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Scott v. Geico General Insurance Co.

United States District Court, Third Circuit

November 15, 2013

MICHAEL SCOTT, Plaintiff,
v.
GEICO GENERAL INSURANCE COMPANY, Defendant.

MEMORANDUM [1]

MALACHY E. MANNION, District Judge.

Presently before the court are a series of motions in limine filed by the parties to preclude the introduction of various pieces of evidence at trial. The defendant, GEICO General Insurance Company, filed motions in limine to preclude the plaintiff's bad faith expert witness, Allan Windt, Esq., from testifying, (Doc. No. 39); to preclude anticipated new testimony, (Doc. No. 41); to preclude evidence of alleged punitive damages, attorneys' fees, cost, interest, and GEICO's net worth, (Doc. No. 43); to preclude evidence of the arbitration award and post-arbitration memorandum, (Doc. No. 45); and to preclude evidence of claim activity during and after the arbitration. (Doc. No. 67). The plaintiff, Michael Scott, has also filed a motion in limine to preclude any reference to settlement discussions that occurred after the arbitration award. (Doc. No. 47). The defendant filed a certificate of concurrence in regard to the plaintiff's motion. (Doc. No. 64). As such, the plaintiff's motion in limine, (Doc. No. 47), is GRANTED. The plaintiff did not concur with the defendant's motion to preclude claim activity that occurred during and after the arbitration, (Doc. No. 67), but did not file a brief in opposition. As such, the motion is deemed unopposed pursuant to MDPA Local Rule 7.6, and is GRANTED.

The plaintiff has filed briefs in opposition to three of the defendant's motions, (Doc. Nos. 60, 61, 65), and the defendant filed two reply briefs. (Doc. Nos. 62, 70).

I. BACKGROUND

The plaintiff and his wife were injured in an automobile accident on July 11, 2006. (Doc. No. 1, Att. 1 ¶ 4). The plaintiff brought a claim against the driver of the automobile that had collided with him and settled that first party claim for $95, 000 of the $100, 000 insurance policy limit. (Id. at ¶ 5). The plaintiff subsequently made a claim for underinsured motorist (UIM) coverage under his own policy with the defendant. The plaintiff's policy provides for underinsured motorist benefits stacked to $300, 000 per person and $600, 000 per accident. (Id. at ¶ 5).

After the defendant's motion for summary judgment was granted in part, the plaintiff's claims for breach of contract and acting in bad faith under Pennsylvania's bad faith statute, 42 Pa.C.S. §8371, are proceeding to trial. (Doc. No. 33). The plaintiff argues that the defendant's bad faith is evidenced by the protracted processing of his claim that included several settlement offers which were unreasonably low considering his injuries. On July 20, 2006, counsel for the plaintiff presented the plaintiff's UIM claim to the defendant seeking to collect proceeds at the policy limit of $300, 000. (Doc. No. 24 at ¶ 22).

On or about June 1, 2007, the defendant determined the appropriate compensation for the plaintiff's injury was less than $100, 000 and therefore was fully covered by the other driver's policy. Over the next twenty months the defendant continued to investigate the claim and receive additional information from the plaintiff. (Doc. No. 24 at ¶¶ 93-126; Doc. No. 25 Att. 4 at 6-7). On or about February 23, 2009, the defendant extended and the plaintiff rejected a settlement offer of $35, 000 based on the information presented in the additional documentation collected during the intervening period. (Doc. No. 24). On or about December 1, 2009, based on the newly acquired information, the defendant extended an offer of $120, 000 to settle the claim. (Doc. No. 24 at ¶199). On December 10, 2009 the defendant increased its offer to $150, 000. (Id. at ¶200). The plaintiff decreased his demand of $300, 000 to $285, 000, but the parties were unable to settle the matter. (Id. at ¶ 201).

On or about January 15, 2010, an arbitration panel awarded the plaintiff $450, 000 in damages. (Id. at ¶ 209). The award was eventually molded to reflect the policy limit of $300, 000. (Id. at ¶ 215). After the arbitration hearing, the defendant's claims examiner, assigned to the plaintiff's case, authored a memorandum regarding the arbitration proceedings. (Doc. No. 51, Att. 1). The last sentence of that report reads: "Our pain and suffering evaluation was only $6K less than that of the arbitration panel." (Id.). The arbitration panel determined the value of the plaintiff's pain and suffering to be $225, 000, thereby making the defendant's alleged valuation $219, 000. (Id.). On or about February 23, 2010, the defendant paid its full policy limit in the amount of $300, 000 to the plaintiff. (Id. at ¶ 216).

The plaintiff hired Allan D. Windt, a bad faith expert with extensive experience in the insurance industry, to formulate an opinion regarding the defendant's conduct. (Doc. No. 39, Exh. A). He is a former attorney who has handled more than 10, 000 insurance claims as an independent adjuster and has also authored a book on insurance claims and disputes. (Id.). He composed a report on the plaintiff's behalf and concluded that the defendant acted in bad faith. (Id.). In sum, the report discusses what information the defendant had at various points in the process and compares that information to the defendant's settlement offers. (Id.). He discusses what the defendant knew or was aware of at several different times, (Id., ¶7, 8, 9, 12), interprets the defendant's claim policy, (Id., ¶ 10), and makes several conclusions about what constitutes "bad faith" in these circumstances. (Id., ¶14, 15).

As an example, he notes that on February 23, 2009, the defendant had enough information to know that the plaintiff sustained $141, 963 in damages. (Doc. No. 39, Exh. A, ¶8). He then concludes that, given the $95, 000 the plaintiff received from the other insurance company, the defendant "undisputedly owed" the plaintiff $46, 963. (Id., ¶9). However, he claims the defendant acted in bad faith because the insurance company offered him $30, 000 conditioned upon the plaintiff signing a release. (Id.). According to his report, if the funds are undisputably owed, an insurer acts in bad faith as a matter of law by not immediately paying those funds. (Id., ¶8).

II. PROCEDURAL HISTORY

This case was commenced on September 27, 2011. (Doc. No. 1). The defendant's filed a motion for summary judgment that was granted in part and denied in part on June 19, 2013. (Doc. No. 33). As mentioned above, the parties have filed a series of motions in limine, (Doc. Nos. 39, 41, 43, 45, 47, 68), and briefs in support thereof, (Doc. Nos. 40, 42, 44, 46, 68), in anticipation of trial. The plaintiff filed briefs in opposition pertaining to three of the defendant's motions, (Doc. Nos. 60, 61, 65), and the defendant filed reply briefs addressing two of the plaintiff's briefs in opposition. (Doc. No. 62, 70). The motions are now ripe for the court's decision.

III. DISCUSSION

A. The Plaintiff's Bad ...


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