The opinion of the court was delivered by: Schiller, J.
Plaintiff Cecilia M. Spinelli originally filed this action in the Montgomery County Court of Common Pleas , alleging claims for breach of contract and for bad faith, pursuant to 42 PA. CONS.
STAT. § 8371. Plaintiff's bad faith claim is premised on Defendant's alleged unjustified delay of the parties' arbitration and lack of reasonable basis for denying Plaintiff's claim. Defendant State Farm Mutual Automobile Insurance Company ("State Farm") removed the case to this Court on March 27, 2008. Currently before the Court is Defendant's Motion for Summary Judgment. For the reasons discussed below, Defendant's motion is granted.
On October 19, 1994, Spinelli was involved in a motor vehicle accident with Henry B. Brown, Jr. (Compl. ¶ 9, Def.'s Statement of Facts ¶ 8). On September 11, 1998, Spinelli's attorney Leonard Konesky, who is also her counsel in this case, notified State Farm, her automobile insurance carrier, of her demand for arbitration pursuant to her policy's underinsured motorist bodily injury coverage provision. (Compl. Ex. C [Sept. 11, 1998 letter to State Farm].) State Farm responded on October 5, 1998, explaining that it had assigned the claim to outside counsel Fred Smith and requesting proof of Brown's policy limits, any information regarding a settlement offer, and medical documentation of Spinelli's injuries. (Def.'s Mot. for Summ. J. [hereinafter "Def.'s Mot."] Ex. 4 [Oct. 5, 1998 letter from State Farm to Konefsky].) Smith then wrote to Spinelli's attorney to confirm his representation of State Farm and identify his appointed arbitrator. (Def.'s Mot. Ex. 5 [Oct. 22, 1998 letter from Smith to Konefsky].) Over the next few months, as Smith received the medical records, State Farm claim representative Rob Petro began evaluating the claim. (Def.'s Mot. Ex. 6 [Feb. 4, 1999 Claim Evaluation].)*fn1 Although Spinelli's sworn statement was originally scheduled for August 4, 1999, and subsequently rescheduled on multiple occasions, it did not occur until October 23, 2000. (Def.'s Mot. Ex. 7 [Multiple letters from Smith to Konesky]; Def.'s Mot. Ex. 10 [Oct. 30, 2000 letter from Smith to Petro summarizing Spinelli's statement under oath].)
In September 2000, Konefsky wrote to Petro and requested consent to settle the underlying claim against Brown. (Def.'s Mot. Ex. 8 [Sept. 9, 2000 letter from Konefsky to Petro].) State Farm granted consent to accept an offer of $180,000 of the $192,696.34 coverage limit and Plaintiff settled with Brown. (Def.'s Mot. Ex. 9 [Sept. 26, 2000 letter from Petro to Konefsky].) On February 12, 2001, Smith wrote to Konefsky, requesting additional information and medical records and suggesting "that we may want to begin moving forward toward arbitration." (Def.'s Mot. Ex. 11 [Feb. 12, 2001 letter from Smith to Konefsky].) Konefsky sent a fax on February 13, 2001, prior to receiving State Farm's letter of February 12, 2001, in which he asserted that all requested "medical and hospital record and reports" had already been delivered to State Farm. He alleged that "State Farm has knowingly and willfully engaged in dereliction and bad faith misconduct for the purpose of prejudicing the rights of its totally and permanently disabled and crippled insured." (Def.'s Mot. Ex. 12 [Feb. 13, 2001 fax from Konefsky to Smith] at 2.) After receiving Smith's letter, Konefsky sent a second letter, which questioned why a prior Authorization executed by Spinelli was insufficient to obtain the requested information and contended that State Farm had already acknowledged receipt of the records in question. (Def.'s Mot. Ex. 13 [Feb. 16, 2001 fax from Konefsky to Smith].) Konefsky concluded by asserting:
Your present insistence upon a newly executed Authorization and my resending of the comprehensive and copious information which you have already acknowledged as having received several months ago are clearly a continuation of the systematic course of gross dereliction and bad faith misconduct engaged in by State Farm in this matter. (Id.) In response to these letters, Smith asserted that he had never received a prior signed Authorization, nor confirmed receipt of such Authorization. (Def.'s Mot. Ex. 14 [Letter of Feb. 21, 2001 from Smith to Konefsky].) He reminded Plaintiff that the policy entitled the carrier to an independent medical examination ("IME") of Plaintiff and complete medical records. (Id.) He noted that, if complete records had already been sent, Konefsky could simply send a letter confirming that. (Id.)
On May 3, 2001, Dr. Leonard Brody, an orthopedic surgeon, performed an independent medical examination of Spinelli. (Def.'s Mot. Ex. 15 [May 3, 2001 IME Report].) His report recounted that Spinelli complained of "virtual 'total body pain'" due to the 1994 accident. (Id. at 7.) His review of prior medical records noted that "[a]ccording to Dr. Hirshberg [Spinelli's primary physician], the patient did not have any complaints of chest pain, neck pain, or cervical radiculopathy prior to the 10/19/94 motor vehicle accident." (Id. at 5.) Brody stated that the patient complained of pain even when subjected to "minimal palpatory pressure," rendering an examination "close to impossible." (Id.) He also noted that "the patient's complaints of pain with minimal palpatory pressure and her complaints of decreased sensation in a stocking/glove distribution in the entire lower left extremity are inconsistent and have no coherent medical basis." (Id. at 7.) His report concluded by stating:
In summary, it is my opinion that the patient may have suffered a short-term exacerbation of her pre-existent fibromyositis and rheumatoid arthritis after the 10/19/94 incident in question, but I simply cannot relate her current complaints of 'total body pain' to any soft tissue injuries that she may have suffered at the time of the 10/19/94 incident in question. (Id.) In a May 14, 2001 supplement to this report, Dr. Brody reaffirmed this conclusion and stated that "the patient has fully recovered from this short-term exacerbation and has no residuals from it." (Def.'s Mot. Ex. 16 [May 14, 2001 IME Supplemental Report].)
Following a meeting of State Farm representatives, Smith informed Konefsky that State Farm had determined that the full value of Spinelli's claim was less than what she had already received from Brown's insurance carrier and that therefore State Farm "respectfully declines to make any offer on the underinsured motorist claim." (Def.'s Mot. Ex. 20 [July 9, 2001 letter from Smith to Konefsky].)
The parties then began to seek a neutral arbitrator and ultimately agreed upon Attorney Nathaniel P. D'Amico. (Konefsky Dep. at 38; Def.'s Mot. Ex. 22 [Nov. 6, 2001 letter from Smith to D'Amico].)D'Amico subsequently sent a letter setting the arbitration hearing for March 5, 2002.
(Def.'s Mot. Ex. 25 [Jan. 10, 2002 letter from D'Amico].) In his Pre-Arbitration Report, Smith stated that he and State Farm had determined, based in part on the IME, that the full value of the case was less than the amount already credited, and so no recovery was expected. (Def.'s Mot. Ex. 26 [Feb. 14, 2002 letter from Smith to Petro].)
The day prior to the scheduled arbitration hearing, D'Amico cancelled it so that he could attend a law school classmate's funeral. (Def. Mot. Ex. 23 [D'Amico Dep.] at 33-34.) D'Amico initially attempted to reschedule the 9:00 a.m. arbitration for the afternoon of the same day, but Smith was not available. (Id.) On March 8, 2002, Konefsky faxed to D'Amico a request that he recuse himself and, should he fail to do so, threatened to file a petition to have him removed for cause. (Def.'s Mot. Ex. 26 [Mar. 8, 2002 fax from Konefsky to D'Amico].) D'Amico responded by handwritten fax that same day, asking why Konefsky would request his recusal and offering eight possible dates for rescheduling. (Def.'s Mot. Ex. 27 [Mar. 8, 2002 fax from D'Amico to Konefsky].) Konefsky responded by fax on March 11, 2002:
The reason for my proceeding in this regard is the gross misconduct, falsity and irresponsibility in which you engaged in the cancellation of Mrs. Spinelli's March 5th hearing which had been scheduled five (5) months earlier, and the false and frivolous reason you have therefore. Your actions in this regard are not befitting a judicial officer and there is no question that you are not competent to conduct a fair, impartial or otherwise proper arbitration hearing in this matter. (Def.'s Mot. Ex. 26 [Mar. 11, 2002 fax from Konefsky to D'Amico].) In subsequent exchanges D'Amico defended his decision to attend his law school classmate's funeral and Konefsky questioned how close he was to the decedent, restating his accusation that D'Amico had cancelled "for literally no legitimate or acceptable reason." (Def.'s Mot. Ex. 26 [Mar. 12, 2002 fax from Konefsky to D'Amico].) D'Amico never received any criticism from Alsberg, the Plaintiff's chosen ...