JUNE 2010 BAD FAITH CASES
BAD FAITH SUCESSULLY PLED WHEN INSURER WAITS 32 MONTHS TO PAY INSURANCE BENEFITS UNDER A POLICY (Middle District)
In Nazario v. Nationwide Mutual Insurance Company, one insured was killed in an automobile accident in which he was not at fault and the driver at fault was uninsured. The deceased insured and his wife held a policy of insurance by the insurer that included an uninsured motorist benefit of $25,000 per each person, and $50,000 for each occurrence. The insurer failed to pay the surviving insured her $25,000 uninsured motorist benefit for 32 months after the accident. The insured filed a Complaint alleging that the insurer acted in bad faith by delaying the payment for 32 months and breached the contract in the process. In asserting the bad faith claim, the insurer asserted that the delay in awarding the $25,000 was attributable to mere negligence, and therefore the company did not exhibit bad faith.
While it dismissed the breach of contract claim because the Complaint did not state a specific theory of a breach of contract, the court agreed that the insured had pled a bad faith cause of action, and it denied the insurer’s Motion for Summary Judgment with respect to the bad faith claim. The court stated that “it would be a reasonable inference for a jury to draw that a 32 month delay in paying the insurance benefit to the plaintiff to which the plaintiff was entitled is an unreasonable delay and is the result of bad faith . . . A 32 month delay by an insurer in paying a benefit under the insurance policy supports a finding made by a fact finder using a clear and convincing filter that the insurer failed to process the claim in good faith.”
Date of Decision: United States Magistrate Judge Smyser’s May 17, 2010 Report and Recommendation was adopted by the United States District Court on June 7, 2010
Nazario v. Nationwide Mut. Ins. Co., Civil No. 1:09-CV-1187, United States District Court for the Middle District of Pennsylvania, 2010 U.S. Dist. LEXIS 55467 (M.D. Pa. May 17, 2010) (Smyser. U.S.M.J.),
adopted in Nazario v. Nationwide Mut. Ins. Co., Civil Action No. 1:09-CV-01187, United States District Court for the Middle District of Pennsylvania, 2010 U.S. Dist. LEXIS 55469 (M.D. Pa. June 7, 2010) (Conner, J.)