In the case of Ridolfi v State Farm., Federal Magistrate Judge Carlson of the Middle District granted an insurer’s Motion for Summary Judgment in a UIM bad faith case.

The Plaintiff alleged bad faith based on State Farm Mutual Automobile Insurance Company: (1) allegedly misstating the scope of its coverage; (2) insisting upon a sworn statement from its insured, even though a deposition had previously been completed two; (3) unreasonably delaying its investigation the claim and requiring the production of multiple sets of medical records; and (4) failing to keep Plaintiff fully informed in writing of the progress of her claim.

The court granted summary judgment finding that, “while both parties indulged in occasional missteps in the process of reviewing and litigating this claim, the essentially uncontested evidence does not meet the demanding, concise and exacting legal standards prescribed under Pennsylvania law for a bad faith insurance processing claim.” The court additionally noted that a carrier can be successful in defending against the bad faith claims by showing that there were “red flags” warranting further investigation into the claims presented.   Accordingly, the court found that delay alone does not amount to bad faith.   Rather, the court found that an inference of possible bad faith only arises when time passes as a part of pattern of a knowing or reckless delay in processing a meritorious insurance claim.

With respect to State Auto seeking a sworn statement, the court disagreed with Plaintiff’s argument that no sworn statement was necessary as the insured had been deposed two (2) years earlier in the underlying third party litigation, instead finding nothing wrong with the UIM carrier seeking a sworn statement under oath from the Plaintiff in light of the fact that the medical information discovered to date was incomplete. With respect to State Auto’s violations of the regulatory requirement that a UIM carrier provide 45 day updates on the status of insurance claims, the court recognized that, while violations of this insurance rules can be considered when examining a bad faith claim under §8371, the violations of the regulatory scheme in and of themselves do not amount to a per se violation of the bad faith standard.

Thanks to Hillary Ladov for her contribution to this post.