Category: Bad Faith

Dickie McCamey Lawyers Hold Summary Judgment For Harleysville On Appeal Of Breach of Contract and Bad Faith Case

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HARRISBURG, September 13 – Dickie McCamey Attorneys C.J. Haddick and Christine Line won a victory for Harleysville Insurance in Pa. Superior Court yesterday, winning an affirmance of a summary judgment motion in a coverage and bad faith case originally filed against the company in Berks County.

In the case, insured Clyde Rogers made claims under both commercial and inland marine insurance policies issued by Harleysville covering a van Rogers used in his business.  After Rogers claimed the vehicle caught fire on January 25, 2012, and was a total loss, he sought reimbursement for the van, tools, and equipment allegedly destroyed inside the van.  Harleysville  paid Rogers a policy limit of $5,000.00 for unscheduled tools and equipment which Rogers accepted, and offered to pay $1,120.00 for the value of the van and $1,220.68 for rental of a substitute van, which Rogers did not accept.  Rogers thereafter filed suit against Harleysville in the Berks County Court of Common Pleas.

The Berks County Court of Common Pleas granted Harleysville’s Motion for Summary Judgment, finding that Harleysville’s remaining offers to pay for the actual cash value of the van, and for rental of a substitute van, were the only remaining obligations owed under either the commercial auto or inland marine policies.  Rogers appealed.

On appeal, a unanimous panel dismissed all of the arguments made on Rogers’ behalf seeking reversal of the judgment in favor of the insurer.  Pa. Superior Court Senior Judge William H. Platt found that nothing in either of the Harleysville polices was ambiguous, as Rogers contended.  Judge Platt also found there was no provision in the policies supporting Rogers’ claims for storage fees or loss of business income.

Based upon his review of the policy language and Harleysville’s position on payment of the claim, the Court found the Plaintiff’s bad faith claims without merit, and affirmed summary judgment on those claims as well.

Finally, Judge Platt ruled that the failure of Mr. Rogers’ lawyer to attend oral argument on Harleysville’s summary judgment motion despite receiving notice of the date of the argument from Harleysville’s lawyers was insufficient grounds to overturn the judgment in favor of Harleysville.

Clyde Rogers v. Harleysville Insurance, No. 289 MDA 2016, Filed September 13, 2016, Pa. Superior Court.

 

Why You Should File (And Win) Summary Judgment In (Almost) Every Bad Faith Case, Part II

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In Part I of this post, we examined the reasons why motions for summary judgment should be filed and won more often  by insurers in bad faith litigation.  In Part II, we examine how to improve the odds which already start out in an insurer’s favor in the summary judgment arena.

You Had One Job

The first rule of filing and winning more summary judgments in bad faith litigation is to do what the summary judgment rules ask be done:  demonstrate that there is no genuine issue of material fact remaining for trial.  The operative word in that requirement is “demonstrate.”

Summary judgments are won and lost based upon the amount of sweat and toil the moving lawyer puts into the facts which will appear in the summary judgment motion and briefing.  The record in the case, most plainly discovery, has to be combed through to cull all documents, all testimony, all evidence which demonstrates that the insurer handled the claim in question reasonably.

We do not say that it must be shown the insurer handled the claim “correctly” here, because as discussed in the prior post, insurers have a right to be wrong, as long as they are not unreasonably wrong.  By all means, however, if you can demonstrate to the reviewing court that the insurer handled the claim both reasonably and correctly, that should be done. Reasonable and correct is always better than reasonable and incorrect, although either can win an insurer a summary judgment in a bad faith case.

The main jobs in developing the record for a summary judgment motion are specificity and thoroughness.  Every assertion made in support of the motion should be supported with some item from the record.

Be A Beast Of Burden

In Part I of this post, we reviewed the burden of proof in bad faith cases, often referred to as “clear and convincing evidence,” which favors insurers, and makes the job of a bad faith plaintiff an uphill battle.  It is a burden of proof which should be stressed throughout the summary judgment submissions because some  judges tend to forget that the burden applies at the summary judgment stage , and it does not hurt to remind those judges who do remember.

If the summary judgment opinion and ruling an insurer’s lawyer gets back following the motion mentions that the plaintiff’s burden at summary judgment  is one of clear and convincing evidence, then the insurer’s lawyer has done her job in sufficiently arguing it.  She has also increased the chances that summary judgment is going to be granted for her client.

Tell A Story, And Trace The Thought Process

In my practice, I defend professional liability actions of all kinds from time to time.  There is an important lesson in defending those cases which translates very nicely to summary judgment motions in bad faith cases:  telling a story, and tracing a thought process.

Since the focus of any bad faith case is the nature and quality of how the insurance claim at issue was handled, the successful insurers in summary judgment motions are the ones which walk the presiding judge through the claims handling process, demonstrating what was done, when it was done, why it was done, and how the insured’s interests were considered and not unfairly compromised.  If the presiding judge can understand the how and why of the claims handling process, the burden and proof and the case law will very likely carry the judge where insurers need him to go.  The judge is equipped  to see that while the insured may not have agreed with the claims outcome, the insurer came by that outcome honestly, sincerely, and reasonably.  And if an insurer can get a judge to go there, they will win summary judgment in their bad faith case.

As we did in closing out Part I of this post, we close here by saying again:  summary judgments for insurers in bad faith litigation are fat pitches in which the odds favor the insurer.  If the motion and briefing process are executed with the above in mind, the chances of success are substantial.

For more information on how to file and win more summary judgments in coverage and bad faith cases, and to reduce your legal expense while doing it,  reach  me at chaddick@dmclaw.com or 717-731-4800.

 

BREAKING NEWS — Pa. Supreme Court To Consider Whether Ill Will Is Prerequisite To Establishing Bad Faith

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HARRISBURG, Aug. 30 – The Pa. Supreme Court issued a ruling granting  appeal in a bad faith case to consider whether proof of ill will or motive is a prerequisite to establishing liability under the Pa. Bad Faith Statute, 42 Pa.C.S.A. §8371.

In Rancosky v. Wash. National Ins. Co. , 2016 Pa. LEXIS 1910 (Pa. Aug. 30, 2016), the state’s highest court ruled it will undertake limited review of a Pa. Superior Court ruling which granted a new trial to a bad faith plaintiff, an estate executor, after the trial court found for Washington National following a non-jury trial in a dispute over a cancer insurance policy.

The Supreme Court Order indicates it will review only the following issue:

“Whether this Court should ratify the requirements of Terletsky v. Prudential Property & Casualty Insurance Co., 649 A.2d 680 (Pa. Super. 1994), appeal denied, 659 A.2d 560 (Pa. 1995), for establishing insurer bad faith under 42 Pa.C.S. § 8371, and assuming the answer to be in the affirmative, whether the Superior Court erred in holding that Terletsky factor of a “motive of self-interest or ill-will” is merely a discretionary consideration rather than a mandatory prerequisite to proving bad faith?

While recognizing that the state legislature did not define bad faith, the Superior Court held that a statutory bad faith claim under Pennsylvania’s bad faith statute had two elements:  (1) the insurer did not have a reasonable basis for denying benefits under the policy, and (2) the insurer knew of or recklessly disregarded its lack of reasonable basis in denying the claim.  According to the Superior Court opinion, the trial court granted judgment to the insurer in part because the Plaintiff “failed to prove that Conseco [predecessor to Washington Mutual]  had a dishonest purpose” or a “motive of self-interest or ill-will.”

The Superior Court ruled it was sending the case back to the trial court for a new trial because the trial court’s finding that Plaintiff failed to prove the first element of the bad faith claim was in part premised upon  the Plaintiff’s failure to prove that the insurer in the case acted will ill will or a dishonest purpose.

The following passage from the Superior Court opinion, which could be seen as exalting form over substance, refers to an insurer’s ill will or dishonest purpose as  merely “probative.”  This aspect of the opinion could be what drew the Supreme Court’s attention:

We conclude that the trial court’s verdict is faulty based on its erroneous determination that Rancosky failed to establish the first prong of the test for bad faith because he failed to prove that Conseco had a dishonest purpose or a motive of self-interest or ill-will against LeAnn. As noted above, a dishonest purpose or a motive of self-interest or ill-will is probative of the second prong of the test for bad faith, rather than the first prong.. . .  The trial court could not have considered whether Conseco had a dishonest purpose or a motive of self-interest or ill-will unless it had first determined that Conseco lacked a reasonable basis for denying benefits to LeAnn under the Cancer Policy. However, because the trial court made no such determination, its consideration of a dishonest purpose or a motive of self-interest or ill-will was improper. Accordingly, we conclude that the trial court erred as a matter of law by using standards applicable to the second prong of the test for bad faith in its determination of whether Rancosky had satisfied the first prong of the test for bad faith.

Rancosky v. Wash. National Ins. Co. , 2016 Pa. LEXIS 1910 (Pa. Aug. 30, 2016)

 

 

Why You Should File (And Win) Summary Judgment In (Almost) Every Bad Faith Case, Part I

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Excepting death and taxes, there are no sure things.  But there are plenty of near – sure things and fat pitches in life, and summary judgment motions by insurers in bad faith cases is one of those things.    Insurers should be filing and winning more of them.  In this post, we undertake a brief review of why more summary judgment motions should be filed by insurers in bad faith cases.  In the next post, we will look at how such motions can be best positioned to win.

But first, why should more summary judgments be sought in bad faith cases?

The Burden of Proof Is Exactingly High, Favoring The Insurer

In most if not all states, bad faith must be proved by a hybrid burden of proof which lies somewhere above preponderance of the evidence, and below beyond a reasonable doubt.  This burden of proof applies as much to the summary judgment stage as it does to the trial of a bad faith case, and it can be used offensively to argue that no genuine issue of material fact can be established.

In my experience, the burden of proof should be stressed more by insurers at the summary judgment stage than it is.  It is a great reminder to the judge to properly orient his frame of reference when reviewing the motion.

Genuine, Bona Fide Bad Faith Is Rare

Don’t believe what the Plaintiff’s bar says.  Claims adjusters and claims departments simply do not benefit from intentionally and unfairly  handling claims, and the list of why they do not benefit is a long one.  Most people want to do a good job and do it fairly.  Even the ones that don’t  seek to avoid unwarranted attention, and don’t want to get fired.  Nobody in a claims department wants their name associated with a bad faith suit, to be drug into interviews and depositions, or to be responsible for legal expense and risk.

I have written on this subject before, but in nearly 30 years of practice I can count the number of instances of claims handling with malice aforethought on a single hand — half of a single hand, actually.  It just does not happen.

Do mistakes happen in claims handling?  Of Course.  Negligence?  Occasionally.  But bad faith law allows safe harbor for both, and neither statutory nor common law bad faith claims are designed to punish an insurer for either mistakes or negligence.

Bad Faith Rulings Are Inherently Ideal  For Judges To Make

Nearly ten times out of ten, the proper adjudication of a bad faith case can be made following discovery, when a judge can look at the facts of the specific claims handling, and apply the particular bad faith law of the jurisdiction to serve a gate keeping function.  If  a judge finds a reasonable basis for handling the claim at issue, the inquiry is over.  And only in the rarest of cases will a judge genuinely believe that an insurance bad faith case can go to trial.

Summary judgments for insurers in bad faith litigation are fat pitches in which the odds favor the insurer.  In the next post, we will examine how to maximize that advantage, and win more summary judgment motions.

For more information on how to file and win more summary judgments in coverage and bad faith cases, and to reduce your legal expense while doing it,  reach  me at chaddick@dmclaw.com or 717-731-4800.

Insured’s Failure To Cooperate In Auto Claim Leads to Summary Judgment for State Farm

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LAS VEGAS, Aug. 3 — A Nevada federal judge has granted State Farm’s motion for summary judgment in a case involving an auto insurance claim, finding that the insureds did not comply with the policy requirement of cooperation with the investigation of the claim.

Jessica Auriemma was insured under an automobile insurance policy from State Farm Mutual Automobile Insurance Co.  After she and Charlette Auriemma were involved in a rear end collision during which the other motorist fled the scene, they filed a claim pursuant to the policy.  State farm asked for information from the Auriemmas  which was not returned.

State Farm made repeated request for information without response.  Nevertheless, the Auriemmas sued State Farm in the Clark County, Nev., District Court, alleging breach of contract, breach of the implied covenant of good faith and fair dealing, violation of the Nevada Unfair Claims Practices Act and unjust enrichment.  State Farm removed the action to the U.S. District Court for the District of Nevada after which the parties agreed to voluntary dismissal of all extracontractual claims.

With respect to the remaining claim for breach of contract, State Farm moved for summary judgment, and the Auriemmas failed to respond to the motion within the allotted time, choosing instead to seek remand of the case to state court on grounds that the value of the controversy  fell to below $75,000 after the extracontractual claims were dismissed.. They also moved to obtain more  time to respond to State Farm’s summary judgment motion.

U.S. District Judge  Judge Andrew P. Gordon denied the Aureimma’s motions, specifically refusing remand  because “the parties were diverse and the amount in controversy at the time of removal more likely than not was above the jurisdictional amount.”

Judge Gordon also found that the Auriemmas were not entitled an extension of time to file opposition to State Farm’s summary judgment motion because although State Farm alleged no prejudice, “[t]he filing of a timely opposition was entirely within the plaintiffs’ control.”

Judge Gordon also denied the request for more time to respond to State Farm’s motion for summary judgment, and granted judgment for State Farm,  ruling:

“[N]othing prevented [the Auriemmas] from challenging subject-matter jurisdiction before the response deadline expired. They also could have provided an opposition along with the extension motion, which was filed long after the response deadline had already expired. They did none of these things. Under these circumstances, I find no excusable neglect and I deny the plaintiffs’ motion to extend. . .

State Farm has satisfied its initial burden to show that no genuine dispute exists as to the plaintiffs’ failure to comply with their contractual duties because the plaintiffs did not cooperate before they filed suit. . . The plaintiffs have not responded with any specific facts to show that a genuine dispute exists. Nor does the evidence before me demonstrate any such facts. Because the plaintiffs did not comply with an express condition precedent of the policy, State Farm is entitled to summary judgment on the remaining breach of contract claim.”

Life Insurer Had Reasonable Basis To Rescind; No Bad Faith

 

lifeinsuranceMILWAUKEE, Aug. 5 — A federal judge in Wisconsin has dismissed a  bad faith claim on the insurer’s motion for partial summary judgment, finding it had a reasonable basis to contest a claim for death benefits based on possible misrepresentations in the application.

Calvin Nutt and Lowanda Smith submitted answers to medical questionnaires as part of the purchase of life insurance from United of Omaha Life Insurance Co.  Mr. Nutt answered “No” to a question regarding whether he had ever been treated for chronic obstructive pulmonary disease (COPD).  The policy cancelled for non payment, but the couple resubmitted the application, and again denied treatment of Mr. Nutt for COPD.

On July 10, 2016, Smith submitted a claim under the policy after Nutt was murdered.  United  undertook a policy review within the two year contestability period and obtained medical records which showed that one of Nutt’s treating doctors ordered diagnostic testing on whether his complaints of chest pain may have been caused by COPD.  The results were negative for COPD.

As part of the claim, Smith obtained an autopsy report which indicated Nutt did not have COPD.  She filed suit in Wisconsin State Court alleging breach of contract and bad faith, and United removed the action to U.S, District Court for the Eastern District of Wisconsin.  The insurer thereafter filed a motion for partial summary judgment on the bad faith claim.

Judge J.P. Stadmueller granted United’s motion on the bad faith claim, and denied Smith’s motion for partial summary judgment on the breach of contract claim on grounds of lateness and reliance on evidence not in the record.   Judge Stadmueller  wrote, in granting United’s summary judgment motion on the bad faith:

“[t]he undisputed evidence shows that Smith’s bad faith claim must fail…United was within its rights to review the policy given that Smith’s claim occurred within the contestability window. It sought medical records and, from those it could obtain, there was some basis to believe that Nutt had lied about his COPD. Though that basis was moderated by other statements in the records, for instance the ‘well aerated’ opinion on Nutt’s x-rays, all that is required ‘[t]o avoid a bad faith claim . . . [is] one reasonable basis on which to deny benefits.’ As of September 1, 2015, United had ‘exercise[d] its duty of ordinary care and reasonable diligence in investigating and evaluating’ Smith’s claim and had a reasonable basis to debate the claim. . . . [T]he fact that the basis for denial later evaporated is no reason to impose bad faith liability for the earlier denial decision.”

The judge also ruled Smith failed to show United was unaware of a reasonable basis to contest the claim, which was also fatal to Smith’s bad faith claim.

Lowanda Smith v. United of Omaha Life Insurance, No. 15-1344, E.D. Wis.; 2016 U.S. Dist. LEXIS 101726

 

 

Iqbal Used To Dismiss Bad Faith Claims Against Foremost

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SCRANTON, Aug. 5 — A federal magistrate judge has granted Foremost Insurance’s motion to dismiss a bad faith claim on the grounds it did not meet minimum fact pleading requirements under federal law.  The judge found that the Plaintiff’s reliance solely on the allegation of a breach of contract count and the bare language of the Pa. Bad Faith Statute were not enough to allow the claim to survive.

Plaintiff Beata Rogowski bought a policy of  homeowners insurance from Foremost Insurance Co. and filed a claim for fire damage sustained in her home.  After disagreements arose during the claim, Rogowski sued Foremost in U.S. District Court for the Middle District of Pennsylvania, claiming that Foremost did not properly handle adjustment of the claim.  She alleged both a breach of contract count and a bad faith count.

Foremost filed a motion to dismiss both claims, but Magistrate Judge Martin C. Carlson granted the motion only as to the bad faith count, finding it not to have been properly plead.

Judge Carlson wrote:

“In reaching this conclusion, we note that [the bad faith] count of the plaintiff’s complaint consists of little more than a paraphrase of the statute, coupled with a factual assertion that the defendant has breached the insurance policy in ways which are undefined, but allegedly willful and malicious. Upon consideration, we conclude that these ‘[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice’ to state a claim under [42 Pa. Consolidated Statutes Annotated] §8371. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009). In this bad faith context, we require more than conclusory, bare-bones allegations that an insurance company acted in bad faith to sustain such a claim. Since Rogowski has not met these pleading requirements in her current, spare complaint the bad faith claim set forth in Count II of the complaint should be dismissed. However, mindful of the fact that plaintiffs often should be afforded an opportunity to further amend and articulate their bad faith claims, it is recommended that this count of the complaint be dismissed without prejudice to the filing of an amended complaint which meets the pleading standards prescribed by law for such claims.”

Judge Carlson also found the complaint not sufficiently specific to allow him at that point to dismiss the breach of contract count on grounds it was time-barred:

“Given the legal and factual ambiguity of the plaintiff’s complaint, an ambiguity which prevent[s] us from determining whether there are any barriers to the application of the contractual terms which call for the filing of a lawsuit within one year of the alleged loss, we believe that the plaintiff should be required to provide a more definite statement of this claim before the Court is tasked with assessing the legal merits of this motion to dismiss. Therefore, it is recommended that the plaintiff be directed pursuant to [Federal Rule of Civil Procedure] Rule 12(e) to submit a more definite statement of this claim. Upon receipt of this more definite statement the Court could then determine whether that claim is time-barred.”

Beata Rogowski v. Foremost Insurance Co., No. 15-1606, M.D. Pa.; 2016 U.S. Dist. LEXIS 95930 (Carlson, Dist. Mag. Judge)

Summary Judgment For Insurer In Mold Coverage Dispute

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CAMDEN, July  15 — A New Jersey federal judge ruled an insurer’s handling  of claims for water and mold damages were neither breach of contract nor bad faith.  The Court further ruled that the insurer paid the full amount of the mold remediation sublimit under the policy.

Warren and Maryann Andrews sued Merchants Mutual Insurance Co. in the U.S. District Court for the District of New Jersey after a dispute arose under the Andrews’ homeowners’ policy with Merchants.  The insureds discovered several water leaks after a rainstorm, and filed a claim for coverage with Merchants.

The Andrewses sought coverage from Merchants Mutual for the damages. Merchants made partial payment for some of the damages, including a $10,000.00 payment to satisfy the policy’s mold remediation sublimit.

The Andrewses were unsatisfied with the payment, and alleged breach of contract and bad faith against Merchants in the New Jersey federal action.  In the case,  Merchants moved for summary judgment.

U.S. District Judge Joseph H. Rodriguez granted the motion, determining that Merchants Mutual fully  paid the mold remediation sublimit, and otherwise fully performed its obligations under the homeowners policy.  Rodriguez also found no evidence in the record of claims delay on the part of merchants, which led to the dismissal of both the breach of contract and bad faith claims.

Warren and Maryann Andrews v. Merchants Mutual Insurance Co., No. 14-5147, D. N.J.; 2016 U.S. Dist. LEXIS 89997

Farm Bureau’s Denial of Skid Loader Claim “Fairly Debatable” and Therefore Not Bad Faith

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SALT LAKE CITY, July 21  — Sufficient evidence existed to establish that a stolen skid loader was not covered by a homeowners policy issued by Farm Bureau Insurance Company, a federal judge ruled on July 18.

Insureds  Naser and Stacy Awadh submitted a claim for a stolen skid loader after it went missing  on or about April 22, 2009. Farm Bureau investigated the theft and made an offer to pay the $2,500 limit for equipment on residential premises “used primarily for any business purpose.”  The insureds rejected the offer.

Mr. Awadh at one time indicated he purchased the loader for his company.  Farm Bureau’s investigation included contact with the Weber County, Utah, Sheriff’s Office, which closed a criminal theft investigation on the loader after determining there was a dispute between Mr. Awadh and a buyer of the loader,  Montalvo,  who claimed he paid the Awwadhs $13,000.00 to purchase it.  Farm Bureau later denied the Awadhs’ claim after uncovering a bill of sale for the loader, corroborating the sale.

The Awadhs then sued Farm Bureau in state court in Utah,  and  Farm Bureau removed the action to the U.S. District Court for the District of Utah.  Following removal it sought ant obtained summary judgment on both the insureds’ breach of contract and bad faith claims.

U.S. District  Judge Dale A. Kimball found “ample evidence to support Farm Bureau’s denial.”  He wrote:

 “Even if it is ultimately established that Montalvo stole the skid loader, there was evidence supporting Farm Bureau’s decision at the time. Based on all the evidence Farm Bureau uncovered in its investigation, it was fairly debatable whether the skid loader was stolen and Farm Bureau acted reasonably in denying Plaintiffs’ claim. Whether the skid loader was actually stolen is irrelevant to the present motion and Farm Bureau’s fairly debatable defense. And, Plaintiffs’ arguments that a fact finder would need to make findings about the intent of Farm Bureau’s agents, representatives, and investigators misses the mark. Plaintiffs have failed to point to any evidence that Farm Bureau’s agents or representatives acted inappropriately. Because it was fairly debatable whether the skid loader was stolen, Farm Bureau’s denial of Plaintiffs’ claim on those grounds cannot be the basis for a bad faith claim. Therefore, the court dismisses Plaintiffs’ bad faith claim.”

Kimball also dismissed the breach of contract claim, finding that Farm Bureau  had record evidence that the loader was business property, and the Awadhs had no corroboration of their claim that the loader was personal property:

“Awadh asserts he initially bought it with a personal account, but he gives no information or records in relation to the account. Awadh testified that he bought the skid loader from his business for one dollar, but again there is no record or documentation of the sale that would be conducted solely for the purpose of changing ownership. Awadh further testified that, at the time the skid loader went missing, he had no business and he was using the skid loader for personal snow removal at his home. But, he claims damages for the loss of rental income from not having the skid loader. While there are several unsupported assertions supporting Plaintiffs position, there is actual evidence supporting Farm Bureau’s position. At the summary judgment stage, Plaintiffs must do more than make unsupported, self-serving assertions. Even if there was a brief hiatus in which the skid loader was not rented out, the evidence demonstrates that the skid loader was ‘primarily’ used for business purposes. The court concludes that no reasonable juror could conclude otherwise. Accordingly, the court concludes that there is no basis for Plaintiffs’ breach of contract claim and Farm Bureau is entitled to summary judgment.”

Naser Awadh, et al. v. Farm Bureau Mutual Insurance Co., No. 13-0145, D. Utah; 2016 U.S. Dist. LEXIS 93369

Policy Limits, Premium, Excluded From Jury In UM/UIM Case

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PHILADELPHIA, July 19 – A federal judge has ruled in a UM/UIM case that neither the policy limits nor the amount of premium paid for the UM/UIM coverage was relevant, and should be excluded from admission into evidence at trial.

U.S. District Judge Gene E.K. Pratter granted a motion in limine filed by the insurer, Geico Insurance Company, to exclude these items from the jury’s consideration in a case brought by Darren Lucca for UM/UIM benefits.  Lucca originally filed a complaint in state court,  alleging breach of contract, bad faith, and violation of the UTPCPL, but after the case was removed to federal court only the breach of contract count remained at issue.

The only remaining issue in the case is the extent of damages Lucca allegedly suffered, which will determine whether he is entitled to any UM/UIM benefits, over and above the $75,000.00 Lucca received from the tortfeasor.

Judge Pratter wrote:

“On April 8, 2011, Lucca was involved in a car accident due to the negligence of another motorist, causing him to suffer various personal injuries. At the time, his car was insured by defendant Geico. . . As part of his policy, Lucca had underinsured motorist benefits. The other motorist had $100,000 in coverage through his insurance carrier, which Lucca alleges was insufficient to cover his injuries. . . “Geico denied his claim, believing that Mr. Lucca had received $75,000 from the other motorist’s insurance as an award in binding arbitration, not in settlement, and that therefore the other motorist was not underinsured.”

In granting Geico’s motion in limine, Pratter  observed the very limited amount of available case law on the subject, and ruled that neither the UM/UIM limits, nor the premium paid for those limits was relevant to the issue to be tried — the nature and extent, and therefore the value, of Lucca’s injuries:

“Geico filed a motion in limine, asking the Court to bar Lucca from offering evidence or testimony regarding the amount of underinsured motorist coverage provided for in the insurance policy at issue or regarding the amount of any premiums paid for the coverage. . . Indeed, not only is the policy limit irrelevant in this case, introducing evidence of the policy limit may very well serve to prejudice Geico by giving the jury an anchor number that has no bearing on Lucca’s damages. . . For these reasons, the Court will exclude at trial any mention of the policy limits or the amount of premiums paid. Once a verdict has been rendered by the jury on the amount of damages suffered by Lucca, the Court can mold the verdict appropriately to reflect the limits of both Lucca’s policy and the third party tortfeasor’s policy. . . ”

“The only issue for the jury to decide in this matter is the extent of Mr. Lucca’s injuries from the accident. That Mr. Lucca’s policy includes a $900,000 underinsured motorist limit or that his stepfather paid a certain amount in premiums for the policy does not have ‘any tendency to make (any fact at issue in this case) more or less probable than it would be without the evidence.”

Lucca v. Geico, E.D. Pa., July 7, 2016 (Pratter, J.)