ROWE et al v. NATIONWIDE INSURANCE COMPANY et al
Filing
79
MEMORANDUM OPINION & ORDER - it is hereby Ordered that Defendants Nationwide Insurance Company, Nationwide, and Nationwide Insurance Company of America's Motion for Summary Judgment (ECF No. 38 ) is GRANTED. Plaintiffs Christopher H. Rowe and Nancy L. Rowe's Motions for Summary Judgment (ECF Nos. 41 and 47 ) are DENIED; and Defendants' Supplemental Motion for Summary Judgment (ECF No. 75 ) is DENIED as moot. It is further Ordered that the Clerk shall mark this case closed, and as more fully stated in said Memorandum Opinion & Order. Signed by Judge Kim R. Gibson on 3/19/2014. (dlg)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
CHRISTOPHER H. ROWE and
NANCY L. ROWE, husband and wife,
)
)
)
Plaintiffs,
)
)
v.
)
)
NATIONWIDE INSURANCE COMPANY, )
NATIONWIDE, and NATIONWIDE
)
INSURANCE COMPANY OF AMERICA, )
)
Defendants.
)
CIVIL ACTION NO. 3:12-81
JUDGE KIM R. GIBSON
MEMORANDUM AND ORDER OF COURT
I.
SYNOPSIS
Pending before the Court are cross-motions for summary judgment, filed pursuant
to Federal Rule of Civil Procedure 56. (See ECF Nos. 38, 41, 47, and 75). For the reasons
stated below, the Court will GRANT Defendants’ first motion for summary judgment
(ECF No. 38) and will DENY Plaintiffs’ motions for summary judgment (ECF Nos. 41 and
47)1 and Defendants’ supplemental motion for summary judgment (ECF No. 75).
II.
JURISDICTION AND VENUE
The Court has diversity jurisdiction in this removal action pursuant to 28 U.S.C. §§
1332 and 1441. Venue is proper under 28 U.S.C. § 1441(a).
Plaintiffs’ two summary judgment motions (ECF Nos. 41 and 47) are the same, except for certain
redacted information. The first motion (ECF No. 41) is a redacted version, while the second motion
(ECF No. 47) is a sealed, non-redacted version. The Court has reviewed the protected information
in the sealed, non-redacted motion (ECF No. 47) and its supporting documents (ECF Nos. 48, 66,
67, 68), but will cite only to the redacted version of the motion (ECF No. 41) and its supporting
documents (ECF Nos. 43, 45, 65).
1
III.
BACKGROUND
This case stems from an automobile accident in which Plaintiff Christopher Rowe
(“Mr. Rowe”) sustained personal injuries and property damage to his car. Plaintiffs filed
a property damage claim and an underinsured motorist claim (“UIM claim”) with their
insurance carrier, Nationwide Insurance Company of America (“Nationwide”). Plaintiffs
now allege that Nationwide failed to properly handle their claims. Plaintiffs filed suit and
assert causes of action against Nationwide for breach of contract and statutory bad faith.
A.
Statement of Facts
The following facts are not in dispute.2 On July 5, 2007, Mr. Rowe was involved in
an automobile accident while driving his car, an Oldsmobile 98, model year 1996. (ECF
No. 65-1 ¶¶ 9, 10). As alleged in the complaint, Mr. Rowe was stopped at a traffic signal
when another vehicle, driven by Opal Gayle, struck the rear of Mr. Rowe’s car,
substantially destroying the car and causing injuries to Mr. Rowe. (ECF No. 1-2, Compl.
¶¶ 8-10). Mr. Rowe was not at fault in the accident. (ECF No. 65-1 ¶ 13).
At the time of the accident, Plaintiffs’ car was covered by an automobile insurance
policy (“the policy”) issued by Nationwide. (Id. ¶¶ 3-4, 11-12). Among other things, the
policy provided full tort coverage, up to $500,000 in UIM bodily injury coverage, and
actual cash value minus a $250 deductible for collision coverage. (Id. ¶¶ 5-7).
2
Plaintiffs did not file a response to Defendants’ concise statement of material facts (ECF No. 58).
Accordingly, the facts contained in Defendants’ CSMF are deemed admitted pursuant to Local
Rule 56(E).
2
Plaintiffs filed suit against Ms. Gayle, after which Lincoln General Insurance
Company, Ms. Gayle’s insurer, offered its full bodily injury policy limit of $15,000 on
February 26, 2010. (Id. ¶¶ 48-49). On March 8, 2010, Nationwide waived its subrogation
interest against Ms. Gayle related to the bodily injury claim. (Id. ¶ 51). Plaintiffs also
submitted UIM and property damage claims to Nationwide.
Property Damage Claim
Initially after the accident, Plaintiffs’ car was towed and stored at a local salvage
yard. (ECF No. 58-7 at 28-30). Approximately one month after the accident, Plaintiffs’ car
was transported to a Nationwide total loss center for evaluation. (Id. at 28). Within one
month after taking Plaintiffs’ car for evaluation, Nationwide notified Plaintiffs that the car
was a total loss. (Id. at 29-30). Nationwide offered Plaintiffs $3,037.59 for the property
damage to the vehicle. (Id. at 62). Plaintiffs rejected Nationwide’s offer, demanding
$6,500 instead. (Id. at 45).
While in Nationwide’s possession, Plaintiffs’ car sustained further damage in the
amount of $1,658.74. (Id. ECF No. 65-1 ¶¶ 20, 28). On April 24, 2008, Nationwide
returned the car to Plaintiffs. (Id. ¶ 22).
After rejecting Nationwide’s offer, Plaintiffs filed suit against Nationwide on July
1, 2009, for the property damage claim. (Id. ¶ 30). On August 31, 2009, judgment was
entered for Plaintiffs in the amount of $4,776.29. (Id. ¶ 31). On November 19, 2009,
Nationwide issued a check to Plaintiffs for $4,857.66 on the property damage claim. (Id. ¶
33).
3
UIM Bodily Injury Claim
According to the complaint, the accident caused injuries to Mr. Rowe’s neck and
back3 and aggravated a pre-existing lipoma on his forehead, which had to be surgically
removed. (ECF No. 1-2, Compl. ¶¶ 15-17). Plaintiffs, represented by counsel, submitted a
UIM claim to Nationwide on October 5, 2007. (ECF No. 58 ¶ 7).
Nationwide assigned the UIM claim to Claim Representative Craig Robinson, who
requested a copy of the police report and a status update regarding Mr. Rowe’s medical
treatment on October 19, 2007. (Id. ¶¶ 8-9). Robinson contacted Lincoln General, Ms.
Gayles’ liability carrier, to discuss the claim on November 6, 2007. (Id. ¶ 10).
Over the next 17 months, Robinson continued to follow-up with Plaintiffs’
counsel, but was unable to fully evaluate the claim because Plaintiffs did not provide
complete medical records. (Id. ¶ 13-14). By February 29, 2009, Nationwide had paid $946
in medical benefits for Mr. Rowe’s treatment based on submitted chiropractic treatment
records. (Id. ¶ 15). On March 23, 2009, Plaintiffs’ counsel provided Nationwide with
additional medical records. (Id. ¶ 16). On July 1, 2009, Plaintiffs’ counsel informed
Nationwide that she was unable to estimate a value for the UIM claim until she received
3
Plaintiffs allege, “[Mr. Rowe sustained] injuries to his neck and upper back with constant pain on
both sides of his neck causing difficulty with his sleeping and increased pain when sitting or
standing as well as when he would turn his neck from side to side. The neck and upper back
muscles were weak. . . . [Mr. Rowe] was found to have decreased and painful cervical flexion,
right and left later flexion and rotation; shoulder depression-positive bilaterally; cervical
distraction-positive; palpable C3 through T4 muscle spasms bilaterally with trigger point pain with
a potential for disc degeneration of C5 and C6 in the vertebra.” (ECF No. 1-2, Compl. ¶¶ 15-17).
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additional medication information. (Id. ¶ 17). On January 11, 2010, Nationwide received
a report prepared by Mr. Rowe’s chiropractor. (Id. ¶ 19).
On March 8, 2010, Nationwide waived its subrogation rights after Lincoln General
tendered its $15,000 bodily injury policy limits. (Id. ¶ 20-21). On May 5, 2010, Plaintiffs
submitted their UIM demand package to Nationwide, which included photographs of Mr.
Rowe, two reports from Mr. Rowe’s chiropractor, and additional chiropractic treatment
records. (Id. ¶ 22). Plaintiffs demanded $313,500. (Id. ¶ 23).
Nationwide then conducted an internal medical management review. (Id. ¶¶ 2629). Following this review, Nationwide informed Plaintiffs that the injuries, as presented,
did not surpass the $15,000 bodily injury credit from Lincoln General, but that
Nationwide would further evaluate the claim. (Id. ¶ 29).
To further evaluate the claim, Nationwide obtained Mr. Rowe’s statement under
oath on September 22, 2010 (id. ¶ 30); retained Dr. Seraly, a licensed dermatologist, to
review the records related to Mr. Rowe’s lipoma (id. ¶ 31); and scheduled Mr. Rowe for an
independent medical examination (“IME”) by Dr. Daniel A. Wecht in Pittsburgh,
Pennsylvania (id. ¶ 33).
However, on February 3, 2011, Plaintiffs’ counsel informed
Nationwide that Mr. Rowe was unable to attend the scheduled IME appointment due to a
disability preventing him from traveling to Pittsburgh, at least through May 7, 2011. (Id. ¶
34). Nationwide cancelled the IME and attempted to reschedule the IME with Dr. Wecht
at a later date. (Id. ¶¶ 36-47). On January 6, 2012, Dr. Gerald W. Pifer conducted an IME
on Mr. Rowe in Ebensburg, Pennsylvania. (Id. ¶ 47-48).
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After completing its review, Nationwide offered Plaintiffs $5,000 to settle the UIM
claim. (Id. ¶ 50). Plaintiffs rejected the offer and countered with a demand of $275,000.
(Id. ¶ 51). Thereafter, Plaintiffs filed suit against Nationwide on the UIM claim. (Id. ¶ 53).
On August 22, 2012, the parties settled the UIM claim for $50,000. (Id. ¶ 54).
B.
Procedural Background
Plaintiffs initiated this matter by filing a four-count complaint in the Court of
Common Pleas of Cambria County.
(See ECF No. 1-2, Compl.)
On April 18, 2012,
Defendants removed the matter to this Court (ECF No. 1), and subsequently filed an
answer (ECF No. 7). The parties then conducted discovery.
Mediation was held on August 22, 2012, during which the parties resolved the
UIM claims. (See ECF Nos. 19, 20). However, the mediation did not resolve the bad faith
claims. On November 30, 2012, upon stipulation of the parties, the Court dismissed
Counts One and Two of the complaint, related to the underlying UIM claim, with
prejudice. (See ECF No. 26). Thus, only Counts Three and Four, which assert contractual
and statutory bad faith claims against Nationwide, remain pending in this case.
On June 24, 2013, Defendants filed a motion for summary judgment (ECF No. 38),
a brief in support (ECF No. 40), a concise statement of material facts (ECF No. 58),4 and an
appendix of supporting exhibits (ECF No. 58-1). On July 22, 2013, Plaintiffs filed a
response (ECF No. 59) to Defendants’ motion, along with a brief in opposition (ECF No.
On July 19, 2013, in accordance with the Court’s Order of Protection (see ECF Nos. 32 and 57),
Defendants filed an amended concise statement of material facts and appendix of exhibits (ECF
No. 58) replacing its previously filed statement of facts and appendix of exhibits (ECF No. 39).
4
6
60), and an appendix of exhibits (ECF No. 59-2). With leave from the Court (see ECF No.
63), Defendants filed a reply brief (ECF No. 69) on August 7, 2013.
On June 24, 2013, Plaintiffs filed a motion for partial summary judgment (ECF No.
41), along with a brief in support (ECF No. 43), a concise statement of material facts (ECF
No. 45), an amended concise statement of material facts (ECF No. 65-1), and an appendix
of exhibits (ECF No. 65-2). Portions of these filings are redacted.
On June 26, 2013, Plaintiffs filed, under seal, a motion for partial summary
judgment (ECF No. 47), along with a brief in support (ECF No. 48), a concise statement of
material facts (ECF No. 66), and an appendix of exhibits (ECF No. 68). All of these sealed
documents are identical to the previously filed corresponding documents, except that
they are not redacted. The sealed documents contain personal information or information
related to Nationwide’s business practices, which the parties agree should not be
publically available on the docket. The Court has reviewed the sealed, non-redacted
documents. However, to preserve the sensitive information in those documents, the
Court will only cite the redacted versions of the sealed documents in the record.
Defendants filed a brief in opposition (ECF No. 72) to Plaintiffs’ motions for
summary judgment on August 23, 2013, along with a response to Plaintiffs’ concise
statement of material facts (ECF No. 73).
On September 26, 2013, Defendants filed a supplemental motion for summary
judgment (ECF No. 75) along with a brief in support (ECF No. 76). Plaintiffs filed a
response and brief in opposition (ECF Nos. 77 and 78) on October 24, 2013. The parties
have fully briefed the Court, and this matter is ripe for adjudication.
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IV.
LEGAL STANDARD
Summary judgment is appropriate only where there is no genuine issue as to any
material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ.
P. 56(a); Melrose, Inc. v. Pittsburgh, 613 F.3d 380, 387 (3d Cir. 2010). Issues of fact are
genuine “if the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see also
McGreevy v. Stroup, 413 F.3d 359, 363 (3d Cir. 2005). Material facts are those that will
affect the outcome of the trial under governing law. Anderson, 477 U.S. at 248. The
Court’s role is “not to weigh the evidence or to determine the truth of the matter, but only
to determine whether the evidence of record is such that a reasonable jury could return a
verdict for the nonmoving party.” Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575,
581 (3d Cir. 2009). “In making this determination, ‘a court must view the facts in the light
most favorable to the nonmoving party and draw all inferences in that party’s favor.’”
Farrell v. Planters Lifesavers Co., 206 F.3d 271, 278 (3d Cir. 2000) (quoting Armbruster v.
Unisys Corp., 32 F.3d 768, 777 (3d Cir. 1994).
The moving party bears the initial responsibility of stating the basis for its motion
and identifying those portions of the record that demonstrate the absence of a genuine
issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party
meets this burden, the party opposing summary judgment “may not rest upon the mere
allegations or denials” of the pleading, but “must set forth specific facts showing that
there is a genuine issue for trial.” Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001)
(quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 n.11 (1986)). “For
8
an issue to be genuine, the nonmovant needs to supply more than a scintilla of evidence
in support of its position—there must be sufficient evidence (not mere allegations) for a
reasonable jury to find for the nonmovant.” Coolspring Stone Supply v. Am. States Life Ins.
Co., 10 F.3d 144, 148 (3d Cir. 1993).
V.
DISCUSSION
Plaintiffs’ complaint asserts a contractual bad faith claim (ECF No. 1-2, Compl. ¶¶
30-33) and a statutory bad faith claim (id. ¶¶ 34-51) against Defendants. Plaintiffs allege
that Nationwide engaged in a pattern of activity evidencing the breach of its contractual
and statutory duties of good faith and fair dealing concerning both the property damage
claim and the UIM claim arising from the car accident involving Mr. Rowe. (Id. ¶ 38).
In their first motion for summary judgment, Defendants argue that Plaintiffs have
failed to demonstrate any evidence to support the bad faith claims. (ECF No. 40 at 1).
According to Defendants, following the accident, Nationwide adequately and
appropriately investigated Plaintiffs’ insurance claims and made reasonable offers to
settle the claims. (Id.). Defendants assert that the sole basis for Plaintiffs’ allegations of
bad faith arise from a dispute over the value of the claims. (Id.). Defendants contend that
the disagreement over the value of the claims is an insufficient basis for bad faith, and that
Defendants are therefore entitled to judgment as a matter of law. (Id.).
Plaintiffs, on the other hand, argue that summary judgment is proper in their favor
on the issue of liability. Plaintiffs’ motion contains a short, two-and-a-half page argument
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section, comprised almost entirely of block quotes from statutes and case law. Plaintiffs’
conclusory argument consists of the following assertions:
Unfair insurance practices under 40 P.S. § 1171.5 include refusing to pay
plaintiffs’ claims, not attempting in good faith to effectuate a prompt, fair
and equitable settlement of plaintiffs’ claims in this clear liability case,
compelling plaintiffs to institute litigation to recover the amounts due
under their insurance policy, (Mr. and Mrs. Rowe were compelled to
institute litigation against Nationwide twice), and attempting to settle
plaintiffs’ claims for less than the amount that a reasonable man would
believe he was entitled to.
In addition, 31 Pa. Code § 146.6 and 146.7 require that every insurer
complete investigation of a claim within thirty days, and if the
investigation cannot be completed within thirty days, provide the
claimant with a reasonable written explanation for the delay stating when
a decision may be expected every forty-five days thereafter. Nationwide
cannot produce notices sent every forty-five days, because Nationwide
did not send the notices.
(ECF No. 43 at 15-16) (emphasis in original). On this basis, Plaintiffs move for “summary
judgment as to liability.” (Id. at 16).
The Court will separately address the two remaining claims in Plaintiffs’
complaint—the contractual bad faith claim and the statutory bad faith claim.
A.
Count III – Contractual Bad Faith Claim
Plaintiffs’ complaint and summary judgment motion focus almost exclusively on
the statutory bad faith claim. Nevertheless, the Court will briefly address Plaintiffs’
contractual bad faith claim asserted in Count III of the complaint.
A party asserting a breach of contract claim under Pennsylvania law must
demonstrate (1) the existence of a contract; (2) a breach of duty imposed by the contract;
and (3) resultant damages. Ware v. Rodale Press, Inc., 322 F.3d 218, 225 (3d Cir. 2003);
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Williams v. Nationwide Mut. Ins. Co., 750 A.2d 881, 884 (Pa. Super. Ct. 2000). “In other
words, a plaintiff must allege facts to establish that a contract exists or existed, including
its essential terms, that defendant failed to comply with the covenant of good faith and
fair dealing by breaching a specific duty imposed by the contract other than the covenant of
good faith and fair dealing, and that resultant damages were incurred by plaintiff.” CRS
Auto Parts, Inc. v. Nat’l Grange Mut. Ins. Co., 645 F. Supp. 2d 354, 369 (E.D. Pa. 2009)
(citations omitted).
“In Pennsylvania, a duty of good faith and fair dealing is implicit in an insurance
contract.” Simmons v. Nationwide Mut. Fire Ins. Co., 788 F. Supp. 2d 404, 408 (W.D. Pa.
2011). To prove a contractual bad faith claim, a plaintiff must show that the insurer’s
conduct was unreasonable or negligent. CRS Auto Parts, 645 F. Supp. 2d at 369; DeWalt v.
Ohio Cas. Ins. Co., 513 F. Supp. 2d 287, 296-97 (E.D. Pa. 2007). A contractual bad faith
claim must be established by clear and convincing evidence. Campbell v. State Farm Mut.
Auto. Ins. Co., 617 F. Supp. 2d 378, 383 (W.D. Pa. 2008).
Generally, when an insurance company has paid the proceeds of an insurance
policy, there can be no breach of contract claim because the insured has received what he
was due under the policy and therefore has no damages. See Smith v. Allstate Ins. Co., 904
F. Supp. 2d 515, 521 (W.D. Pa. 2012) (citing Fitzpatrick v. State Farm Ins. Co., No. 09-cv1498, 2010 WL 2103954, at *2-3 (W.D. Pa. May 24, 2010)). However, when a party sues for
damages stemming from an insurer’s bad faith in handling a claim, the damages sought
may be different from the damages compensated by payment pursuant to the insurance
policy and therefore may not be remedied by such payment. See Birth Ctr. v. St. Paul Cos.,
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787 A.2d 376, 385 (Pa. 2001); Clunie-Haskins v. State Farm Fire & Cas. Co., 855 F. Supp. 2d
380, 388 (E.D. Pa. 2012). Thus, “where an insurer acts in bad faith, by unreasonably
refusing to settle a claim, it breaches its contractual duty to act in good faith” and is liable
for “the known and/or foreseeable compensatory damages of its insured that reasonably
flow from the insurer’s bad faith conduct.” Birth Ctr., 787 A.2d at 389; Fitzpatrick, 2010 WL
2103954, at *3-4.
Here, Plaintiffs have failed to show with clear and convincing evidence that
Defendants’ conduct was unreasonable or negligent. A contract clearly existed between
the parties, and the terms of the insurance policy are not in dispute. However, Plaintiffs
have failed to demonstrate that Defendants violated the covenant of good faith and fair
dealing by breaching a specific duty imposed by the contract. As will be explained in
more detail below, the evidence in the record shows that the settlement offers were based
on Nationwide’s honest, considered judgment following a careful and thorough
investigation.
See DeWalt, 513 F. Supp. 2d at 292.
Plaintiffs’ disagreement with
Defendants over the value of their claims is simply not a basis for a contractual bad faith
claim where Plaintiffs have not shown that Defendants breached some contractual duty.
Plaintiffs contend that their bad faith claims are not simply the result of a dispute
over the value of their claims, but “cover a lot more than the unfair valuation of their
claims by Nationwide.” (ECF No. 60 at 2) (emphasis in original). Plaintiffs’ argument,
however, is contradicted by their own allegations. Plaintiffs base their contractual bad
faith claim on the assertion that “Nationwide has failed and refused to pay Underinsured
Motorists coverage to Plaintiffs, in breach of . . . the insurance contract.” (ECF No. 1-2,
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Compl. ¶ 33). Plaintiffs further allege in their complaint, “Nationwide has offered only a
fraction of the value of plaintiffs’ claim.” (Id. ¶ 44).
In sum, Plaintiffs have failed to demonstrate with clear and convincing evidence
that Defendants breached a duty under the insurance contract such that Nationwide
should become “liable for the known and/or foreseeable compensatory damages of its
insured that reasonably flow from the bad faith conduct of the insurer.” DeWalt, 513 F.
Supp. 2d at 292 (quoting Birth Center, 787 A.2d at 379).
Instead, Nationwide has
demonstrated that it had a reasonable basis for its conduct. Therefore, regarding Count
III of the complaint, Defendants’ first motion for summary judgment is granted, Plaintiffs’
motions for summary judgment are denied, and this claim is dismissed as a matter of law.
B.
Count IV – Statutory Bad Faith Claim
Plaintiffs also assert a statutory bad faith claim pursuant to 42 Pa. C. S. § 8371,
which states:
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.
To establish a bad faith claim under the statute, “a plaintiff must show by clear
and convincing evidence that the insurer (1) did not have a reasonable basis for denying
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benefits under the policy; and (2) knew of or recklessly disregarded its lack of reasonable
basis in denying the claim.” W.V. Realty Inc. v. N. Ins. Co., 334 F.3d 306, 312 (3d Cir. 2003);
Terletsky v. Prudential Prop. & Cas. Ins. Co., 649 A.2d 680, 688 (Pa. Super. Ct. 1994). Courts
have defined bad faith as “any frivolous or unfounded refusal to pay proceeds of a
policy.” Nw. Mut. Life Ins. Co. v. Babayan, 430 F.3d 121, 137 (3d Cir. 2005). An insurer’s
mere negligence or bad judgment is not bad faith. Id. at 137. To defeat a claim of bad
faith, an insurer must only demonstrate that it had a reasonable basis for its decision.
Leach v. Nw. Mut. Ins. Co., No. 01-cv-2364, 2005 WL 3533116, at * 11 (W.D. Pa. Dec. 22,
2005) aff’d, 262 F. App’x 455 (3d Cir. 2008); see also J.C. Penney Life Ins. Co. v. Pilosi, 393 F.3d
356, 367 (3d Cir. 2004) (“A reasonable basis is all that is required to defeat a claim of bad
faith.”).
Section 8371 encompasses a broad range of conduct by an insurer. Cohen v. State
Auto Prop. & Cas. Co., No. 00-cv-3168, 2001 WL 120145, at *2 (E.D. Pa. Feb. 8, 2001).
Among other conduct, bad faith includes: an unreasonable delay in handling claims; a
frivolous or unfounded refusal to pay; a failure to communicate with the insured; acting
in a dilatory manner; and settlement offers which bear no reasonable relationship to the
insured’s reasonable medical expenses. See Willow Inn, Inc. v. Public Serv. Mut. Ins. Co.,
399 F.3d 224, 235 (3d Cir. 2005); Purcell v. State Farm Mut. Auto. Ins. Co., No. 11-cv-7004,
2012 WL 425005, at *11 (E.D. Pa. Feb. 10, 2012); Frog, Switch & Mfg. Co. v. Travelers Ins. Co.,
193 F.3d 742, 751 n.9 (3d Cir. 1999); Condio v. Erie Ins. Exch., 899 A.2d 1136, 1143 (Pa.
Super. Ct. 2006). A bad faith claim may also arise when an insurance company conducts
an inadequate investigation. Condio, 899 A.2d 1136 at 1142.
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To succeed on a bad faith claim pursuant to 42 Pa. C. S. § 8371, a plaintiff must
prove bad faith with clear and convincing evidence and not merely by insinuation.
Polselli v. Nationwide Mut. Fire Ins. Co., 23 F.3d 747, 750 (3d Cir. 1994); Cowden v. Aetna Cas.
& Sur. Co., 134 A.2d 223, 229 (Pa. 1957). “At the summary judgment stage, the insured’s
burden in opposing a summary judgment motion brought by the insurer is
‘commensurately high because the court must view the evidence presented in light of the
substantive evidentiary burden at trial.’” Babayan, 430 F.3d at 137 (quoting Koiserowski v.
Allstate Ins. Co., 51 F. Supp. 2d 583, 588 (E.D. Pa. 1999)). Nonetheless, if a reasonable jury
could find that Nationwide did not have a reasonable basis for denying benefits under the
policy and knew of or recklessly disregarded this, summary judgment is not appropriate.
See Jung v. Nationwide Mut. Fire Ins. Co., 949 F. Supp. 353, 355-56 (E.D. Pa. 1997).
Analysis
In the instant case, Plaintiffs support their statutory bad faith claim with the
following allegations:
(1) Regarding the property damage claim, Nationwide offered far less than the car’s
value. (ECF No. 1-2, Compl. ¶ 39).
(2) Nationwide threatened to abandon Plaintiffs’ car and charge the costs to Plaintiffs,
unless Plaintiffs accepted Nationwide’s low offer. (Id.).
(3) Plaintiffs’ car was damaged while in Nationwide’s possession. (Id.).
(4) Plaintiffs had to sue Nationwide to recover the property damage claim. (Id.).
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(5) Nationwide attempted to force Mr. Rowe to violate his doctors’ travel restrictions
by requiring an IME in Pittsburgh, rather than selecting a physician close to
Plaintiffs’ home. (Id. ¶ 41).
(6) Nationwide delayed resolving the claims for its own economic benefit. (Id. ¶ 42).
(7) Nationwide failed to offer a prompt, fair, and equitable settlement under the UIM
coverage for Mr. Rowe’s personal injuries. (Id. ¶ 43).
(8) Nationwide engaged in unfair claims settlement practices by failing to complete its
investigation within thirty days and by failing to provide a written explanation for
the delay in violation of 31 Pa. Code § 146.6 and 146.7. (Id. ¶ 46).
(9) Nationwide engaged in unfair insurance practices under 40 P.S. § 1171.5 by
refusing to pay Plaintiffs’ claims; failing to promptly, fairly, and equitably settle
Plaintiffs’ claims; forcing Plaintiffs to initiate litigation to recover under the
insurance policy; and attempting to settle Plaintiffs’ claims for an unreasonable
amount. (Id. ¶ 47).
The first four reasons for bad faith appear to involve the property damage claim, while
the remaining five reasons appear to involve the UIM claim. The Court will address
Plaintiffs’ allegations of statutory bad faith under these two general categories.
1.
Property Damage Claim
Plaintiffs allege that Nationwide acted in bad faith in handling Plaintiffs’ property
damage claim.
Plaintiffs contend Nationwide offered far less than the car’s value;
Nationwide threatened to abandon Plaintiffs’ car unless Plaintiffs accepted Nationwide’s
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low offer; Plaintiffs’ car was damaged while in Nationwide’s possession; and Plaintiffs
had to sue Nationwide to recover the property damage claim. Despite these allegations,
Plaintiffs have failed to demonstrate with clear and convincing evidence that Nationwide
acted in bad faith in handling Plaintiffs’ property damage claim.
Nationwide’s Valuation and Offer
First, Nationwide’s valuation of the vehicle was not unreasonable.
After
evaluating the vehicle, Nationwide determined that the car was a total loss and offered
Plaintiffs $3,037.59 on the property damage claim.
Plaintiffs rejected that offer,
demanding $6,500 instead. Plaintiffs then filed suit, and a magistrate judge awarded
damages in the amount of $4,776.29 against Nationwide in favor of Plaintiffs.
Contrary to Plaintiffs’ allegations of bad faith, Nationwide had a reasonable basis
for its offer. Nationwide’s offer was based on a CCC Valuescope Market Report.5 (ECF
No. 58-10 at 17-37). Nationwide classified the car as a total loss and offered the market
cash value of the car based on the CCC Valuescope report.
(ECF No. 58-9 at 13).
Nationwide asked Plaintiffs for any additional information that might change the
valuation of the car. (Id.). Plaintiffs have not provided any evidence to show that the car
was worth more than the market cash value calculated in the CCC Valuescope report. It
is noteworthy that Mr. Rowe stated at his deposition that he agreed the car was a total
loss and that, despite Plaintiffs’ initial $6,500 demand, he believed the car was only worth
$4,500.
5
Nationwide’s offer was also consistent with the total loss valuation offered by Lincoln General—
$3,327.87. (See ECF No. 58 ¶ 56).
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Accordingly, Nationwide has demonstrated a reasonable basis for its offer. See
Aquila v. Nationwide Mut. Ins. Co., No. 07-cv-2696, 2008 WL 5348137, *2 (E.D. Pa. Dec. 15,
2008) (finding insurer demonstrated reasonable basis for its valuation of vehicle in relying
on CCC Valuescope report where no evidence was offered to dispute its accuracy); Katta
v. Geico Ins. Co., No. 2:11-cv-729, 2013 WL 275529, *10 (W.D. Pa. Jan. 24, 2013).
Nationwide’s Threat to Abandon the Car
Plaintiffs allege that Nationwide “threatened to abandon the vehicle and charge
the costs to [Plaintiffs] unless they accepted Nationwide’s low offer.” (ECF No. 1-2 ¶ 39).
Following the accident, Plaintiffs’ car was transported to Copart Auto Auctions, a salvage
yard, for evaluation by Nationwide. Following Nationwide’s evaluation of the car, the car
remained at Copart for nearly a year. Plaintiffs refused Nationwide’s offer for property
damage and failed to reclaim their car or to advise Nationwide what to do with the car.
(ECF No. 58 ¶¶ 59-75). Nationwide repeatedly asked Plaintiffs for a status update. (Id.
¶¶ 66-72). However, Plaintiffs did not attempt to reclaim their car until April 14, 2008,
after Nationwide sent notice of its intent to abandon the car. (Id. ¶¶ 71-72). At Plaintiffs’
request, Nationwide delivered the car to Plaintiffs’ residence. (Id. ¶ 73).
The evidence in the record shows that Nationwide sent Plaintiffs a letter
explaining that, if Plaintiffs did not reclaim possession of their car, Nationwide would
abandon the car and assess costs to the Plaintiffs. (ECF No. 58-9 at 18). Nationwide sent
this letter after finishing its evaluation of the car and tendering an offer to Plaintiffs on the
property damage claim, and after repeatedly communicating with Plaintiffs regarding the
18
status of the claim. Nationwide no longer needed the car to resolve the claims and was
incurring storage fees. Nationwide’s letter did not make its offer to settle the claim
contingent on Plaintiffs’ reclamation of their car. Thus, the letter was not a “threat”
intended to coerce Plaintiffs into accepting an offer and is not evidence of bad faith. The
letter was simply an effort by Nationwide to dispose of Plaintiffs’ car and settle the claim.
Additional After-Accident Damage
Similarly, the additional, after-accident damage to Plaintiffs’ car while in
Nationwide’s possession does not establish bad faith.
It is undisputed that, while
Plaintiffs’ car was being stored at Copart to undergo evaluation by Nationwide, the car
sustained additional damage. However, Plaintiffs have failed to show that the additional
damage constitutes bad faith. Nationwide’s CCC Valuescope Report was generated prior
to the additional damage. Nationwide classified the car as a total loss and calculated the
car’s value without factoring the additional damage. Thus, Nationwide’s valuation of the
property damage claim was in no way influenced by the additional, after-accident
damage to the car. The car was deemed a total loss because of the accident—a conclusion
which Mr. Rowe affirmed in his deposition. The Court agrees with Nationwide that,
“Though the damage should not have happened, it does not establish that Nationwide
acted in bad faith in the handling of the property damage claim.” (ECF No. 40 at 25).6
6
This conclusion does not address whether Nationwide must compensate Plaintiffs for any claims
they might have against Nationwide for the additional damage, an issue which is not presently
before this Court. However, the fact that the car sustained additional damage while being stored
at Nationwide’s valuation center does not establish bad faith without evidence that the damage
was connected in some way to Nationwide’s handling of the property damage claim.
19
Plaintiffs’ Decision to Sue
Finally, the fact that Plaintiffs initiated litigation against Defendants is not
evidence of bad faith. Plaintiffs allege in the complaint that they “had to sue Nationwide
in order to be paid for their car.” (ECF No. 1-2 at ¶ 39). Contrary to this assertion,
Nationwide made a reasonable offer for the full market value of the car. Dissatisfied with
Nationwide’s valuation of the car, Plaintiffs rejected the offer and decided to sue
Nationwide. Nevertheless, because Nationwide had a reasonable basis for its offer, and
because Plaintiffs could have accepted that offer, Plaintiffs contention that they “had to
sue Nationwide” is without merit and is not evidence of bad faith.
In sum, Plaintiffs have failed to demonstrate with clear and convincing evidence
that Nationwide acted in bad faith in handling Plaintiffs’ property damage claim. Instead,
Nationwide has demonstrated a reasonable basis for its actions and is thus entitled to
summary judgment.
2.
UIM Claim
The essence of Plaintiffs’ statutory bad faith action is that Nationwide failed to
offer a prompt, fair, and equitable settlement under the UIM coverage policy provision
with regard to Mr. Rowe’s personal injuries. Plaintiffs contend Nationwide attempted to
force Mr. Rowe to violate his doctors’ travel restrictions by requiring an IME examination
in Pittsburgh; Nationwide failed to complete its investigation within thirty days or
provide a written explanation for the delay and delayed resolving the claims for its own
economic benefit; Nationwide refused to pay Plaintiffs’ claims; Nationwide forced
20
Plaintiffs to initiate litigation; and Nationwide attempted to settle Plaintiffs’ claims for an
unreasonable amount. The Court will separately address each of these allegations.
The IME
Plaintiffs allege that Nationwide acted in bad faith by attempting to force Mr.
Rowe to travel to Pittsburgh for an IME, in violation of his doctor’s travel restrictions.
(ECF No. 1-2 ¶ 41). Plaintiffs have failed to show bad faith.
To help evaluate Plaintiffs’ UIM claim, Nationwide scheduled Mr. Rowe for an
IME with Dr. Daniel Wecht, a physician in Pittsburgh with the UPMC Department of
Neurological Surgery. (ECF No. 58 ¶ 33). After Nationwide notified Plaintiffs about the
scheduled IME, Plaintiffs’ counsel informed Nationwide that Mr. Rowe was prohibited
from sitting for periods longer than one hour, at least through May 7, 2011. (Id. ¶ 34).
Nationwide cancelled the IME and, on May 23, 2011, contacted Plaintiffs’ counsel to
follow-up on Mr. Rowe’s disability status and travel limitations. (Id. ¶¶ 36-37). Plaintiffs’
counsel then submitted two disability slips to Nationwide from Plaintiffs’ doctors, which
stated that Mr. Rowe had to “get out of motor vehicle frequently to walk and stretch” and
prohibited “sitting for more than 1 hour without standing and moving about.” (Id. ¶ 3739; ECF No. 65-5 at 23-24).
Despite these travel restrictions, Mr. Rowe testified in his depositions (ECF No. 585; ECF No. 59-9) that, throughout 2010 and 2011, he traveled up to three days every other
week for work, and that these work related trips typically lasted three hours one way.
(ECF No. 58 ¶¶ 40-44).
21
After reviewing Mr. Rowe’s disability slips, Nationwide again requested, on June
8, 2011, that Mr. Rowe submit to an IME with Dr. Wecht and offered to provide travel
accommodations. (Id. ¶ 45). Again, Plaintiffs’ counsel refused Nationwide’s request for
an IME with Dr. Wecht, stating that Mr. Rowe was medically unable to travel to
Pittsburgh.
Thereafter, Nationwide agreed to select a different physician closer to
Plaintiffs’ home and chose Dr. Pifer to conduct the IME. (Id. ¶¶ 46-47). Based on these
undisputed facts in the record, Plaintiffs have failed to show with clear and convincing
evidence that Nationwide acted in bad faith by scheduling an IME in Pittsburgh.
Improper Delay
Plaintiffs allege that Nationwide acted in bad faith by delaying resolution of the
claims. “Delay is a relevant factor in determining whether bad faith has occurred, but a
long period of time between demand and settlement does not, on its own, necessarily
constitute bad faith. . . . [I]f delay is attributable to the need to investigate further or even
to simple negligence, no bad faith has occurred.” Kosierowski v. Allstate Ins. Co., 51 F.
Supp. 2d 583, 588-89 (E.D. Pa. 1999) aff’d, 234 F.3d 1265 (3d Cir. 2000).
Plaintiffs first assert that Nationwide delayed selecting an IME close to Plaintiffs’
home for over a year, to Nationwide’s economic benefit. (ECF No. 1-2 ¶ 42). However,
Nationwide has produced ample evidence that the reason for the delay in scheduling an
IME was the result of Plaintiffs’ own refusal due to certain travel restrictions.
The
evidence in the record shows that Nationwide initially scheduled Mr. Rowe’s IME in early
2011; that Nationwide cancelled the IME and attempted to reschedule the IME upon
22
learning of Mr. Rowe’s travel restrictions; that Nationwide continued to communicate
with Plaintiffs’ counsel concerning Mr. Rowe’s availability for an IME appointment; and
that Nationwide finally rescheduled the IME with a doctor closer to Mr. Rowe’s home,
which was conducted in early 2012.
Thus, the record before the Court indicates legitimate delays that arose based on
the circumstances of this case, largely due to Mr. Rowe’s travel restrictions. The evidence
shows that Nationwide attempted to accommodate Mr. Rowe’s disability. There is simply
no evidence from which a reasonable jury could find that the delay was the result of bad
faith. See Kosierowski, 51 F. Supp. 2d at 590.
Plaintiffs also assert that Nationwide “failed in good faith to effectuate prompt . . .
settlement” and engaged in unfair claims settlement practices by failing to complete the
claims investigation within thirty days. (ECF No. 1-2, Compl. ¶¶ 43, 46-47). There is no
dispute that it took the parties a prolonged period of time to resolve Plaintiffs’ UIM claim.
However, the evidence in the record shows that the length of time between the filing of
the claim and final settlement of the claim was the result of Nationwide’s investigation
and Plaintiffs’ own conduct.
A number of factors contributed to this protracted delay. First, Plaintiffs failed to
submit medical records to support the claim, despite Nationwide’s numerous requests.
(ECF No. 58 ¶¶ 13-17). Next, Plaintiffs did not submit their UIM demand package to
Nationwide until May 5, 2010, after Lincoln General tendered its $15,000 policy limits. (Id.
¶¶ 19-24). Thus, Nationwide did not receive Plaintiffs $313,500 demand package until
nearly three years after the accident. (Id. ¶¶ 22-23). Next, as communicated to Plaintiffs’
23
counsel, Nationwide needed to collect additional records and conduct its own evaluation
based on the demand package. (Id. ¶¶ 25-28).
To further evaluate Plaintiffs’ claim, Nationwide obtained Mr. Rowe’s statement
under oath on September 22, 2010 (id. ¶ 30); retained Dr. Seraly, a licensed dermatologist,
who issued a report concerning Mr. Rowe’s lipoma on January 18, 2011 (id. ¶ 31); and
scheduled an IME in early 2011, which was cancelled and ultimately rescheduled in
January 2012 due to Mr. Rowe’s travel restrictions (id. ¶¶ 33-48). Finally, after receiving
Plaintiffs’ demand package and supporting documentation, after reviewing both Dr.
Seraly’s and Dr. Pifer’s reports, and after collecting Mr. Rowe’s statement, Nationwide
was able to adequately evaluate the claim. (Id. ¶¶ 49-50). Nationwide valued Mr. Rowe’s
injuries below Lincoln General’s $15,000 payment, but decided to offer Plaintiffs $5,000 to
settle the claim, and further offered to submit to high/low arbitration. (Id. ¶ 50). Plaintiffs
rejected Nationwide’s offer on February 14, 2012. The claim then proceeded to litigation,
and the claim was settled on August 22, 2012, in mediation for $50,000. (Id. ¶¶ 53-54).
The record shows that, throughout the claims investigation, Nationwide
communicated with Plaintiffs’ counsel regarding the progress of the claim, and asked for
additional documentation to support Plaintiffs’ high demand. Most of the delays are
directly attributable to Plaintiffs’ failure to provide requested documentation and Mr.
Rowe’s inability to appear for the scheduled IME appointments. Here, the length of time
it took to resolve Plaintiffs’ UIM claim does not provide clear and convincing evidence for
a reasonable jury to conclude that Nationwide acted in bad faith. Williams v. Hartford Cas.
24
Ins. Co., 83 F. Supp. 2d 567, 573 (E.D. Pa. 2000) aff’d, 261 F.3d 495 (3d Cir. 2001); Aquila v.
Nationwide Mut. Ins. Co., No. 07-cv-2696, 2008 WL 5348137, *9-10 (E.D. Pa. Dec. 15, 2008).
Similarly, Plaintiffs have failed to provide evidence demonstrating that
Nationwide failed to comply with 31 Pa. Code §§ 146.6 and 146.7. However, even if
Nationwide was negligent in failing to inform Plaintiffs of the progress of the
investigation in the precise manner mandated by the regulations, such negligence does
not constitute bad faith in this case. See Williams, 83 F. Supp. 2d at 577. The record is
replete with evidence of regular written and oral communication from Nationwide to
Plaintiffs and Plaintiffs’ counsel concerning the status and progress of the investigation.
Thus, Plaintiffs have not demonstrated bad faith with clear and convincing evidence.
Settlement of UIM Claim for Unreasonable Amount
Plaintiffs allege that Nationwide acted in bad faith by failing to equitably settle the
UIM claim. According to Plaintiffs, Nationwide offered “only a fraction of the value of
[P]laintiffs’ claim.”
(ECF No. 1-2 ¶¶ 43-44).
Contrary to Plaintiffs’ allegations, the
evidence in the record shows that Nationwide conducted a reasonable investigation and
based its offer on the medical records and expert reports. Plaintiffs have failed to show
with clear and convincing evidence that Nationwide’s offer lacked a reasonable basis.
Following the accident, Plaintiffs asserted a bodily injury claim against Lincoln
General, who settled Plaintiffs’ bodily injury claim for the full $15,000 liability limit under
Ms. Gayle’s policy. (ECF No. 58 ¶¶ 19-20). Plaintiffs then demanded $313,500 in their
UIM claim against Nationwide. (Id. ¶¶ 23-24).
25
According to Plaintiffs, Mr. Rowe’s
injuries included a lipoma on his forehead, which had to be surgically removed, and neck
and back injuries, including cervical disc compressions and cervical and thoracic sprains.
(Id. ¶ 23). After conducting an investigation, and taking into account the $15,000 bodily
injury credit from Lincoln General, Nationwide offered Plaintiffs $5,000 to settle the claim.
(Id. ¶ 50). Plaintiffs rejected the $5,000 offer and countered with a demand for $275,000.
(Id. ¶ 51). Nationwide offered binding high/low arbitration, with $5,000 as the low and
$100,000 as the high. (Id. ¶ 50). Plaintiffs also rejected this offer, explaining that they
would only agree to arbitration if the high was the $500,000 policy limits and the low was
$100,000. (Id. ¶ 52). On August 22, 2012, Nationwide settled the claim for $50,000 during
mediation. (Id. ¶ 54).
Plaintiffs have not produced clear and convincing evidence that Nationwide’s
offer lacked a reasonable basis. To the contrary, Nationwide has demonstrated that its
investigation and its offer were reasonable and based on medical records, expert reports,
and other relevant information. Nationwide based its offer on the following.
Dr. Gerald W. Pifer examined Mr. Rowe for an IME on January 6, 2012, and
reviewed Mr. Rowe’s medical records and deposition testimony. (ECF No. 58-8). Dr.
Pifer’s IME report contains the following opinion:
[Mr. Rowe] had soft tissue injuries to his thoracic and lumbar spine as a
result of the motor vehicle accident he describes taking place on July 5,
2007. . . .
There is a possibility that Mr. Rowe had a previous lesion of the right
forehead which was traumatized slightly. He may have had a little
bleeding in the area. This became more noticeable post-accident, and he
had the lesion removed. He certainly has had excellent healing after that
procedure.
26
As far as the spine is concerned, it certainly does not seem by history that
Mr. Rowe is any different than he was prior to the accident. . . .
. . . [T]he soft tissue issues with his spine would have resolved within six
months after the accident which would have put it in early 2008. . . . Mr.
Rowe has no limitations as a result of the motor vehicle accident related
to the symptoms that he has today which are certainly minimal.
Mr. Rowe's prognosis is good. Mr. Rowe has no limitations at this time as
a result of any accident related conditions.
(Id. at 5-6). Significantly, Dr. Pifer noted, “[Mr. Rowe’s] life at this point, according to his
history, is no different than it was prior to the accident.” (Id. at 3).
Dr. Mark P. Seraly prepared an expert report regarding Mr. Rowe’s lipoma after
reviewing various photographs, pathology reports, Mr. Rowe’s medical records, and Mr.
Rowe’s deposition testimony. (ECF No. 58-6). The report contains the following opinion:
[T]here is no clinical evidence as documented in the objective medical
record or laboratory/pathological evidence to conclude trauma following
a motor vehicle accident on July 5, 2007 caused a pre-existing lipoma on
the claimant’s right forehead to increase in size.
(Id. at 2).
Dr. Seraly also noted, “The post-operative photograph demonstrates an
excellent cosmetic result with excision placement within a pre-existing forehead
crease/wrinkle line.” (Id. at 3).
Mr. Rowe’s own statement under oath, taken September 22, 2010, is revealing. Mr.
Rowe noted that he went to work following the accident and did not seek immediate
medical attention. Mr. Rowe stated that he continues to enjoy the same activities, such as
hunting and fishing, as he did before the accident. (ECF No. 58-5 at 11). Likewise, Mr.
Rowe stated that he continues to work around the house, cutting the grass, keeping up
general maintenance, and helping his wife with household chores, similar to before the
27
accident. (Id.). While Mr. Rowe stated that he sometimes suffers back pain and stiffness
during these activities, (id. at 9), he also admitted that he experienced back pain prior to
the accident and regularly treated with a chiropractor for general adjustments. (Id.).
Likewise, Mr. Rowe explained that the lipoma on his forehead predated the accident, but
that it grew in size following the accident. (Id. at 6). Mr. Rowe further testified that his
dermatologist could not confirm with certainty that the accident caused the lipoma to
grow. (Id. at 7). Mr. Rowe also stated that he was pleased with the removal of the lipoma
and credited his doctor with concealing the scar from the procedure within a “character
line” on his forehead. (Id. at 11-12).
At his deposition on December 10, 2012, Mr. Rowe stated that he did not miss any
work as a result of the accident, except for some medical appointments sometime after the
accident. (ECF No. 58-7 at 72). Nor did the accident prevent him “from earning more
money” with his employer. (Id.). Furthermore, when asked why Plaintiffs decided to
settle the UIM claim for $50,000—over $260,000 less than Plaintiffs’ original demand—Mr.
Rowe explained that he simply “needed the money” to pay bills, including his daughter’s
medical school tuition, student loans, rent payments, car payments and insurance,
household bills, and vacation. (Id. at 69-71). Indeed, Mr. Rowe testified that he did not
have any ongoing medical bills or any other bills related to the accident. (Id. at 69).
Based on its investigation and the reports and other records it had gathered,
Nationwide adopted the following conclusions, which the Plaintiffs have not disputed:
Mr. Rowe had pre-existing neck and back issues and treated with a
chiropractor before the accident;
28
Plaintiffs’ counsel failed to provide any pre-accident records to
Nationwide;
Post-accident, Mr. Rowe treated with a chiropractor for
approximately one month, followed by a one month gap in treatment,
and then had minimal treatment for one more month in 2007;
The chiropractor, and not a radiologist, interpreted Mr. Rowe’s
cervical x-rays;
There were no MRIs submitted to Nationwide to confirm any injuries;
The lipoma was also a pre-existing condition; and
Medical bills for removal of the lipoma were not submitted to
Nationwide for payment.
(ECF No. 58 ¶ 28). The foregoing evidence shows that Nationwide conducted a thorough
investigation and had a reasonable basis for its offer on the UIM claim.
Plaintiffs
disagreed with Nationwide’s valuation of the UIM claim. However, Plaintiffs have failed
to present any evidence to dispute Nationwide’s valuation.
Violations of Statute and Code Provisions
Plaintiffs allege that Nationwide acted in bad faith by violating certain
Pennsylvania statute and code provisions, including 31 Pa. Code §§ 146.6 and 146.7 and
40 P.S. § 1171.5. (ECF No. 1-2 at ¶¶ 46, 47). Plaintiffs have not provided evidence to
support its allegations and Plaintiffs’ allegations fail as a matter of law. See Leach v. Nw.
Mut. Ins. Co., No. 01-cv-2364, 2005 WL 3533116, *12-14 (W.D. Pa. Dec. 22, 2005) aff’d, 262 F.
App’x 455 (3d Cir. 2008); Purcell v. State Farm Mut. Auto. Ins. Co., No. 11-cv-7004, 2012 WL
425005, *6 (E.D. Pa. Feb. 10, 2012); Williams v. Hartford Cas. Ins. Co., 83 F. Supp. 2d 567, 576
(E.D. Pa. 2000) aff’d, 261 F.3d 495 (3d Cir. 2001).
29
Conclusion
Nationwide has demonstrated that it had a reasonable basis for its decision, thus
defeating Plaintiffs’ statutory bad faith claim.
Nationwide conducted a substantial,
thorough investigation, which Nationwide used as the basis for determining the value of
Plaintiffs’ UIM claim. Plaintiffs have not met their burden of pointing to clear and
convincing evidence from which a jury could conclude that Nationwide did not have a
reasonable basis for its decision, or that Nationwide acted with knowledge or reckless
indifference to the lack of such basis. Leach v. Nw. Mut. Ins. Co., No. 01-cv-2364, 2005 WL
3533116, *11 (W.D. Pa. Dec. 22, 2005) aff’d, 262 F. App’x 455 (3d Cir. 2008); Kosierowski v.
Allstate Ins. Co., 51 F. Supp. 2d 583, 591-92 (E.D. Pa. 1999) aff’d, 234 F.3d 1265 (3d Cir. 2000).
Accordingly, viewing the undisputed facts in the light most favorable to the
Plaintiffs, Plaintiffs have not established clear and convincing evidence such that a
reasonable jury could find that Nationwide acted in bad faith. Therefore, regarding
Count IV of the complaint, Defendants’ first motion for summary judgment is granted,
Plaintiffs’ motions for summary judgment are denied, and this claim is dismissed as a
matter of law.
C.
Defendants’ Supplemental Motion for Summary Judgment
On September 26, 2013, Defendants filed a supplemental motion for summary
judgment. (ECF No. 75). In that motion, Defendants argue Plaintiffs’ bad faith claims
regarding the property damage should be dismissed as time-barred. (ECF No. 76 at 1).
The Defendants argue that the statute of limitations for bad faith claims in Pennsylvania is
30
two years, that Defendants paid Plaintiffs’ property damage claim on November 19, 2009,
and that Plaintiffs did not file suit on the bad faith claim until February 23, 2012, three
months after the limitations period. (Id.).
In response, Plaintiffs argue that a cause of action for a continuing wrong begins to
accrue only when the wrongful conduct stops. (ECF No. 78 at 4). Plaintiffs assert that
“there has been a pattern of tortious activity by [Defendants] towards [Plaintiffs]
beginning in 2007 and continuing to the present date, involving continuing and frequently
repeated wrongs and breaches of fiduciary duty.” (Id. at 5). Accordingly, Plaintiffs
contend, the limitations period did not begin on November 19, 2011, as alleged by the
Defendants, and the property damage claim is therefore not time-barred.
Because the Court grants Defendants’ first motion for summary judgment (ECF
No. 38) and dismisses Plaintiffs’ bad faith claim for property damage on other grounds,
the Court will deny Defendants’ supplemental motion for summary judgment (ECF No.
75) as moot.
VI.
CONCLUSION
The material facts in this case are not in dispute. Viewing the evidence in the light
most favorable to Plaintiffs, judgment as a matter of law in favor of Defendants is proper
on Plaintiffs’ bad faith claims. Accordingly, the Court will GRANT Defendants’ first
motion for summary judgment and will DENY Plaintiffs’ motions for summary
judgment. An appropriate order follows.
31
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
CHRISTOPHER H. ROWE and
NANCY L. ROWE, husband and wife,
)
)
)
Plaintiffs,
)
)
v.
CIVIL ACTION NO. 3:12-81
)
)
JUDGE KIM R. GIBSON
NATIONWIDE INSURANCE COMPANY, )
NATIONWIDE, and NATIONWIDE
)
INSURANCE COMPANY OF AMERICA, )
)
Defendants.
AND NOW, this
)
\9 +h day
ORDER
of March 2014, having considered the pending
summary judgment motions in this case, along with the briefs and supporting exhibits,
and in accordance with the foregoing memorandum, IT IS HEREBY ORDERED that
(1) Defendants Nationwide Insurance Company, Nationwide,
and Nationwide
Insurance Company of America's motion for summary judgment (ECF No. 38) is
GRANTED;
(2) Plaintiffs Christopher H. Rowe and Nancy L. Rowe's motions for summary
judgment (ECF Nos. 41 and 47) are DENIED; and
(3) Defendants' supplemental motion for summary judgment (ECF No. 75) is
DENIED as moot.
IT IS FURTHER ORDERED that the Clerk shall mark this case closed.
BY THE COURT:
KIM R. GIBSON
UNITED STATES DISTRICT JUDGE
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