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Jallad v. Progressive Advanced Insurance Co.

United States District Court, E.D. Pennsylvania

December 11, 2017

SAHAR JALLAD, Plaintiff,
v.
PROGRESSIVE ADVANCED INSURANCE COMPANY, Defendant.

          MEMORANDUM

          ROBERT F. KELLY, SR. J.

         Plaintiff Sahar Jallad (“Jallad”) filed suit against Felix Madera (“Madera”) and Defendant Progressive Advanced Insurance Company (“Progressive”) in the Court of Common Pleas of Philadelphia County, alleging a claim of negligence against Madera as a result of a motor vehicle accident, and claims of breach of contract and bad faith against Progressive for issues related to underinsured motorist (“UIM”) benefits. Progressive invoked this Court's federal diversity jurisdiction and removed the case on September 7, 2016. Although there was complete diversity between the parties (Jallad was a citizen of Massachusetts; Progressive was a citizen of Ohio; and Madera was a citizen of Pennsylvania), Jallad filed a Motion to Remand, contending that removal was improper because of the “forum defendant rule.” See 28 U.S.C. § 1441(b)(2). On November 8, 2016, this Court issued an Order denying Jallad's Motion to Remand and dismissing Madera from the suit on the basis of fraudulent joinder. (See Doc. No. 14.) Accordingly, the only causes of action that remain are against Progressive for breach of contract (Count II) and statutory bad faith (Count III).

         Presently before the Court is Progressive's Motion for Partial Summary Judgment, which seeks dismissal of the statutory bad faith claim. Jallad has filed a Brief in Opposition, and Progressive has filed a Reply Brief in Support. For the reasons noted below, we will grant Progressive's Motion for Partial Summary Judgment and dismiss the bad faith count.

         I. BACKGROUND

         A. Factual History

         Jallad and Madera, both insured through Progressive, were involved in a motor vehicle accident on September 24, 2014. (Pl.'s Br. in Opp'n Def.'s Mot. Partial Summ. J. at 2, 4.) Jallad was taken by a friend from the scene of the accident to the emergency room at Albert Einstein Medical Center. (Id. at 2.) She then underwent a course of treatment with Andrew M. Lipton, D.O. (“Lipton”), approximately two to three times per week from October 14, 2014, until she moved out of the Philadelphia area in May 2015. (Id. at 3.) After moving out of the area and back to Boston, she received treatment from a chiropractor, Brian J. Pace, D.C. (“Pace”), approximately two to three times per week from June 15, 2015 to October 19, 2015. (Id. at 4.) Jallad received treatment from another chiropractor, Scott A. Darragh, D.C., between May 3, 2016 and January 9, 2017. (Id.)

         Jallad was insured through a Progressive automobile policy that provided first party medical benefits with a limit of $50, 000; income loss protection with a limit of $5, 000; and UIM coverage with a limit of $100, 000. (Id. at 5 (citing Ex. V).) Madera, also insured through a Progressive automobile policy, had third party liability limits of $15, 000. (Id. (citing Ex. U).) Shortly after the accident, Progressive opened a first party claim (the “first party claim”) for Jallad and a third party claim (the “third party claim”) for Jallad against Madera.

         On October 9, 2014, Progressive first documented Jallad's intent to make an income loss claim under the first party claim. (Id. at 6 (citing Ex. AA).) Jallad then forwarded to Progressive wage and salary verification information from her part-time employer, My Alarm Center. (Id. at 7 (citing Ex. BB).) Jallad also worked a full-time job as a manager for a T-Mobile retail store, (see Id. at 3), although she apparently never sent Progressive wage loss information related to that employer. Her $5, 000 income loss limit exhausted on June 11, 2015. (Id. (citing Ex. EE).)

         On May 6, 2015, Progressive sent a letter to Lipton that stated, in part, “All necessary documentation has been submitted to a Peer Review Organization [“PRO”] in accordance with Section 1797[(b)](1) of the Pennsylvania Motor Vehicle Financial Responsibility Law. . . . Pursuant to [Section] 1797[(b)](3) of the Pennsylvania Motor Vehicle Financial Responsibility Law, paying of any billing is pending determination by the PRO.” (Id. (citing Ex. GG).) Progressive sent an identical letter to Pace on July 31, 2015. (Id. at 7-8 (citing Ex. HH).)

         On October 2, 2015, Jallad's counsel requested that Progressive open a UIM claim under the existing first party claim. (Id. at 8.) Progressive assigned Jallad's UIM claim to Margaret Mary Burke (“Burke”). (Id.) On October 29, 2015, Progressive denied Jallad's third party bodily injury claim against Madera, concluding their investigation revealed that Jallad's policy provided limited tort insurance.[1] (Id. at 9.) Progressive's claim log notes reveal that only $4, 600 in first party medical benefits of the possible $50, 000 in coverage had been paid as of October 16, 2015. (See id., Ex. G (“Claim Log Notes”) at Jallad 218.)

         On October 19, 2015, Burke sent a letter to Jallad's counsel requesting, inter alia, “[a]ny information that you would like for me to consider in evaluation of your [client's] claim for bodily injury including any medical and/or wage information.” (Def.'s Concise Statement of Facts, Ex. C at 3.) On November 24, 2015, Burke sent a similar letter to Jallad's counsel, stating that she had not received the documentation and would need it “to properly evaluate your client's claims of injury.” (Id. at 1.) Jallad's counsel responded on December 11, 2015 and enclosed all evidence that he currently had on file. (Id. at 9.)

         On December 18, 2015, Burke evaluated the records Jallad's counsel sent and noted that only $5, 400 in first party medical benefits had been paid out of the possible $50, 000 in coverage. (Claim Log Notes at Jallad 222.) Burke further wrote that Jallad had two employers, T-Mobile and My Alarm Center, but Progressive did not have verification of lost wages and the period of disability from T-Mobile. (Id. at Jallad 223.) That same day, she sent Jallad's counsel a letter requesting a T-Mobile verification of the period of disability and wages, the employment file, and the job description; the My Alarm Center employment file and job description; and Jallad's current employment status and records. (Id.) Burke sent identical letters on January 15, 2016, February 18, 2016, March 28, 2016, and April 27, 2016, and apparently never received a response from Jallad's counsel to any of those correspondences. (Id. at Jallad 224, 225; see also Def.'s Concise Statement of Facts, Ex. C. at 5-8.)

         On May 3, 2016, Burke and Jallad's counsel exchanged voicemails regarding Jallad's employment records. (Claim Log Notes at 225.) Jallad filed a state court lawsuit against Progressive the very next day for breach of contract (and an implied bad faith claim) for failing to make any offer to resolve her UIM claim. (Pl.'s Br. in Opp'n Def.'s Mot. Partial Summ. J. at 10.) On June 23, 2016, Progressive made a $3, 000 offer to resolve Jallad's claims. (Id.)

         B. Procedural History

         On November 18, 2015, Jallad commenced suit against Madera in the Court of Common Pleas of Philadelphia County that asserted a negligence cause of action. (Id. at 9.) On May 4, 2016, Jallad filed a separate lawsuit against Progressive in the Court of Common Pleas of Philadelphia County that asserted breach of contract and bad faith claims related to her claim of UIM benefits. (Id. at 10.) Progressive removed the May 4, 2016 lawsuit to this Court on the basis of diversity jurisdiction, which was docketed at Civil Action No. 16-2384. Jallad subsequently filed a Motion for Joinder and Remand, seeking remand to state court in the event the Court joined Madera to the case. On July 13, ...


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