OCTOBER 2008 BAD FAITH CASES
SUMMARY JUDGMENT GRANTED WHERE REASONABLE BASIS TO DENY CLAIM BASED ON THE POLICY’S CONCEALMENT PROVISION & INCONSISTENT STATEMENT UNDER OATH (Philadelphia Federal)
In Barrie v. Great Northern Insurance Company, the insured brought a breach of contract and bad faith claim against a moving company and her insurer arising out of the insured’s alleged loss of her jewelry collection. The insured hired a moving company to move her belongings from a one bedroom apartment she shared with three other women to a new home. The insured had a valuable jewelry collection, which she packed inside a wooden box and in a case kept in her dresser in the bedroom of her apartment. The insured held an insurance policy with the insurer providing itemized coverage in the total amount of $82,425 for 64 listed items of jewelry. Four days after the move and before she reported the jewelry missing to the police, the insured reported a claim for loss of scheduled jewelry under the policy. The insured indicated the jewelry was stolen by the moving company and claims the policy limit.
Under the policy the insurer reserved the right to take an examination under oath of the policyholder, along with family members and any other members of the policyholder’s household. The policy also stated that in the event of concealment or fraud, coverage will not be provided if the policyholder or any covered person has “intentionally concealed or misrepresented any material fact relating to this policy before or after a loss.”
The insured made various recorded statements and gave testimony that was inconsistent with regard to various material issues. As a result, the insurer disclaimed coverage under the concealment or fraud provision of the policy.
The insured then filed a complaint for breach of contract against the moving company and a breach of contract and bad faith claim against the insurer. The insurer moved for summary judgment. With regard to the bad faith claim, the court found that the insurer had a reasonable basis for denying benefits under the concealment provision of the insurance policy. The insured’s version of the loss was implausible and lacked support. The insured’s testimony failed to tell a consistent story as to several material issues leading up to the disappearance of her jewelry. For example, the insured gave several conflicting reports concerning when she asked the movers about the jewelry and whether or not she went back to the apartment to search for it. At one point, the insured even admitted that her earlier testimony was not true. The insured did not show bad faith by a clear and convincing standard and therefore the court granted the insurer’s summary judgment motion on the bad faith claim.
Date of Decision: August 28, 2008
Barrie v. Great Northern Ins. Co.,
United States District Court for the Eastern District of Pennsylvania , No. 06-5320, 2008 U.S. Dist. LEXIS 66029 (E.D. Pa. August 28, 2008) (Stengel, J.),