The court granted summary judgment to the insurer in this bad faith case arising out of a fire at the insureds’ home. While the insurer provided a detailed factual recount from the record to makes its case, the court stated that the insureds “relied upon bare allegations and narrative argument that does little more than summarize bad-faith law in Pennsylvania, without showing how the facts of this particular case could support a claim under the statute.” The insurer had paid nearly $150,000 after investigating the fire and losses therefrom, but it argued the items put in dispute by the insured were not connected to the fire, which the insured failed to factually refute.
The court observed that “It is not bad faith for an insurance company to ‘conduct a thorough investigation into a questionable claim.’” The insurer will be successful in defending a bad faith claim based on its investigation of the matter by “showing ‘a reasonable basis’ for investigating a claim, and is … entitled to judgment as a matter of law, where it demonstrates the existence of certain ‘red flags’ which prompted it to further investigate an insured’s claim.”
Red flags existed in this case where “the insurance policy had been purchased immediately prior to the fire and the determination by two fire experts that it had been caused by arson. The record also reveals that, rather than wasting time, [the insurer] began an investigation immediately, while at the same time advancing money to the plaintiffs for immediate needs such as clothing and hotel expenses.” Further, the insurer “promptly undertook investigation into the fire’s cause, the plaintiffs contributed directly to the duration of the investigation by delaying their examinations under oath, which State Farm had requested, roughly two months earlier.” And, “during this investigation, [the insurer] continued to pay the plaintiffs’ housing and living expenses, despite the ongoing nature of the investigation and the possibility that at the end of that process coverage would not be offered.” The insurer ultimately concluded that the matter was not arson, but as stated did not pay every claim the insureds made in connection with the loss.
The insurer routinely and appropriately sent correspondence in response to the insureds, and delays in the process were “not solely or even principally attributable to” the insurer.
Finally, the court rejected the notion that it should review evidence provided by the moving insurer, and “wade into that evidence in order to find some evidence that could rise to the level needed for the plaintiffs to carry their burden on this claim. This invitation is antithetical to good summary judgment practice, and the plaintiffs would do well to remember that “‘[j]udges are not like pigs, hunting for truffles buried in the record.’”
Date of Decision: November 16, 2016
Hoffman v. State Farm Fire & Cas. Co., No. 4:14-1978, 2016 U.S. Dist. LEXIS 158795 (M.D. Pa. Nov. 16, 2016) (Carlson, M.J.)