Shaw v. United Statesa Cas. Ins. Co.

BRITTANY SHAW, Plaintiff v. USAA CASUALTY INSURANCE COMPANY, Defendant

CIVIL ACTION NO. 3:17-947

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF PENNSYLVANIA

May 11, 2018

(JUDGE MANNION)

MEMORANDUM

Pending before the court is defendant USAA Casualty Insurance Company's motion for partial summary judgment, (Doc. 12), pursuant to Fed.R.Civ.P. 56(c), with respect to Count II of the complaint, bad faith. Upon review, and finding that a reasonable jury could not conclude that the defendant acted in bad faith thereby violating Pennsylvania's bad faith statute, 42 Pa.C.S. §8371, the defendant's motion will be GRANTED.

I. BACKGROUND

The plaintiff, Brittany Shaw, filed the instant action in the Court of Common Pleas of Lackawanna County on April 20, 2017. On May 30, 2017, the defendant timely removed the action to this court based upon diversity jurisdiction. (Doc. 1). An answer to the complaint with affirmative defenses was filed by defendant on June 12, 2017. (Doc. 4).

After the completion of discovery, the defendant filed the instant motion for partial summary judgment, (Doc. 12), on January 31, 2018, along with a statement of material facts, supporting exhibits, (Docs. 13-18), and a supporting brief, (Doc. 17). The plaintiff filed a brief in opposition to the defendant's motion for partial summary judgment on February 27, 2018, (Doc. 20), and a response to defendant's statement of material facts with exhibits, (Doc. 19). On March 13, 2018, the defendant filed a reply brief. (Doc. 21).

This court has diversity jurisdiction over plaintiff's state law claims pursuant to 28 U.S.C. §1332.

II. SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate if the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Turner v. Schering-Plough Corp., 901 F.2d 335, 340 (3d Cir. 1990). A factual dispute is genuine if a reasonable jury could find for the non-moving party, and is material if it will affect the outcome of the trial under governing substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Aetna Casualty & Sur. Co. v. Ericksen, 903 F. Supp. 836, 838 (M.D. Pa. 1995). At the summary judgment stage, "the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether thereis a genuine issue for trial." Anderson, 477 U.S. at 249; see also Marino v. Indus. Crating Co., 358 F.3d 241, 247 (3d Cir. 2004) (holding that a court may not weigh the evidence or make credibility determinations). The court must consider all evidence and inferences drawn therefrom in the light most favorable to the non-moving party. Andreoli v. Gates, 482 F.3d 641, 647 (3d Cir. 2007).

To prevail on summary judgment, the moving party must affirmatively identify those portions of the record which demonstrate the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323-24. The moving party can discharge the burden by showing that "on all the essential elements of its case on which it bears the burden of proof at trial, no reasonable jury could find for the non-moving party." In re Bressman, 327 F.3d 229, 238 (3d Cir. 2003); see also Celotex, 477 U.S. at 325. If the moving party meets this initial burden, the non-moving party "must do more than simply show that there is some metaphysical doubt as to material facts," but must show sufficient evidence to support a jury verdict in its favor. Boyle v. County of Allegheny, 139 F.3d 386, 393 (3d Cir. 1998) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 586 (1986)). However, if the non-moving party "fails to make a showing sufficient to establish the existence of an element essential to [the non-movant's] case, and on which [the non-movant] will bear the burden of proof at trial," Rule 56 mandates the entry of summary judgment because such a failure "necessarily renders all other facts immaterial."Celotex Corp., 477 U.S. at 322-23; Jakimas v. Hoffman La Roche, Inc., 485 F.3d 770, 777 (3d Cir. 2007).

III. MATERIAL FACTS

In its motion, the defendant seeks summary judgment only as to the bad faith claim, Count II. In support of its motion, the defendant has submitted a statement of material facts, with supporting exhibits, and the plaintiff responded to it and submitted exhibits. In large part, plaintiff agrees with the facts stated by the defendant.

On March 8, 2012, plaintiff, while a pedestrian, was involved in a motor vehicle accident in Moosic, Pennsylvania. Specifically, plaintiff was crossing the street in front of the preschool where she worked, when she was struck by a Nissan Infiniti owned and operated by Laurie Kolatis-Mecca. Plaintiff sustained bodily injuries from the accident. At the time of the accident, Kolatis-Mecca was insured under a motor vehicle insurance policy issued by State Farm Insurance Company. The State Farm Policy provided bodily injury liability limits in the amount of $100,000. At the time of the accident, plaintiff was the named insured on an Auto Insurance Policy, Number 018949213C 71025, which was issued by defendant. This policy provided Underinsured Motorists Bodily Injury Coverage with limits of $100,000/$200,000 per person/per accident ("UIM limits").

Following the accident, plaintiff filed a bodily injury claim againstKolatis-Mecca under her State Farm policy. Subsequently, plaintiff filed an action against Kolatis-Mecca in the Lackawanna County Court of Common Pleas, at No. 4871-CIVIL-2013. Eventually, plaintiff settled her bodily injury claim against Kolatis-Mecca for $50,000 of the $100,000 State Farm policy liability limits. She also signed a Release of all claims against Kolatis-Mecca.

On February 11, 2014, plaintiff submitted a claim for UIM benefits under her policy with defendant. Defendant then initiated an investigation and adjustment of plaintiff's claim for UIM benefits. Defendant's claims log as well as the records of communications between defendant and plaintiff's counsel document defendant's handling of plaintiff's UIM claim. (Doc. 12-5, Exs. 4, 5). However, in response plaintiff alleges that:

[Defendant] did not fully investigate nor revise in any way its initial assessment despite Plaintiff submitting treating Doctor's Medical Records, Economic Expert Report and proposed Complaint in January 2017, (Plaintiff's Motion Exhibit "A" attached), but rather continued to send out its routine "30 day" letters, and did not review or revise its initial evaluation as set forth in USAA's letters, and the claim notes/log of January, February, March and April, 2017, (Plaintiff's Motion Exhibit "B" attached). [Defendant] ignored the Plaintiff's expert submissions (Plaintiff's Motion Exhibit C and D attached) and thus requiring a filing of suit on April 20, 2017.

During its investigation, defendant determined that the overall value of plaintiff's liability claim against Kolatis-Mecca did not exceed the $100,000 liability limits in effect under Kolatis-Mecca's State Farm policy. Plaintiff contends that defendant determined the overall claim value before it receivedher treating doctor's report and her economic report. Plaintiff also states that defendant then failed to revise its initial valuation despite her reports.

Unable to resolve their dispute as to the valuation issue, plaintiff filed the instant action against defendant asserting her two claims, contract/UIM claim and statutory insurance bad faith claim. With respect to the second claim, plaintiff essentially alleges that defendant acted outrageously and in bad faith in its handling, investigation, and adjustment of her UIM claim under her policy with defendant.

IV. DISCUSSION

There is no question that plaintiff and defendant dispute the overall value of her underlying liability claim against Kolatis-Mecca because if it did not exceed the $100,000 State Farm policy limit, then plaintiff is not entitled to any money under her UIM coverage with defendant. The question is whether plaintiff has sufficiently demonstrated that defendant acted in bad faith, by clear and convincing evidence, to overcome defendant's motion.

Pennsylvania's insurance bad faith statue provides:

[i]n an action arising under an insurance policy, if the court finds that the insurer has acted in bad faith toward the insured, the court may take all of the following actions: (1) Award interest on the amount of the claim from the date the claim was made by the insured in an amount equal to the prime rate of interest plus 3%; (2) Award punitive damages against the insurer; (3) Assess court costs and attorney fees against the insurer.

42 Pa.C.S.A. §8371.

In order to satisfy the requirements of §8371, the insured must demonstrate by clear and convincing evidence that the insurer (1) "lacked a reasonable basis for denying benefits;" and (2) "knew or recklessly disregarded its lack of reasonable basis." Klinger v. State Farm Mut. Auto. Ins. Co., 115 F.3d 230, 233 (3d Cir. 1997) (citing Terletsky v. Prudential Prop. and Cas. Co., 649 A.2d 680, 688 (Pa.Super.Ct. 1994)). "'[P]roof of an insurance company's motive of self-interest or ill-will is not a prerequisite to prevailing in a bad faith claim[,]' though such evidence is probative of the second prong of the bad faith test." Berg v. Nationwide Mutual Ins. Co., Inc., --- A.3d ---- (Pa. Super. 2018), 2018 WL 1705274 (April 9, 2018) (quoting Rancosky v. Washington Nat'l Ins. Co., — Pa. —, 170 A.3d 364, 365 (2017)). Mere negligence, however, is not sufficient to establish a bad faith claim. See Polselli v. Nationwide Mut. Fire Ins. Co., 23 F.3d 747, 751 (3d Cir. 1994). "Rather, it is the unreasonable and intentional or reckless denial of benefits which is the essence of a bad faith claim." Myers v. State Farm Mut. Auto. Ins. Co., 2017 WL...