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HASELRIG v. LIBERTY MUT. INS. CO.

September 1, 1998

BURRELL L. HASELRIG, Plaintiff,
v.
LIBERTY MUTUAL INSURANCE COMPANY and JASON GILBERT, Defendants.



The opinion of the court was delivered by: KATZ

MEMORANDUM AND ORDER

 Katz, J.

 September 1, 1998

 On December 22, 1993, an insured of Liberty Mutual rear-ended Mr. Haselrig's vehicle in Pennsylvania. On September 14, 1995, plaintiff's lawyer, Brian Dillard, *fn1" submitted a settlement demand to Liberty Mutual, dealing with claims adjuster Jason Gilbert over the next few months. No settlement was reached. On November 28, 1995, Mr. Dillard sent a letter to Mr. Gilbert stating that if the matter were not resolved within twenty days, he would file suit. There was no contact between the parties in the subsequent twenty days, and Mr. Dillard did not file suit. Mr. Dillard drafted a complaint in December, 1995 but did not file it. On December 22, 1995, Pennsylvania's two-year statute of limitations expired. On January 31, 1996, Mr. Gilbert advised Mr. Dillard that the statute of limitations had run and Liberty Mutual was closing its file on Mr. Haselrig's claim.

 In December, 1996, plaintiff filed the instant complaint, alleging that Liberty Mutual and Mr. Gilbert engaged in fraud by making repeated assurances that the company would pay Mr. Haselrig's claim without litigation and thus lulling plaintiff into not filing suit within the limitations period, and further alleging that Liberty Mutual and Mr. Gilbert breached an oral contract to settle the claims. Before the court is defendants' motion for summary judgment. For the following reasons, the court agrees that the defendants are entitled to summary judgment, and the motion will be granted. *fn2"

 Breach of Contract

 Plaintiff claims that his lawyer Mr. Dillard and Mr. Gilbert had formed an oral agreement that Liberty Mutual would pay the claim without litigation, and Mr. Haselrig would thus refrain from filing suit on the claim. Plaintiff contends that a contract was formed when Liberty Mutual accepted plaintiff's offer of settlement in the form of his $ 80,000 settlement demand. The consideration involved was the offer to pay on Liberty Mutual's part, and the refraining from suit on Mr. Haselrig's part. The alleged breach is Mr. Gilbert's January, 1996 closing of the file without paying the claim.

 Quite simply, the defendants could not have breached a contract because the evidence shows that no contract was formed. To form a contract under Pennsylvania law, of course there must be:

 
(1) an offer by one party that expresses a willingness to enter a contract; (2) an acceptance by which the second party agrees to be bounds by the terms of the offer; and (3) a bargained-for exchange of consideration, i.e., a specific, definite promise by each party to perform some act.

 Tuman v. Genesis Assoc., 935 F. Supp. 1375, 1389 (E.D. Pa. 1996). In this case, even assuming the settlement demand constituted an offer, there was no acceptance nor consideration.

 Upon receiving the settlement demand, Liberty Mutual did not accept it. Mr. Gilbert asked for more information, specifically medical records from Mr. Haselrig's treating physician. See Ex. F at 27-28; Ex. D (Nov. 28 letter from Brian Dillard to Jason Gilbert referencing the request for an authorization to obtain medical records). Further, Mr. Dillard in his deposition admitted that the amount of settlement was never discussed. See Ex. F at 32. Also never discussed was the statute of limitations issue and plaintiff's refraining from suit. See Ex. F at 49 (the only discussion of the statute of limitations was in the final telephone call of January 31, 1996). Certainly a topic never discussed could not be the basis of plaintiff's bargained-for consideration required to form a contract. Because there was no contract to breach, defendants are entitled to summary judgment on this count.

 Fraud

 Plaintiff claims that Mr. Gilbert made repeated assurances that Liberty Mutual would pay Mr. Haselrig's claim without Mr. Haselrig instituting suit on it, and that those assurances amount to fraud. Plaintiff has not specified exactly what those assurances were, but Mr. Dillard testified at his deposition that "settlement had been [discussed], and promised." Ex. F at 32.

 The elements of a cause of action for fraud are (1) a misrepresentation; (2) a fraudulent utterance thereof; (3) an intention by the maker that the recipient will thereby be induced to act; (4) justifiable reliance by the recipient on the misrepresentation; and (5) damage to the recipient as the proximate result. See Greenberg v. Tomlin, 816 F. Supp. 1039, 1054 (E.D. Pa. 1993). As for what type of statement can constitute an actionable misrepresentation, "a promise to do something in the future and the failure to keep that promise, is not fraud. Rather, a cause of action for fraud requires that a misrepresentation of a past or present material fact be pleaded and proved." Id.; see also Bash v. Bell Tel. Co., 411 Pa. Super. 347, 601 A.2d 825, 832 (1992) ("The breach of a promise to do something in the future is not fraud. . ...


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