DECEMBER 2006 BAD FAITH CASES
JUDGMENT GRANTED TO INSURER FOR INSURED’S FAILURE TO PRODUCE FAMILY MEMBERS FOR DEPOSITION (Third Circuit)
In Murphy v. Federal Insurance Company, Plaintiff insured filed an action against Defendant insurer seeking coverage for damage allegedly caused by a tree falling on his house during Hurricane Floyd. Plaintiff was the sole owner of the house. However, Plaintiff’s wife was a named insured on the homeowner’s policy along with Plaintiff. After inspection of the property, Defendant questioned whether the damage had been caused in the manner described by Plaintiff. Defendant refused coverage. Plaintiff filed suit alleging claims at both common law as well as under the Pennsylvania insurance bad faith statute. Defendant sought to depose Plaintiff’s wife and sons. Plaintiff claimed that neither his wife nor his sons had any material knowledge and at the relevant times did not occupy the property. Plaintiff refused to produce the family members for deposition, even after the Eastern District of Pennsylvania issued an Order compelling the depositions. The Eastern District of Pennsylvania subsequently granted Defendant summary judgment. The Third Circuit affirmed. The Third Circuit found that the failure of Plaintiff to comply with the insurance policy–which allowed examination of insureds and “family members” of an insureds’ household–as well as the failure to comply with discovery orders, prejudiced Defendant. As to Plaintiff’s claim that his wife and sons had no material knowledge of the matter, the Third Circuit noted that Defendant was not required to take Plaintiff’s word on the matter, but instead was entitled to the depositions under the insurance policy.
Date of Decision: November 20, 2006