Firm lawyers Jay Barry Harris, Lee Applebaum and Jason T. LaRocco obtained a successful decision in a bad faith case on behalf of their clients, Indian Harbor Insurance Company and American Claims Service, Inc., in the Court of Common Pleas of Lackawanna County, Pennsylvania. An insured party was sued for injuries allegedly suffered by a man moving a refrigerator on the insured’s property. Indian Harbor, through its third party administrator, American Claims Service, Inc., actually provided counsel to the insured who successfully defended the insured in the underlying personal injury lawsuit.
From the very outset, a question arose as to whether the accident occurred during the effective dates of the Indian Harbor policy. The injured – and ultimately unsuccessful – plaintiff had claimed in his complaint that the accident occurred one day before the policy became effective, while the insured insisted that the accident happened one day later, when the policy was in effect.
The insured was informed via a reservation of rights letter that he would continue to be provided with a defense, but if the facts established that the accident occurred before the inception of the policy, there would be no duty to indemnify the insured. The insured, upon reading the reservation of rights letter, allegedly became so upset that he suffered a seizure and had to be hospitalized. After the underlying action was successfully defended, the insured brought a bad faith action against Indian Harbor and its third party administrator alleging that the delay in issuing the reservation of rights letter was due to the failure of Indian Harbor to adequately investigate the coverage issues and that it also had an obligation to locate other insurance for the insured because it knew of the potential that the insured would not be covered under its policy.
On behalf of the insurer clients, the Firm filed a motion for summary judgment, contesting each of the numerous theories of liability being advanced by the insured. In granting the motion, the trial court judge found that Indian Harbor and its third party administrator breached no duty to the insured, that there was no duty to find other insurance for the insured and that by successfully defending the insured in the underlying action, Indian Harbor had fulfilled its obligation to its insured. You can find a copy of the Court’s opinion here.