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Schlegel v. State Farm Mutual Automobile Insurance Co.

United States District Court, Third Circuit

August 8, 2013

MATTHEW SCHLEGEL and JENNIFER SCHLEGEL, Plaintiffs
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendants.

MEMORANDUM

MALACHY E. MANNION, District Judge.

Presently before the court is defendant State Farm's motion for partial summary judgment seeking dismissal of plaintiffs' bad faith and malfeasance claims. (Doc. No. 29.) In particular, defendant argues that plaintiff has failed to point to concrete proof in the record that State Farm, plaintiff's automobile insurer, engaged in bad faith conduct or violated the provisions of the UTPCPL when it requested documentation before evaluating plaintiff's claim. After reviewing the motion and the materials related thereto, the motion for partial summary judgment will be GRANTED.

I. FACTUAL BACKGROUND

The instant action stems from an underinsured motorist ("UIM") claim. On or about December 20, 2007, Mrs. Schlegel was seriously injured in a motor vehicle when the vehicle in which she was a passenger was struck by a negligent motorist. (Doc. No. 30, at 2.) Plaintiffs subsequently filed a personal injury claim against the tortfeasor who carried $100, 000 in bodily injury liability coverage. While that claim was pending, Mrs. Schlegal requested first-party medical benefits under their own State Farm insurance policy. (Id.) These first-party benefits were paid in full until February 13, 2008, when plaintiffs reached the $5000 first-party medical benefit policy limit. (Id. at 3.)

Plaintiffs' policy with State Farm provides for underinsured benefits of up to $100, 000, after the original tortfeasor's coverage has been exhausted. In other words, plaintiffs must establish that the damages resulting from a motor vehicle accident have exceeded $100, 000 before State Farm is liable under the terms of the policy. (Id.)

Here, Mrs. Schlegel settled her third party claim for $25, 000 out of an available $100, 000 personal liability policy of the original tortfeasor. State Farm informed her and her husband that "State Farm, as a UIM insurer, is entitled to full credit of the $100, 000 liability limits and would only be responsible to pay any damages over and above $100, 000." (Id.)

The UIM clause of plaintiffs' insurance contract states that the insured party must "give [State Farm] all the details about the death, injury, treatment, and other information that [the insurer] may need as soon as reasonably possible after the injured insured is first examined or treated for the injury." (Doc. No. 31 Ex. 5, at 25.) Furthermore, it states that plaintiff must "provide written authorization for [State Farm] to obtain (a) medical bills, (b) medical records, (c) wage, salary, employment, tax, business, and financial information; and (d) any other information [State Farm] deems necessary to substantiate the claim." (Id.) Finally, the agreement requires production of all "(a) medical bills; (b) medical records; (c) wage, salary, employment, tax, business, and financial information; and (d) any other information [State Farm deems] necessary to substantiate the claim." (Id.)

On November 25, 2009, after plaintiffs filed their UIM claim, State Farm requested documentation from plaintiff's counsel such as medical records and medical bills so that State Farm could evaluate the claim. (Doc. No. 31 Ex. 9, at 1.) When plaintiffs failed to answer, State Farm sent at least nine additional inquiries between November 25, 2009, and October 29, 2010, but did not receive a response until October 29, 2010, when plaintiffs' counsel responded with the requested information. (Doc. No. 31 Ex. 9, at 20.) Two weeks later, State Farm conducted its UIM evaluation and, finding that the value of the claim did not exceed $100, 000, denied the claim. (Doc. No. 31 Ex. 11, at 1.) Plaintiffs provided additional medical documentation on March 2, 2011, but State Farm again determined that the value did not exceed $100, 000 and again denied the claim. (Doc. No. 31 Ex. 11, at 4, 7.)

II. PROCEDURAL HISTORY

On October 12, 2011, plaintiffs filed a complaint in the Court of Common Pleas of Susquehanna County, Pennsylvania alleging various claims under Pennsylvania's Unfair Insurance Practice Act, Pennsylvania's Motor Vehicle Financial Responsibility Law, and Pennsylvania's Unfair Trade Practices and Consumer Protection Law (hereinafter "UTPCPL"). (Doc. No. 1 Ex. 1.) Plaintiff also brought a claim for bad faith under 42 Pa.C.S.A. ยง8371, Pennsylvania's bad faith insurance statute. (Doc. No. 1 Ex. 1.) On November 23, 2011, defendant removed the case to the United States District Court for the Middle District of Pennsylvania, (Doc. No. 1). On November 30, 2011, the defendant filed a motion to dismiss. (Doc. No. 4.) Plaintiffs responded by filing a motion to remand, (Doc. No. 6), and a brief in opposition to the defendant's motion to dismiss on December 28, 2011. (Doc. No. 9.) The court denied plaintiffs' motion to remand, granted defendant's motion to dismiss, but additionally granted plaintiffs leave to amend the complaint on February 10, 2012. (Doc. No. 11.)

On February 22, 2012, plaintiffs filed an amended complaint alleging the same causes of action as the original complaint but providing further factual detail. (Doc. No. 12.) On March 7, 2012, defendant again moved to dismiss on the same grounds as the original complaint, (Doc. No. 13), and on July 13, 2012, the court granted the motion in part and denied in part. (Doc. No. 21.)

After the parties completed discovery, defendant filed the present motion for summary judgment and a statement of undisputed material facts as required by Rule 56 and Local Rule 56.1, on February 21, 2013, asserting generally that plaintiffs failed to provide sufficient evidence to sustain their remaining claims in Count II and Count III. (Doc. No. 29, Doc. No. 30, Doc. No. 31.) In response, plaintiffs filed a document titled "Plaintiffs' Memorandum of Law in Opposition to Defendant's Motion to Dismiss Plaintiff's Bad Faith Claims, " (emphasis added)(Doc. No. 38). Unfortunately for the plaintiffs, this was not a motion to dismiss under Rule 12(b), rather it is a motion for summary judgement pursuant to Rule 56. Since the plaintiffs have failed to file the required statement of undisputed material facts, or dispute the defendant's statement of undisputed material facts under Local Rule 56.1, defendant's statement of material facts will be deemed to be admitted.

III. STANDARD OF REVIEW

Summary judgment is appropriate "if the pleadings, the discovery [including depositions, answers to interrogatories, and admissions on file] and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett , 477 U.S. 317, 322-23 (1986); Turner v. Schering-Plough Corp. , 901 F.2d 335, 340 (3d Cir. 1990). A factual dispute is genuine if a reasonable jury could find for the non-moving party and is material if it will affect the outcome of the trial under governing substantive law. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248 (1986); Aetna Cas. & Sur. Co. v. Ericksen , 903 F.Supp. 836, 838 (M.D. Pa. 1995). At the summary judgment stage, "the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson , 477 U.S. at 249; see also Marino v. Indus. Crating Co. , 358 F.3d 241, 247 ...


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