Long v. Transamerica Life Ins. Co.

RONALD E. LONG, Plaintiff, v. TRANSAMERICA LIFE INSURANCE COMPANY, Defendant.

CIVIL NO.: 4:16-CV-00139

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

November 27, 2018

(Chief Magistrate Judge Schwab)

MEMORANDUM

I. Introduction.

This case arises from an insurance dispute between the plaintiff, Ronald E. Long ("Long"), and the defendant, Transamerica Life Insurance Company ("Transamerica"). The dispute centers on Transamerica's denial of coverage for the amputation of Long's left leg. Transamerica argues it was not required to cover the amputation because Long's diabetes precipitated the need for the amputation. Transamerica has filed a motion for summary judgment. For the reasons that follow, we will deny Transamerica's motion for summary judgment with regard to Long's breach of contract claim, but grant Transamerica's motion for summary judgment with regard to Long's bad faith claim.

II. Background and Procedural History.

JCPenney Life Insurance Company issued an accidental death and dismemberment plan ("the plan") to Long on April 1, 1999. Doc. 45 ¶ 1. Stonebridge Life Insurance Company subsequently took over administration of the policy, and Stonebridge then merged into Transamerica on October 1, 2015. Id. ¶ 2.¹ While he was insured under the plan, Long suffered an injury which became infected and eventually led to the amputation of his left leg below the knee. See Def.'s Ex. Q.²

On January 26, 2016, Long filed complaints in two separate cases, one (this case) against Transamerica, and the other against Hartford Life and Accident Insurance Company ("Hartford"). See Long v. Hartford Life and Accident Ins. Co., No. 4:16-CV-00138 (hereinafter Long I) doc. 1. Given the similar factual backgrounds of the two cases, we briefly recite the procedural history of Long I.

A. Long I.

In Long I, Long alleged essentially the same facts against Hartford that he alleges against Transamerica in the present case: that his leg was amputated below the knee following his fall in early February 2013 and that Hartford refused to paythe claim. See id. Long raised claims against Hartford for breach of contract and bad faith. Id. at 5-6.

After discovery in Long I, Hartford moved for summary judgment. Long I doc. 27. Hartford argued that it was entitled to judgment as a matter of law on Long's breach of contract claim because "there is no basis upon which a reasonable trier of fact could conclude that Plaintiff's amputation was solely the result of an accident ... and that Plaintiff's diabetes and related conditions did not contribute to the amputation. As such, Plaintiff's amputation cannot be considered an injury covered under the Policy and Hartford is entitled to summary judgment." Long I doc. 28. Hartford further argued that it was entitled to judgment as a matter of law on Long's bad faith claim because Long could not point to any evidence that Hartford had acted improperly in denying his claim for benefits. Id. at 20-22.

On June 28, 2018, Judge Matthew W. Brann, writing for this court, granted in part and denied in part Hartford's motion for summary judgment in Long I. Long v. Hartford Life & Accident Ins. Co., No. 4:16-CV-00138, 2018 WL 3155826 (M.D. Pa. June 28, 2018). Judge Brann acknowledged that "[i]n Pennsylvania, insurance policies excluding coverage where a loss is 'caused directly or indirectly by disease' are construed broadly against the insured, and 'there can be no recovery under such policies if pre-existing disease contributed to the loss." Id. at *4 (internal alterations omitted) (emphasis in original) (quoting Shiffler v.Equitable Life Assurance Soc. of the U.S., 838 F.2d 78, 84 (3d Cir. 1988)). Judge Brann reasoned, however, that the policy at issue in Long I "does not neatly align with the policies discussed in the cases" applying that rule. Id. Instead, the policy in question allowed Long to recover "if his 'injury resulted in the loss of either foot,'" and defined "'injury' as 'bodily injury resulting directly from accident and independently of all other causes[,] including sickness or disease." Id. (internal alterations omitted) (quoting Long I Def.'s Ex. E). "Reading this language all together," Judge Brann reasoned, "it is clear that, while Mr. Long's injury had to be independent of any 'sickness or disease,' there is no similar requirement applicable to his loss." Id. (emphasis in original). "In other words, if Mr. Long can demonstrate that he suffered some accidental injury, not caused in any way by his diabetes, which injury eventually 'resulted in' his amputation, it is irrelevant whether or not his diabetes exacerbated the consequences of his injury such that amputation would not have occurred but for his medical condition. Id. (internal alterations omitted). Based on that analysis, Judge Brann denied Hartford's motion for summary judgment with regard to Long's breach of contract claim.

After denying Hartford's motion for summary judgment on Long's breach of contract claim, Judge Brann granted Hartford's motion for summary judgment with regard to Long's bad faith claim. "The only evidence in front of Hartford regarding any alleged injury was Mr. Long's own words on his 'statement ofclaim.' ... [A]n insured cannot sustain a bad faith claim with merely ipse dixit. Therefore, summary judgment will be granted to Hartford on Count II of Mr. Long's complaint." Id. at *5. Shortly after Judge Brann granted in part and denied in part Hartford's motion for summary judgment, the parties settled the case. Long I docs. 45-46.

B. The Present Case.

Just as he did in his case against Hartford, Long initiated the present case with a complaint alleging breach of contract and bad faith by Transamerica arising out of the company's refusal to pay benefits under his insurance plan for the amputation of his leg. See doc. 1. On August 29, 2016, Judge Brann dismissed Long's bad faith claim to the extent that it was based on violations of Pennsylvania's Unfair Insurance Practices Act. Doc. 14. On November 10, 2016, the parties consented to jurisdiction before a United States Magistrate Judge, and the case was assigned to the undersigned. See doc. 20. The case is now before us on Transamerica's motion for summary judgment. Doc. 44.

III. Summary Judgment Motions.

A. Standard for Summary Judgment.

"A party may move for summary judgment, identifying each claim or defense—or the part of each claim or defense—on which summary judgment is sought." Fed. R. Civ. P. 56(a). "The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Id.

In a summary judgment motion, the moving party "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). With respect to an issue on which the nonmoving party bears the burden of proof, the moving party may discharge that burden by "'showing'—that is, pointing out to the district court—that there is an absence of evidence to support the nonmoving party's case." Id. at 325.

Once the moving party has met its burden, the nonmoving party may not rest upon the mere allegations or denials of its pleading; rather, the nonmoving party must show a genuine dispute by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information,affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials" or "showing that the materials cited do not establish the absence . . . of a genuine dispute." Fed. R. Civ. P. 56(c). If the nonmoving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden at trial," summary judgment is appropriate. Celotex, 477 U.S. at 322. Summary judgment is also appropriate if the nonmoving party provides merely colorable, conclusory, or speculative evidence. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). There must be more than a scintilla of evidence supporting the nonmoving party and more than some metaphysical doubt as to the material facts. Id. at 252. "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no 'genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).

The substantive law identifies which facts are material, and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248. A dispute about a material fact is genuine only if there is a sufficient evidentiary basis that would allow a reasonable fact finder to return a verdict for the non-moving party. Id. at 248-49. When "faced with a summary judgment motion, thecourt must view the facts 'in the light most favorable to the nonmoving party.'" N.A.A.C.P. v. N. Hudson Reg'l Fire & Rescue, 665 F.3d 464, 475 (3d Cir. 2011) (quoting Scott v. Harris, 550 U.S. 372, 380 (2007)).

At the summary judgment stage, the judge's function is not to weigh the evidence or to determine the truth of the matter; rather it is to determine whether there is a genuine issue for trial. Anderson, 477 U.S. at 249. The proper inquiry of the court "is the threshold inquiry of determining whether there is the need for a trial—whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Id. at 250.

B. Material Facts.

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