The opinion of the court was delivered by: (Chief Judge Kane)
Plaintiff Janice Bariski brings this suit on behalf of herself and as the executrix of her husband's estate. She raises claims of breach of contract, bad faith, and violations of the Pennsylvania Consumer Protection Law arising from Defendant Reassure America Life Insurance Company's termination of a life insurance policy held by Plaintiff's husband, James Bariski. Defendant moves for summary judgment on Plaintiff's bad faith claim brought pursuant to 42 Pa. Conn. Stat. § 8371. Defendant's motion for partial summary judgment has been fully briefed and the Court held oral argument on the motion on June 28, 2011. For the reasons stated more fully herein, the Court will grant Defendant's motion for summary judgment on the bad faith claim.
Defendant issued life insurance policy number 3166593 to Mr. Bariski on June 8, 1990. (Doc. No. 32-2 ¶ 4.) Mr. Bariski elected to pay monthly premiums. (Id. ¶¶ 15-16.) The terms of the policy provide for a thirty-one day grace period for late payment of each premium. (Id. ¶ 7.) The policy remains in force during the pendency of the grace period. (Id. ¶ 7.) If payment is not made within the grace period, Defendant issues a "notice of policy lapse." (Id. ¶ 23.) The notice of policy lapse provides for an extra-contractual grace period of thirty days, during which time the policy lapses but Defendant will reinstate the policy without requiring the policy holder to provide evidence of insurability, subject to certain limitations including that the policy holder makes all past due premium payments. (Id.; Doc. No. 36 ¶ 23.)
A $364.05 premium payment was due on Mr. Bariski's policy on November 8, 2005.*fn1
(Doc. No. 32-2 ¶ 26; Doc. No. 36 ¶ 25.) Defendant issued Mr. Bariski a lapse notice dated December 9, 2005, indicating that the policy's grace period had run and that the policy lapsed. (Doc. No. 32-2 ¶ 32.) The lapse notice also advised Mr. Bariski to "DISREGARD THIS NOTICE IF PREMIUMS WERE PAID WITHIN THE POLICY'S GRACE PERIOD." (Doc. No. 36 ¶ 32 (emphasis in original).) The letter further advised Mr. Bariski of the lapse notice's thirty day grace period. (Doc. No. 32-2 ¶ 34.) Taking into account the thirty-one day grace period under the policy and the thirty day grace period provided in the notice of policy lapse, Mr. Bariski's November 8, 2005 payment was due on January 9, 2006. Defendant issued Mr. Bariski a notice of policy termination dated January 9, 2006, informing Mr. Bariski that the policy was terminated due to non-payment of the November 8, 2005 premium. (Id. ¶ 43.)
On January 13, 2006, after receipt of the termination notice, Mr. Bariski called Defendant several times regarding the termination of his policy. (Id. ¶45.) Defendant wrote a letter to Mr. Bariski dated January 16, 2006, representing that Defendant received Mr. Bariski's November 8, 2005 premium payment on January 10, 2006, but informing Mr. Bariski that he would need to file a reinstatement application because the policy lapsed on January 9, 2006. (Id. ¶ 46.) The letter further informed Mr. Bariski that Defendant had cashed the check and was holding the funds pending the approval of his reinstatement application and indicating that the funds would be refunded if Defendant did not receive the application by February 6, 2006. (Doc. No. 32-5 Ex. O.) Mr. Bariski sent Defendant a letter dated January 17, 2006, in which he wrote "to plead [his] case for immediate reinstatement of [his] insurance policy. (Doc. No. 32-5 Ex. N.) The letter states that Mr. Bariski was informed by Defendant that the policy was cancelled because Defendant claimed to have not received the check until after the grace period ended on January 9, 2006. (Id.) However, in the letter Mr. Bariski claimed that he wrote the November 8, 2005 premium check on November 14, 2005, and that the check was postmarked before January 8, 2006. (Id.) Mr. Bariski copied a "John Fenstermacher, Esq." on his letter. (Id.) The request for reinstatement without evidence of insurability was declined by letter dated February 21, 2006. (32-2 ¶ 51.) Mr. Bariski told Plaintiff during the Spring of 2006 that Defendant had taken the position that the policy was terminated. (Id. ¶ 53.) Mr. Bariski died on December 20, 2007.*fn2
Rule 56(a) of the Federal Rules of Civil Procedure provides that
summary judgment is warranted "if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law." Fed. R. Civ. P. 56(a).*fn3
A factual dispute is
material if it might affect the outcome of the suit under the
applicable law, and it is genuine only if there is a sufficient
evidentiary basis that would allow a reasonable fact finder to return
a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248-49 (1986). At summary judgment, the inquiry is
whether the evidence presents a sufficient disagreement to require
submission to the jury or whether it is so one-sided that one party
must prevail as a matter of law. Id. at 251-52. In making this
determination, the Court must "consider all evidence in the light most
favorable to the party opposing the motion." A.W. v. Jersey City Pub.
Schs., 486 F.3d 791, 794 (3d Cir. 2007).
The moving party has the initial burden of identifying evidence that it believes shows an absence of a genuine issue of material fact. Conoshenti v. Pub. Serv. Elec. & Gas Co., 364 F.3d 135, 145-46 (3d Cir. 2004). Once the moving party has shown that there is an absence of evidence to support the non-moving party's claims, "the non-moving party must rebut the motion with facts in the record and cannot rest solely on assertions made in the pleadings, legal memoranda, or oral argument." Berckeley Inv. Grp.. Ltd. v. Colkitt, 455 F.3d 195, 201 (3d Cir. 2006); accord Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). If the non-moving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden at trial," summary judgment is warranted. Celotex, 477 U.S. at 322. With respect to the sufficiency of the evidence that the non-moving party must provide, a court should grant summary judgment where the non-movant's evidence is merely colorable, conclusory, or speculative. Anderson, 477 U.S. at 249-50. There must be more than a scintilla of evidence supporting the non-moving party and more than some metaphysical doubt as to the material facts. Id. at 252; see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Further, a party may not defeat a motion for summary judgment with evidence that would not be admissible at trial. Pamintuan v. Nanticoke Mem'l Hosp., 192 F.3d 378, 387 (3d Cir. 1999).
Defendant moves for summary judgment on Plaintiff's bad faith claim brought pursuant to 24 Pa. Cons. Stat. § 8371. Defendant asserts two independent grounds justifying summary judgment on these claims. First, Defendant asserts that the two year statute of limitations has run on the claim. In the alternative, Defendant asserts that the good faith claim does not apply where the alleged bad faith arises in the context of a policy being terminated rather than in the context of an insurer denying payment of the policy proceeds. Because Defendant prevails on the statute of limitations defense, the Court will not address the applicability of the good faith statute.
A statute of limitations question is a question of law that is properly decided at summary judgment. Adamski v. Allstate Ins. Co., 738 A.2d 1033, 1036 (Pa. Super. Ct. 1999). A cause of action alleging bad faith under 24 Pa. Cons. Stat. § 8371 is subject to a two year statute of limitations. Ash v. Cont'l Ins. Co., 932 A.2d 877, 885 (Pa. 2007). In a survival action, the statute of limitations for an estate begins to run on the date the right to institute a cause of action arose for the decedent. Pocono Int'l Raceway, Inc. v. Pocono Produce, Inc., 468 A.2d 468, 471 (Pa. 1983); see also Holt v. Lenko, 791 A.2d 1212, 1215 (Pa. Super. Ct. 2002). A cause of action generally arises on the date the injury is sustained. Wilson v. El-Daief, 964 A.2d 354, 361 (Pa. 2009). A named beneficiary,*fn4 however, does not have a standing to sue to challenge the termination of a life insurance contract ...