March 2014 Bad Faith Cases: Where Carrier Investigated Claim And There Were Facts Supported Two Potential Causes Of Loss, One Covered And One Not Covered, Summary Judgement Could Not Be Granted On Coverage, But Could Be Granted On Bad Faith As Reasonableness Of Insurer’s Actions Could Not Meet Exacting Bad Faith Standards (Middle District)

In Kojsza v. Scottsdale Ins. Co., personal property insurance was at issue, in connection with a burglary claim. The insured and the carrier’s investigator disputed over whether there were signs of forced entry, the policy’s the critical language being: Theft, including attempted theft and loss of property provided theft is a result of burglary and visible signs of forced entry are evidence. Mysterious disappearance will not be considered as theft.”  The court analyzed the record closely, and found three areas of disputed facts which precluded the carrier’s summary judgment motion on the coverage claim.  However, the close nature of the disputed facts established that the carrier could not be found liable under the bad faith statute’s exacting standards, and that claim was dismissed. The court could not find “clear, direct, weighty and convincing” evidence to establish by clear and convincing evidence that Defendant acted in bad faith in denying coverage.”  The undisputed evidence showed that the investigator did conduct an investigation in which he scrutinized the premises for signs of physical damage, indicating a break-in.  The police report found no physical evidence of a break-in, but he officer deduced a break in from other circumstances (ransacking of the premises). As such, the Court found a reasonable basis for denying coverage when the carrier relied on both the investigator and the police report.

Date of Decision:  January 15, 2014

Kojsza v. Scottsdale Ins. Co., 3:12-CV-1602, 2014 U.S. Dist. LEXIS 5286 (M.D. Pa. Jan. 15, 2014) (Mariani, J.)