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Cynthia Chemij v. Allstate Insurance Company

June 11, 2012

CYNTHIA CHEMIJ, PLAINTIFF,
v.
ALLSTATE INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: Schiller, J.

MEMORANDUM

In December 2005, Plaintiff Cynthia Chemijwas injured when a school bus collided with her car. She sued the school district and eventually settled her claim. She also claimed underinsured motorist ("UIM") benefits from Defendant Allstate Insurance Company ("Allstate"). The parties were unable to reach a settlement, and the claim proceeded to arbitration. The arbitrators awarded Chemij a net sum of $225,000, which Allstate promptly paid. Chemij then sued Allstate for bad faith under Pennsylvania law. Currently before the Court are the parties' cross-motions for summary judgment. For the following reasons, the Court denies Chemij's motion and grants Allstate's motion.

I. BACKGROUND

A. The Accident

On December 13, 2005, a school bus operated by the PennsburySchool District ("Pennsbury") made a wide turn and struck Chemij's car. (Def.'s Statement of Undisputed Facts in Supp. of its Mot. for Summ. J. [Def.'s SOF] ¶ 1.)*fn1 Chemij went to the emergency room the next day for injuries sustained in the accident. (Id. ¶ 2; Def.'s Mot. for Summ. J. Ex. 1 [Resps. to Reqs. for Admis.]¶ 3.) In the years that followed, she was treated for injuries to her neck and arm. (Def.'s SOF ¶ 3.)

Within two weeks of the accident, Chemij returned to her job as an accounting clerk/secretary for Pennsbury. (Id. ¶4; Resps. to Reqs. for Admis. ¶ 7.)In April 2006, she applied for a position in Pennsbury's computer center but was not hired. (Def.'s SOF ¶¶ 5-6.) Chemij continued working as an accounting clerk/secretary until May 22, 2006, when she took a medical leave of absence. (Id. ¶ 6.)In August 2006, she underwent a discectomy and fusion surgery on her neck. (Id. ¶ 7.) Chemij returned to work as an accounting clerk/secretary in January 2007 and worked full-time until August 2008, when she took a second medical leave of absence. (Id. ¶ 8.)She has not worked since, although she attempted to negotiate a return to employment with Pennsbury in a managerial capacity in 2009. (Id. ¶ 11.)

B. Chemij's Claim Against Pennsbury

After the accident, Chemij sought tort compensation from Pennsbury. (Id. ¶ 12.) While Pennsbury's insurance policy limit was $1 million, its potential liability was statutorily capped at $500,000. (Id.) Pennsbury disputed the extent of Chemij's damages, and in September 2007, Chemij sued Pennsbury in the Bucks County Court of Common Pleas. (Id. ¶ 13.) The parties engaged in substantial discovery during the lawsuit, including depositions and expert reports. (Id. ¶¶ 14-16.) The parties' experts disputed the extent of Chemij's injuries and whether she was employable. (Id. ¶¶17, 20.) Several of Chemij's colleagues from Pennsbury testified that Chemij seemed to be exaggerating the extent of her disability. (Id. ¶ 14.) In May 2009, following mediation, Chemij agreed to settle her case against Pennsbury for $375,000. (Id. ¶ 23.) Pennsbury's insurance carrier had previously offered Chemij $150,000 to settle her claim and estimated the maximum value of her claim to be $400,000. (Id. ¶ 24.) At the request of Chemij's lawyer, Michael van der Veen, Allstate waived its right of subrogation and consented to the settlement. (Id. ¶ 25.)

C. Chemij's UIM Claim

On January 12, 2007, before Chemij sued Pennsbury, van der Veen sent a letter notifying Allstate that Chemij intended to make a UIM claim. (Id. ¶ 26.) The letter did not include a demand or any details about the claim; it merely requested that Allstate assign an adjuster to the claim and provide the adjuster's contact information. (Id. ¶ 27.) Allstate assigned Martha Ruggero to handle the claim. (Id. ¶ 28.) Ruggero sent a letter dated January 23, 2007 identifying herself to van der Veen and inquiring about the status of the Pennsbury case, but received no response. (Id. ¶¶ 28-29; Def.'s Mot. for Summ. J. Ex. 22 [1/23/07 Letter].) Instead, van der Veen sent a letter dated November 7, 2007 to Teressa Chrietien, a first-party med pay adjuster in Allstate's Dallas office, requesting a certified copy of Chemij's UIM policy. (Def.'s SOF ¶¶ 30-31; Def.'s Mot. for Summ. J. Ex. 23 [11/7/07 Letter].) On December 4, 2007, Allstate sent van der Veen a copy of the declarations page showing Chemij's UIM limits, but not a copy of the full policy as requested. (Def.'s SOF ¶ 36.) As discussed below, van der Veen did not renew his request for the full policy until February 2011, over three years later. (Id. ¶ 126.)

Also in November 2007, van der Veen appointed Geoffrey Gompers as Chemij's arbitrator. (Id. ¶ 31.) On December 7, 2007, Ruggero spoke to van der Veen by telephone and advised him that she needed information on Pennsbury's coverage limits and Chemij's medical treatments and expenses in order to evaluate the UIM claim. (Id. ¶ 38.) Ruggero offered to review the claim before sending it to counsel, but van der Veen requested that Allstate refer the case to counsel to begin the arbitration process. (Id. ¶¶ 39-40.) Allstate assigned the matter to attorney Thomas Blackburn. (Id. ¶ 43.) By letter dated December 19, 2007, van der Veen sent some of Chemij's medical records to Ruggero and stated, "We are also waiting for additional medical records, reports, and bills. Once received, these documents will be forwarded to you." (Id. ¶¶ 44-45; Def.'s Mot. for Summ. J. Ex. 32 [12/19/07 Letter].)

On January 4, 2008, Blackburn notified van der Veen that he had appointed James Palmer as Allstate's arbitrator and requested that van der Veen contact his paralegal to schedule Chemij's statement under oath. (Def.'s SOF ¶¶ 48-49.) However, van der Veen did not suggest any dates for Chemij's statement under oath until June or July of 2008. (Id. ¶50.) The statement under oath was originally scheduled for September 24, 2008, but van der Veen canceled it. (Id. ¶¶51-52.) Blackburn's paralegal asked van der Veen to provide new dates but got no response. (Id. ¶ 54.) Blackburn wrote to van der Veen directly in February 2009 and reminded him of the need to schedule a statement under oath. (Id. ¶ 55.) Chemij's statement under oath was ultimately taken on July 28, 2009. (Id. ¶ 61.)

D. Evaluation of Claim and Settlement Discussions

At Ruggero's request, van der Veen forwarded the third-party expert reports from the Pennsbury litigation on July 1, 2009. (Id. ¶¶ 66-67.) On July 28, 2009, van der Veen sent Blackburn the records he had promised in his December 2007 letter to Ruggero. (Id. ¶ 62.) Blackburn did not receive the records until after Chemij's statement under oath. (Id. ¶ 63.) Following the statement under oath, Blackburn requested authorizations for the release of additional medical records and received the authorizations on September 30, 2009. (Id. ¶¶ 64-65.) ...


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