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Brown v. Great Northern Insurance Co.

February 23, 2009


The opinion of the court was delivered by: Judge Caputo


Presently before the Court is Defendant Great Northern Insurance Company's Motion for Summary Judgment. (Doc. 31.) Defendant moves for summary judgment on Plaintiff James L. Brown's claim for bad faith pursuant to 42 Pa. Cons. Stat. § 8371. Because there is no clear and convincing evidence by which a reasonable jury could find bad faith, the motion will be granted. This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332 based on diversity of citizenship.


This action arises from a claim for underinsured motorist ("UIM") benefits under Plaintiff James L. Brown's automobile insurance policy. The undisputed facts are as follows. Plaintiff was involved in an automobile accident on February 7, 2001 from which he sustained injuries. (Def.'s Statement of Material Facts ¶ 2, Doc. 32.) At the time, he and his wife were named as the insured under a policy with Defendant which provided uninsured and underinsured motorist benefits in a total coverage amount of one million, six-hundred thousand dollars ($1,600,000). (Id. ¶ 1.)

On March 25, 2003, Plaintiff provided oral notice to Defendant that he intended to file a claim for UIM benefits under his policy. (Id. ¶ 3.) He followed this up with written notice in a letter dated March 28, 2003 which also requested Defendant's consent to his settlement with the tortfeasor's insurance company for its policy limits. (Id. ¶ 5.) Defendant consented to the settlement and requested a settlement demand for his UIM claim as well as copies of his complete medical file. (Id. ¶ 6.) Receiving no response, Defendant, through its claims examiners, made a number of renewed requests for information from Plaintiff over a period of nearly two (2) years. (Id. ¶¶ 7-9, 12, 14, 17-20.) Having received no communication from Plaintiff since March 2003, Defendant sent a letter to him on January 24, 2005 advising that if he did not respond within sixty (60) days, Defendant would assume he did not wish to pursue the UIM claim. (Id. ¶ 23.) Plaintiff responded to this letter through his counsel*fn1 on February 14, 2005. (Id. ¶ 24.) This letter described Plaintiff's alleged injuries, described his course of treatment as well as his ongoing pain, and notified Defendant of a wage loss component of the claim asserting Plaintiff would experience over three million dollars ($3,000,000) in future lost earning capacity. (Doc. 32, Ex. L.) He presented a demand for the full policy coverage amount of one million, six hundred thousand dollars ($1,600,000). (Id.) He also enclosed a number of medical records from his treating doctors as well as other records such as x-rays, MRIs, and records of prescriptions. (Id.) He later supplemented these with additional records and medical bills sent to Defendant's counsel in July 2005. (Doc. 37, Ex. 3.)

Between receipt of Plaintiff's demand in February, 2005, and November 22, 2006, when the claim ultimately went to arbitration, Defendant made requests for several different kinds of information and documentation from Plaintiff in support of his UIM claim. First, Defendant's counsel sent Plaintiff numerous authorizations throughout the time period for the release of medical records from his treating doctors, labs, and other medical record-holders. (Doc. 32, Exs. O, Q, R, S, CC, GG, HH, II.) Plaintiff generally responded by signing and returning them, although his turnaround time appears to have varied significantly, with some delays spanning several months. (Compare Doc. 32, Ex. N; Doc. 37, Exs. 1, 2, with Doc. 32, Ex. U; Doc. 37, Ex. 7.)

Second, by letter dated April 5, 2005, Defendant's counsel requested information regarding a pre-existing condition for which Plaintiff was treated in 1991. (Doc. 32, Ex. N.) The information was requested because Plaintiff alleged post-2001 injury to his cervical area and Defendant's records revealed that he underwent a cervical fusion in 1991. (Doc. 32, Ex. R.) Defendant's counsel believed the pre-existing injury could be relevant to the injuries claimed from the accident and consequently wanted the physician conducting an independent medical examination to review pre-2001 records before evaluating Plaintiff. (Id.) Receiving no response, Defendant's counsel made several repeated requests for the information. (Doc. 32, Exs. N, O, P, Q.) Plaintiff stated in his deposition testimony that Defendant's request was reasonable. (Brown Dep. 66:16-67:5, Oct. 3, 2008.) However, Plaintiff's counsel ultimately responded by letter dated August 4, 2005, refusing to provide any information regarding the pre-accident injury. (Doc. 37, Ex. 5.)

Third, by letter dated September 21, 2005, Defendant's counsel began requesting written permission to access Plaintiff's file relating to the first party benefits*fn2 he received from Defendant as a result of the same 2001 automobile accident. (Doc. 32, Ex. T.) The first party file contained information regarding his medical treatment. (Def.'s Statement of Material Facts ¶ 11.) Though first party and UIM benefits were claimed from the same company, Plaintiff's permission was necessary for the UIM claim examiners to view the first party file. (Id.) After Defendant's counsel renewed the request numerous times, (Doc. 32, Exs. U-AA, CC, DD), Plaintiff ultimately provided authorization to view the file on April 11, 2006 (Doc. 32, Ex. EE). In his deposition testimony, Plaintiff stated that Defendant's request to view his first party benefits file is "a request that is made by all carriers in situations like this." (Brown Dep. 69:10-69:12.) However, he testified that one of the reasons he initially failed to give permission to view the file was because he felt it contained erroneous, adverse medical reviews and that the UIM evaluators would "jump all over that." (Id. 69:22-70:19.)

Finally, after receiving notice of Plaintiff's wage loss claim through his counsel's letter of February 14, 2005, Defendant's counsel made several requests for documentation supporting the claim. (Doc. 32, Exs.N, Q, GG, JJ, KK, MM.) Plaintiff provided no documentary support for this claim until November 20, 2006, two days preceding the parties' arbitration hearing, at which point he provided a the report of a vocational expert. (Def.'s Statement of Material Facts ¶ 49.)

The afternoon prior to arbitration, one day after receiving documentation supporting the wage loss claim, Defendant offered to settle Plaintiff's UIM claim together with his related first party benefits claim for a total of seven hundred seventy-five thousand dollars ($775,000), six hundred fifty thousand dollars ($650,000) of which was for the UIM claim. (Id. ¶ 50.) Plaintiff rejected this offer. (Id. ¶ 51.) The matter went to arbitration on November 22, 2006, and the panel awarded Plaintiff and his wife nine hundred sixty thousand dollars ($960,000). (Id. ¶ 48, 52.)

On January 19, 2007, Plaintiff and his wife filed the present action in the Court of Common Pleas of Luzerne County, Pennsylvania. (Doc. 1.) Plaintiff brought a claim against Defendant for bad faith in its handling of his UIM claim, pursuant to 42 Pa. Cons. Stat. § 8371. Plaintiff's wife brought a claim against Defendant for bad faith in its handling of her related loss of consortium claim.*fn3 Defendant removed the action to this Court on February 20, 2007. (Id.) It then submitted its Answer with affirmative defenses on February 26, 2007. (Doc. 3.) Defendant filed the present motion on November 14, 2008, moving for summary judgment on Plaintiff's bad faith claim based on the handling of his UIM claim. (Doc. 31.) This motion has been fully briefed and is ripe for disposition.


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). A fact is material if proof of its existence ...

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