January 2017 Bad Faith Cases: Judge Munley Grants Summary Judgement To Carrier On Bad Faith Claims As To Issues Of Multiple Adjusters and Multiple Estimates During Claims Process (Middle District)

Judge Munley granted the insurer’s summary judgment motion on bad faith. The insured’s claims rested on two arguments: (1) the insurer “assigned an inordinate number of representatives to her claim.”; amd (2) the insurer “refused to timely pay the full value of her loss. Rather, [it] provided multiple estimates and payments over a seven-month period.”

The court observed, “it is not bad faith to conduct a thorough investigation into a questionable claim.” The insured failed to present evidence that the claim management “was anything other than what it claimed: an attempt to further investigate the water damage at plaintiff’s home to determine the value of her claim.” No expert testimony was offered regarding the nature of the insurer’s investigation. No evidence of internal communications or testimony establishing that the carrier acted out of spite during its investigation was offered. There was “no competent evidence from which a reasonable jury could find that the number of … employees assigned to her claim establishes bad faith.”

Second, the court rejected the insured’s arguments that multiple estimates demonstrate bad faith. There was a difference of $19,000 over six months, and the insured argued this showed the insurer refused to fully investigate her claim and make timely payment. There was no authority to support this argument. The court cited appellate law for the point that “subsequent estimates assign[ing] a higher value to the claim is not ‘clear and convincing’ evidence that the insurer acted in bad faith in arriving at its initial estimate or by standing by that estimate until the appraisal process concluded.’” There was also a history of detailed investigations at the home, and an attempt to reconcile various estimates. At most, the evidence may have demonstrated the estimates were arguably negligent, but mere negligence is not bad faith.

Date of Decision: December 5, 2016

Yatsonsky v. State Farm Fire & Cas. Co., No. 3:15cv1777, 2016 U.S. Dist. LEXIS 167224 (M.D. Pa. Dec. 5, 2016) (Munley, J.)