United States District Court, W.D. Pennsylvania
MELISSA C. PARISI and MICHAEL C. PARISI, III, wife and husband, Plaintiffs,
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.
GIBSON, UNITED STATES DISTRICT JUDGE
before the Court are (1) a Motion for Partial Summary
Judgment on Bad Faith filed by Plaintiffs Melissa and Michael
Parisi (ECF No. 38), and (2) a Motion for Summary Judgment
filed by Defendant State Farm (ECF No. 40). The motions have
been fully briefed (see ECF Nos. 39, 41, 55, 58, 63)
and are ripe for disposition. For the reasons stated below,
the Court will DENY the Parisis' motion
and will GRANT in PART, and DENY in PART,
State Farm's motion.
Court has subject matter jurisdiction under 28 U.S.C. §
1332 because the parties are completely diverse and the
amount in controversy exceeds $75, 000. Venue is proper under
28 U.S.C. § 1391(b) because a substantial portion of the
events giving rise to the claims occurred in the Western
District of Pennsylvania.
Melissa Parisi Files a Claim for Underinsured Motorist
Parisi sustained injuries in a car accident on
April 28, 2014. At the time of the accident, Parisi
carried a State Farm insurance policy. Parisi's
policy provided $100, 000 in underinsured motorist
filed an underinsured motorist claim with State Farm via a
letter dated May 23, 2014. Parisi's attorney, Douglas Stoehr,
drafted and signed the letter. Stoehr stated that the other
motorist carried a Met Life insurance policy with a $15, 000
limit. Stoehr wrote that, given "the serious
nature" of Ms. Parisi's injuries, he had "no
doubt" that her claim would exceed the limit of the
other driver's policy.
Farm assigned Parisi's claim to Scott Whiteside, a claims
representative.Whiteside reviewed Parisi's claim on
June 3, 2014, and determined that the other driver caused the
crash. The same day, Whiteside called
Stoehr's office, but did not speak with Stoehr because he
5, 2014, Whiteside wrote to Stoehr. Whiteside asked Stoehr to
provide State Farm with "written confirmation" of
the other motorist's insurance limits and stated that
State Farm would not authorize Stoehr to settle with the
other motorist until it received this written
confirmation. Whiteside also stated that State Farm
understood that Parisi continued to seek medical care for her
injuries. And Whiteside stated that State Farm
needed records of "all injuries and all treatment"
to finalize Parisi's claim. Whiteside requested that
"[u]pon your client concluding [her] medical treatment,
please advise me regarding the same."
entered two claims notes on June 15, 2014. Whiteside
stated that the "CV" (current value) of
Parisi's claim was $0. Whiteside also noted that he
had requested additional information from Stoehr "so
that UIM evaluation may be finalized."
State Farm Requests Additional Information
sent Stoehr six letters between July 2014 and January
2015. These letters are extremely similar. In
each letter, Whiteside requests that Stoehr provide State
Farm with written confirmation of the other motorist's
third-party coverage. The letters either state that State
Farm understands that Parisi continues to seek medical
treatment for her injuries, or request that Stoehr inform
State Farm about whether Parisi continues to receive
treatment. In each letter, Whiteside asks Stoehr to
notify State Farm when Parisi completes treatment and
requests that he provide State Farm with Parisi's
complete medical records at that time.
also states that Stoehr need not provide documentation of
medical treatment that Parisi already submitted for her
first-party claim. This is because Whiteside had access to,
and reviewed, the medical records from Parisi's
first-party claims file. These records included: two reports
from Parisi's treating neurologist who, on May 13, 2014,
diagnosed her with "post-concussion syndrome" and,
during Parisi's second office visit on May 27, 2014,
noted that she experienced "a lot of memory
issues;" two reports from a concussion specialist who,
during two appointments in May 2014, confirmed Parisi's
diagnoses of a concussion and labyrinthine dysfunction and
reported that she experienced difficulty concentrating and
deficits in short-term memory; and records from the forty
physical therapy sessions that Parisi completed between May
2014 and August 2014.
February 18, 2015, Stoehr submitted another batch of
Parisi's medical records.These included E.R. records;
reports from four different doctors who treated Ms. Parisi
following the accident; and updated documentation of
Parisi's ongoing physical therapy.In this
letter, Stoehr informed Whiteside that he typically
"work[s] with the [underinsured motorist] claims
representative after [he] settle[s] the underlying
claim." Whiteside confirmed receipt of the
records via letter dated March 4, 2015. Whiteside
requested that Stoehr provide documentation of any future
care that Parisi received so that State Farm could consider
all treatment when making a final decision on her
State Farm Completes an Injury Evaluation
completed an injury evaluation on March 17,
2015. Whiteside noted that Parisi suffered
from post-concussion syndrome and experienced dizziness,
headaches, balance problems, and sensitivity to sound and
light. Whiteside confirmed that the automobile
accident caused Parisi's injuries and concluded that
Parisi's medical treatment appeared "reasonable and
provided additional medical records on March 18,
2015. These records included a report from Dr.
Michael Drass, who conducted a physical examination of
Parisi; two office notes from Dr. Clark, Parisi's
neurologist; four months of records from Parisi's ongoing
physical therapy; and reports from two visits to Parisi's
primary care physician. Additionally, Stoehr stated that
Parisi might receive an evaluation by a neuropsychologist and
that he would inform State Farm if that
occurred. Whiteside did not update the injury
evaluation after he received these records.
informed Whiteside via letter dated March 19, 2015, that he
settled with the other motorist for the $15, 000 policy
told, Stoehr provided State Farm with over 200 pages of
medical records in February and March 2015. But
Whiteside-who handled Parisi's claim until the end of May
2015-never asked to interview Parisi. He never
requested authorization to obtain Parisi's medical
records himself. He never utilized a nurse to evaluate
Parisi's claim. And he never asked Parisi to provide a
statement under oath or submit to an independent medical
examination. But Whiteside did place a value on
Parisi's claim. In April 2015, Whiteside valued
Parisi's claim between $0 and $7, 500.
sent additional medical records on June 1,
2015. These records included two reports from
Dr. Clark, Parisi's neurologist, who noted Parisi's
worsening "forgetfulness, headaches, and speech problems
. .. ." Stoehr also provided a report from Dr.
Baker-the concussion specialist-who noted increased symptom
severity. Stoehr also submitted letters from
Parisi's husband, daughter, and sister that detailed the
changes they observed in Parisi since the car
accident. State Farm never responded to
Stoehr's June 1, 2015 letter.
Farm reassigned Parisi's claim to Edward Naser in August
2015. Naser sent Stoehr letters in August and
October 2015 that asked Stoehr to submit "your
underinsured demand package when
complete." Stoehr did not respond to either
called Stoehr on November 11, 2015. Stoehr told Naser that
Parisi was still treating with her neurologist and that she
had a follow-up appointment with her concussion
specialist. Stoehr told Naser that he would submit
additional medical records to State Farm.
sent Stoehr a letter on November 11, 2015 that asked Stoehr
to submit a demand package for consideration. Stoehr
responded on November 19, 2015. In his response, Stoehr
provided Naser with a neurological evaluation prepared by Dr.
Michelle Arbitell, dated May 14, 2015, which Parisi obtained
at her own expense. Dr. Arbitell reported that Parisi
exhibited impairments in several tests of cognitive
functioning. Stoehr also provided updated treatment
records from Parisi's speech language therapist,
examination records from a physician, documentation of
Parisi's lost wages and medical expenses, and an
affidavit from a physician-assistant with whom Parisi worked.
The physician-assistant testified that Parisi's work
performance, attention, and concentration decreased
precipitously following the car accident and that she could
no longer rely on Parisi at work. Additionally, Stoehr
stated that Parisi scheduled an appointment with her
neurologist in late December and that she would also schedule
an appointment with her concussion specialist. Stoehr
concluded the letter by telling Naser that "[p]erhaps
after these upcoming medical appointments we may be in a
position to settle this claim."
State Farm Completes an Updated Injury Evaluation
interpreted Stoehr's submission of medical records on
November 19, 2015 as a demand for settlement. Naser
completed an updated injury evaluation for Parisi's claim
on December 15, 2015. Naser noted that the car accident
caused Parisi's injuries and that her medical treatment
appeared to be "reasonable and
necessary." Naser set the value range on
Parisi's claim between $35, 000 and $50, 000 for pain and
suffering, $1, 800 for past medical bills, and $10, 000 for
past wage loss. Naser's estimate did not account for
future pain and suffering. Bill Reed, Naser's
supervisor, understood that Naser asked for settlement
authority by placing a value on Parisi's
claim. On December 24, 2015, Reed gave Naser
authority to settle for up to $26, 800.
sent another letter on December 30, 2015. Stoehr
enclosed a twenty-minute videotaped conversation between
Parisi and her family which, according to Stoehr, elucidated
Parisi's enduring cognitive deficits and the negative
impacts that those defects had on her family
life. Stoehr stated that he would provide
Naser with a report from a recent consultation with
Parisi's neurologist. Stoehr stated that, when he
provided Naser with the note, "[a]t that time I will
likely make a demand for settlement." Stoehr
advised Naser that he would demand the $100, 000 policy limit
"at that time." Stoehr requested that Naser
explain State Farm's reasoning in writing if State Farm
disagreed with Stoehr's opinion that the value of
Parisi's claim exceeded the $100, 000 policy
State Farm Offers to Settle
a telephone call with Stoehr on January 5, 2016, Naser
offered to settle Parisi's claim for $17,
000. This offer fell at the low end of
Naser's settlement authority.Naser did not offer to
settle for $26, 800, even though he had the authority to
settle for that amount. Naser did not offer to settle for a
higher amount within the range of his settlement authority
because Stoehr unequivocally stated that Parisi would not
accept less than $100, 000. Naser did not think that
Parisi would accept any settlement offer in State Farm's
settlement range, and believed that making an additional
offer within that range would have been futile.
Farm had a policy to advance the amount of its first
settlement offer to a claimant if the claimant and State Farm
reached an "impasse" in settlement
negotiations.But Naser did not offer to advance Parisi
$17, 000 because he did not believe that the parties reached
wrote to Naser again on January 13, 2016. Stoehr
enclosed updated medical records from Parisi's
neurologist. Stoehr also reiterated his request that
State Farm explain its reasoning for offering less than the
$100, 000 policy limit. Stoehr further renewed his $100, 000
demand, stated that State Farm acted in bad faith by
extending the $17, 000 offer, and threatened to sue unless
State Farm provided written explanation for its decision to
only offer $17, 000.
updated his injury evaluation on January 22,
2016. Naser noted that Parisi's cognitive
deficits had increased in severity since she initially filed
called Stoehr again on January 26, 2016. Stoehr told
Naser that Parisi scheduled follow-up appointments with her
neurologist and concussion specialist. Later that
day, Naser updated the injury evaluation, noting that Parisi
scheduled follow-up appointments for February
2016. The following day, Naser updated the
injury evaluation again, and wrote that "complaints and
[treatment] continuing 1.5 years post-loss increase[s]
State Farm Retains Outside Counsel
reviewed the updated injury evaluation and instructed Naser
to retain outside counsel to assist the investigation and,
specifically, to obtain a statement under oath and an
independent medical examination. State Farm had not
previously asked Parisi to provide a statement under oath or
submit to an independent medical examination.
testified that head injuries are particularly difficult to
evaluate. Naser explained that he has relatively
little experience with claims for head injuries, and that it
is difficult to determine recovery time for head
injuries." According to Naser, State Farm waited
until this point in its investigation to schedule the
statement under oath and independent medical examination
because it wanted to have a better sense of how Parisi's
called Stoehr on January 28, 2016 and told him that State
Farm hired an outside law firm to obtain a statement under
oath from Parisi. Stoehr stated that he "might as
well file suit."
Farm hired outside counsel Thomas McDonnell to handle
Parisi's claim. On February 5, 2016, McDonnell
requested that Parisi provide a statement under
oath. Parisi agreed to provide a
statement. The parties scheduled the statement
for February 25, 2016. It took place as
March 8, 2016, Stoehr notified Naser via letter that Parisi
scheduled an appointment with a doctor at the UPMC Concussion
Program for later that month. Stoehr also renewed the
$100, 000 settlement demand. Once again, Stoehr
threatened litigation if State Farm did not offer to settle
the case for the $100, 000 limit.
March 24, 2016, State Farm claims representatives held a
conference call with Attorney McDonnell and discussed
Parisi's claim. Naser increased the valuation of
Parisi's claim two times that day. After the
second adjustment, State Farm valued the "low
range" of Parisi's claim at $50, 000 to $60, 000 for
past pain and suffering, $10, 000 to $12, 000 for future pain
and suffering, and $1, 800 to $8, 000 for past medical
bills. Thus, according to State Farm's
calculations, the minimum value of Parisi's claim was
$61, 800. State Farm valued the "high range" of
Parisi's claim at $70, 000 to $75, 000 for past pain and
suffering; $20, 000 to $22, 500 for future pain and
suffering, and $1, 800 to $10, 000 for past medical
bills. Thus, the maximum value of
Parisi's claim exceeded the $100, 000 policy
Farm updated Parisi's file again two days later. State
Farm created a stacking claim as permitted by Parisi's
policy. Additionally, a notation was entered
that stated "[l]ets move forward with a neuropsych IME
to address cognitive/concussion related
issues." State Farm claims that Reed entered
this message,  though the claims file does not
identify a "performer" for this
Parisi Undergoes an Independent Medical Examination
and State Farm Offers to Settle for the Policy
April 6, 2016, Attorney McDonnell contacted Stoehr to
coordinate an independent medical examination. On June
1, 2016, Naser wrote to Stoehr and advised him that McDonnel
would contact him again to schedule Parisi's
appointment. On June 21, 2016, Stoehr received a
letter from Prizm Medical Resources stating that Parisi's
independent medical examination had been scheduled for July
27, 2016 in Mount Lebanon, Pennsylvania.
wrote Nasser on July 5, 2016. Stoehr objected to the
independent medical examination taking place in Mount Lebanon
because Parisi would have trouble traveling there due to her
cognitive difficulties. Stoehr also wrote that he
would sue State Farm for bad faith and breach of
responded to Stoehr's letter on July 7,
2016. Naser informed Stoehr that he
forwarded Stoehr's letter to McDonnell and stated that
State Farm would reimburse Parisi's wages and
transportation costs associated with participating in the
independent medical examination.
responded to Stoehr's letter on July 13,
2016. McDonnell stated that he would
consider scheduling the independent medical examination
closer to Parisi's residence and requested that Stoehr
identify other neuropsychologists who Parisi would
prefer. In late July, Stoehr proposed that Dr.
Wayne D'Agaro, a psychologist in Altoona, Pennsylvania,
conduct the independent medical examination. McDonnell
agreed with this proposal.
wrote to McDonnell on August 4, 2016 and provided McDonnell
with a copy of the complaint he filed against State Farm
before this Court.
August 10, 2016, Prizm contacted Stoehr and scheduled a
neuropsychological examination with Dr. D'Agaro on
September 26, 2016. The examination took place as
D'Agaro completed a report on October 13,
2016. Dr. D'Agaro diagnosed Parisi with
mild neurocognitive disorder due to traumatic brain injury
caused by the car accident.
November 2, 2016, State Farm offered Parisi a $100, 000
settlement, the coverage limit of her policy. Parisi
asserts three counts in her Amended Complaint: (1)
contractual bad faith; (2) statutory bad faith under 42 Pa.
C.S. § 8371; and (3) violations of Pennsylvania's
Unfair Trade Practices and Consumer Protection Law
("UTPCPL"), 73. P.S. § 201-1. (ECF No. 8.)
moves for partial summary judgment on her bad faith claim.
(ECF No. 38.) State Farm moves for summary judgment on all of
Ms. Parisi's claims. (ECF No. 40.)
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." Melrose,
Inc. v. Pittsburgh, 613 F.3d 380, 387 (3d Cir. 2010)
(quoting Ruehl v. Viacom, Inc., 500 F.3d 375, 380
n.6 (3d Cir. 2007)); see also Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986); Fed.R.Civ.P. 56(a).
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 (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)).
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, 477 U.S. at 323. 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 (3d Cir. 2001) (quoting Matsushita Elec. Indus. Co.
v. Zenith Radio Corp., 475 U.S. 574, 587 n.ll (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); see
also Podobnik v. U.S. Postal Sew., 409 F.3d 584, 594 (3d
Cir. 2005) (noting that a party opposing summary judgment
"must present more than just bare assertions, conclusory
allegations or suspicions to show the existence of a genuine
issue") (internal quotation marks omitted).
Discussion: Bad Faith Claims
Contractual Bad Faith (Breach of Contract)
state a claim for breach of contract under Pennsylvania law,
a plaintiff must plead the following elements: (1) the
existence of a contract, including its essential terms; (2)
the defendant's breach of duty imposed by the terms; and
(3) actual loss or injury as a direct result of the
breach." Angino v. Wells Fargo Bank, N.A., 666
Fed.Appx. 204, 207 (3d Cir. 2016) (citing Ware v. Rodale
Press, Inc., 322 F.3d 218, 225 (3d Cir. 2003));
Haywood v. Univ. of Pittsburgh, 976 F.Supp.2d 606,
625 (W.D. Pa. 2013) (Conti, J.) (citing Ware).
"In Pennsylvania, a duty of good faith and fair dealing
is implicit in an insurance contract." Rowe v.
Nationwide Ins. Co., 6 F.Supp.3d 621, 629 (W.D. Pa.
2014) (Gibson, J.) (quoting Simmons v. Nationwide Mut.
Fire Ins. Co., 788 F.Supp.2d 404, 408 (W.D. Pa. 2011)).
prove a contractual bad faith claim, a plaintiff must show
that the insurer's conduct was unreasonable or
negligent." Rowe, 6 F.Supp.3d at 629 (citing
CRS Auto Parts, Inc. v. Natl Grange Mut. Ins. Co.,
645 F.Supp.2d 354, 369 (E.D. Pa. 2009)). A plaintiff must
establish an insurer's contractual bad faith by clear and
convincing evidence. Rowe, 6 F.Supp.3d at 629
(citing Campbell v. State Farm Mut. Auto. Ins. Co.,
617 F.Supp.2d 378, 383 (W.D. Pa. 2008)).
when an insurance company has paid the proceeds of an
insurance policy, there can be no breach of contract claim
because the insured has received what she was due under the
policy and therefore has no damages." Smith v.
Allstate Ins. Co., 904 F.Supp.2d 515, 521 (W.D. Pa.
2012) (Gibson, J.) (internal citations omitted.) But
"[w]hen a party sues for damages stemming from an
insurer's bad faith in handling a claim . . . the damages
sought may be different from the damages compensated by
payment pursuant to the insurance policy and therefore may
not be remedied by such payment." Id. (citing
Birth Ctr. v. St. Paul Cos., 787 A.2d 376, 385
(2001)). Accordingly, "'where an insurer acts in bad
faith, by unreasonably refusing to settle a claim, it
breaches its contractual duty to act in good faith' and
is liable for 'the known and/or foreseeable compensatory
damages of its insured that reasonably flow from the
insurer's bad faith conduct.'" Rowe, 6
F.Supp.3d at 629 (quoting Birth, 787 A.2d at 389).
Statutory Bad Faith
bad faith statute provides that:
In an action arising under an insurance policy, if the court
finds that the insurer has acted in bad faith toward the
insured, the court may take all of the following actions:
(1) Award interest on the amount of the claim from the date
the claim was made by the insured in an amount equal to the
prime rate of interest plus 3%.
(2) Award punitive damages against the insurer.
(3) Assess court costs and attorney fees against the insurer.
42 Pa. C.S. §8371.
succeed on a statutory bad faith claim, "the insured
must prove: (1) that the insurer did not have a reasonable
basis for denying benefits under the policy; and (2) that the
insurer knew of or recklessly disregarded its lack of a
reasonable basis in denying the claim." Nw.
Mut. Life Ins. Co. v. Babayan, 430 F.3d 121, 137 (3d
Cir. 2005) (citing Keefe v. Prudential Prop. & Cas.
Ins. Co., 203 F.3d 218, 225 (3d Cir. 2000)); U.S.
Fire Ins. Co. v. Kelman Bottles, 538 Fed.Appx. 175, 182
(3d Cir. 2013) (quoting Babayan); Terletsky v. Prudential
Prop. & Cas. Ins. Co., 437 Pa. Super. 108, 125
(1994); Rowe, 6 F.Supp.3d at 630; Hayden v.
Westfield Ins. Co., No. CIV.A. 12-0390, 2013 WL 5781121,
at *10 (W.D. Pa. Oct. 25, 2013) (Hornak, J.); Lewis v.
Atl. States Ins. Co., No. 2:08-CV-01040-LPL, 2014 WL
12595309, at *7 (W.D. Pa. Sept. 26, 2014) (Lenihan,
Court has previously noted, "Section 8371 encompasses a
broad range of insurer conduct." Smith, 904
F.Supp.2d at 524. Although Section 8371 does not define the
term "bad faith, " "courts have subsequently
determined that a variety of carrier actions can constitute
bad faith, including 'a frivolous or unfounded refusal to
pay, lack of investigation into the facts, or a failure to
communicate with the insured.'" Hamm v. Allstate
Prop. & Cas. Ins. Co., 908 F.Supp.2d 656, 669 (W.D.
Pa. 2012) (quoting Frog, Switch & Mfg. Co., Inc. v.
Travelers Ins. Co., 193 F.3d 742, 751 n. 9 (3d Cir.
1999)). An insurer's delay in processing a claim can also
constitute bad faith. See, e.g., Mirarchi v. Seneca
Specialty Ins. Co., 564 Fed.Appx. 652, 655 (3d Cir.
Farm ultimately paid Parisi the maximum benefit permitted
under her policy. Accordingly, Parisi alleges that State Farm
acted in bad faith by delaying payment of her claim-not by
denying payment outright. To prevail on her "bad faith
delay" claim, Parisi must prove that State Farm (1)
"had no reasonable basis for causing the delay" and
(2) "knew or recklessly disregarded the lack of a
reasonable basis for the delay." Mirarchi, 564
Fed.Appx. at 655-56 (citing Thomer v. Allstate Ins.
Co., 790 F.Supp.2d 360, 369-70 (E.D. Pa. 2011));
Sands v. State Farm Fire & Cas. Co., No.
5:17-CV-4160, 2018 WL 1693387, at *6 (E.D. Pa. Apr.
6, 2018) (citing Mirarchi); see Ridolfi v. State Farm
Mut. Auto. Ins. Co., 146 F.Supp.3d 619, 623 (M.D. Pa.
2015) (citing Wiener v. Banner Life Ins. Co., No.
2-1351, 2003 U.S. Dist. LEXIS 4957, at *19-20 (E.D. Pa. Feb.
28, 2003)); Ressler v. Enter. Rent-A-Car Co., No.
CIV.A. 06-562, 2007 WL 2071655, at *7 (W.D. Pa. July
13, 2007) (Ambrose, J.) (citing Wiener).
"[a]n insurer's delay in settling a claim 'does
not, on its own, necessarily constitute bad faith.'"
Great Lakes Reinsurance (UK) PLC v. Stephens Garden
Creations, Inc., 119 F.Supp.3d 297, 306 (E.D. Pa. 2015)
(quoting Kosierowski v. Allstate Ins. Co., 51
F.Supp.2d 583, 588 (E.D. Pa. 1999)). "A delay
attributable to the uncertainty of the claim's value or
the insurer's need to investigate further does not
constitute bad faith." Great Lakes, 119
F.Supp.3d at 306 (citing Quaciari v. Allstate Ins.
Co., 998 F.Supp. 578, 583 (E.D. Pa. 1998)). And "if
delay is attributable to the need to investigate further or
even to simple negligence, no bad faith has occurred."
Sands, 2018 WL 1693387, at *6 (quoting Williams
v. Hartford Cas. Ins. Co., 83 F.Supp.2d 567, 572 (E.D.
Parisi further alleges that State Farm acted in bad faith by
making a low-ball settlement offer. "Generally,
Pennsylvania law does not treat as bad faith an insurer's
low but reasonable estimate of an insured's losses."
Seto v. State Farm Ins. Co., 855 F.Supp.2d 424, 430
(W.D. Pa. 2012) (citing Brown v. Progressive Ins.
Co., 860 A.2d 493, 501 (Pa. Super. Ct. 2004)). But
"low-ball offers which bear no reasonable relationship
to an insured's actual losses can constitute bad faith
within the meaning of § 8371." Seto, 855
F.Supp.2d at 430 (citing Brown, 860 A.2d at 501);
Barry v. Ohio Cas. Grp., No. CIV.A.3;O4 188, 2007 WL
128878, at *8 (W.D. Pa. Jan. 12, 2007) (Gibson, J.);
Schifino v. Geico Gen. Ins. Co., No. 2;ll-CV-lO94,
2012 WL 6552839, at *2 (W.D. Pa. Dec. 14, 2012) (quoting
insured is required to meet its burden of proving 'bad
faith' by clear and convincing evidence."
Babayan, 430 F.3d at 137 (citing Terletsky,
649 A.2d at 688); Henriquez- Disla v. Allstate
Prop. & Cas. Ins. Co., No. CIV.A. 13-284, 2015 WL
539550, at *9 (E.D. Pa. Feb.10, 2015). To satisfy
this standard, "the plaintiff [must] show that the
evidence is so clear, direct, weighty and convincing as to
enable a clear conviction, without hesitation, about whether
or not the defendants acted in bad faith." Hay
den, 2013 WL 5781121, at *11 (internal quotation marks
omitted) (quoting }.C. Penney Life Ins. Co. v.
Pilosi, 393 F.3d 356, 367 (3d Cir. 2004)). Accordingly,
"the plaintiff's burden in opposing a summary
judgment motion is commensurately high in light of the
substantive evidentiary burden at trial."
Hayden, 2013 WL 5781121, at *11 (internal quotation
marks omitted) (quoting Pilosi, 393 F.3d at 367);
Swan Caterers, Inc. v. Nationwide Mut. Fire Ins.
Co., No. 12-CV-00024, 2012 WL 5508371, at *6 (E.D. Pa.
Nov. 13, 2012).
The Court Will Deny Both Parties' Motions for Summary
Judgment on Bad Faith
Court finds that genuine issues of material fact exist that
preclude the Court from entering summary judgment for either
party on bad faith.
The Court Will Deny Parisi's Partial Motion for
Because State Farm Presented Sufficient Evidence for a
Reasonable Jury to Conclude that it Did Not Act in Bad
argues that this Court should grant summary judgment in her
favor because State Farm failed to conduct a prompt and
thorough investigation and engaged in low-ball settlement
tactics. (See ECF No. 47 at 6, 25.) The Court
rejects these arguments. As explained below, a reasonable
jury could determine that State Farm appropriately handled
A Reasonable Jury Could Find that the Delay Was
correctly notes that a significant period of time
-approximately two-and-a-half years-elapsed between
Parisi's filing her claim on May 23, 2014 and State
Farm's offer to settle for the policy limit on November
2, 2016. But Stoehr told State Farm that he usually did not
work with claims representatives until he settled the
underlying claim with the other driver. Stoehr
did not settle the underlying claim until March 19,
2015. And even after he settled the
underlying claim, Stoehr did not indicate any desire to
expeditiously settle Parisi's claim with State Farm. In
fact, in letters dated November 19, 2015 and December 30,
2015, Stoehr explicitly stated that he would make a
settlement demand at a future date. In fact,
it appears that Stoehr first demanded settlement during a
phone conversation on January 5, 2016,  and did
not make a written demand for settlement until January 13,
Stoehr made formal demands for settlement, State Farm acted
to promptly resolve Parisi's claim. In late January,
State Farm hired McDonnell to conduct a statement under
oath. McDonnell took Parisi's statement
under oath on February 25, 2016-six weeks after Stoehr
made his written settlement demand. In March, State Farm held
a conference call with McDonnell to discuss Parisi's
statement under oath and decided to schedule an independent
medical examination. In early June, State Farm informed
Stoehr that it scheduled the independent medical examination
for July. Importantly, State Farm scheduled the
independent medical examination before Parisi filed
suit. And while State Farm rescheduled the
independent medical examination, it did so because Stoehr
objected to its taking place in Mount Lebanon. Finally,
State Farm settled Parisi's claim approximately three
weeks after it received the report from the independent
on these undisputed facts, a reasonable jury could easily
find that State Farm did not unreasonably delay in processing
A Reasonable Jury Could Find that State Farm's Settlement