The opinion of the court was delivered by: Anita B. Brody, District Judge.
The plaintiff, Marybeth McCabe (McCabe), brought an action
against her insurer, defendant State Farm Mutual Automobile
Insurance Company (State Farm), for damages arising out of the
alleged mishandling of an insurance claim. The parties have filed
cross motions, State Farm for summary judgment and McCabe for
partial summary judgment.
On March 22, 1991, McCabe was injured in an automobile accident
when her car was hit from the rear. As a result of the accident,
she claims she suffers serious permanent injuries including a
brachial plexus traction injury which requires ongoing medical
treatment and physical therapy. She incurred medical expenses in
excess of $18,000. As for the brachial plexus injury, McCabe was
advised that she would need surgery which would expose her to
potential paralysis. Besides medical expenses, McCabe claims a
loss of approximately $25,000 from her law practice.
At the time of the accident, McCabe was insured by State Farm.
On December 22, 1992, the tortfeasor offered McCabe $92,755.39 to
settle, which she accepted following State Farm's February 1993
approval of the offer. On December 30, 1992, McCabe's lawyer,
Mona Shuben Picciotto, notified State Farm that McCabe would seek
underinsured motorist benefits (UIM) under the terms of her
insurance policy. In August of 1993, McCabe discharged her
lawyer. On November 8, 1993, McCabe submitted medical
documentation to State Farm regarding treatment for her injuries.
On March 1, 1994, McCabe wrote to State Farm demanding the
$100,000 policy limits pursuant to the UIM claim. In response to
a request by State Farm, McCabe submitted additional medical
records on July 20, 1994.
On September 28, 1994, State Farm offered McCabe $3,000 to
settle her claim. The following day, McCabe rejected the offer
and demanded arbitration pursuant to the terms of the insurance
policy. Following this demand, State Farm retained John F. Lewis
as counsel to handle the arbitration and Mr. Lewis appointed
William H. Pugh, V, Esq. as State Farm's arbitrator. On October
25, 1994, McCabe requested an extension of time to retain new
counsel and to appoint an arbitrator. McCabe chose Joseph M.
Adams as her attorney, who in turn appointed Carol A. Shelly,
Esq. as McCabe's arbitrator. On June 14, 1995, both arbitrators
agreed on the choice of Rae Boylan Thomas, Esq. as the neutral
Following McCabe's demand for arbitration, State Farm requested
additional medical authorizations from McCabe, a statement under
oath (SUO), and an independent medical examination (IME). In
February 1995, McCabe forwarded the medical authorizations to Mr.
Lewis, followed by the SUO in August 1995. Dr. Lawrence Kerson
was chosen by Mr. Lewis to conduct the IME. The examination took
place on September 8, 1995. On September 18, 1995, McCabe was
examined by Dr. Robert Schwartzman, who indicated the potential
for surgery to treat her injuries. In April 1996, both Dr. Kerson
and Dr. Schwartzman submitted additional reports. Dr. Schwartzman
continued to recommend surgery and Dr. Kerson advised against it.
On April 10, 1996, Dr. Schwartzman was deposed. On May 17,
1996, State Farm made a second offer to McCabe in the sum of
$25,000. On May 20, 1996, McCabe refused the offer, reiterating
her demand for the policy limits. Dr. Kerson was deposed on May
23, 1996. Following his deposition, State Farm increased its
offer to $30,000. The next day, McCabe refused this offer and
again demanded the $100,000 policy limits.
The arbitration hearing was held on May 30, 1996. On June 6,
1996, the arbitrators unanimously agreed to an award of
$52,744.11. On July 1, 1996, State Farm paid this amount to
Rule 56(c) of the Federal Rules of Civil Procedure provides
that 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 a judgment as a matter of law." Fed.R.Civ.P.
56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23,
106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
The party moving for summary judgment "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, 477 U.S. at 323, 106 S.Ct. 2548. When the moving party
does not bear the burden of persuasion at trial, as here, its
burden "may be discharged 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, 106 S.Ct.
Once the moving party has filed a properly supported motion,
the burden shifts to the nonmoving party to "set forth specific
facts showing that there is a genuine issue for trial."
Fed.R.Civ.P. 56(e). The nonmoving party "may not rest upon the
mere allegations or denials of the [nonmoving] party's pleading,"
id., but must support its response with affidavits,
depositions, answers to interrogatories, or admissions on file.
See Celotex, 477 U.S. at 324, 106 S.Ct. 2548; Schoch v. First
Fidelity Bancorporation, 912 F.2d 654, 657 (3d Cir. 1990).
To determine whether summary judgment is appropriate, I must
determine whether any genuine issue of material fact exists. An
issue is "material" only if the dispute "might affect the outcome
of the suit under the governing law." See Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202
(1986). An issue is "genuine" only "if the evidence is such that
a reasonable jury could return a verdict for the nonmoving
party." Id. Of course, "[c]redibility determinations, the
weighing of the evidence, and the drawing of legitimate
inferences from the facts are jury functions, not those of a
judge." Anderson, 477 U.S. at 255, 106 S.Ct. 2505; see also
Big Apple BMW, Inc. v. BMW of N. Am., Inc., 974 F.2d 1358, 1363
(3d Cir. 1992). Moreover, the "evidence of the non-movant is to
be believed, and all justifiable inferences are to be drawn in
his favor." Anderson, 477 U.S. at 255, 106 S.Ct. 2505; see
also Big Apple BMW, 974 F.2d at 1363. Thus, my inquiry at the
summary judgment stage is only the "threshold inquiry of
determining whether there is the need for a trial," that is,
"whether the evidence presents a sufficient disagreement to
require submission to a jury or whether it is so one-sided that
one party must prevail as a matter
of law." Anderson, 477 U.S. at 250-52, 106 S.Ct. 2505.
McCabe brings her bad faith claim under 42 Pa.C.S.A. § ...