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Shaffer v. State Farm Mutual Automobile Insurance Co.

United States District Court, M.D. Pennsylvania

October 20, 2014

BARRY SHAFFER and KIMBERLY SHAFFER, Plaintiffs,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., Defendant.

MEMORANDUM

SYLVIA H. RAMBO, District Judge.

In this civil action, Plaintiffs have sued Defendant, their insurance carrier, asserting breach of contract (Count I) and bad faith (Count II) claims arising out of Defendant's handling of Plaintiffs' underinsured motorist claim. ( See Doc 1.) Presently before the court is Defendant's motion for partial summary judgment, wherein it seeks judgment on Plaintiffs' bad faith claim. (Doc. 29.) For the following reasons, Defendant's motion will be granted.

I. Background

A. Facts

The instant claim arises from a request by Plaintiff Barry Shaffer ("Plaintiff") for underinsured motorist ("UIM") benefits against his insurance carrier, Defendant State Farm Mutual Automobile Insurance Company ("Defendant"), stemming from a motor vehicle accident that occurred on September 5, 2008. (Doc. 31, ¶ 4.) Plaintiff is a 45-year-old veteran who served during the 1980s and 1990s and has a history of physical ailments, which are documented by extensive medical records dating back to nearly a decade before the collision underlying this action occurred. ( See Doc. 32, pp. 17, 22-27 of 33.)

At the time of the collision, Plaintiff and his wife, Kimberly Shaffer (collectively "Plaintiffs"), were insured by Defendant under an automobile insurance policy-number 23 2135 C15 38F-that provided for, inter alia , medical payments coverage and $100, 000.00 UIM coverage. ( See Doc. 31, ¶ 5.) The policy provided "stacked" UIM coverage, yielding total UIM coverage of $200, 000.00. ( Id .) The UIM policy provided coverage as follows:

[Defendant] will pay compensatory damages for bodily injury an insured is legally entitled to recover from the owner or driver of an underinsured motor vehicle. The bodily injury must be: (1) sustained by an insured; and (2) caused by an accident that involves the ownership, maintenance, or use of an underinsured motor vehicle. [Defendant] will pay only if the full amount of all available limits of all bodily injury liability bonds, policies, and self-insurance plans that apply to the insured's bodily injury have been used up by payment of judgments or settlements, or have been offered to the insured in writing.

(Doc. 38, p. 28 of 48.) The policy also provided that:

The insured and [Defendant] must agree to the answers to the following two questions: (1) [whether] the insured [is] legally entitled to recover compensatory damages from the owner or driver of the underinsured motor vehicle [and] (2) if the insured and [Defendant] agree that the answer to [the foregoing question] is yes, then what... the [proper] amount of... compensatory damages [is] that the insured is legally entitled to recover from the owner or driver of the underinsured motor vehicle.

( Id .)

On September 5, 2008, Plaintiff was involved in a two-car collision in Dauphin County, Pennsylvania, in which the other driver, Tina Kresge, was primarily at fault. ( See Doc. 31, ¶ 4.) Plaintiff reported the incident to Defendant on September 6, 2008. ( Id. at ¶ 6.) On September 8, 2008, Lynda Holl ("Holl"), a medical payments claim representative, spoke with Plaintiff regarding the collision and his injuries and treatment. ( Id. at ¶ 6.) The collision was head-on and caused Defendant to declare that Plaintiff's vehicle, a 2003 Toyota Sienna, was a total loss, for which Defendant issued payment to the lienholder to completely discharge the loan. ( Id. at ¶ 9.) Plaintiff also communicated to Holl that he had an extensive medical history due to his prior military service, which caused the claim to be flagged for review to determine if the medical treatment he was receiving was related to the motor vehicle accident. ( See Doc. 30-1, p. 15 of 74.)

Over the next several months, Defendant wrote numerous letters to Plaintiff regarding the claim. For example, on September 8, 2008, Defendant acknowledged Plaintiff's claim for medical benefits and forwarded an application for benefits and an authorization for release of information, which Defendant requested that Plaintiff return with Plaintiff's medical bills. ( Id. at p. 23 of 74.) On October 21, 2008, Holl informed Plaintiff that Defendant still had not received any medical bills. ( Id. at p. 30 of 74.) On November 4, 2008, Plaintiffs' counsel advised Defendant that he had been retained to represent Plaintiffs and requested that Defendant forward to Plaintiff several documents related to the handling of Plaintiff's first-party claim for medical benefits. ( Id. at p. 32 of 74.) The following day, Holl sent Plaintiffs' counsel a letter acknowledging the representation and informing Plaintiffs' counsel that Defendant had received neither an application for benefits nor any medical bills on Plaintiff's behalf. ( Id. at 37 of 74.) Additionally, Holl forwarded to Plaintiff another application for benefits and an authorization for release of information. ( Id. ) On November 10, 2008, Holl provided Plaintiff with a certificate of coverage for Plaintiff. ( Id. at p. 39 of 74; Doc. 31, ¶ 14.)

On November 19, 2008, Plaintiff submitted a completed application for benefits and requested that Defendant place the enclosed bills in line for payment. (Doc. 31, ¶ 15; Doc. 30-1, p. 41 of 74; Doc. 35, ¶ 15.[1]) The application for benefits set forth Plaintiff's injuries as follows:

Cervical spine sprain/strain, distended eye lenses and vision has been effected requiring glasses, severe light sensitivity, bruising around eyes & on knees, impact to knees. Lots of neck & back ...

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