March 2014 Bad Faith Cases: Court Rules That Carrier Acted With Poor Judgement, But Did Not Engage In Bad Faith (Western District)

In Schifino v. Geico Gen. Ins. Co., the Plaintiff-insured sued his insurance carriers seeking underinsured motorist (“UIM”) benefits pursuant to automobile insurance policies issued by each defendant-carrier. The insured argued that the carriers had breached their contractual duties in failing to pay UIM benefits and claimed that one of the carriers engaged in bad faith.

The insured argued that one of its carriers acted in bad faith by failing to conduct a reasonable investigation, by taking inconsistent positions, by offering a low settlement, and by forcing him to litigate an otherwise meritorious claim.

The court disagreed, finding that the carrier’s adjuster timely reviewed the insured’s file and made an initial offer of $10,000 that was later adjusted to reflect a medical lien with an understanding that the carrier was entitled to a $50,000 credit. Although the carrier was “not free from criticism in its initial handling of the claim” the court ruled that its conduct was “more indicative of poor judgment than bad faith.” Moreover, the insured failed to carry its burden of proof.

Date of Decision:  December 13, 2013

Schifino v. Geico Gen. Ins. Co., No. 2:11-cv-1094, 2013 U.S. Dist. LEXIS 174574 (W.D. Pa. Dec. 13, 2013) (McVerry, J.)