PARISI et al v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Filing 64

MEMORANDUM OPINION AND ORDER denying 38 Motion for Partial Summary Judgment; granting in part and denying in part 40 Motion for Summary Judgment. The Court denies the motion with respect to bad faith. The Court grants the motion with respect to the UTPCPL claim, and as more fully stated in said Memorandum Opinion and Order. Signed by Judge Kim R. Gibson on 5/7/2018. (dlg)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
MELISSA C. PARISI and MICHAEL
C. PARISI, III, wife and husband,

)
)

Plaintiffs,

CIVIL ACTION NO. 3:16-179

)

JUDGE KIM R. GIBSON

)

v.

)
)

STATE FARM MUTUAL
AUTOMOBILE INSURANCE
COMPANY,

)
)
)
)

Defendant.

)

MEMORANDUM OPINION

I.

Introduction

Pending before the Court are (1) a Motion for Partial Summary Judgment on Bad
Faith filed by Plaintiffs Melissa and Michael Parisi (ECF No. 38), and (2) a Motion for
Summary Judgment filed by Defendant State Farm (ECF No. 40). The motions have been
fully briefed (see ECF Nos. 39, 41, 55, 58, 63) and are ripe for disposition. For the reasons
stated below, the Court will DENY the Parisis' motion and will GRANT in PART, and
DENY in PART, State Farm's motion.
II.

Jurisdiction

The Court has subject matter jurisdiction under 28 U.S.C. § 1332 because the parties
are completely diverse and the amount in controversy exceeds $75,000. Venue is proper
under 28 U.S.C. § 1391(6) because a substantial portion of the events giving rise to the claims
occurred in the Western District of Pennsylvania.

III.

Background
A.

Factual History1
1.

Melissa Parisi Files a Claim for Underinsured Motorist Benefits

Melissa Parisi2 sustained injuries in a car accident on April 28, 2014. 3 At the time of
the accident, Parisi carried a State Farm insurance policy. 4 Parisi's policy provided $100,000
in underinsured motorist coverage. 5
Parisi filed an underinsured motorist claim with State Farm via a letter dated May
23, 2014. 6 Parisi's attorney, Douglas Stoehr, drafted and signed the letter.7 Stoehr stated that
the other motorist carried a Met Life insurance policy with a $15,000 limit. 8 Stoehr wrote
that, given "the serious nature" of Ms. Parisi' s injuries, he had "no doubt" that her claim
would exceed the limit of the other driver's policy. 9
State Farm assigned Parisi's claim to Scott Whiteside, a claims representative. 10
Whiteside reviewed Parisi's claim on June 3, 2014, and determined that the other driver

The Court derived the facts in this section from State Farm's Concise Statement of Material Facts
(ECF No. 42), the Parisis' Response to State Farm's Concise Statement of Material Facts (ECF No. 56),
the Parisis' Concise Statement of Material Facts (ECF No. 43), and State Farm's Response to the
Parisis' Concise Statement of Material Facts (ECF No. 57). These facts are undisputed unless
otherwise noted.
2 The Court refers to Melissa Parisi simply as "Parisi" throughout.
3 ECF No. 42 at 'I[ 1; ECF No. 56 at 'II 1; see Expert Medical Report by Dr. Wayne D' Agaro, ECF No.
57-10 at 6.
4 ECF No. 42 at 'I[ 2; ECF No. 56 at 'I[ 2.
5 ECF No. 42 at 'I[ 3; ECF No. 56 at 'I[ 3.
6 ECF No. 48 at 'II 18; ECF No. 57 at 'II 18.
7 See ECF No. 45-17.
8 Id. at 1.
9 Id.
10 ECF No. 48 at 'I[ 19; ECF No. 57 at 1[ 19.
1

2

caused the crash. 11 The same day, Whiteside called Stoehr' s office, but did not speak with
Stoehr because he was unavailable. 12
On June 5, 2014, Whiteside wrote to Stoehr. 13 Whiteside asked Stoehr to provide
State Farm with "written confirmation" of the other motorist's insurance limits and stated
that State Farm would not authorize Stoehr to settle with the other motorist until it received
this written confirmation. 14 Whiteside also stated that State Farm understood that Parisi
continued to seek medical care for her injuries.13 And Whiteside stated that State Farm
needed records -of "all injuries and all treatment" to finalize Parisi' s claim. 16 Whiteside·
requested that "[u]pon your client concluding [her] medical treatment, please advise me
regarding the same." 17
Whiteside entered two claims notes on June 15, 2014. 18 Whiteside stated that the
"CV" (current value) of Parisi's claim was $0. 19 Whiteside also noted that he had requested
additional information from Stoehr "so that UIM evaluation may be finalized." 20

ECF No. 42 at 'l['l[ 11, 12; ECF No. 56 at 'l['I[ 11, 12.
ECF No. 48 at 'I[ 24; ECF No. 57 at 1[ 24.
13 ECF No. 42 at 'I[ 15; ECF No. 56 at 'II 15.
14 ECF No. 42-4 at 26.
1s Id.
16 Id.
17 Id.
1s ECF No. 57-3 at 21.
19 ECF No. 42 at 'II 16. Parisi denies that Whiteside's claim notes placed a current value on Parisi's
underinsured motorist claim. (See ECF No. 56 at 'II 16.) But Parisi does not reference the record or
provide any citation for her denial. (See id.) Because she failed to cite to the record to substantiate her
denial as required by Fed. R. Civ. P. 56(c)(l), the Court may "consider the fact undisputed for
purposes of the motion." Fed. R. Civ. P. 56(E). Therefore, the Court deems this allegation as admitted.
20 Id.
11

12

3

2.

State Farm Requests Additional Information

Whiteside sent Stoehr six letters between July 2014 and January 2015. 21 These letters
are extremely similar. In each letter, Whiteside requests that Stoehr provide State Farm with
written confirmation of the other motorist's third-party coverage. 22 The letters either state
that State Farm understands that Parisi continues to seek medical treatment for her injuries,
or request that Stoehr inform State Farm about whether Parisi continues to receive
treatment. 23 In each letter, Whiteside asks Stoehr to notify State Farm when Parisi completes
treatment and requests that he provide State Farm with Parisi's complete medical records
at that time. 24
Whiteside also states that Stoehr need not provide documentation of medical
treatment that Parisi already submitted for her first-party claim. 25 This is because Whiteside
had access to, and reviewed, the medical records from Parisi' s first-party claims file. 26 These
records included: two reports from Parisi's treating neurologist who, on May 13, 2014,
diagnosed her with "post-concussion syndrome" and, during Parisi's second office visit on
May 27, 2014, noted that she experienced "a lot of memory issues;" two reports from a
concussion specialist who, during two appointments in May 2014, confirmed Parisi's
diagnoses of a concussion and labyrinthine dysfunction and reported that she experienced

21
22
23

24
25

26

ECF No. 42 at 'l['I[ 17-23; ECF No. 56 at 111117-23.
ECF No.57-4 at 26; ECF No. 45-19; ECF No. 45-20; ECF No. 45-21; ECF No. 45-22; ECF No. 45-23.
Id.
See id.
See ECF No. 45-21; ECF No. 45-22; ECF No. 45-23.
ECF No. 48 at 'I[ 27; ECF No. 57 at 11 27.
4

difficulty concentrating and deficits in short-term memory; and records from the forty
physical therapy sessions that Parisi completed between May 2014 and August 2014. 27
On February 18, 2015, Stoehr submitted another batch of Parisi's medical records. 28
These included E.R. records; reports from four different doctors who treated Ms. Parisi
following the accident; and updated documentation of Parisi's ongoing physical therapy. 29
In this letter, Stoehr informed Whiteside that he typically "work[s] with the [underinsured
motorist] claims representative after [he] settle[s] the underlying claim." 30 Whiteside
confirmed receipt of the records via letter dated March 4, 2015. 31 Whiteside requested that
Stoehr provide documentation of any future care that Parisi received so that State Farm
could consider all treatment when making a final decision on her claim. 32

3.

State Farm Completes an Injury Evaluation

Whiteside completed an injury evaluation on March 17, 2015. 33 Whiteside noted that
Parisi suffered from post-concussion syndrome and experienced dizziness, headaches,
balance problems, and sensitivity to sound and light. 34 Whiteside confirmed that the
automobile accident caused Parisi's injuries and concluded that Parisi's medical treatment
appeared "reasonable and necessary." 35

ECF No. 45-28; ECF No. 45-29; ECF No. 45-30.
ECF No. 48 at 'l[ 30; ECF No. 57 at 'l[ 30.
29 Id.
30 ECF No. 42 that 'l[ 28; ECF No. 56 at 1[ 28.
31 ECF No. 45-35.
32 Id.
33 ECF No. 45-11 at 4.
34 Id. at 7.
35 Id. at 4-6.
27
28

5

Stoehr provided additional medical records on March 18, 2015. 36 These records
included a report from Dr. Michael Drass, who conducted a physical examination of Parisi;
two office notes from Dr. Clark, Parisi' s neurologist; four months of records from Parisi' s
ongoing physical therapy; and reports from two visits to Parisi's primary care physician.37
Additionally, Stoehr stated that Parisi might receive an evaluation by a neuropsychologist
and that he would inform State Farm if that occurred. 38 Whiteside did not update the injury
evaluation after he received these records. 39
Stoehr informed Whiteside via letter dated March 19, 2015, that he settled with the
other motorist for the $15,000 policy limit. 40
All told, Stoehr provided State Farm with over 200 pages of medical records in
February and March 2015. 41 But Whiteside-who handled Parisi's claim until the end of
May 2015-never asked to interview Parisi. 42 He never requested authorization to obtain
Parisi' s medical records himself. 43 He never utilized a nurse to evaluate Parisi' s claim. 44 And
he never asked Parisi to provide a statement under oath or submit to an independent

ECF
31 Id.
3s Id .
39 ECF
40 ECF
4 1 ECF
42 ECF
43 Id.
44 Id.
36

.

No. 45-36.

No.
No.
No.
No.

48 at 'I[ 34; ECF No. 57 at 1[ 34.
42-4 at 13.
48 at 'I[ 39; ECF No. 57 at 'II 39.
48 at 'I[ 36; ECF No. 57 at 'I[ 36.

6

medical examination. 45 But Whiteside did place a value on Parisi's claim. 46 In April 2015,
Whiteside valued Parisi' s claim between $0 and $7,500. 47
Stoehr sent additional medical records on June 1, 2015. 48 These records included two
reports from Dr. Clark, Parisi's neurologist, who noted Parisi's worsening "forgetfulness,
headaches, and speech problems .... " 49 Stoehr also provided a report from Dr. Baker-the
concussion specialist-who noted increased symptom severity. 50 Stoehr also submitted
letters from Parisi's husband, daughter, and sister that detailed the changes they observed
in Parisi since the car accident. 51 State Farm never responded to Stoehr's June 1, 2015 letter. 52
State Farm reassigned Parisi's claim to Edward Naser in August 2015. 53 Naser sent
Stoehr letters in August and October 2015 that asked Stoehr to submit "your underinsured
demand package when complete." 54 Stoehr did not respond to either letter. 55

45

46
47

ECF No. 48 at 'l['l[ 37, 38; ECF No. 57 at 'll'll 37, 38.
ECF No. 48 at 'l[ 41; ECF No. 57 at 'l[ 41.
Id.

ECF No. 48 at 'l[ 48; ECF No. 57 at 'l[ 48.
ECF No. 45-37 at 9.
50 ECF No. 45-37 at 16.
51 Id. at 17-23.
52 ECF No. 48 at 'l[ 49; ECF No. 57 at 'lI 49.
53 ECF No. 48 at 'l[ 51; ECF No. 57 at 1[ 51. The parties dispute whether State Farm assigned Parisi's
claim to an additional claims handler, Marla Olinzock, between Whiteside and Naser. State Farm
claims that it assigned Parisi's claim to Olinzock in June 2015, and further states that it reassigned
her claim to Naser in August after Olinzock left work on long-term disability. (ECF No. 42 at 'll'll 4344.) Parisi disputes that State Farm assigned her claim to Olinzock, and points to the deposition of
Reed, Naser's supervisor, who stated that Olinzock was not a member of his claims team and that
he did not know why Olinzock made entries on Parisi's claims file during June and August of 2015.
(ECF No. 45-77 at 30-33.) But the Court doubts whether this disputed fact bears any relevance to
Parisi's bad faith claim.
s4 ECF No. 45-38; ECF No. 45-39.
55 ECF No. 42 at 'l[ 55; ECF No. 56 at 'l[ 45.
48

49

7

Naser called Stoehr on November 11, 2015. 56 Stoehr told Naser that Parisi was still
treating with her neurologist and that she had a follow-up appointment with her
concussion specialist."7 Stoehr told Naser that he would submit additional medical records
to State Farm. 58
Naser sent Stoehr a letter on November 11, 2015 that asked Stoehr to submit a
demand package for consideration. 59 Stoehr responded on November 19, 2015. 60 In his
response, Stoehr provided Naser with a neurological evaluation prepared by Dr. Michelle
Arbitell, dated May 14, 2015, which Parisi obtained at her own expense. 61 Dr. Arbitell
reported that Parisi exhibited impairments in several tests of cognitive functioning. 62 Stoehr
also provided updated treatment records from Parisi's speech language therapist,
examination records from a physician, documentation of Parisi's lost wages and medical

ECF No. 42 at 'll 56; ECF No. 56 at 'll 56.
The Court deems this fact admitted. State Farm presented evidence to substantiate this claim (see
ECF No. 57-3 at 12; ECF No. 42-5 at 102). Parisi does not present evidence to rebut State Farm's
factual allegations. Instead, Parisi denies these facts "to the extent they rely upon hearsay testimony."
(ECF No. 56 at 'l!'l! 57-58.) The Court easily holds that these facts do not rely on hearsay. The Federal
Rules of Evidence exclude from the definition of "hearsay" a statement by an opposing party made
"by the party in an individual or representative capacity" or "made by the party's agent ... on a
matter within the scope of that relationship and while it existed." Fed. R. Evid. 801(d)(2)(A); Fed. R.
Evid. (d)(2)(D). An attorney's statement made while representing his client on a matter within the
scope of the agency relationship is excluded from the definition of hearsay. See, e.g., Lightning Lube,
Inc. v. Witco Corp., 4 F.3d 1153, 1198 (3d Cir. 1993); Moody v. Twp. of Marlboro, 885 F. Supp. 101, 104
(D. N.J. 1995); Palmer v. Nassan, No. 10CV0922, 2011 WL 286127, at *2 (W.D. Pa. Jan. 26, 2011). The
Court finds that Stoehr made these statements in a representative capacity and that the statements
directly related to Stoehr' s representation of Parisi. Accordingly, the Court finds that Stoehr' s
statements do not constitute hearsay. Therefore, the Court may consider the statements at the
summary judgment stage.
58 ECF No. 57-3 at 12; ECF No. 42-5 at 103.
59 ECF No. 42 at 'JI 59; ECF No. 56 at 'JI 59.
6o ECF No. 42 at 'll 60; ECF No. 56 at 'll 60.
61 ECF No. 48 at 'l!'l! 54-57; ECF No. 57 at 'll'l! 54-57.
62 See, xenerally, ECF No. 45-40.
56

57

8

expenses, and an affidavit from a physician-assistant with whom Parisi worked. The
physician-assistant testified that Parisi' s work performance, attention, and concentration
decreased precipitously following the car accident and that she could no longer rely on
Parisi at work. 63 Additionally, Stoehr stated that Parisi scheduled an appointment with her
neurologist in late December and that she would also schedule an appointment with her
concussion specialist. 64 Stoehr concluded the letter by telling Naser that "[p]erhaps after
these upcoming medical appointments we may be in a position to settle this claim." 65

4.

State Farm Completes an Updated Injury Evaluation

Naser interpreted Stoehr's submission of medical records on November 19, 2015 as
a demand for settlement. 66 Naser completed an updated injury evaluation for Parisi's claim
on December 15, 2015. 67 Naser noted that the car accident caused Parisi's injuries and that
her medical treatment appeared to be "reasonable and necessary." 68 Naser set the value
range on Parisi's claim between $35,000 and $50,000 for pain and suffering, $1,800 for past
medical bills, and $10,000 for past wage loss. 69 Naser's estimate did not account for future
pain and suffering.7° Bill Reed, Naser's supervisor, understood that Naser asked for

ECF No. 48 at 'l['l[ 57-58; ECF No. 57 at 'l['l[ 57-58.
ECF No. 45-51 at 5.
6s Id.
66 ECF No. 45-72, Naser Deposition Transcript at pp. 51-52.
67 ECF No. 48 at 'II 60; ECF No. 57 at 'II 60.
68 ECF No. 45-12. The Court notes that Parisi claims that Naser did not consult all of the medical
records in her file when completing his injury evaluation. State Farm disputes this, and argues that
Naser did in fact consult Parisi's entire medical file. Naser testified that he "did not recall" whether
he reviewed the medical records that Stoehr gave State Farm prior to November 19, 2015. (ECF No.
45-72 at Deposition Transcript pp. 55-56.) But _Naser testified that he generally consults "all the
records" that State Farm possesses when completing an injury evaluation. (Id. at p. 56.)
69 ECF No. 48 at 'II 71; ECF No. 57 at 'II 71.
70 ECF No. 48 at 'l[ 72; ECF No. 57 at 'II 72.
63
64

9

settlement authority by placing a value on Parisi's claim. 71 On December 24, 2015, Reed
gave Naser authority to settle for up to $26,800. 72
Stoehr sent another letter on December 30, 2015. 73 Stoehr enclosed a twenty-minute
videotaped conversation between Parisi and her family which, according to Stoehr,
elucidated Parisi' s enduring cognitive deficits and the negative impacts that those defects
had on her family life. 74 Stoehr stated that he would provide Naser with a report from a
recent consultation with Parisi's neurologist.75 Stoehr stated that, when he provided Naser
with the note, "[a]t that time I will likely make a demand for settlement." 76 Stoehr advised
Naser that he would demand the $100,000 policy limit "at that time." 77 Stoehr requested
that Naser explain State Farm's reasoning in writing if State Farm disagreed with Stoehr's
opinion that the value of Parisi' s claim exceeded the $100,000 policy limit.78

5.

State Farm Offers to Settle

During a telephone call with Stoehr on January 5, 2016, Naser offered to settle
Parisi's claim for $17,000. 79 This offer fell at the low end of Naser's settlement authority. 80
Naser did not offer to settle for $26,800, even though he had the authority to settle for that

ECF No. 48 at 'II 73; ECF No. 57 at 'II 73.
ECF No. 48 at 'II 74; ECF No. 57 at 'l[ 74. The parties dispute the value that Reed placed on Parisi's
claim, but agree that $26,800-the amount that Reed authorized Naser to settle for-fell within
Reed's valuation of her claim.
73 See ECF No. 45-43.
74 Id.
7s Id.
76 Id.
77 Id.
78 Id.
79 ECF No. 42 at 'l[ 76; ECF No. 56 at 11 76.
80 ECF No. 48 at 'II 80; ECF No. 57 at 'II 80.
71

72

10

amount. 81 Naser did not offer to settle for a higher amount within the range of his settlement
authority because Stoehr unequivocally stated that Parisi would not accept less than
$100,000. 82 Naser did not think that Parisi would accept any settlement offer in State Farm's
settlement range, and believed that making an additional offer within that range would
have been futile. 83
State Farm had a policy to advance the amount of its first settlement offer to a
claimant if the claimant and State Farm reached an "impasse" in settlement negotiations. 84
But Naser did not offer to advance Parisi $17,000 because he did not believe that the parties
reached an impasse. 85
Stoehr wrote to Naser again on January 13, 2016. 86 Stoehr enclosed updated medical
records from Parisi' s neurologist. 87 Stoehr also reiterated his request that State Farm explain
its reasoning for offering less than the $100,000 policy limit. 88 Stoehr further renewed his
$100,000 demand, stated that State Farm acted in bad faith by extending the $17,000 offer,
and threatened to sue unless State Farm provided written explanation for its decision to
only offer $17,000. 89

Id.
ECF No. 42 at 'I[ 77. The Court deems this fact as admitted. Contrary to Parisi's contention, this
statement does not constitute hearsay because it is an admission of a party opponent. Therefore, the
Court deems this fact as admitted for the reasons stated in footnote 57, supra.
83 ECF No. 42 at 'I[ 78; ECF No. 56 at 'II 78.
84 ECF No. 48 at 'I[ 82; ECF No. 57 at 'I[ 82.
85 ECF No. 48 at 'I[ 81; ECF No. 57 at 'I[ 81; ECF No. 42 at 'll 79; ECF No. 56 at 'II 79.
86 See ECF No. 45-46.
87 Id.
8s Id.
89 Id.
s1

82

11

Naser updated his injury evaluation on January 22, 2016. 90 Naser noted that Parisi's
cognitive deficits had increased in severity since she initially filed her claim. 91
Naser called Stoehr again on January 26, 2016. 92 Stoehr told Naser that Parisi
scheduled follow-up appointments with her neurologist and concussion specialist. 93 Later
that day, Naser updated the injury evaluation, noting that Parisi scheduled follow-up
appointments for February 2016. 94 The following day, Naser updated the injury evaluation
again, and wrote that "complaints and [treatment] continuing 1.5 years post-loss increase[s]
pervious values." 95
6.

State Farm Retains Outside Counsel

Reed reviewed the updated injury evaluation and instructed Naser to retain outside
counsel to assist the investigation and, specifically, to obtain a statement under oath and an
independent medical examination. 96 State Farm had not previously asked Parisi to provide
a statement under oath or submit to an independent medical examination. 97
Naser testified that head injuries are particularly difficult to evaluate. 98 Naser
explained that he has relatively little experience with claims for head injuries, and that it is

See ECF No. 45-13.
See, generally, id.
92 ECF No. 42 at 'II 89; ECF No. 56 at 'II 87.
93 ECF No. 42 at 'II 88. The Court deems this fact as admitted. Contrary to Parisi's contention, this
statement does not constitute hearsay because it is an admission of a party opponent. Therefore, the
Court deems this fact as admitted for the reasons stated in footnotes 57 and 82, supra.
94 ECF No. 45-14.
95 ECF No. 45-15.
96
ECF No. 42 at '1190; ECF No. 56 at 'l[ 90.
97 ECF No. 48 at 'II 94; ECF No. 57 at 'l[ 94.
98 See ECF No. 42-6 at 17, Deposition testimony of Edward Naser at p. 212.
90

91

12

difficult to determine recovery time for head injuries. 99 According to Naser, State Farm
waited until this point in its investigation to schedule the statement under oath and
independent medical examination because it wanted to have a better sense of how Parisi's
injuries progressed. 100
Naser called Stoehr on January 28, 2016 and told him that State Farm hired an
outside law firm to obtain a statement under oath from Parisi. 101 Stoehr stated that he
"might as well file suit." 102
State Farm hired outside counsel Thomas McDonnell to handle Parisi' s claim. 103 On
February 5, 2016, McDonnell requested that Parisi provide a statement under oath. 104 Parisi
agreed to provide a statement. 105 The parties scheduled the statement for February 25,
2016. 106 It took place as scheduled. 107
On March 8, 2016, Stoehr notified Naser via letter that Parisi scheduled an
appointment with a doctor at the UPMC Concussion Program for later that month. 108 Stoehr
also renewed the $100,000 settlement demand. 109 Once again, Stoehr threatened litigation if
State Farm did not offer to settle the case for the $100,000 limit. 110

99

Id.

See ECF No. 57-6 at 51, Deposition testimony of Edward Naser at p. 198.
ECF No. 42 at 'I[ 94; ECF No. 56 at 1[ 94.
102 ECF No. 42 at 'II 96. The Court deems this fact as admitted. Contrary to Parisi's contention, this
statement does not constitute hearsay because it is an admission of a party opponent. Therefore, the
Court deems this fact as admitted for the reasons stated in footnotes 57, 82, and 93, supra.
103 ECF No. 48 at 'I[ 95; ECF No. 57 at 1[ 95.
104 ECF No. 48 at 'I[ 97; ECF No. 57 at 1[ 97.
ws Id.
106 ECF No. 48 at 'II 100; ECF No. 57 at 'II 100.
107 ECF No. 42 at 'I[ 102; ECF No. 56 at 1[ 102.
10s ECF No. 45-52.
109 Id.
i10 Id.
100

101

13

On March 24, 2016, State Farm claims representatives held a conference call with
Attorney McDonnell and discussed Parisi's claim. 111 Naser increased the valuation of
Parisi's claim two times that day. 112 After the second adjustment, State Farm valued the
"low range" of Parisi's claim at $50,000 to $60,000 for past pain and suffering, $10,000 to
$12,000 for future pain and suffering, and $1,800 to $8,000 for past medical bills. 113 Thus,
according to State Farm's calculations, the minimum value of Parisi's claim was $61,800.
State Farm valued the "high range" of Parisi' s claim at $70,000 to $75,000 for past pain and
suffering; $20,000 to $22,500 for future pain and suffering, and $1,800 to $10,000 for past
medical bills. 114 Thus, the maximum value of Parisi's claim exceeded the $100,000 policy
limit. 115
State Farm updated Parisi's file again two days later. State Farm created a stacking
claim as permitted by Parisi's policy. 116 Additionally, a notation was entered that stated
"[l]ets move forward with a neuropsych IME to address cognitive/concussion related
issues." 117 State Farm claims that Reed entered this message, 118 though the claims file does
not identify a "performer" for this entry. 119

ECF No. 48 at 'I[ 102; ECF No. 57 at 1[ 102.
ECF No. 45-9 at 19-20.
113 ECF No. 45-9 at 18-19.
114 Id.
115 The parties dispute whether these valuations took into account the $15,000 credit from the other
motorist's liability insurance, and Parisi's wage loss and medical expenses.
116 ECF No. 42 at 'I[ 105; ECF No. 56 at 'II 105.
117 ECF No. 45-8 at 5.
11s ECF No. 42 at 'I[ 104.
119 ECF No. 45-8 at 5.
111

112

14

7.

Parisi Undergoes an Independent Medical Examination
and State Farm Offers to Settle for the Policy Limit

On April 6, 2016, Attorney McDonnell contacted Stoehr to coordinate an
independent medical examination. 120 On June 1, 2016, Naser wrote to Stoehr and advised
him that McDonnel would contact him again to schedule Parisi's appointment. 121 On June
21, 2016, Stoehr received a letter from Prizm Medical Resources stating that Parisi's
independent medical examination had been scheduled for July 27, 2016 in Mount Lebanon,
Pennsy lvania. 122
Stoehr wrote Nasser on July 5, 2016. 123 Stoehr objected to the independent medical
examination taking place in Mount Lebanon because Parisi would have trouble traveling
there due to her cognitive difficulties. 124 Stoehr also wrote that he would sue State Farm for
bad faith and breach of contract. 125
Nasser responded to Stoehr's letter on July 7, 2016. 126 Naser informed Stoehr that he
forwarded Stoehr' s letter to McDonnell and stated that State Farm would reimburse Parisi' s
wages and transportation costs associated with participating in the independent medical
examination. 127

ECF
ECF
122 ECF
123 ECF
124 Id.

120
121

No.
No.
No.
No.

42 at 'l[ 106; ECF No. 56 at 'l[ 106.
45-47.
45-48.
45-57.

mJd.
126
127

ECF No. 57-4 at 31.
Id.

15

McDonnell responded to Stoehr' s letter on July 13, 2016. 128 McDonnell stated that he
would consider scheduling the independent medical examination closer to Parisi' s
residence and requested that Stoehr identify other neuropsychologists who Parisi would
prefer. 129 In late July, Stoehr proposed that Dr. Wayne D' Agaro, a psychologist in Altoona,
Pennsylvania, conduct the independent medical examination. 130 McDonnell agreed with
this proposal. 131
Stoehr wrote to McDonnell on August 4, 2016 and provided McDonnell with a copy
of the complaint he filed against State Farm before this Court. 132
On August 10, 2016, Prizm contacted Stoehr and scheduled a neuropsychological
examination with Dr. D' Agaro on September 26, 2016. 133 The examination took place as
scheduled. 134
Dr. ,D' Agaro completed a report on October 13, 2016. 135 Dr. D' Agaro diagnosed
Parisi with mild neurocognitive disorder due to traumatic brain injury caused by the car
accident. 136

ECF No. 57-4 at 20-21.
Id.
130 ECF No. 48 at 'l[ 118; ECF No. 57 at 'l[ 118.
131 Id.
132 ECF No. 48 at 'l[ 119; ECF No. 57 at 'l[ 119.
133 ECF No. 48 at 'l[ 120; ECF No. 57 at 'l[ 120.
134 ECF No. 42 at 'l[ 115; ECF No. 56 at 'l[ 115.
135 ECF No. 42 at 'l[ 116; ECF No. 56 at 'l[ 116.
136 ECF No. 45-64. Dr. D' Agaro also diagnosed Parisi with adjustment disorder with anxiety and
generalized anxiety disorder. He stated that Parisi suffered from these disorders prior to the car
accident, though he reported that the car accident made Parisi's anxiety worse. Id.
128
129

16

On November 2, 2016, State Farm offered Parisi a $100,000 settlement, the coverage
limit of her policy. 137 Parisi accepted.

B.

Procedural History

Parisi asserts three counts in her Amended Complaint: (1) contractual bad faith; (2)
statutory bad faith under 42 Pa. C.S. § 8371; and (3) violations of Pennsylvania's Unfair
Trade Practices and Consumer Protection Law ("UTPCPL"), 73. P.S. § 201-1. (ECF No. 8.)
Parisi moves for partial summary judgment on her bad faith claim. (ECF No. 38.)
State Farm moves for summary judgment on all of Ms. Parisi's claims. (ECF No. 40.)

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."

Melrose, Inc. v. Pittsburgh, 613 F.3d 380, 387 (3d Cir. 2010) (quoting Ruehl v. Viacom, Inc., 500
F.3d 375,380 n.6 (3d Cir. 2007)); see also Celotex Corp. v. Catrett, 477 U.S. 317,322 (1986); Fed.
R. Civ. P. 56(a). 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

137

ECF No. 48 at 'l[ 126; ECF No. 57 at 'l[ 126.

17

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, 477 U.S. at 323. 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 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 L~fe Ins. Co., 10 F.3d 144, 148 (3d Cir. 1993); see also
Podobnik v. U.S. Postal Serv., 409 F.3d 584, 594 (3d Cir. 2005) (noting that a party opposing
summary judgment "must present more than just bare assertions, conclusory allegations or
suspicions to show the existence of a genuine issue") (internal quotation marks omitted).

V.

Discussion: Bad Faith Claims
A.

Contractual Bad Faith (Breach of Contract)

"To state a claim for breach of contract under Pennsylvania law, a plaintiff must
plead the following elements: (1) the existence of a contract, including its essential terms;
(2) the defendant's breach of duty imposed by the terms; and (3) actual loss or injury as a
18

direct result of the breach." Angina v. Wells Fargo Bank, N.A., 666 F. App'x 204, 207 (3d Cir.
2016) (citing Ware v. Rodale Press, Inc., 322 F.3d 218, 225 (3d Cir. 2003)); Haywood v. Univ. of

Pittsburgh, 976 F. Supp. 2d 606, 625 (W.D. Pa. 2013) (Conti, J.) (citing Ware). "In
Pennsylvania, a duty of good faith and fair dealing is implicit in an insurance contract."

Rowe v. Nationwide Ins. Co., 6 F. Supp. 3d 621, 629 (W.D. Pa. 2014) (Gibson, J.) (quoting
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." Rowe, 6 F. Supp. 3d at 629 (citing CRS Auto Parts,

Inc. v. Nat'l Grange Mut. Ins. Co., 645 F. Supp. 2d 354, 369 (E.D. Pa. 2009)). A plaintiff must
establish an insurer's contractual bad faith by clear and convincing evidence. Rowe, 6 F.
Supp. 3d at 629 (citing 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 she
was due under the policy and therefore has no damages." Smith v. Allstate Ins. Co., 904 F.
Supp. 2d 515, 521 (W.D. Pa. 2012) (Gibson,

J.) (internal citations omitted.) But "[w]hen 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." Id. (citing Birth

Ctr. v. St. Paul Cos., 787 A.2d 376, 385 (2001)). Accordingly, '"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
19

insured that reasonably flow from the insurer's bad faith conduct."' Rowe, 6 F. Supp. 3d at
629 (quoting Birth, 787 A.2d at 389).
B.

Statutory Bad Faith

Pennsylvania's bad faith statute provides that:
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) A ward punitive damages against the insurer.
(3) Assess court costs and attorney fees against the insurer.
42 Pa. C.S. § 8371.
To succeed on a statutory bad faith claim, "the insured must prove: (1) that the
insurer did not have a reasonable basis for denying benefits under the policy; and (2) that
the insurer knew of or recklessly disregarded its lack of a reasonable basis in denying the
claim." 138 Nw. Mut. Life Ins. Co. v. Babayan, 430 F.3d 121, 137 (3d Cir. 2005) (citing Keefe v.

As Judge Hornak stated, "[t]he first prong of the Babayan test is objective, 'so if a reasonable basis
exists for an insurer's decision, even if the insurer did not rely on that reason, there cannot' as a
matter of law be bad faith." Hamm v. Allstate Prop. & Cas. Ins. Co., 908 F. Supp. 2d 656, 669 (W.D. Pa.
2012) (quoting Wedemeyer v. U.S. Life Ins. Co. in City of New York, No. 05-6263, 2007 WL 710290, at *9
(E.D. Pa. Mar. 6, 2007)); see Rowe, 6 F. Supp. 3d at 630 (citing Leach v. Nw. Mut. Ins. Co., No. 01-cv2364, 2005 WL 3533116, at *11 (W.D. Pa. Dec. 22, 2005)) (holding that "[t]o defeat a claim of bad faith,
an insurer must only demonstrate that it had a reasonable basis for its decision."); Hayden, 2013 WL
5781121, at *10 (W.D. Pa. Oct. 25, 2013) (quoting Arnica Mut. Ins. Co. v. Fogel, 656 F.3d 167, 179 (3d
Cir. 2011)) (holding that "an insurer may defeat a claim of bad faith by showing that it had a
reasonable basis for its actions.")
The second prong requires demonstrating that the "insurer knowingly or recklessly
disregarded its lack of a reasonable basis for denying a claim." Rancosky v. Washington Nat. Ins. Co.,
2015 PA Super 264, 130 A.3d 79, 93 (2015) (citing Greene v. United Servs. Auto. Ass'n, 2007 PA Super
344, 'II 19, 936 A.2d 1178, 1191 (2007)). "Indeed, 'the essence of a bad faith claim must be the
unreasonable and intentional (or reckless) denial of benefits."' Hayden, 2013 WL 5781121, at *10
(quoting UPMC Health Sys. v. Metropolitan Life Ins. Co., 391 F.3d 497,506 (3d Cir. 2004)).
138

20

Prudential Prop. & Cas. Ins. Co., 203 F.3d 218, 225 (3d Cir. 2000)); U.S. Fire Ins. Co. v. Kelman
Bottles, 538 F. App'x 175, 182 (3d Cir. 2013) (quoting Babayan); Terletsky v. Prudential Prop. &
Cas. Ins. Co., 437 Pa. Super. 108, 125 (1994); Rowe, 6 F. Supp. 3d at 630; Hayden v. Westfield
Ins. Co., No. CIV.A. 12-0390, 2013 WL 5781121, at *10 (W.D. Pa. Oct. 25, 2013) (Hornak, J.);
Lewis v. Atl. States Ins. Co., No. 2:08-CV-01040-LPL, 2014 WL 12595309, at *7 (W.D. Pa. Sept.
26, 2014) (Lenihan, M.J.)
As this Court has previously noted, "Section 8371 encompasses a broad range of
insurer conduct." Smith, 904 F. Supp. 2d at 524. Although Section 8371 does not define the
term "bad faith," "courts have subsequently determined that a variety of carrier actions can
constitute bad faith, including' a frivolous or unfounded refusal to pay, lack of investigation
into the facts, or a failure to communicate with the insured."' Hamm v. Allstate Prop. & Cas.

Ins. Co., 908 F. Supp. 2d 656, 669 (W.D. Pa. 2012) (quoting Frog, Switch & Mfg. Co., Inc. v.
Travelers Ins. Co., 193 F.3d 742, 751 n. 9 (3d Cir. 1999)). An insurer's delay in processing a
claim can also constitute bad faith. See, e.g., Mirarchi v. Seneca Specialty Ins. Co., 564 F. App'x
652, 655 (3d Cir. 2014).
State Farm ultimately paid Parisi the maximum benefit permitted under her policy.
Accordingly, Parisi alleges that State Farm acted in bad faith by delaying payment of her
claim -not by denying payment outright. To prevail on her "bad faith delay" claim, Parisi
must prove that State Farm (1) "had no reasonable basis for causing the delay" and (2)
"knew or recklessly disregarded the lack of a reasonable basis for the delay." Mirarchi, 564

21

F. App'x at 655-56 (citing Thomer v. Allstate Ins. Co., 790 F. Supp. 2d 360, 369-70 (E.D. Pa.
2011)); Sands v. State Farm Fire & Cas. Co., No. 5:17-CV-4160, 2018 WL 1693387, at *6 (E.D.
Pa. Apr. 6, 2018) (citing Mirarchi); see Ridolfi v. State Farm Mut. Auto. Ins. Co., 146 F. Supp. 3d
619, 623 (M.D. Pa. 2015) (citing Wiener v. Banner Life Ins. Co., No. 2-1351, 2003 U.S. Dist.
LEXIS 4957, at *19-20 (E.D. Pa. Feb. 28, 2003)); Ressler v. Enter. Rent-A-Car Co., No. CIV.A.
06-562, 2007 WL 2071655, at *7 (W.D. Pa. July 13, 2007) (Ambrose, J.) (citing Wiener).
But "[a]n insurer's delay in settling a claim 'does not, on its own, necessarily
constitute bad faith."' Great Lakes Reinsurance (UK) PLC v. Stephens Garden Creations, Inc.,
119 F. Supp. 3d 297, 306 (E.D. Pa. 2015) (quoting Kosierowski v. Allstate Ins. Co., 51 F. Supp.
2d 583,588 (E.D. Pa. 1999)). "A delay attributable to the uncertainty of the claim's value or
the insurer's need to investigate further does not constitute bad faith." Great Lakes, 119 F.
Supp. 3d at 306 (citing Quaciari v. Allstate Ins. Co., 998 F. Supp. 578,583 (E.D. Pa. 1998)). And
"if delay is attributable to the need to investigate further or even to simple negligence, no
bad faith has occurred." Sands, 2018 WL 1693387, at *6 (quoting Williams v. Hartford Cas. Ins.
Co., 83 F. Supp. 2d 567,572 (E.D. Pa. 2000)).

Ms. Parisi further alleges that State Farm acted in bad faith by making a low-ball
settlement offer. "Generally, Pennsylvania law does not treat as bad faith an insurer's low
but reasonable estimate of an insured's losses." Seto v. State Farm Ins. Co., 855 F. Supp. 2d
424, 430 (W.D. Pa. 2012) (citing Brown v. Progressive Ins. Co., 860 A.2d 493, 501 (Pa. Super.
Ct. 2004)). But "low-ball offers which bear no reasonable relationship to an insured's actual
losses can constitute bad faith within the meaning of § 8371." Seto, 855 F. Supp. 2d at 430
(citing Brown, 860 A.2d at 501); Barry v. Ohio Cas. Grp., No. CIV.A.3:04 188, 2007 WL 128878,
22

at *8 (W.D. Pa. Jan. 12, 2007) (Gibson, J.); Schifino v. Geico Gen. Ins. Co., No. 2:11-CV-1094,
2012 WL 6552839, at *2 (W.D. Pa. Dec. 14, 2012) (quoting Barry).
"The insured is required to meet its burden of proving 'bad faith' by clear and
convincing evidence." Babayan, 430 F.3d at 137 (citing Terletsky, 649 A.2d at 688); Henriquez-

Disla v. Allstate Prop. & Cas. Ins. Co., No. CIV.A. 13-284, 2015 WL 539550, at *9 (E.D. Pa. Feb.
10, 2015). To satisfy this 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 not the defendants acted in bad faith." Hayden, 2013 WL 5781121, at *11 (internal
quotation marks omitted) (quoting J.C. Penney Life Ins. Co. v. Pilosi, 393 F .3d 356, 367 (3d Cir.
2004)). Accordingly, "the plaintiff's burden in opposing a summary judgment motion is
commensurately high in light of the substantive evidentiary burden at trial." Hayden, 2013
WL 5781121, at *11 (internal quotation marks omitted) (quoting Pilosi, 393 F.3d at 367); Swan

Caterers, Inc. v. Nationwide Mut. Fire Ins. Co., No. 12-CV-00024, 2012 WL 5508371, at *6 (E.D.
Pa. Nov. 13, 2012).
C.

The Court Will Deny Both Parties' Motions for Summary Judgment on
Bad Faith

The Court finds that genuine issues of material fact exist that preclude the Court
from entering summary judgment for either party on bad faith.

1.

The Court Will Deny Parisi's Partial Motion for Summary
Judgment Because State Farm Presented Sufficient Evidence for
a Reasonable Jury to Conclude that it Did Not Act in Bad Faith

Parisi argues that this Court should grant summary judgment in her favor because
State Farm failed to conduct a prompt and thorough investigation and engaged in low-ball

23

settlement tactics. (See ECF No. 47 at 6, 25.) The Court rejects these arguments. As explained
below, a reasonable jury could determine that State Farm appropriately handled Parisi's
claim.
1.

A Reasonable Jury Could Find that the Delay Was Reasonable

Parisi correctly notes that a significant period of time-approximately two-and-ahalf years-elapsed between Parisi's filing her claim on May 23, 2014 and State Farm's offer
to settle for the policy limit on November 2, 2016. But Stoehr told State Farm that he usually
did not work with claims representatives until he settled the underlying claim with the
other driver. 139 Stoehr did not settle the underlying claim until March 19, 2015. 140 And even
after he settled the underlying claim, Stoehr did not indicate any desire to expeditiously
settle Parisi's claim with State Farm. In fact, in letters dated November 19, 2015 and
December 30, 2015, Stoehr explicitly stated that he would make a settlement demand at a

future date. 141 In fact, it appears that Stoehr first demanded settlement during a phone
conversation on January 5, 2016, 142 and did not make a written demand for settlement until
January 13, 2016. 143
Once Stoehr made formal demands for settlement, State Farm acted to promptly
resolve Parisi's claim. In late January, State Farm hired McDonnell to conduct a statement
under oath. 144 McDonnell took Parisi's statement under oath on February 25, 2016 145 -six

ECF No. 48 at 'l[ 30; ECF No. 57 at 'l[ 30.
ECF No. 42-4 at 13.
141 See ECF No. 45-41 at 5 and ECF No. 45-43, respectively.
142 See ECF No. 42 at 'l[ 77.
143 See ECF No. 45-46.
144 ECF No. 42 at 'l[ 90; ECF No. 56 at 'l[ 90.
145 ECF No. 42 at 'l[ 102; ECF No. 56 at 'l[ 102.
139

140

24

weeks after Stoehr made his written settlement demand. In March, State Farm held a
conference call with McDonnell to discuss Parisi's statement under oath and decided to
schedule an independent medical examination. 146 In early June, State Farm informed Stoehr
that it scheduled the independent medical examination for July. 147 Importantly, State Farm
scheduled the independent medical examination before Parisi filed suit. 148 And while State
Farm rescheduled the independent medical examination, it did so because Stoehr objected
to its taking place in Mount Lebanon. 149 Finally, State Farm settled Parisi's claim
approximately three weeks after it received the report from the independent medical
examination. 150
Based on these undisputed facts, a reasonable jury could easily find that State Farm
did not unreasonably delay in processing Parisi' s claim.

ii.

A Reasonable Jury Could Find that State Farm's Settlement Tactics
Did Not Constitute Bad Faith

Parisi argues that State Farm acted in bad faith by extending an unreasonably low
settlement offer of $17,000 in January 2016. 151 But a reasonable jury could find that State
Farm made a reasonable offer. Parisi does not contend that the offer failed to compensate
her for all of the expenses that she incurred because of the accident-in fact, Parisi admits
that as of late 2015, she suffered only $12,000 in "special damages," i.e. excess lost wages

ECF
ECF
14s ECF
149 ECF
150 ECF
151 ECF
14 6

147

No.
No.
No.
No.
No.
No.

48 at 'lI 102; ECF No. 57 at 'lI 102.
45-48.
48 at 'lI 119; ECF No. 57 at 'lI 119.
45-57,
48 at 'JI 126; ECF No. 57 at 'lI 126.
47 at 25.

25

and out-of-pocket medical expenses. 152 Parisi provided State Farm with documentation of
these expenses and State Farm's settlement offer more than fully compensated Parisi for
these confirmed losses.
Parisi objects to the fact that State Farm's $17,000 settlement offer placed a low value
on Parisi's pain and suffering-ostensibly $5,000 given that she had $12,000 in documented
out-of-pocket expenses. Parisi contends that her claims file contained sufficient information
to conclusively determine that her claim would exceed the $100,000 policy limit. But Parisi' s
first-party file exclusively contained doctors' reports authored in the first month after her
injury. 153 And Dr. Arbitell-the neuropsychologist obtained by Parisi-wrote his report in
May 2015 154 -eight months before State Farm offered to settle. Naser testified that head
injuries are particularly difficult to evaluate and that it is especially difficult to judge
recovery time. 155 A jury could find that State Farm made a reasonable settlement offer of
$17,000 because it lacked sufficient information to corroborate Parisi's contention that she
suffered significant cognitive impairments, particularly because several of the doctors'
reports upon which Parisi relies were authored long before Stoehr made his settlement.
demand. Furthermore, a jury could conclude that State Farm needed more information
about the extent of her non-economic losses, and that State Farm promptly offered Parisi
the policy limit once it corroborated her claims of cognitive impairment through a
statement under oath and an independent medical evaluation.

ECF
ECF
154 ECF
155 ECF
152

1s3

No.
No.
No.
No.

48 at 'I[ 57.
48 at 'I[ 28.
48 at '11'11 54-57; ECF No. 57 at '11'11 54-57.
42-6 at 17, Deposition testimony of Edward Naser at p. 212.

26

iii.

Conclusion: The Court Will Deny Parisi's Motion for
Partial Summary Judgment on Bad Faith

For the reasons stated above, the Court finds that a reasonable jury could conclude
that State Farm did not act in bad faith. Therefore, the Court will deny Parisi's motion for
summary judgment. 156

2.

The Court Will Deny State Farm's Motion for Summary
Judgment on Bad Faith Because Parisi Presented Sufficient
Evidence for a Reasonable Jury to Find that State Farm Acted in
Bad Faith

This is a close call. But when viewing the evidence in the light most favorable to
Parisi, the Court concludes that a reasonable jury could find that State Farm unreasonably
delayed settling Parisi' s claim and/or made an unreasonably low-ball settlement offer with
reckless disregard to the fact that it acted unreasonably. Therefore, the Court will deny State
Farm's motion for summary judgment on bad faith.
1.

A Reasonable Jury Could Find that State Farm Unreasonably
Delayed Handling Parisi's Claim and Consciously Disregarded
Its Unreasonable Delay

In the summer of 2014, Whiteside reviewed the extensive medical records in Parisi' s
first-party claims file, records that unambiguously indicated that Parisi suffered a serious

The cases Parisi cites to support her motion for summary judgment fail to persuade the Court.
Both of the cases that Parisi relies on to argue that State Farm's delay constituted bad faith do not
apply because, in those cases, the district courts found that the insurance companies acted in bad
faith following bench trials-not at the summary judgment stage. See Hallock v. Erie Ins. Exch., 54 Pa.
D. & C.4th 449,450 (Corn. Pl. 2002); Bonenberger v. Nationwide Mut. Ins. Co., 2002 PA Super 14, 'l[ 3,
791 A.2d 378, 379 (2002). The cases Parisi cites to support her argument that State Farm's settlement
offer demonstrated bad faith similarly do not persuade the Court because they did not result in
summary judgments in favor of the insured. See Collins v. Allstate Ins. Co., No. CIV. A. 95-592, 1997
WL 700495, at *1 (E.D. Pa. Oct. 31, 1997) (finding for insured after bench trial); Barry, 2007 WL 128878
(denying both parties' motions for summary judgment).
156

27

head injury. 157 In fact, one of these reports revealed that Parisi had been diagnosed with
"post-concussion syndrome" and experienced considerable deficits in memory and
attention. 158 Despite receiving these records in mid-2014, State Farm did not complete an
injury evaluation for Parisi's claim until March 2015 159 and did not place a valuation on her
claim until April 2015 160 -nearly eleven months after she filed her claim.
When Whiteside finally completed his injury evaluation, he concluded that the
automobile accident caused Parisi' s injuries and observed that Parisi' s medical treatment
appeared "reasonable and necessary." 161 But despite acknowledging causation and liability,
State Farm did not offer to settle Parisi' s claim. In fact, it appears that State Farm took littleif any-action on Parisi's claim for the next six months. 162 And State Farm did not request a
statement under oath or an independent medical examination until early 2016-over a yearand-a-half after Parisi filed her claim.
True, State Farm began actively attempting to resolve Parisi' s claim once Stoehr
made a formal settlement demand in January 2016. But in the eighteen months between
when Parisi filed her claim and when Stoehr demanded settlement, State Farm failed to

ECF No. 45-28; ECF No. 45-29; ECF No. 45-30.
s See ECF No. 45-28.
1s9 ECF No. 45-11 at 4.
160 ECF No. 48 at 'I[ 41; ECF No. 57 at 'II 41.
161 ECF No. 45-11 at 4-6.
162 State Farm only made two entries in Parisi's claims file between April and November 2015, and
one of them simply noted that someone from Allegheny Pain Management contacted State Farm. See
ECF No. 45-8 at 12-13.
157
15

28

conduct a meaningful investigation, and made no attempts to settle. Based on these facts, a
jury could conclude that State Farm acted in bad faith. 163

n.

A Reasonable Jury Could Find that State Farm Acted in Bad Faith
By Offering a Low-Ball Settlement

State Farm only offered to settle Parisi's claim once during the two-and-a-half years
between when she submitted her claim and when she completed an independent medical
examination. Naser offered to settle Parisi's claim for $17,000 in January 2016. 164 As
explained below, a reasonable jury could conclude that State Farm acted in bad faith by
extending a low-ball settlement offer.
Naser completed an injury evaluation in December 2015 that valued Parisi's claim
between $46,800 and $61,800. 165 And this figure likely represented an artificially low value
because it failed to account for Parisi's future pain and suffering. 166 State Farm claims that
these figures did not account for the $15,000 offset from the other driver's insurance. Even
accepting this as true-and even if the value of Parisi's future pain and suffering truly
equaled $0, as State Farm apparently assumed by failing to incorporate any damages for

The cases State Farm cites to argue that its delay did not constitute bad faith are inapposite. For
example, in granting summary judgment for the insurer in Thomer v. Allstate Ins. Co., 790 F. Supp. 2d
360 (E.D. Pa. 2011), the Court found that "much of the delay was directly caused by [the plaintiff] or
her counsel." Id. at 370. As described above, a reasonable jury could find that State Farm caused most
of the extended delay in this case. The Court is similarly unpersuaded by Richardson v. United Fin.
Cas. Co., No. CIV.A. 11-7688, 2013 WL 2357519 (E.D. Pa. May 30, 2013)-the plaintiff's attorney in
that case failed to promptly provide complete medical records to the insurance company-and Rowe,
6 F. Supp. 3d 621-where the insured failed to submit medical records despite the insurance
company's "numerous requests" to do so. Stoehr regularly supplied State Farm with medical records
soon after they became available and State Farm possessed robust records from Parisi's first-party
claims file from the beginning.
164 ECF No. 42 at 'l[ 76; ECF No. 56 at 'l[ 76.
165 ECF No. 48 at 'l[ 60; ECF No. 57 at 'l[ 60.
166 ECF No. 48 at 'l[ 72; ECF No. 57 at 'l[ 72.
163

29

future pain and suffering into the injury evaluation-the low range of State Farm's liability
would still have been $31,800. But Reed only extended Naser settlement authority up to
$26,800. 167 State Farm has not offered any explanation for why Reed only authorized Naser
to settle for $26,800 when, just nine days before, Naser had evaluated Parisi' s claim as being
worth a minimum of $31,800. And, despite having settlement authority up to $26,800, Naser
offered Parisi a paltry $17,000-$14,800 less than the lowest amount that State Farm thought
Parisi's claim was worth. A reasonable jury could find that State Farm acted in bad faith by
placing an arbitrary value on Parisi' s claim and offering a low-ball settlement that did not
reflect a reasonable estimation of her true damages.
State Farm argues that its settlement offer could not have constituted bad faith
because it fell within State Farm's estimated range of value. 168 If courts accepted this
principle, they would incentivize insurers to artificially reduce the low end of their range
of claim values because, by doing so, insurers could categorically insulate themselves from
liability for bad faith. In the legal paradigm envisioned by State Farm, a rational insurer
would place a $10,000 to $80,000 value on a claim that it knew was worth a minimum of
$50,000 so that it could make a low-ball settlement offer of $15,000 and avoid being found
liable for bad faith. The Court declines State Farm's invitation to announce a rule that would
incentivize insurers to manipulate their valuations and make unreasonably low settlement
offers.

16 7
168

ECF No. 48 at 'II 74; ECF No. 57 at
See ECF No. 41 at 18.

'II 74.
30

iii.

Conclusion: The Court Will Deny State Farm's Motion to
Dismiss Parisi's Bad Faith Claims

For the reasons articulated above, a reasonable jury could find that State Farm acted
in bad faith by delaying its investigation into Parisi's claim and by making a low-ball
settlement offer. Therefore, the Court will deny State Farm's motion to dismiss Parisi's bad
faith claims.

VI.

Unfair Trade Practices and Consumer Protection Law
State Farm argues that the Court should dismiss Parisi's UTPCPL claim because

Parisi failed to demonstrate that she justifiably relied on any deceptive trade practice and
because the UTPCPL does not provide a remedy for misconduct during the claims handling
process. 169 In response, Parisi contends that she justifiably relied on State Farm's specious
promise to treat her like a "good neighbor" when purchasing her policy. 170 But Parisi fails
to identify any evidence in the record that State Farm's "good neighbor" marketing
campaign induced her to purchase insurance from State Farm.
The UTPCPL prohibits unfair and deceptive trade practices. See 73 P.S. § 201-2( 4).
"To establish liability under the UTPCPL' s catchall provision a plaintiff must present
evidence showing: (1) a deceptive act that is likely to deceive a consumer acting reasonably
under similar circumstances; (2) justifiable reliance; and (3) that the plaintiff's justifiable
reliance caused ascertainable loss." Slapikas v. First Am. Title Ins. Co., 298 F.R.D. 285, 292

169
170

ECF No. 41 at 21-25.
ECF No. 55 at 28-29.

31

(W.D. Pa. 2014) (Conti, J.) (citing Seldon v. Home Loan Servs., 647 F. Supp. 2d 451, 470 (E.D.
Pa. 2009).
"[A]llegations of misconduct in the claims handling process are not actionable
under the UTPCPL." Mondron v. State Farm Mut. Auto. Ins. Co., No. CV 16-412, 2016 WL
7384183, at *5 (W.D. Pa. Dec. 21, 2016) (Bissoon, J.) (quoting Doherty v. Allstate Indem. Co.,
No. CV 15-05165, 2016 WL 5390638, at *8 (E.D. Pa. Sept. 27, 2016)); Gibson v. Progressive

Specialty Ins. Co., No. CIV.A. 15-1038, 2015 WL 2337294, at *4 (E.D. Pa. May 13, 2015) (citing
Nardi v. Keystone Health Plan W. Inc., 989 A.2d 376, 385 (Pa. Super. 2010)); Kelly v. Progressive
Advanced Ins. Co., 159 F. Supp. 3d 562,565 (E.D. Pa. 2016).
The Court will grant State Farm's motion for summary judgment on Parisi's
UTPCPL claim. Parisi failed to present any evidence whatsoever to support her assertion
that she relied on State Farm's "good neighbor" campaign when deciding whether to
purchase State Farm insurance. Furthermore, the evidence that Parisi presented exclusively
pertains to State Farm's handling of her claim. The UTPCPL does not afford a cause of
action to redress misconduct committed during the claims handling process. See, e.g.,

Mondron, 2016 WL 7384183. Therefore, the Court will dismiss Parisi's UTPCPL claim.
VII.

Conclusion

For the reasons articulated above, the Court DENIES Parisi' s Partial Motion for
Summary Judgment on Bad Faith. The Court GRANTS in PART, and DENIES in PART,
State Farm's Motion for Summary Judgment-the Court DENIES State Farm's Motion with
respect to bad faith, but GRANTS it with respect to the UTPCPL claim.
An appropriate order follows.
32

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
MELISSA C. PARISI and MICHAEL
C. PARISI, III, wife and husband,

CIVIL ACTION NO. 3:16-179

)
)

)

Plaintiffs,

JUDGE KIM R. GIBSON

)

v.

)
)

STATE FARM MUTUAL
AUTOMOBILE INSURANCE
COMPANY,

)
)
)
)

Defendant.

)

A

AND NOW, this

7/i

ORDER

day of May, 2018, upon consideration of Parisi's Motion

for Partial Summary Judgment on Bad Faith (ECF No. 38) and State Farm's Motion for
Summary Judgment (ECF No. 40), and in accordance with the attached memorandum
opinion, IT IS HEREBY ORDERED as follows:
1.

The Court DENIES Parisi' s Motion for Partial Summary Judgment on Bad
Faith (ECF No. 38).

2. The Court GRANTS in PART, and DENIES in PART, State Farm's Motion
for Summary Judgment (ECF No. 40). The Court DENIES the motion with
respect to bad faith. The Court GRANTS the motion with respect to the
UTPCPL claim.

BY THE COURT:

KIM R. GIBSON
UNITED ST A TES DISTRICT JUDGE