, 2016, GEICO sent a letter to Mr.
Kannebecker stating that the claim remained open, it had not denied
the UM claim and was in the process of investigating it, and asked
for Mr. Kannebecker’s cooperation in scheduling Plaintiff’s
recorded statement.
(Doc. 51-2 ¶ 57.)
In another letter sent on
or about July 22, 2016, GEICO expressed a desire to review
Plaintiff’s medical records and requested that Mr. Kannebecker
forward a copy of the records or provide permission for GEICO to
obtain them from her personal injury protection file.
58.)
(Doc. 51-2 ¶
Plaintiff’s recorded statement was again requested.
(Id.)
Mr. Kannebecker did not respond to either letter and Defendant
never received Plaintiff’s written statement or the signed
authorizations requested previously.
(Doc. 51-2 ¶¶ 46, 59, 60,
61.)
On or about October 18, 2016, GEICO served discovery requests
on Plaintiff.
(Doc. 51-2 ¶ 64.)
On November 29, 2016, GEICO sent
Mr. Kannebecker a letter requesting responses to the October 18th
requests within ten days.
(Doc. 51-2 ¶ 66.)
On December 13, 2016,
GEICO filed a Motion to Compel Plaintiff’s discovery responses.
10
(Doc. 51-2 ¶ 67.)
Plaintiff mailed her discovery responses which
included her medical records and responses to interrogatories on
December 29, 2016.
(Doc. 51-2 ¶ 68.)
On or about February 1, 2017, GEICO sent a letter to Mr.
Kannebecker stating Plaintiff’s submissions and the entire claims
file had been reviewed, GEICO was in a position to tender the
policy limits for UM coverage, and a check was attached.
2 ¶ 69.)
(Doc. 51-
On February 6, 2017, Mr. Kannebecker sent a letter to
GEICO, the body of which states in its entirety “This check was
received by our office alone in an envelope.”
(Doc. 51-2 ¶ 70.)
The correspondence indicates a “check enclosure.”
116.)
(Doc. 51-3 at
On February 23, 2017, GEICO again sent Plaintiff the letter
sent on February 1st along with a check for $15,000.
71.)
(Doc. 51-2 ¶
On February 24, 2017, Mr. Kannebecker sent a letter to GEICO
stating that he was returning the check for $15,000 and the letter
noted that a check was enclosed.
(Doc. 51-3 at 118.)
II. Discussion
Defendant asserts that Plaintiff’s bad faith claim is based on
two theories: 1) GEICO lied to Plaintiff’s counsel in denying
Plaintiff’s claim in the May 17, 2016, phone call; and 2) GEICO did
not properly investigate and evaluate Plaintiff’s claim.
at 5.)
1.)
Plaintiff does not dispute this assessment.
(Doc. 52
(See Doc. 55-
Regarding the first theory, Defendant maintains Plaintiff
cannot show that GEICO denied Plaintiff’s claim and evidence shows
11
that GEICO told Plaintiff on several occasions that the UM claim
had not been denied during the May 17th phone conversation.
(Id.)
Regarding the second theory, Defendant avers that it made payment
of the policy limits within one month after receipt of the
requested information and any delay was attributable to Plaintiff’s
failure to cooperate in the investigation of her claim.
(Id.)
Plaintiff responds generally that Defendant’s actions clearly
demonstrate bad faith conduct.
(Doc. 55-1 at 1.)
Plaintiff
follows the statement with eleven “facts” which she avers are not
disputed.
A.
(Doc. 55-1 at 1-2 (citing “timeline and exhibits”). )
Legal Standards
1. Summary Judgment
Summary judgment is appropriate when the movant demonstrates
there is no “genuine issue as to any material fact.”
P. 56(a).
Fed. R. Civ.
“[T]his standard provides that the mere existence of
some alleged factual dispute between the parties will not defeat an
otherwise properly supported motion for summary judgment; the
requirement is that there be no genuine issue of material fact."
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).
“An issue is genuine only if there is a sufficient evidentiary
basis on which a reasonable jury could find for the non-moving
party, and a factual dispute is material only if it might affect
the outcome of the suit under governing law.”
Kaucher v. County of
Bucks, 455 F.3d 418, 423 (3d Cir. 2006) (citing Anderson, 477 U.S.
12
at 248).
In determining whether a genuine issue of fact exists, a
court must resolve all factual doubts and draw all reasonable
inferences in favor of the nonmoving party.
Scott v. Harris, 550
U.S. 372, 378 (2007); Halsey v. Pfeiffer, 750 F.3d 273, 287 (3d
Cir. 2014).
evidence.”
Such inferences “must flow directly from admissible
Halsey, 750 F.3d at 287.
The initial burden is on the moving party to show an absence
of a genuine issue of material fact.
Celotex Corp. v. Catrett, 477
U.S. 317, 330 (1986) (citations omitted).
The moving party may
meet this burden by “pointing out to the district court [] that
there is an absence of evidence to support the nonmoving party’s
case when the nonmoving party bears the ultimate burden of proof.”
Id. at 325.
The non-moving party may not rest on the bare
allegations contained in his or her pleadings, but is required by
Federal Rule of Civil Procedure 56 to go beyond the pleadings by
way of affidavits, depositions, answers to interrogatories or the
like in order to demonstrate specific material facts which give
rise to a genuine issue.
Id. at 324.
“The non-moving party must
show where in the record there exists a genuine dispute over a
material fact.’”
Hankins v. Wetzel, 640 F. App’x 130, 132 (3d Cir.
Jan. 6, 2016) (not precedential) (quoting Doe v. Abington Friends
Sch., 480 F.3d 252, 256 (3d Cir. 2007)).
“A mere ‘scintilla of
evidence in support of the [non-moving party]’s position will be
insufficient’ to create a genuine issue of fact.”
13
Hankins, 640 F.
App’x at 132 (quoting Anderson, 477 U.S. at 252)).
“In considering a motion for summary judgment, a district
court may not make credibility determinations or engage in any
weighing of evidence.”
Anderson, 477 U.S. at 255.
Therefore, when
evidentiary facts are in dispute, when the credibility of witnesses
may be in issue, or when conflicting evidence must be weighed, a
full trial is usually necessary.
2.
Statutory Bad Faith
An action for bad faith in Pennsylvania is governed by 42 Pa.
C.S. § 8371 which provides:
In an action arising under an insurance
policy, if the court finds that the insurer
has acted in bad faith toward the insured,
the court may take all of the following
actions:
(1) Award interest on the amount of the claim
from the date the claim was made by the
insured in an amount equal to the prime rate
of interest plus 3%.
(2) Award punitive damages against the
insurer.
(3) Assess court costs and attorney fees
against the insurer.
42 Pa. C.S. § 8371.
The statute does not define what constitutes bad faith but
Pennsylvania courts, the Third Circuit Court of Appeals, and
decisions from district courts within the Third Circuit provide
ample guidance.
“The term ‘bad faith’ under section 8371 concerns
‘the duty of good faith and fair dealing in the parties’ contract
14
and the manner in which an insurer discharged . . . its obligation
to pay for a loss in the first party claim context.’”
Berg v.
Nationwide Mut. Ins. Co., Inc., 44 A.3d 1164, 1175-76 (Pa. Super.
April 17, 2012) (quoting Toy v. Metrolpolitan Life Ins. Co., 928
A.2d 186, 199 (Pa. 2007)) (alteration in original).
A panel of the
Court of Appeals for the Third Circuit summarized the relevant
framework for considering an insurance bad faith claim under
Pennsylvania law in Treadways LLC v. Travelers Indem. Co., 467 F.
App’x 143 (3d Cir. 2012) (not precedential).
“Bad faith” under Pennsylvania’s bad faith
statute–-42 Pa. Const. Stat. § 8371, which
provides a remedy in an action under an insurance
policy–-is defined as “any frivolous or unfounded
refusal to pay proceeds of a policy.” J.C. Penney
Life Ins. Co. v. Pilosi, 393 F.3d 356, 367 (3d
Cir. 2004) (quoting Terletsky v. Prudential Prop.
& Cas. Ins. Co., 649 A.2d 680, 688 (Pa. Super. Ct.
1994)). A valid cause of action for bad faith
requires “clear and convincing evidence . . . that
the insurer: (1) did not have a reasonable basis
for denying benefits under the policy; and (2)
knew or recklessly disregarded its lack of a
reasonable basis in denying the claim.” Id.
Under the “clear and convincing” standard, “the
plaintiff [must] show ‘that the evidence is so
clear, direct, weighty and convincing as to enable
a clear conviction, without hesitation, about
whether or nor the defendants acted in bad
faith.’” Id. (quoting Bostick v. ITT Hartford
Grp., Inc., 56 F. Supp. 2d 580, 587 (E.D. Pa.
1999)). Though we have found that bad faith may
be found in circumstances other than an insurer’s
refusal to pay, “[a] reasonable basis is all that
is required to defeat a claim of bad faith.” Id.
See also Frog, Switch & Mfg. Co. V. Travelers Ins.
Co., 193 F.3d 742, 751 n.9 (3d Cir. 1999).
Treadways, 467 F. App’x at 146-47.
15
Reiterating the two elements
set out in Terletsky, the Pennsylvania Supreme Court held in
Rancosky v. Washington National, 170 A.3d 364, 377 (Pa. 2017), that
“proof of the insurer’s subjective motive of ill-will, while
perhaps probative of the second prong of the . . . test, is not a
necessary prerequisite to succeeding in a bad faith claim.”
The Pennsylvania Superior Court has observed that “[b]ad faith
claims are fact specific and depend on the conduct of the insurer
vis a` vis the insured.”
Condio v. Erie Ins. Exchange, 899 A.2d
1136, 1143 (Pa. Super. 2006) (citing Williams v. Nationwide Ins.
Co., 750 A.2d 881, 887 (Pa. Super. 2000)).
In O’Donnell ex. rel.
Mitro v. Allstate Ins. Co., 734 A.2d 901 (Pa. Super. 1999), the
Pennsylvania Superior Court discussed the expanding nature of the
applicability of the bad faith statute and held that the conduct of
an insurer during the pendency of litigation may be considered as
evidence of bad faith.
O’Donnell, 734 A.2d at 906-08.
Bad faith
is not restricted to an insurer’s denial of benefits and includes a
wide variety of objectionable conduct including lack of good faith
investigation and failure to communicate with a client.
Brown v.
Progressive Ins. Co., 860 A.2d 493, 500-01 (Pa. Super. 2004)
(listing cases).
faith.
Negligence or bad judgment do not constitute bad
Brown, 860 A.2d at 501 (citing Adamski v. Allstate Ins.
Co., 738 A.2d 1033, 1036 (Pa. Super. 1999)).
B.
Defendant’s Motion
16
1.
Investigation and Evaluation of Plaintiff’s Claim
Defendant maintains it had a reasonable basis for its
investigation, evaluation, and payment of policy limits to
Plaintiff.
(Doc. 52 at 15-16.)
Assessing Plaintiff’s argument to
be that it should have paid policy proceeds based on her initial
call without requiring supporting documentation or Proof of Claim,
Defendant avers it was reasonable to require the Proof of Claim and
information on how the accident occurred before paying benefits in
accordance with the policy.
(Id.)
Plaintiff responds that Defendant had no reasonable basis to
deny her claim and advise her that she was at fault.
4.)
(Doc. 55-1 at
In support of this assertion, Plaintiff first points to
Defendant’s letter of May 7, 2016, in which it advised Plaintiff
that “‘[b]ased on the loss description provided, we have determined
the driver of your vehicle to be at fault for the auto accident
that occurred on May 4, 2016.’”
(Id. (citing Ex. F).)
Plaintiff
contends this statement is at odds with her report of the incident.
(Id.)
She also points to the fact that Defendant did not inform
her that her report gave rise to an uninsured motorist claim as
evidence of a lack of reasonable basis to deny her claim.
(Id. at
4-5.)
Taking inconsistent positions on whether a policy’s
requirements were satisfied cannot alone support a bad faith claim.
See, e.g., J.C. Penney Life Ins. Co. v. Pilosi, 393 F.3d 356, 36717
68 (3d Cir. 2004).
As set out above, Pennsylvania courts have
clearly found that negligence or bad judgment do not constitute bad
faith.
Brown, 860 A.2d at 501 (citing Adamski, 738 A.2d at 1036).
Evidence shows that Defendant continued to investigate
Plaintiff’s claim following the May 7, 2016, letter and prior to
being notified of attorney representation.
As set out above, it is
undisputed that Defendant sent Plaintiff a letter on or about May
10, 2016, which sought additional information from Plaintiff and
requested completion and return of relevant forms.
36.)
(Doc. 51-2 ¶
Plaintiff’s attorney, Charles Kannebecker, sent a letter to
GEICO on or about May 12, 2016, which advised that he represented
Plaintiff, provided a summary of how the accident occurred,
requested that the letter be accepted “as a notification of claim
for UM benefits under Ms. Koerner’s coverage with GEICO Insurance
Company,” and noted that GIECO “should undertake any investigation
you elect as a result.”
(Doc. 51-2 ¶ 37.)
Defendant sent another
letter to the Law Office of Charles Kannebecker on or about May 16,
2016, which acknowledged Mr. Kannebecker’s representation,
requested completion and return of relevant forms, requested bills
and documentation supporting the claim, and requested that Mr.
Kannebecker contact Defendant to schedule a recorded statement.
(Doc. 51-2 ¶ 38.)
On May 16, 2016, the claim was transferred to
Paul Brunskole for handling.
(Doc. 51-2 ¶ 39.)
The next day Mr.
Brunskole ordered a copy of the police report and sent a letter to
18
and called Mr. Kannebecker.
(Doc. 51-2 ¶ 40.)
Kannebecker returned the call.
Later that day, Mr.
(Doc. 51-2 ¶ 41.)
A recording of
the May 17, 2016, phone conversation is contained in the Statement
of Material Facts
(Doc. 51-2 ¶ 43) and will be discussed below.
The events outlined indicate that Defendant’s May 7th letter
cannot be viewed in isolation.
Defendant sought additional
information about the claim directly from Plaintiff before
receiving Mr. Kannebecker’s letter of representation and notice of
a UM claim.
(Doc. 51-2 ¶ 36.)
Defendant responded promptly to Mr.
Kannebecker’s letter and did not deny UM coverage in its responsive
correspondence.
(Id. ¶ 38.)
Thus Plaintiff seeks to establish a
bad faith claim based on conduct which occurred within one week of
the accident giving rise to the claim where the insurer continued
to investigate the claim and seek further information about a UM
claim upon being notified of same.
In the circumstances presented
here, even if the May 7th letter made a premature determination
about certain coverage which was inconsistent with its later
findings, no reasonable fact finder could conclude that Defendant
knew or recklessly disregarded its lack of a reasonable basis in
denying the claim given subsequent events.
At most the May 7th
letter shows bad judgment or negligence on the part of the initial
claims handler who drew conclusions from only the initial
statements made by Plaintiff.
Plaintiff cites no authority for her conclusion that
19
Defendant’s failure to advise Plaintiff that her claim gave rise to
an unisured motorist claim is evidence of bad faith.
1 at 4-5.)
(See Doc. 55-
On the contrary, the Pennsylvania Superior Court has
found that an insurer had not acted in bad faith before a formal
UIM claim was made even where the insurer was aware of the
potential of such a claim.
Condio, 899 A.2d at 1150-51; see also
Clemens v. N.Y. Cent. Mut. Fire Ins. Co., Civ. A. No. 3:13-CV-2247,
2015 WL 3742130 (M.D. Pa. June 15, 2015).
Similarly, Plaintiff conclusorily states that, beyond the
initial handling of the claim, Defendant acted in bad faith in the
handling of the litigation.
(Doc. 55-1 at 5.)
Plaintiff precedes
the conclusion with references to Defendant’s tender of $15,000 in
UM benefits, its lack of acknowledgment of a bad faith claim, and
the “mountains of pleadings” generated “in an attempt to avoid
responsibility for its bad faith actions.”
(Id.)
Plaintiff does
not assert that the amount tendered was improper nor does she show
that Defendant submitted frivolous filings.
(See Doc. 55-1.)
A
review of the docket shows that many of Defendant’s filings were
appropriate responses to numerous complaints filed by Plaintiff and
other filings were within the parameters of acceptable motion
practice.
Plaintiff cannot base a bad faith claim concerning
Defendant’s handling of the claim on Defendant’s failure to
acknowledge bad faith where Plaintiff has not presented facts
giving rise to such a claim.
20
2.
May 17, 2016, Phone Conversation
Defendant asserts that a transcript of the May 17, 2016, phone
conversation shows that its claim representative, Paul Brunskole,
did not deny Plaintiff’s UM claim in the course of the
conversation.
(Doc. 52 at 9.)
In her responsive Memorandum,
Plaintiff’s eleven bullet point “facts” (absent specific citation
to the record) include four related to the May 17th conversation
between Plaintiff’s attorney and Mr. Brunskole (Doc. 55-1 at 1-2)
but Plaintiff does not address Defendant’s argument that the phone
conversation does not evidence bad faith.
Although this
constitutes waiver of the argument, see, e.g., Reynolds v. Wagner,
128 F.3d 166, 178 (3d Cir. 1997), the Court will briefly address
the merits of Defendant’s position.
As set out in the Background section of this Memorandum, a
recording of the May 17, 2016, phone conversation is contained in
the Statement of Material Facts.
(Doc. 51-2 ¶ 43.)
A review of
the transcript shows that Defendant’s representative did not deny
Plaintiff’s UM claim during the course of the conversation–-he
discussed an ongoing investigation.
(Id.)
Mr. Brunskole’s
expressed skepticism about the events as presented by Plaintiff and
her attorney was accompanied by his request for more information.
(Id.)
Mr. Brunskole repeatedly stated that Defendant had made no
final determination regarding UM coverage.
(Id.)
The conversation
at issue took place less than two weeks after Plaintiff’s accident.
21
Thus, even if Defendant’s initial investigation was less than
perfect, its failure to reach the right conclusion in that early
period and evident acknowledgment that the UM claim was the subject
of ongoing consideration on May 17, 2016, cannot be construed as
evidence of statutory bad faith.
See, e.g., J.C. Penney Life Ins.
Co., 393 F.3d at 367-68.
III. Conclusion
For the reasons discussed above, the Court concludes
Defendant’s Motion for Summary Judgment (Doc. 51) is properly
granted and judgment will be entered in Defendant’s favor on the
claims remaining in the Third Amended Complaint (Doc. 26).
An
appropriate Order is filed simultaneously with this Memorandum.
S/Richard P. Conaboy
RICHARD P. CONABOY
United States District Judge
DATED: March 6, 2018
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