JULY 2014 BAD FAITH CASES: INSURER SUCCESSFUL IN DISMISSING BAD FAITH CLAIM AND IN OBTAINING INDEMNIFICATION FROM INSURANCE AGENT (Philadelphia County Common Pleas)
In Markus v. Infinity Indem. Ins. Co., the defendant insurance agency sought appeal of an order denying its Motion for Post-Trial Relief. The underlying action involved a motor vehicle accident in which Plaintiff’s brother was driving her vehicle. Plaintiff’s claim was ultimately denied on the basis that her brother was not a driver listed on her policy at the time of the accident. Plaintiff brought an action against her insurer, her agent, and his affiliated agency.
Judge Ackerman found in favor of the plaintiff on the Breach of Contract claim, but found in favor of the Defendant insurer on claims for bad faith, misrepresentation, and violations of the Unfair Insurance Practices Act. The Court also found in favor of the insurer on cross claims against Plaintiff’s agent and his affiliate. Following the trial, the Affiliate Defendants appealed. Judge Fox issued an opinion justifying retired Judge Ackerman’s decision and discussing why the appeals must fail.
The agency defendants argued that, because there was no Breach of Contract claim in the original Complaint, a new trial was warranted in order to give them time to prepare an appropriate defense. Judge Fox disagreed in her opinion, citing defendants’ failure to object when Breach of Contract was included in the Amended Complaint and also when it was argued at the non-jury trial.
The Court referenced Pa. R.C.P. No. 227.1, which states: “if no objection is made, error which could have been corrected in pre-trial proceedings or during trial by timely objection may not constitute a ground for post-trial relief. “ The Court also noted that, although Plaintiff’s complaint was poorly plead, there were sufficient allegations set forth to serve as the basis for a Breach of Contract claim.
The agency defendants further argued that the $15,715.52 verdict was excessive under a Breach of Contract theory. They contended that, under Plaintiff’s policy, recovery would be limited to the lowest of three sums: 1) actual value of the vehicle 2) cost of repairs, or 3) limit on the policy. While the defendants asserted that the limit on the property damage policy was $10,000, the Court noted that the claim was a collision claim, not a property damage claim, and, therefore, the verdict entered in the amount of the repair cost was proper.
Finally, the agency defendants challenged the verdict on the insurer’s cross-claim for indemnification, arguing that the verdict was against the weight of evidence. The Court found that the insurer defendant was liable to Plaintiff solely by operation of law and was seeking to recover its loss from the agency defendants who were actually responsible for the incident. Failing to find “any evidence of culpable conduct on the part of [the insurer]”, the Court found that the cross-claim award in favor of the insurer was appropriate.
Date of Decision: March 28, 2014
Markus v. Infinity Indem. Ins. Co., 2014 Phila. Ct. Com. Pl. LEXIS 119, No. 2186 (C.C.P. Phila. 2014) (Fox, J.)
