Third Circuit Affirms Summary Judgment For Nationwide in Bad Faith Case

PHILADELPHIA, October 4 – Dickie McCamey lawyers C.J. Haddick and Bryon Kaster have won affirmance of a summary judgment in favor of Nationwide Insurance in a bad faith case before the U.S. Court of Appeals For The Third Circuit.

In Bodnar, et al. v. Nationwide Mutual Insurance Company, the Plaintiffs alleged that Nationwide was guilty of bad faith in the investigation of whether or not the work-related death of an employee of its insured was covered or barred by the terms of the  insured’s CGL policy, which included an  Employers’ Liability Exclusion.  During the investigation of the claim, Nationwide  filed a declaratory judgment action because of conflicting information on the employment status of the deceased employee.  Nationwide later dismissed the declaratory judgment action and settled with the estate of the deceased employee’s estate, ultimately agreeing to indemnify its insured.

The decedent’s estate took an assignment of rights from the insured as part of the settlement , and filed a bad faith action against Nationwide in the U.S. District Court for the Middle District of Pennsylvania. Nationwide requested and obtained summary judgment in its favor in the district court, U.S. District Judge Robert Mariani finding:

“The claims file reflects information that indicates that Berry [decedent] variously could have been an employee, a temporary worker, or independent contractor…Plaintiffs may not like how the claim was handled, but it cannot be said that Nationwide breached any duty under these facts.”

In affirming summary judgment, U.S. Third Circuit Judge Thomas Hardiman agreed, finding that Nationwide’s filing of a declaratory judgment,  and subsequent decision to indemnify its insured in the underlying wrongful death action,  reflected both an ongoing investigation and open minds on the part of Nationwide’s claims personnel:

“Given the ambiguities surryounding Berry’s employment status, it was reasonable for Nationwide to seek declaratory relief. . . Appellants failed to show by clear and convincing evidence that Nationwide acted unreasonably in the manner [in which] it handled Bodnar’s claim.”

Bodnar, et. al. v. Nationwide Mutual Insurance Company, No. 15-3485 (3d Cir., October 4, 2016)

Author: CJ Haddick

C.J. Haddick is a Director with the law firm of Dickie, McCamey, & Chilcote, PC, based in Pittsburgh, Pa. He has advised and represented insurers in insurance coverage and bad faith litigation for more than three decades, and written and spoken throughout the United States on insurance coverage and bad faith prevention and litigation. He is Managing Director of the firm's Harrisburg, Pa. office. Reach him at chaddick@dmclaw.com or 717-731-4800. View all posts by CJ Haddick