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Scheirer v. Nationwide Ins. Co. of America

United States District Court, Middle District of Pennsylvania

March 9, 2015

VIRGINIA SCHEIRER, Plaintiff,
v.
NATIONWIDE INSURANCE COMPANY OF AMERICA, Defendant

MEMORANDUM

MALACHY E. MANNION, United States District Judge.

Pending before the court are the cross-motions for summary judgment filed by the plaintiff and defendant. (Docs. 29, 32). Plaintiff's amended complaint, (Doc. No. 12), raised claims for breach of contract (Count I), bad faith (Count II), and violation of the Unfair Trade Practices and Consumer Protection Law ("UTPCPL"), 73 P.S. §201-1 et seq. (Count III). The court has previously dismissed Count III of plaintiff's amended complaint. (Doc. 21). Plaintiff and defendant now move pursuant to Fed.R.Civ.P. 56 for summary judgment on the remaining two counts in their respective favors.

I. PROCEDURAL BACKGROUND

Plaintiff Virginia Scheirer is a resident of Monroe County who was riding a county bus on September 24, 2008, when she was thrown to the floor of the bus and injured as the driver swerved to avoid an oncoming vehicle. The incident was captured on a surveillance video tape. (Doc. No. 12, ¶¶ 1, 8, 9). Plaintiff had an insurance policy from defendant Nationwide Insurance Company of America ("Nationwide"), in effect on the day of plaintiff's injury, which included tort coverage and uninsured[1] motorist ("UM") benefits of "up to $100, 000.00 per person." (Id., ¶¶ 6, 7, 8). Plaintiff formally notified defendant of her UM claim on July 7, 2011, provided relevant medical documentation to the defendant, and later demanded arbitration of her claim on September 26, 2012. (Id., ¶¶ 12, 14, 16). Defendant refused the arbitration request on October 10, 2012, and made a written request for a medical examination of plaintiff and a statement under oath on April 16, 2013. (Id., ¶¶ 17, 19). Plaintiff then brought the instant action in Monroe County Court alleging that the inordinate delay in handling her claim is a breach of contract, bad faith, and a violation of the UTPCPL. On May 22, 2013, defendant removed this case to federal court. (Doc. 1). Plaintiff then filed an amended complaint on June 27, 2013, alleging a breach of contract claim for UM benefits, a bad faith claim pursuant to 42 Pa.C.S. §8371, regarding defendant's handling of her UM benefits claim and a UTPCPL claim. (Doc. 12). As stated, plaintiff's UTPCPL claim was dismissed with prejudice by this court on October 23, 2013. (Doc. 21).

After the pleadings closed and discovery was completed, defendant filed a motion for summary judgment, with exhibits on July 11, 2014, regarding plaintiff's two remaining counts. (Doc. 29). Defendant also filed its statement of material facts and its brief in support. (Docs. 30, 31). On July 28, 2014, plaintiff filed her motion for summary judgment and her statement of material facts. (Doc. 32, 33). On August 7 and 8, 2014, plaintiff filed exhibits and her response to defendant's statement of material facts. (Docs. 34, 36). On August 8, 2014, plaintiff filed her brief in support of her motion for summary judgment. (Doc. 37). Defendant filed its reply brief, with exhibits, in support of its motion on August 19, 2014, and filed its response to plaintiff's statement of material facts on August 28, 2014. (Docs. 38, 38-1, 39).

The cross-motions for summary judgment are ripe for disposition. The court has diversity jurisdiction over this case pursuant to 28 U.S.C. §1332. As discussed below, the defendant's motion will be granted as to the breach of contract claim, Count I, and it will be dismissed. The remaining motions will be denied since disputed material facts exist.

II. FACTUAL BACKGROUND[2]

Immediately after the bus accident, defendant opened a UM claim for plaintiff on September 26, 2008. Plaintiff's insurance policy, issued by defendant, provided for "up to $100, 000.00 per person" in UM benefits. The UM adjuster for defendant met with plaintiff and recorded her statement on October 1, 2008. (Doc. 38-2). In her statement, plaintiff, who was 73 years old, stated that after the bus driver swerved to avoid a pick up truck and slammed on the brakes, she was "thrown from the front seat with her shopping cart, the length of the bus, right up to the front of the bus." Plaintiff then told the bus driver that she would get up herself and that she could walk home by herself. Plaintiff then walked home. The day after the accident, September 25, 2008, plaintiff did not feel well, she had a horrible headache, and she was beginning to show large bruises. She called the bus company and it picked her up and took her to the Pocono Hospital to be examined and to have tests, including x-rays and a CT scan of her head. Plaintiff did not have any broken bones, but she had multiple contusions.

The adjuster for defendant closed plaintiff's UM claim on October 10, 2008. The adjuster was aware that the bus had a video showing the unidentified vehicle involved in the accident but did not attempt to obtain a copy of it.

In a letter dated July 7, 2011, plaintiff's counsel advised defendant that plaintiff was pursuing a primary UM claim against the bus company's insurer, Travelers Insurance Company ("Travelers"), and that the policy limits was $35, 000. Plaintiff's counsel also stated that plaintiff was placing defendant "on notice of an [UM] claim [against defendant] arising out of the September 24, 2008 incident." (Doc. 38-3).

There is no dispute that plaintiff resolved the first level UM claim against Travelers for its $35, 000 policy limits. It is disputed whether defendant's adjuster believed that he had no responsibility to evaluate plaintiff's UM claim until he received confirmation of the policy limit offer by Travelers.

Another apparently critical issue for the defendant was the amount of UM coverage the plaintiff could be awarded under Travelers' insurance policy. Defendant's adjuster William Branigan noted the need to make this determination as early as October 6, 2008. According to the plaintiff, however, this was not confirmed until a later adjuster handling plaintiff's UM claim Brenda Freyz's own log entry dated July 14, 2011, stating that she had spoken to Travelers and "confirmed UM limit is $35k."

The parties also dispute whether defendant's UM claim handlers thought that plaintiff had to exhaust the UM coverage under the Travelers' policy before Nationwide had to evaluate her claim. Glenn Newton, defendant's claims manager, clarified this issue and testified that while plaintiff had to first exhaust the Travelers' UM coverage, Nationwide's responsibility to investigate and evaluate her claim began when it first got the claim. (Doc. 34-2, at 105-106). This makes sense since Nationwide was entitled to a credit in the amount of Travelers' UM coverage, in accordance with Nationwide Ins. Co. v. Schneider, 960 A.2d 442 (Pa. 2008), and it had to determine if the value of plaintiff's UM claim against it exceeded the amount of coverage available to plaintiff under the Travelers' policy.

The parties further dispute whether defendant provided training specific to the handling of UM claims and whether defendant had UM specific claims manuals. Mark Long, a claims manager with defendant who managed adjusters handling plaintiff's UM claim, stated that Nationwide provided general training as well as policy training to its adjusters but not specific to the handling of UM claims. Long also stated that Nationwide did not have a claims-handling manual specifically for UM claims. (Doc. 34-14, at 16-17). Plaintiff suggests that this lack of specific training and manual for UM claims also contributed to the undue delay in handling her claim. However, defendant did have a "Best Claims Practices" that pertained to casualty claims which included UM claims. There is no dispute that on July 30, 2014, "defendant provided plaintiff with copies of the relevant Best Claim Practices document pertaining to UM claims, in effect from 2008 until the present, upon receipt of a signed confidentiality agreement from plaintiff's counsel." (Doc. 39, at 14).

On July 17, 2012, plaintiff demanded the policy limits available under her UM coverage with defendant and provided all of her medical records to defendant, including records dating back to 2001. Also, plaintiff provided defendant with a copy of her first party medical file and a copy of the video from the bus. Plaintiff's counsel sent letters to defendant's attorney on September 25, 2012, and on April 10, 2013, stating that on September 20, 2012, defendant's adjuster confirmed he had all records needed to review plaintiff's UM claim. (Docs. ...


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