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Lublin v. American Financial Group, Inc.

United States District Court, E.D. Pennsylvania

June 20, 2013

MARK LUBLIN, et al., Plaintiffs,
v.
AMERICAN FINANCIAL GROUP, INC., et al., Defendants

Page 535

For ROBERT I LUBLIN, EXECUTORS OF THE ESTATE OF MARK LUBLIN (DECEASED), ANNE E. LAZARUS, EXECUTORS OF THE ESTATE OF MARK LUBLIN (DECEASED), Plaintiffs: ALAN MORRIS FELDMAN, LEAD ATTORNEY, FINEMAN KREKSTEIN & HARRIS, PC, PHILADELPHIA, PA.

For INFINITY STANDARD INSURANCE COMPANY, (FORMERLY KNOWN AS WINDSOR INSURANCE COMPANY), Defendant: KATHRYN A. DUX, GERMAN GALLAGHER & MURTAGH, PHILADELPHIA, PA.

OPINION

Page 536

MEMORANDUM

EDUARDO C. ROBRENO, J.

Mark Lublin (" Plaintiff" ) [1] commenced this diversity action [2] against American Financial Group, Inc., American Spirit Insurance Company, Great American Spirit Insurance Company, Great American Insurance Company, Great American Insurance Companies, Great American Insurance Group, and Great American Insurance Specialty Auto Group (" Defendants" ) for compensatory and punitive damages and attorney's fees related to Plaintiff's underinsured motorist claim in the Montgomery County Court of Common Pleas. Infinity Standard Insurance Company (" Defendant" ) was later substituted as the sole defendant in this action. [3] Defendant removed the action to the Eastern District of Pennsylvania on August 17, 2007. Notice of Removal 2. Defendant filed a motion for summary judgment to which Plaintiff responded in opposition. Def.'s Mot. Summ. J. 1, ECF No. 39; Pl.'s Resp. to Def.'s Mot. Summ. J. 1, ECF No. 40 (" Pl.'s Resp." ). This motion is now ripe for disposition.

I. BACKGROUND

Plaintiff alleges that a vehicle operated by John Nicholas struck Plaintiff's vehicle from behind on June 2, 2001 when both individuals were driving eastward on Robbins Avenue in Philadelphia, Pennsylvania. Am. Compl. ¶ ¶ 15-17. Prior to the collision, Plaintiff stopped his vehicle when a passenger of a parked car opened her car

Page 537

door into Plaintiff's travel lane. Id. ¶ 17. Plaintiff alleges several injuries as a result of the accident, including a herniated disc, annular tearing of a disc, cervical radiculopathy, acute denervation, aggravation of preexisting spinal conditions, and sprain and strain of the cervical spine, lumbar spine, thoracic spine, and infraspinitis tendonitis. Id. ¶ 19. In addition to physical injuries, Plaintiff alleges that he has suffered emotional distress and other damages, including lost wages resulting from his decreased capacity to work. Id. ¶ ¶ 20-22; Employer Wage Loss Correspondence, Am. Compl. Ex. 9.

At the time of the accident, Plaintiff was insured by American Spirit Insurance Company, now known as Great American Insurance Company, through Policy Number SDS 3405526. Am. Compl. ¶ 14. On November 8, 2002, Nicholas's automobile insurance company, AIG Specialty via New Hampshire Indemnity, agreed to settle Plaintiff's claim related to the collision for the $15,000 policy limit. AIG Correspondence, Am. Compl. Ex. 3. Following this settlement, Plaintiff submitted an underinsured motorist claim to American Spirit Insurance Company in December 2002 to Senior Liability Claims Adjustor, Frederick Lubrecht. Stip. ¶ 4; Underinsured Motorist Claim Correspondence, Am. Compl. Ex. 9. The policy included a stacking option of the underinsured motorist bodily injury provisions of $100,000 per individual and $300,000 per accident. Annual Automobile Policy, Am. Compl. Ex. 2. Plaintiff demanded payment of the full policy limits for the accident, or alternatively, an arbitration of the claim with a neutral arbitrator. Underinsured Motorist Claim Correspondence, Am. Compl. Ex. 9.

Effective January 1, 2003, Defendant assumed responsibility for Plaintiff's claim. Stip. ¶ 7. Plaintiff alleges that Defendant did not inform him of this policy transfer or that Mr. Lubrecht was removed from handling the claim until after the Arbitration Hearing on July 15, 2005. Am. Compl. ¶ ¶ 50-51. Plaintiff also contends that Defendant's attorney, Vincent Reilly, represented that he was retained by Great American Insurance Company on January 3, 2003, notwithstanding the policy conveyance. Reilly, Janiczek & McDevitt Correspondence, Am. Compl. Ex. 10. On July 15, 2005, the arbitrator awarded Plaintiff $232,000 after a set-off of $15,000, the amount of Nicholas's policy disbursement. Arbitration Finding Correspondence, Am. Compl. Ex. 17. Plaintiff alleges that Defendant paid this arbitration award with a check from Great American Spirit Insurance Company despite the policy transfer. Am. Compl. ¶ 53.

Plaintiff alleges that Defendant requested numerous documents on several occasions: federal income tax forms, automobile title, proof of state vehicle registration, driver's license, and police reports on January 13, 2003; additional unspecified documents on January 16, 2003; financial and professional records on December 5, 2003; and various other documents on unspecified dates. Am. Compl. ¶ ¶ 61-62, 71, 74, 77. Plaintiff contends that he provided all requested and appropriate documentation to file a complete claims package. Supplemental Undisputed Facts by Plaintiff, Pl.'s Resp. to Def.'s Mot. Summ. J. 6. Plaintiff also alleges that Defendant's requests for documentation were overly burdensome and unreasonable, and he asserts that the investigation was conducted in bad faith in order to delay settlement. Id. at 6-8. Defendant contests that Plaintiff's claims package was complete. Def.'s Mot. Summ. J. 2. Defendant alleges that Plaintiff never corroborated his loss of wages and earning capacity claims through documentation to support settlement demands of $225,000 and subsequently $275,000. Id.

Page 538

Regarding an appropriate settlement for Plaintiff's claim, Plaintiff alleges that Defendant's counsel initially suggested a range of $150,000 to $175,000. Pl.'s Resp. 6. Defendant ultimately suggested a settlement offer of $75,000, believing that Plaintiff's credibility had been compromised. Counsel's Correspondence to Def., Def.'s Statement of Undisputed Facts in Supp. of Def.'s Mot. Summ. J. Ex. 7. Furthermore, Plaintiff alleges that Defendant erroneously suggested that Plaintiff failed to protect Defendant's subrogation rights by filing suit against the passenger who opened her car door into Plaintiff's travel lane at the time of the accident. Pl.'s Resp. 6. For the foregoing reasons, Plaintiff argues that Defendant acted in bad faith throughout the claim investigation and unreasonably denied him benefits.

II. PROCEDURAL HISTORY

On July 13, 2007, Plaintiff filed a complaint against Defendants in the Court of Common Pleas for Montgomery County seeking compensatory and punitive damages in excess of $50,000 for conduct related to Plaintiff's underinsured motorist claim and violation of 42 Pa. Cons. Stat. § 8371 (1990). Compl. 1-2, 18, Notice of Removal, Ex. A. On August 17, 2007, Defendants filed a Notice of Removal to the United States District Court for the Eastern District of Pennsylvania on the basis of diversity of citizenship. Notice of Removal 2. Defendants answered Plaintiff's complaint on August 24, 2007. Answer 1, ECF No. 4.

On November 19, 2007, Plaintiff moved to amend the complaint and add an additional Defendant, Infinity Standard Insurance Company. Pl.'s Mot. Amend. 1-2, ECF No. 16. The parties later filed a stipulation to allow Plaintiff to amend the complaint to substitute Infinity as the Defendant for all named Defendants. Stip. 1. Plaintiff filed an amended complaint on December 18, 2007. Am. Compl. 1. On January 2, 2008, Defendant answered. Def.'s Answer Am. Compl. 1, ECF No. 21.

Defendant moved for summary judgment on September 27, 2012. Def.'s Mot. Summ. J. 1. Plaintiff responded to the motion and requested sanctions. Pl.'s Resp. 1. Defendant subsequently moved for leave to file a reply in support of summary judgment. Def.'s Mot. Leave to File Reply 1, ECF No. 41.

III. LEGAL STANDARD

Summary judgment is appropriate " 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). " A motion for summary judgment will not be defeated by 'the mere existence' of some disputed facts, but will be denied when there is a genuine issue of material fact." Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 581 (3d Cir. 2009) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). A fact is " material" if proof of its existence or nonexistence might affect the outcome of the litigation, and a dispute is " genuine" if " the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248.

The Court must view the facts in the light most favorable to the nonmoving party. " After making all reasonable inferences in the nonmoving party's favor, there is a genuine issue of material fact if a reasonable jury could find for the nonmoving party." Pignataro v. Port Auth. of N.Y. & N.J., 593 F.3d 265, 268 (3d Cir. 2010). While the moving party bears the initial burden of showing the absence of a genuine issue of material fact, meeting this obligation shifts the ...


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