In Connolly v. Progressive Northern Insurance Company, the injured insured received a $250,000 settlement from a third party tortfeasor in connection with an auto accident. She pursued underinsured motorist coverage from her own insurer, and also alleged there were multiple policies entitling her to stacking. The insurer’s position was that the value of the injuries fell within the $250,000, and further that there was no stacking.
The insured claimed that there is an ambiguity as to which policy controlled because the insurer never provided a “certified” copy of the policies placed in issue. She also claimed that this refusal to provide certified copies of the relevant insurance documents and the insurer’s refusal to conduct a reasonable investigation of her claim combine to demonstrate statutory bad faith. More specifically, the insured claimed bad faith on the basis that 1) the insurer failed to communicate with the insured and her counsel regarding provision of “a certified copy of the policies” in order to clarify the issue regarding stacked coverage; and (2) the insurer failed to perform a reasonable and timely investigation of the insured’s claim as indicated by the insurer’s failure to schedule her deposition or to request her Statement Under Oath. The court noted that there was no case law cited to support entitlement to a certified copy of the policy.
The insurer responded that because there is a genuine dispute over the claim’s value, there can be no bad faith, averring: “(1) The Plaintiff’s receipt of a $250,000.00 recovery from the tortfeasor;(2) Plaintiff’s release to “normal activity” with “no restrictions” approximately one month after the accident; (3) An orthopedic physician’s opinion that Plaintiff’s lacerations were “healed” less than two months after the accident; (4) The fact that Plaintiff last sought medical treatment for her injury [18 months after it occurred]; and (5) Plaintiff’s refusal to provide Defendant with updated information on her physical status despite Defendant’s numerous requests for such information.”
The court agreed that the insured’s failure to provide updated medical information despite numerous requests by the insurer over many months is not in dispute. However, the court still declined to grant summary judgment; rather leaving it to a jury to determine the reasonableness of the insurer’s conduct toward the insured. The court stated:
“One may wonder why Defendant did not schedule Plaintiff’s deposition or at least solicit her SUO and see these omissions as possible evidence of an unreasonably slow investigation on Defendant’s part. On the other hand, one could conclude that Defendant reasonably considered updated medical information on Plaintiff a necessary precursor to its request for a deposition or SUO. In any event, the caselaw [governing statutory bad faith claims] will require that Plaintiff demonstrate, by clear and convincing evidence, either that Defendant unreasonably delayed its investigation of her claim or refused to make an offer with reckless disregard of medical documentation in its possession that would clearly indicate that she was due additional money under the policy in question.”
The court had “not been provided with medical documentation from which it could categorically determine that [the insured] had not received a full recovery from the tortfeasor’s carrier. Thus, it appears that the credibility of the witnesses on these points will be a key issue in the determination of the bad faith issue.”
Date of Decision: February 4, 2015
Connolly v. Progressive N. Ins. Co., Case No. 3:13-CV-2717, 2014 U.S. Dist. LEXIS 17074 (M.D. Pa. February 4, 2015) (Conaboy, J.)
A link to the court’s decision can be found on the excellent Tort Talk blog.