JUNE BAD FAITH CASES COURT REJECTS BAD FAITH PLAINTIFF’S EXPERT TESTIMONY FOR HIGHER DUTY IN FIRST PARTY CLAIMS AND THAT FIRST PARTY CLAIMS ARE NOT ADVERSARIAL (Pennsylvania Superior Court)

    

In Zappile v. Amex Assurance Company, the Pennsylvania Superior Court reversed the trial court’s $75,000 judgment entered against the insurer following a non-jury trial on a bad faith claim made by the insureds.  The bad faith claim arose after the insured was struck by an automobile while walking his dog.  He was diagnosed with a torn rotator cuff and underwent arthroscopic surgery.  The insured settled his claim against the tortfeasor for the $15,000 policy limits.  The insured then made a claim against his own automobile insurance policy, for first party benefits, which were paid to the limits of coverage.  The insured then made a claim for underinsured motorist benefits.  The insured had total stacked coverage of $150,000 for three insured vehicles.  He demanded the policy limits.  The insurer, however, offered $32,000.  The case went to arbitration and the insured was ultimately awarded $95,000.  The insured then filed a bad faith claim.  The trial court found that the insurer acted in bad faith by failing to make a partial payment for excess wage loss claims, undervaluing the claim, thereby forcing it to arbitration, never raising the offer and telling trial counsel that plaintiff would not accept anything less than $150,000 to settle. 

On appeal, the Superior Court first found that the insured’s expert’s trial testimony was factually and legally incorrect.  The expert testified on several occasions that a UIM claim is not an adversarial situation and implied that there is some form of heightened duty to a “first party” claimant as opposed to a third party adversarial claimant.  The Superior Court specifically rejected the notion of a higher duty to a first party claimant and held that the duty of the insurer is the same no matter what the party status. 

The remaining issues in this case are discussed in a separate summary in the June 2007 archive.

Date of Decision: June 8, 2007

Richard Zappile and Stephanie Zappile, H/W v. AMEX Assurance Company, Superior Court of Pennsylvania, No. 1274 EDA 2006, 2007 Pa. Super. LEXIS 1580 (Pa. Super. 2007) (Klein, J)