In Platt v. Fireman’s Fund Ins. Co., the carrier filed a motion for summary judgment seeking to resolve allegations of bad faith and breach of contract in its handling of a claim against its named insured. The suit stemmed from a car accident in which the carrier’s named insured struck a woman with his car, causing her to sustain numerous injuries and miss significant time at work.
The insured’s policy contained a Personal Injury Protection (“PIP”) Endorsement, which provides third-party coverage for medical expenses and wage loss. A third-party may be covered under this policy if the named insured was not occupying his covered vehicle at the time of loss or injury. Third-party coverage is also contingent upon the victim’s lack of a separate source of insurance. Therefore, a third party accident victim may be qualified as “an insured” for the purposes of receiving first-party PIP benefits if she did not possess any other form of liability or medical coverage.
The carrier deemed the accident victim an insured for the purposes of first-party benefits under its PIP policy and paid out $53,521.73 to cover her medical expenses. However, the carrier initially refused to tender wage loss benefits and the victim filed a complaint in the Philadelphia Court of Common Pleas. The carrier removed the case to federal court. Later in 2011, the carrier paid the $177,500 policy limits when it received supplemental reports on the victim’s injury.
The victim’s first claim was that the carrier acted in bad faith by delaying investigation into her own source of first-party benefits. She alleged that the carrier had a duty to investigate whether she had her own source of first-party benefits, the absence of which triggered her entitlement to medical and wage loss benefits. The court denied summary judgment on this count because it found that an issue of fact existed with respect to the carrier’s failure to investigate. The court reasoned that the circumstantial evidence presented by the victim tended to at least demonstrate the carrier’s reckless disregard in examining the victim’s insurance coverage, which, under the PIP Endorsement, was a determining factor in the victim’s ability to recover.
Second, the victim alleged that the period of time the carrier took to pay wage loss benefits after receiving her medical records constituted a bad faith delay. The carrier tendered a wage loss check, but incorrectly deducted $3,716.66 in disability benefits. The court granted summary judgment on this claim because the carrier did subsequently pay the full amount of benefits, despite its initial mistake.
The court also granted summary judgment on the breach of contract claim because the carrier paid the full limits of the policy in accordance with the language of the PIP endorsement. However, the court denied summary judgment with respect to the payment of attorney’s fees.
This case was previously addressed in this blog last year.
Date of Decision: May 22, 2012
Platt v. Fireman’s Fund Ins. Co., No. 11-4067, 2012 U.S. Dist. LEXIS 71000, U.S. (E.D. Pa. May 22, 2012) (Buckwalter, J.)