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Rowe v. Nationwide Insurance Co.

United States District Court, W.D. Pennsylvania

March 20, 2014

CHRISTOPHER H. ROWE and NANCY L. ROWE, husband and wife, Plaintiffs,
v.
NATIONWIDE INSURANCE COMPANY, NATIONWIDE, and NATIONWIDE INSURANCE COMPANY OF AMERICA, Defendants

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[Copyrighted Material Omitted]

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For CHRISTOPHER H. ROWE, husband, NANCY L. ROWE, wife, Plaintiffs: Margaret A. O'Malley, LEAD ATTORNEY, Yost & O'Malley, Johnstown, PA.

For NATIONWIDE INSURANCE COMPANY, NATIONWIDE, NATIONWIDE INSURANCE COMPANY OF AMERICA, Defendants: Daniel L. Rivetti, LEAD ATTORNEY, Robb Leonard Mulvihill LLP, Pittsburgh, PA.

OPINION

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KIM R. GIBSON, UNITED STATES DISTRICT JUDGE.

MEMORANDUM AND ORDER OF COURT

I. SYNOPSIS

Pending before the Court are cross-motions for summary judgment, filed pursuant to Federal Rule of Civil Procedure 56. ( See ECF Nos. 38, 41, 47, and 75). For the reasons stated below, the Court will GRANT Defendants' first motion for summary judgment (ECF No. 38) and will DENY Plaintiffs' motions for summary judgment (ECF Nos. 41 and 47)[1] and Defendants' supplemental motion for summary judgment (ECF No. 75).

II. JURISDICTION AND VENUE

The Court has diversity jurisdiction in this removal action pursuant to 28 U.S.C. § § 1332 and 1441. Venue is proper under 28 U.S.C. § 1441(a).

III. BACKGROUND

This case stems from an automobile accident in which Plaintiff Christopher Rowe (" Mr. Rowe" ) sustained personal injuries and property damage to his car. Plaintiffs filed a property damage claim and an underinsured motorist claim (" UIM claim" ) with their insurance carrier, Nationwide Insurance Company of America (" Nationwide" ). Plaintiffs now allege that Nationwide failed to properly handle their claims. Plaintiffs filed suit and assert causes of action against Nationwide for breach of contract and statutory bad faith.

A. Statement of Facts

The following facts are not in dispute.[2] On July 5, 2007, Mr. Rowe was involved in an automobile accident while driving his car, an Oldsmobile 98, model year 1996. (ECF No. 65-1 ¶ ¶ 9, 10). As alleged in the complaint, Mr. Rowe was stopped at a traffic signal when another vehicle, driven by Opal Gayle, struck the rear of Mr. Rowe's car, substantially destroying the car and causing injuries to Mr. Rowe. (ECF No. 1-2, Compl. ¶ ¶ 8-10). Mr. Rowe was not at fault in the accident. (ECF No. 65-1 ¶ 13).

At the time of the accident, Plaintiffs' car was covered by an automobile insurance policy (" the policy" ) issued by Nationwide. ( Id. ¶ ¶ 3-4, 11-12). Among other things, the policy provided full tort coverage, up to $500,000 in UIM bodily injury

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coverage, and actual cash value minus a $250 deductible for collision coverage. ( Id. ¶ ¶ 5-7).

Plaintiffs filed suit against Ms. Gayle, after which Lincoln General Insurance Company, Ms. Gayle's insurer, offered its full bodily injury policy limit of $15,000 on February 26, 2010. ( Id. ¶ ¶ 48-49). On March 8, 2010, Nationwide waived its subrogation interest against Ms. Gayle related to the bodily injury claim. ( Id. ¶ 51). Plaintiffs also submitted UIM and property damage claims to Nationwide.

Property Damage Claim

Initially after the accident, Plaintiffs' car was towed and stored at a local salvage yard. (ECF No. 58-7 at 28-30). Approximately one month after the accident, Plaintiffs' car was transported to a Nationwide total loss center for evaluation. ( Id. at 28). Within one month after taking Plaintiffs' car for evaluation, Nationwide notified Plaintiffs that the car was a total loss. ( Id. at 29-30). Nationwide offered Plaintiffs $3,037.59 for the property damage to the vehicle. ( Id. at 62). Plaintiffs rejected Nationwide's offer, demanding $6,500 instead. ( Id. at 45).

While in Nationwide's possession, Plaintiffs' car sustained further damage in the amount of $1,658.74. ( Id. ECF No. 65-1 ¶ ¶ 20, 28). On April 24, 2008, Nationwide returned the car to Plaintiffs. ( Id. ¶ 22).

After rejecting Nationwide's offer, Plaintiffs filed suit against Nationwide on July 1, 2009, for the property damage claim. ( Id. ¶ 30). On August 31, 2009, judgment was entered for Plaintiffs in the amount of $4,776.29. ( Id. ¶ 31). On November 19, 2009, Nationwide issued a check to Plaintiffs for $4,857.66 on the property damage claim. ( Id. ¶ 33).

UIM Bodily Injury Claim

According to the complaint, the accident caused injuries to Mr. Rowe's neck and back [3] and aggravated a pre-existing lipoma on his forehead, which had to be surgically removed. (ECF No. 1-2, Compl. ¶ ¶ 15-17). Plaintiffs, represented by counsel, submitted a UIM claim to Nationwide on October 5, 2007. (ECF No. 58 ¶ 7).

Nationwide assigned the UIM claim to Claim Representative Craig Robinson, who requested a copy of the police report and a status update regarding Mr. Rowe's medical treatment on October 19, 2007. ( Id. ¶ ¶ 8-9). Robinson contacted Lincoln General, Ms. Gayles' liability carrier, to discuss the claim on November 6, 2007. ( Id. ¶ 10).

Over the next 17 months, Robinson continued to follow-up with Plaintiffs' counsel, but was unable to fully evaluate the claim because Plaintiffs did not provide complete medical records. ( Id. ¶ 13-14). By February 29, 2009, Nationwide had paid $946 in medical benefits for Mr. Rowe's treatment based on submitted chiropractic treatment records. ( Id. ¶ 15). On March 23, 2009, Plaintiffs' counsel provided Nationwide with additional medical records. ( Id. ¶ 16). On July 1, 2009, Plaintiffs' counsel informed Nationwide that she was unable to estimate a value for the UIM claim until she received additional medication information. ( Id. ¶ 17). On January 11, 2010, Nationwide received a report

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prepared by Mr. Rowe's chiropractor. ( Id. ¶ 19).

On March 8, 2010, Nationwide waived its subrogation rights after Lincoln General tendered its $15,000 bodily injury policy limits. ( Id. ¶ 20-21). On May 5, 2010, Plaintiffs submitted their UIM demand package to Nationwide, which included photographs of Mr. Rowe, two reports from Mr. Rowe's chiropractor, and additional chiropractic treatment records. ( Id. ¶ 22). Plaintiffs demanded $313,500. ( Id. ¶ 23).

Nationwide then conducted an internal medical management review. ( Id. ¶ ¶ 26-29). Following this review, Nationwide informed Plaintiffs that the injuries, as presented, did not surpass the $15,000 bodily injury credit from Lincoln General, but that Nationwide would further evaluate the claim. ( Id. ¶ 29).

To further evaluate the claim, Nationwide obtained Mr. Rowe's statement under oath on September 22, 2010 ( id. ¶ 30); retained Dr. Seraly, a licensed dermatologist, to review the records related to Mr. Rowe's lipoma ( id. ¶ 31); and scheduled Mr. Rowe for an independent medical examination (" IME" ) by Dr. Daniel A. Wecht in Pittsburgh, Pennsylvania ( id. ¶ 33). However, on February 3, 2011, Plaintiffs' counsel informed Nationwide that Mr. Rowe was unable to attend the scheduled IME appointment due to a disability preventing him from traveling to Pittsburgh, at least through May 7, 2011. ( Id. ¶ 34). Nationwide cancelled the IME and attempted to reschedule the IME with Dr. Wecht at a later date. ( Id. ¶ ¶ 36-47). On January 6, 2012, Dr. Gerald W. Pifer conducted an IME on Mr. Rowe in Ebensburg, Pennsylvania. ( Id. ¶ 47-48).

After completing its review, Nationwide offered Plaintiffs $5,000 to settle the UIM claim. ( Id. ¶ 50). Plaintiffs rejected the offer and countered with a demand of $275,000. ( Id. ¶ 51). Thereafter, Plaintiffs filed suit against Nationwide on the UIM claim. ( Id. ¶ 53). On August 22, 2012, the parties settled the UIM claim for $50,000. ( Id. ¶ 54).

B. Procedural Background

Plaintiffs initiated this matter by filing a four-count complaint in the Court of Common Pleas of Cambria County. ( See ECF No. 1-2, Compl.) On April 18, 2012, Defendants removed the matter to this Court (ECF No. 1), and subsequently filed an answer (ECF No. 7). The parties then conducted discovery.

Mediation was held on August 22, 2012, during which the parties resolved the UIM claims. ( See ECF Nos. 19, 20). However, the mediation did not resolve the bad faith claims. On November 30, 2012, upon stipulation of the parties, the Court dismissed Counts One and Two of the complaint, related to the underlying UIM claim, with prejudice. ( See ECF No. 26). Thus, only Counts Three and Four, which assert contractual and statutory bad faith claims against Nationwide, remain pending in this case.

On June 24, 2013, Defendants filed a motion for summary judgment (ECF No. 38), a brief in support (ECF No. 40), a concise statement of material facts (ECF No. 58),[4] and an appendix of supporting exhibits (ECF No. 58-1). On July 22, 2013, Plaintiffs filed a response (ECF No. 59) to Defendants' motion, along with a brief in opposition (ECF No. 60), and an appendix of exhibits (ECF No. 59-2).

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With leave from the Court ( see ECF No. 63), Defendants filed a reply brief (ECF No. 69) on August 7, 2013.

On June 24, 2013, Plaintiffs filed a motion for partial summary judgment (ECF No. 41), along with a brief in support (ECF No. 43), a concise statement of material facts (ECF No. 45), an amended concise statement of material facts (ECF No. 65-1), and an appendix of exhibits (ECF No. 65-2). Portions of these filings are redacted.

On June 26, 2013, Plaintiffs filed, under seal, a motion for partial summary judgment (ECF No. 47), along with a brief in support (ECF No. 48), a concise statement of material facts (ECF No. 66), and an appendix of exhibits (ECF No. 68). All of these sealed documents are identical to the previously filed corresponding documents, except that they are not redacted. The sealed documents contain personal information or information related to Nationwide's business practices, which the parties agree should not be publically available on the docket. The Court has reviewed the sealed, non-redacted documents. However, to preserve the sensitive information in those documents, the Court will only cite the redacted versions of the sealed documents in the record.

Defendants filed a brief in opposition (ECF No. 72) to Plaintiffs' motions for summary judgment on August 23, 2013, along with a response to Plaintiffs' concise statement of material facts (ECF No. 73).

On September 26, 2013, Defendants filed a supplemental motion for summary judgment (ECF No. 75) along with a brief in support (ECF No. 76). Plaintiffs filed a response and brief in opposition (ECF Nos. 77 and 78) on October 24, 2013. The parties have fully briefed the Court, and this matter is ripe for adjudication.

IV. LEGAL STANDARD

Summary judgment is appropriate only where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Melrose, Inc. v. Pittsburgh, 613 F.3d 380, 387 (3d Cir. 2010). Issues of fact are genuine " if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); see also McGreevy v. Stroup, 413 F.3d 359, 363 (3d Cir. 2005). Material facts are those that will affect the outcome of the trial under governing law. Anderson, 477 U.S. at 248. The Court's role is " not to weigh the evidence or to determine the truth of the matter, but only to determine whether the evidence of record is such that a reasonable jury could return a verdict for the nonmoving party." Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 581 (3d Cir. 2009). " In making this determination, 'a court must view the facts in the light most favorable to the nonmoving party and draw all inferences in that party's favor.'" Farrell v. Planters Lifesavers Co., 206 F.3d 271, 278 (3d Cir. 2000) ( quoting Armbruster v. Unisys Corp., 32 F.3d 768, 777 (3d Cir. 1994).

The moving party bears the initial responsibility of stating the basis for its motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the moving party meets this burden, the party opposing summary judgment " may not rest upon the mere allegations or denials" of the pleading, but " must set forth specific facts showing that there is a genuine issue for trial." Saldana v. Kmart Corp., 260 F.3d 228, 232, 43 V.I. 361 (3d Cir. 2001) ( quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,

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 475 U.S. 574, 587 n.11, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). " For an issue to be genuine, the nonmovant needs to supply more than a scintilla of evidence in support of its position--there must be sufficient evidence (not mere allegations) for a reasonable jury to find for the nonmovant." Coolspring Stone Supply v. Am. States Life Ins. Co., 10 F.3d 144, 148 (3d Cir. 1993).

V. DISCUSSION

Plaintiffs' complaint asserts a contractual bad faith claim (ECF No. 1-2, Compl. ¶ ¶ 30-33) and a statutory bad faith claim ( id. ¶ ¶ 34-51) against Defendants. Plaintiffs allege that Nationwide engaged in a pattern of activity evidencing the breach of its contractual and statutory duties of good faith and fair dealing concerning both the property damage claim and the UIM claim arising from the car accident involving Mr. Rowe. ( Id. ¶ 38).

In their first motion for summary judgment, Defendants argue that Plaintiffs have failed to demonstrate any evidence to support the bad faith claims. (ECF No. 40 at 1). According to Defendants, following the accident, Nationwide adequately and appropriately investigated Plaintiffs' insurance claims and made reasonable offers to settle the claims. ( Id. ). Defendants assert that the sole basis for Plaintiffs' allegations of bad faith arise from a dispute over the value of the claims. ( Id. ). Defendants contend that the disagreement over the value of the claims is an insufficient basis for bad faith, and that Defendants are therefore entitled to judgment as a matter of law. ( Id. ).

Plaintiffs, on the other hand, argue that summary judgment is proper in their favor on the issue of liability. Plaintiffs' motion contains a short, two-and-a-half page argument section, comprised almost entirely of block quotes from statutes and case law. ...


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