SAN FRANCISCO, May 25 — Summary judgment in favor of an insurer in an insurance breach of contract and bad faith lawsuit was appropriate because an insured failed to submit timely support of her claim, a Ninth Circuit U.S. Court of Appeals panel has ruled.
Plaintiff Carol Sierzega was insured by Country Preferred Insurance Co., and filed a claim after she was involved in an accident with Shirleen Okelberry, who was uninsured at the time of the mishap. Sierzega recovered a trial verdict of more than $4 million against Okelberry, and Country Preferred tendered Sierzega the $50,000 underinsured motorist policy limits. Sierzega sued County Preferred for breach of contract, breach of the implied covenant of good faith and fair dealing and violation of the Nevada Unfair Claims Practices Act for failing to pay the claim more promptly.
After removing the case to the U.S. District Court for the District of Nevada, County Preferred won summary judgment on all claims, after which Sierzega appealed to the Ninth Circuit.
“Upon receiving notice of the claim, Country Preferred requested additional information, but it took Sierzega’s counsel more than five months to respond, with a demand letter. Once counsel sent the demand letter making clear that Sierzega was making an underinsured claim, Country Preferred promptly requested that Sierzega provide Okelberry’s policy limits and her medical records. Country Preferred also sent requests for records to Sierzega’s medical providers and notified Sierzega that some of the providers had not responded. Despite these efforts, Country Preferred still was not in possession of medical bills that established expenses greater than Okelberry’s policy limit at the time the judgment was entered in Sierzega’s civil case against Okelberry.”
“[t]he delay in obtaining Okelberry’s policy limit information was a result of Allstate’s initial refusal to release the information, and there is no evidence that Sierzega was unable to obtain her own medical records from the non-responding providers and provide them to Country Preferred…Once Country Preferred obtained sufficient information about the policy limits and established that Sierzega’s medical bills exceeded Okelberry’s policy limit, Country Preferred paid Sierzega’s full claim. As a result, no reasonable jury, viewing the evidence in a light most favorable to Sierzega, would infer that Country Preferred was ‘act[ing] unreasonably and with knowledge that there [was] no reasonable basis for its conduct.”