CARCAREY v. GEICO GENERAL INSURANCE COMPANY
Filing
68
MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE MARY A. MCLAUGHLIN ON 10/25/11. 10/26/11 ENTERED AND COPIES E-MAILED.(kw, )
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IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
SUZANNE CARCAREY
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v.
GEICO GENERAL INSURANCE
COMPANY
CIVIL ACTION
NO. 10-3155
MEMORANDUM
McLaughlin, J.
October 25, 2011
This case arises from a vehicle accident in which
Edward Carcarey (“Carcarey”) was struck and killed by an
unidentified driver while walking along the side of a road.
Suzanne Carcarey (“the plaintiff”), as administratrix of her
son’s estate, brought this suit against GEICO for uninsured
motorist benefits.
The plaintiff’s complaint alleges both breach
of contract and bad faith claims.
I.
Summary Judgment Record
On September 21, 2007, Carcarey was killed while
walking with his girlfriend, Elizabeth Caserta, along Route 422
in Lower Pottsgrove.
been identified.
The vehicle which struck Carcarey has not
At the time of the accident, the plaintiff had
an insurance policy with the defendant.
The policy contained
uninsured motorist coverage that applied to family members
residing with the plaintiff.
Pl. Mot. for Partial Summ. J.,
Stmt. of Undisputed Facts ¶ 1, 3, 6; Def. Resp. ¶ 1, 3, 6.
On September 24, 2007, the plaintiff filed an uninsured
motorist claim with the defendant.
From September of 2007 until
June of 2009, GEICO obtained information regarding this claim.
The defendant requested that the plaintiff’s attorney provide it
with proof of Carcarey’s residency, death certificate, papers of
administration, the police report, and a witness statement from
Caserta.
The defendant sent several letters to the plaintiff’s
counsel and to Caserta requesting information.
The defendant
obtained a police report regarding the accident on January 21,
2008.
The plaintiff’s counsel provided Carcarey’s Death
Certificate and a police accident report on July 14, 2008.
On April 1, 2009, the defendant was advised that the
plaintiff’s present counsel had taken over the plaintiff’s case.
Present counsel also provided the defendant with a coroner’s
report.
The plaintiff also participated in a phone call with the
defendant and her present counsel in which she stated that she
was no longer represented by the her former counsel.
The
plaintiff’s former counsel continued to state that he represented
the plaintiff.
On April 14, 2009, the defendant sent letters to
both lawyers requesting clarification of the plaintiff’s
representation.
On April 20, 2009, the plaintiff’s former
counsel called the defendant and stated that he was no longer
representing the plaintiff and that neither Carcarey nor Caserta
were living with Suzanne Carcarey at the time of the accident,
2
which would affect Carcarey’s entitlement to benefits.
The next
day, on April 21, 2009, the defendant received a letter from the
plaintiff stating that present counsel now represented her.
With the assistance of the plaintiff’s present counsel,
the defendant continued its investigation.
On April 28, 2009,
the defendant spoke with Caserta and obtained a statement of the
events from her.
On May 15, 2009, the plaintiff’s counsel
provided the defendant with tax records for Carcarey from 2001
through 2003 and a statement book Carcarey used for his business.
On June 1, 2009, the defendant made a verbal offer of $75,000 to
the plaintiff’s counsel.
this suit.
Following initiation of the suit, the defendant
offered $100,000.
II.
On June 9, 2010, the plaintiff filed
Def. Reply, Ex. A.; Pl. Resp., Ex. H.
Analysis1
The defendant has moved for summary judgment on the
second of the plaintiff’s claims, that the defendant acted in bad
faith.
The plaintiff contends that GEICO demonstrated bad faith
1
On a motion for summary judgment, the Court considers
the evidence in the light most favorable to the nonmoving party.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). A
party moving for summary judgment must show that
there are no issues of material fact and that judgment is
appropriate as a matter of law. Fed. R. Civ. P. 56(c). The
moving party bears the initial burden of showing that there are
no issues of material fact. Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986). Once a properly supported motion for summary
judgment is made the burden shifts to the non-moving party, who
must set forth specific facts showing that there is a genuine
issue for trial. Anderson, 477 U.S. at 250.
3
in three ways: (1) the defendant offered less than 25% of the
plaintiff’s claim for $400,000; (2) the defendant spoke with the
plaintiff’s former legal counsel after new counsel had taken over
representation; and (3) the defendant’s counsel engaged in bad
faith conduct by speaking with Caserta before her deposition
without counsel present.
In Pennsylvania, bad faith claims are governed by 42
Pa. Cons. Stat. § 8371.
In order to prevail on a claim of bad
faith, “the insured must show that the insurer did not have a
reasonable basis for denying benefits under the policy and that
the insurer knew of or recklessly disregarded its lack of
reasonable basis in denying the claim.”
Fogel,
F.3d
Amica Mut. Ins. Co. v.
, No. 3611, 2011 U.S. App. LEXIS 18623, at *34
(3d Cir. Sept. 8, 2011) (Terletsky v. Prudential Property &
Casualty Co., 649 A.2d 680, 688 (Pa. Super. Ct. 1984)).
A bad
faith claim requires a heightened showing of clear and convincing
evidence.
Terletsky, 649 A.2d at 688.
The court must decide a
motion for summary judgment by viewing the evidence presented in
light of the plaintiff’s higher burden at trial.
Amica, 2011
U.S. App. LEXIS 18623, at *33-*34.
The defendant first argues that a bad faith claim
requires a prerequisite showing that the insurer refused to pay
the claim.
The Court disagrees.
Pennsylvania courts have
recognized that an insurer’s bad faith is not limited to denials
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of claims.
In the leading decision governing bad faith claims,
Terletsky, the Pennsylvania Superior Court considered whether a
low-dollar settlement offer could support a claim of bad faith.
Terletsky, 469 A.2d at 688.
Although the court found that there
was no evidence of bad faith, because the offer was reasonable,
there is no suggestion that the plaintiff was barred from
pursuing a bad faith claim because a settlement offer was made.
Id. at 688-89.
Pennsylvania courts have also held that bad faith
can include investigative practices during the litigation of a
claim.
In O’Donnell, the Pennsylvania superior court considered
a bad faith claim when the insurer had neither approved nor
denied the plaintiff’s claim.
O’Donnell v. Allstate Ins. Co.,
734 A.2d 901, 906 (Pa. Super. Ct. 1999).
Language from the Court of Appeals for the Third
Circuit supports the defendant’s contention.
The court stated
that “the essence of a bad faith claim must be the unreasonable
and intentional (or reckless) denial of benefits.”
UPMC Health
System v. Metropolitan Life Ins. Co., 391 F.3d 497, 506 (3d Cir.
2004).
That case, however, was about that defendant’s decision
to conceal an underwriting miscalculation in order to extract a
higher premium from the plaintiff, not to deny a benefit.
addition, the UPMC court cited O’Donnell favorably.
In
Id.
The defendant cannot prevail on this motion simply
because it made an offer to the plaintiff.
5
In deciding this
motion, the question is whether the defendant lacked a reasonable
basis for its behavior and the defendant intentionally or
recklessly disregarded that lack of reasonable basis.
Based on the undisputed facts, no reasonable jury could
conclude that the defendant acted in bad faith.
At the time that
the defendant made its initial $75,000 offer, the defendant was
aware of Carcarey’s limited income over the prior several years
and of questions regarding the his residency and therefore
coverage under the insurance policy.
Nor could a reasonable jury
conclude that the defendant acted in bad faith in its subsequent
offer of $100,000.
When that offer was made, there was
additional evidence that Carcarey did not reside at Suzanne
Carcarey’s home and may have been negligent at the time of the
accident
In support of her other two allegations, the plaintiff
does not offer clear and convincing evidence on which a
reasonable jury could conclude there was bad faith on the part of
the defendant.
The record suggests that the defendant was acting
conscientiously in ascertaining the plaintiff’s representation
and did not seek out information from the plaintiff’s former
legal counsel.
At the time that the plaintiff’s former counsel
called the defendant, the issue of the plaintiff’s representation
was unclear.
There is no evidence that the defendant sought out
6
information from the plaintiff’s former counsel.
Second, the plaintiff does not present clear and
convincing evidence that defense counsel engaged in improper
behavior before Ms. Caserta’s deposition.
At oral argument held
on October 21, 2011, both Mr. Brassington, counsel for the
plaintiff, and Mr. Moring, counsel for the defendant, informed
the Court of the events which occurred before Ms. Caserta’s
deposition.
Their reports of these events are not contradictory
and thus the Court accepts both representations as true.
On the day of Ms. Caserta’s deposition, Mr. Brassington
did not speak with Ms. Caserta.
He was informed by his client,
Suzanne Carcarey, that Ms. Caserta wanted a lawyer present.
When
Mr. Moring arrived at Ms. Caserta’s home, Mr. Brassington had
called a lawyer to come represent Ms. Caserta.
Mr. Brassington
informed defense counsel that Ms. Caserta wanted a lawyer and
that he should not speak to her.
Mr. Moring’s paralegal had
spoken with Ms. Caserta the day before and understood Ms. Caserta
did not want a lawyer.
He entered the home and spoke with Ms.
Caserta while Mr. Brassington was outside.
Mr. Moring informed
Ms. Caserta that she could proceed without counsel if she wanted
and that he wanted her to tell the truth.
Ms. Caserta or Suzanne
Carcarey, who was also in the home, became upset.
Hearing this,
Mr. Brassington entered the house and ended the conversation.
Mr. Brassington was not present for the conversation nor did he
7
hear what was said by either Mr. Moring or Ms. Caserta.
No reasonable jury could conclude that Mr. Moring’s
decision to determine if Ms. Caserta wanted representation before
delaying the deposition was an act of bad faith.
Neither counsel
had been informed by Ms. Caserta or her legal counsel that she
was represented when Mr. Moring spoke with her.
In addition,
there is no evidence that Mr. Moring engaged in improper
communication with Caserta during their conversation.
An appropriate order shall issue.
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