MAY 2011 BAD FAITH CASESCOURT GRANTS SUMMARY JUDGMENT TO INSURER ON BAD FAITH CLAIM AFTER DETERMINING THAT THE INSURER ACTED REASONABLY THROUGHOUT THE CLAIM PROCESS (Middle District)

In Rossi v. Progressive Insurance, the insured was driving when he turned left across a lane of incoming traffic, colliding with an oncoming vehicle.  He alleged significant injuries to his shoulders and lumbar and thoracic spines in the accident, and he claimed that he had seen various medical professionals as a result.  The insurer covered the insured with an automobile insurance policy, and it promptly assigned his claim to a specialist.

The claim specialist contacted the other driver’s insurer, which told him that the other driver’s coverage limit was $100,000 and the full value of the insured’s claim was only about $20,000-$25,000 at the time.  In addition, the insured’s attorney repeatedly failed throughout the process to respond to letters and phone calls from the insurer’s claim specialist that requested certain documentation.

A long additional string of events occurred over two years concerning the release of medical records, independent medical examinations, and liability for the accident.  The insurer had investigated the accident scene and determined that the light was red when the insured turned left immediately before the accident.  When ultimately determining liability for the accident, the insurer felt that the insured was 60-80% at fault.  The insurer eventually made a settlement offer for the policy limit of $30,000, but by that point the insured believed his claim was worth over $100,000.

The insured and his wife then filed a Complaint containing counts for breach of contract and bad faith.  The parties were able to settle the breach of contract claim but not the bad faith count.  The insurer then filed a motion for summary judgment on the bad faith claim, which was before the court in this opinion.

The court first noted a major mistake by the insured- after the insurer filed its own

statement of material facts, the insured was required to respond with his own statement of facts setting forth which facts were materially in dispute.  He never filed this statement, and the court therefore had to deem all of the insurer’s alleged facts in that statement to be admitted (while still viewing them in the light most favorable to the insured) [Thus, the facts mentioned above were put forth by the insurer.]

The court then determined that “no reasonable fact-finder could find that [the insured] has proven [the insurer’s] bad faith by clear and convincing evidence.”  It was reasonable to investigate liability for the accident because the insured failed to yield the right-of-way and it was reasonable to dispute the amount of damages and request numerous medical records and independent medical examinations before preparing an offer.  Therefore, because the insured failed (under the insurer’s alleged facts) to demonstrate that the insurer acted with an improper motive, the court granted the insurer’s motion for summary judgment on the bad faith claim.

Date of Decision:  April 25, 2011

Rossi v. Progressive Ins., Civil Action No. 3:09-CV-876, United States District Court for the Middle District of Pennsylvania, 2011 U.S. Dist. LEXIS 44097 (M.D. Pa. Apr. 25, 2011) (Caputo, J.)