Monthly Archive for January, 2010
In Kister v. W.N. Tuscano Agency, Inc., the insured, a business that provides home heating fuel to residential customers, purchased an insurance policy from the insurer to cover its business operations. The policy included a standard exclusion for any pollution, however, the insured purchased an endorsement titled “Pollution Liability-Limited Coverage for Covered Autos Subject to Aggregate Limit,” which provided coverage in the event a covered vehicle was “upset or overturned in the course of transit or was involved in a collision with another object while in the course of transit.” The insured was sued by a customer, after the customer discovered fuel on the ground and around the tank where the fuel had been transferred. The insured filed a claim, and the insurer denied the claim on the basis that the incident was excluded under the policy’s pollution exclusion.
The insured sued for bad faith, among other causes of action. The insurer filed preliminary objections in the nature of a demurer (i.e. a motion to dismiss) to the insured’s bad faith claim. The court noted that the test for granting preliminary objections in the nature of a demurrer is “whether it is clear from all of the facts pleaded that the pleader will be unable to prove facts legally sufficient to establish his or her right to relief.” The court found that the policy did not provide coverage for the incident for which the insured sought coverage. The court noted that the insured failed to show or bring forth any evidence to prove that the insurer did not have a reasonable basis for denying the claim. Accordingly, the court sustained the insurer’s preliminary objections and dismissed the bad faith claim.
Date of Decision: August 26, 2009
Kister v. W.N. Tuscano Agency, Inc., No. 791 CIVIL 2008, Common Pleas Court of Somerset County, Pennsylvania, 2009 Pa. Dist. & Cnty. Dec. LEXIS 96, (C.C.P. Somerset August 26, 2009) (Klementik, J.).
In Johnson v. Progressive Insurance Company, the insured’s car was rear-ended by another vehicle, resulting in a knee injury. The insured’s automobile insurance included $100,000 in underinsured motorist (“UIM”) benefits. Over one year after the accident, the insured advised the insurer that he intended to pursue his UIM coverage. Within days, the insurer acknowledged the claim and promptly consented to the insured’s request to settle the underlying tort action against the driver of the other car.
One month after the insured settled his tort claim, the insurer requested documentation to support the nature and extent of the insured’s injuries, as well as information regarding the insured’s five prior automobile accidents. Instead of providing the requested documentation, the insured made a demand for arbitration and suggested that the insurer’s request relating to the prior accidents was made in bad faith. The insured did not provide the insurer with permission to review his medical records for another month, and the insurer did not receive all of the medical records for an additional four months.
The insured demanded the full amount of UIM coverage of $100,000, and the insurer offered $30,000. At arbitration, the insured was awarded $75,000. The insured subsequently sued the insurer for bad faith. The trial court granted the insurer’s motion for summary judgment, and the insured appealed.
The Superior Court affirmed the trial court, stating that there was “no question that the claim was handled promptly and professionally by the insurer.” The court found that the facts involved nothing more than a normal dispute between an insured and insurer over the value of an UIM claim. The court noted that the insurer’s offer was slightly less than fifty percent of the insured’s award, and emphasized that bad faith is not present merely because an insurer makes a low but reasonable estimate of an insured’s damages. The court stated that allowing an action to proceed under these facts “would invite a floodgate of litigation any time an arbitration award is more than an insurer’s offer to settle, even though the award is substantially below the insured’s demand.”
Date of Decision: December 28, 2009
Johnson v. Progressive Ins. Co., No. 3173 EDA 2008, Superior Court of