FEBRUARY 2013 BAD FAITH CASES: COURT GRANTS CARRIER’S SUMMARY JUDGMENT MOTION ON INSURED’S STATUTORY BAD FAITH CLAIM, BUT NOT ON COMMON LAW BAD FAITH CLAIM (Western District)

In Katta v. GEICO, the court heard a carrier’s motion for summary judgment that was filed in opposition to its insured’s claim for common law and statutory bad faith. The case arose out of a motor vehicle accident during which an uninsured driver caused an accident with the insured’s automobile. The insured filed a claim for uninsured motorist (UM) coverage with the carrier, but the parties could not agree upon a valuation of the claim. The insured filed suit and the carrier filed the instant motion.
First, the carrier argued that Pennsylvania does not recognize a cause of action for common law bad faith. The court denied the carrier’s motion on this count, reasoning that Pennsylvania does recognize a claim for common law bad faith in contract.
Second, the carrier claimed that the facts do not support a claim for statutory bad faith. The court granted the carrier’s motion on this count, holding that the insured could not establish that the carrier unreasonably disregarded its claim for lost wages. Moreover, uncertainties existed with respect to the insured’s injuries, putting the carrier under no obligation to pay the UM claim.
As such, the court granted the carrier’s motion in part, dismissing the insured’s statutory bad faith claim, but allowing its claim for common law bad faith to proceed.
Date of Decision: January 24, 2013
Katta v. Geico Ins. Co., No. 2:11-cv-729, 2013 U.S. Dist. LEXIS 9762, U.S. District Court for the Western District of Pennsylvania (W.D. Pa. Jan. 24, 2013) (Flowers Conti, J.)