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Rossie Davis v. State Farm Insurance

December 13, 2012


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


Before this Court are Defendant's Motion for Summary Judgment (Doc. No. 46), Plaintiff's Cross-Motion and Response to Defendant's Motion (Doc. No. 48), Defendant's Response to Plaintiff's Cross-Motion (Doc. No. 51), and Plaintiff's Reply (Doc. No. 52). For the reasons set forth in this Memorandum, the Court will grant the Defendant's motion in part and deny it in part, and deny the Plaintiff's cross-motion.


This case concerns Defendant State Farm Mutual Automobile Insurance Company's ("Defendant" or "State Farm") denial of a claim made by Plaintiff Rossie Davis ("Plaintiff" or "Davis") for theft coverage under her automobile insurance policy. Davis had an insurance policy with State Farm that covered theft and was in effect in January of 2011. On the morning of January 27, 2011, Davis called State Farm to report the theft of her car, a 2006 Pontiac Grand Prix. Davis reported the theft to the Philadelphia Police Department. When a state farm representative interviewed Davis, Davis recounted that she had last seen her car on January 26, 2011 at 7:49pm when she parked it close to her home and locked the vehicle, retaining both sets of keys. She reported that she discovered the car missing around 9:30am on January 27 th. Davis was current with her payments on the vehicle, and her vehicle had been inspected and serviced within the previous year. On January 31 st, the Special Investigation Unit ("SIU") at State Farm completed its review of the claim, and reported that it had no concerns. A State Farm representative advised Davis that the SIU would not be taking her case and authorized Davis's rental car coverage.

On February 2, 2011, the SIU did accept the case and commenced an investigation. They did so because the police had advised State Farm that they had surveillance footage of the insured vehicle going into a tow yard prior to the date the loss was reported. William Bergstrasser was assigned to investigate the situation for the SIU. The photographs were provided to State Farm by the National Insurance Crime Bureau ("NICB"). Bergstrasser made notes in the claim file over the course of his investigation. On February 10, 2011, he noted: "Vehicle has been recovered and is located at 4298 McAllister St. Phila...Buyer who had vehicle purchased off of Craigs List for 1K, on the Monday prior to the reported theft 1/24. He dealt with a male and saw the vehicle on Sunday..." That same day, Bergstrasser received Davis's credit report, and found that it did not contain significant findings. The next day, February 11 th, Bergstrasser took Davis's recorded statement, and entered what she had told him in the claim file. Bergstrasser then contacted several individuals with connections to Davis. On February 18, 2011, Bergstrasser prepared a reservation of rights advising Davis that State Farm was reserving its rights because it was questionable whether the loss was due to theft and whether material misrepresentations had been made.

Bergstrasser attempted to track down the individual who allegedly bought the car on Craigslist. He contacted Tow Decision, where the car had been taken and the site of the surveillance photos. Another investigator at State Farm, Michael Purdie, spoke with "Mikey" at Tow Decision and Bill Sutch at the NICB. From these conversations, the investigators gleaned that the car had been brought to Tow Decision by a man who worked on cars out of a shop on Tulip Street, later identified as Eric Brian. Brian had received the car from another man who had brought the car into the shop on Tulip Street and asked Brian to fix it, which Brian could not. So the other man sold it to Brian for $1000, and Brian then took off the doors and other parts and took the rest to Tow Decision to make a "junk deal." On February 24 th, Bergstrasser noted that Sutch had obtained photos of the vehicle being brought into Tow Decision on January 25, 2011, and the photos were date and time stamped. *fn1

On February 24 th, Purdie found the garage on Tulip Street, and met with an employee who identified the owner as Eric Brian. The employee recalled the vehicle having been brought to the shop, but did not recall the date and had not seen or spoken to the person who brought the car into the shop. Later that day, Purdie spoke with Brian, who stated that he was contacted about the vehicle by a tow truck driver named "John" who owns "John's Towing." John told Brian that he was acting as a conduit between the shop where the car was and Brian's shop. John told Brian that the car owner had defaulted on repairs and they were selling the car for parts. Brian gave Purdie the phone number for John, which was disconnected. Brian also stated that he was certain that the car was at his garage for at least four days before he towed it over to Tow Decision.

Bergstrasser took a number of actions and spoke to a number of people in an attempt to track down John, John's Towing, and the number that Brian gave to Purdie associated with John's Towing. These efforts were unsuccessful. Finally, on March 3 rd, Bergstrasser requested that the field investigation be discontinued, as it was providing no information on how Brian came into possession of Davis's vehicle. The next day, Bergstrasser spoke with Davis and explained to her that he was going to recommend a denial of her claim as the results of the investigation showed her vehicle arriving at a tow facility two days prior to her saying she last drove it and before that it was at another garage where parts were removed for at least four days. Davis continued to deny the vehicle being in the tow yard on that date. The claim denial memo was prepared on March 8 th, and a letter was sent to Davis on March 14 th, stating that her claim had been denied because: "Our investigation has revealed that this loss was not the result of a theft. As a result, there is no coverage under the Comprehensive coverage," and "Our investigation has revealed that misrepresentations were made during the presentation of this claim, in violation of the Concealment or Fraud condition of this policy. As a result, there is no coverage under this policy for this loss."

The real disputed issue of material fact is whether Davis's car was towed into Tow Decision on January 25 th or on a later date. State Farm maintains that the date stamp on the photographs are correct, and that the car was towed in on January 25 th. Davis maintains that the date stamp on the surveillance camera was incorrect, as sometimes garages or yards dealing with cars alter the dates on the cameras, and the car was towed to Tow Decision on a later date, most likely January 31 st. The Court will not fully go into the parties' arguments and evidence submitted to support each of their positions. *fn2 It will suffice to say that given the evidence presented, a genuine issue of material fact exists as to the date the car was towed into Tow Decision.

The Plaintiff filed her complaint against the Defendant on April 28, 2011 in the Court of Common Pleas for Philadelphia County. The Defendant removed the action to this Court on May 26, 2011 based on diversity jurisdiction. The Plaintiff is a resident of Pennsylvania and the Defendant is a corporation organized under the laws of Illinois and with its principal place of business in Illinois. (Notice of Removal, ¶¶ 1-5, Doc. No. 1). In her Complaint, the Plaintiff asserted the following claims: in Count I, an insurance bad faith claim; in Count II, a claim under Pennsylvania's Unfair Insurance Practices Act; in Count III, a claim for libel; and in Count IV, a claim for breach of contract. State Farm filed an Answer to the Complaint, and the parties conducted discovery. The Defendant filed a Motion for Summary Judgment on all counts of the Complaint on October 5, 2012. The Plaintiff filed a Cross-Motion for Summary Judgment on Counts I, III and IV on October 19, 2012. The Court will address the two motions together, proceeding by each claim made in the Complaint.


Summary judgment is proper "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). An issue is genuine only if there is a sufficient evidentiary basis on which a reasonable jury could find for the non-moving party; a factual dispute is material only if it might affect the outcome of the suit under governing law. Kaucher v. County of Bucks , 455 F.3d 418, 423 (3d Cir. 2006) (citing Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248 (1986)).

The summary judgment standard does not change when parties have filed cross-motions for summary judgment. Applemans v. City of Phila., 826 F.2d 214, 216 (3d Cir. 1987). We "must rule on each party's motion on an individual and separate basis, determining, for each side, whether a judgment may be entered in accordance with the Rule 56 standard." Schlegel v. Life Ins. Co. Of N. Am., 269 F. Supp. 2d 612, 615 n.1 (E.D. Pa. 2003) (quoting 10A Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2720 (1998)). If review of cross-motions reveals no genuine issue of material fact, then judgment may be granted in favor of the party entitled to judgment in view of the law and undisputed facts. Iberia Foods Corp. v. Romeo, 150 F.3d 298, 302 (3d Cir. 1998) (citation omitted).

In conducting our review, we view the record in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. Bowers v. Nat'l Collegiate Athletic Ass'n, 475 F.3d 524, 535 (3d Cir. 2007); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). However, the non-moving party cannot rely on "bare assertions, conclusory allegations or suspicions to show the existence of a genuine issue." Podobnik v. U.S. Postal Serv., 409 F.3d 584, 594 (3d Cir. 2005). When the non-moving party is the plaintiff, she must "make a showing sufficient to establish the ...

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