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Nicholas Schifino v. Geico General Insurance Company

December 14, 2012

NICHOLAS SCHIFINO, PLAINTIFF,
v.
GEICO GENERAL INSURANCE COMPANY, A CORPORATION; ALLIED INSURANCE COMPANY, AND ELECTRIC INSURANCE COMPANY, DEFENDANTS.



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

MEMORANDUM OPINION AND ORDER OF COURT

Presently before the Court for disposition is the MOTION FOR SUMMARY JUDGMENT, with brief in support, filed by Geico General Insurance Company ("GEICO") (Document Nos. 32 and 33), the BRIEF IN OPPOSITION filed by Plaintiff Nicholas Schifino (Document No. 37), the REPLY BRIEF filed by GEICO (Document No. 41), and the SUR- REPLY BRIEF filed by Plaintiff (Document No. 44). The parties have fully stated their respective positions regarding the Concise Statement of Material Facts and have submitted numerous exhibits (Document Nos. 34 and 39). On December 7, 2012, the Court heard oral argument from counsel. The motion is ripe for disposition.

PROCEDURAL BACKGROUND

Plaintiff, Nicholas Schifino, initiated this case by the filing of a four-count complaint against Defendants GEICO, Allied Insurance Company ("Allied"), and Electric Insurance Company ("Electric") in the Court of Common Pleas of Allegheny County, Pennsylvania. Plaintiff seeks underinsured motorist ("UIM") benefits under automobile insurance policies issued by each of the three Defendants. Plaintiff alleges that each of the Defendants has breached its contractual duties (Counts I, III, and IV) and also alleges that GEICO has engaged in bad faith in violation of 42 Pa. C.S.A. § 8371 (Count II). Defendant GEICO removed the action to this Court on the basis of diversity of citizenship jurisdiction and now moves for summary judgment on Plaintiff's claim for bad faith.

Facts*fn1

On October 26, 2009, Plaintiff was a passenger in a motor vehicle being operated by Jeffrey Derubeis who was insured by GEICO. Mr. Derubeis was in the process of making a left turn, when he brought the vehicle to a stop in order to let a marked police car with its emergency lights and siren activated to pass by safely. At that time, the Derubeis vehicle was rear-ended by a vehicle being driven by Andrew Hurayt.

Plaintiff claims that as a result of the accident he sustained very serious injuries to his neck and back, which required one (1) surgical cervical procedure and two (2) surgical lumbar procedures. It is not disputed that prior to the accident Plaintiff had a long complicated medical history and had a number of surgical procedures including two (2) surgical cervical procedures and one (1) lumbar surgical procedure.

Plaintiff collected the liability limits of Andrew Hurayt's automobile insurance policy from Erie Insurance Co. of $50,000. As a result of exhausting third-party benefits of the tortfeasor's insurance company, Plaintiff asserted a claim to recover the policy limits pursuant to the UIM coverage that was in effect under the automobile insurance contract between Jeffrey Derubeis and defendant GEICO.

On November 5, 2010, Plaintiff, through counsel, made a demand upon GEICO for the limits of the UIM coverage under the policy, specifically $300,000 to settle his UIM claim and forwarded copies of Plaintiff's medical records to assist in the evaluation of his claim. On February 18, 2011, GEICO responded with an offer of $10,000, followed by a second offer of $13,000 on March 3, 2011. Thereafter, Plaintiff brought this lawsuit in which he contends that GEICO breached its contract for failing to comply with the valid demand for the policy limits under the UIM coverage and for bad faith, asserting that the manner in which GEICO handled Plaintiff's claim constituted bad faith under 42 Pa. C.S.A. § 8371.

GEICO contends that the Court should grant summary judgment in favor of GEICO as to Plaintiff's claim for bad faith because Plaintiff has failed to adduce any evidence that GEICO acted in bad faith in the handling of his claim for UIM benefits. Obviously, Plaintiff disagrees and contends that summary judgment is not appropriate because genuine issues of material fact exist as to whether GEICO conducted a meaningful investigation and whether its low offers of settlement constitute bad faith. See Barry v. Ohio Casualty Group, 2007 WL 128878 at *4

(W.D. Pa. Jan. 12, 2007) ("low-ball offers which bear no reasonable relationship to an insured's actual losses can constitute bad faith within the meaning of § 8371.").

STANDARD OF REVIEW

Rule 56(c) of the Federal Rules of Civil Procedure provides, in pertinent part, as follows: [Summary Judgment] shall be rendered forthwith 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 ...


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