District Court Sleuthing Around Policy Numbering Undermines Insurer’s Motion for Summary Judgment

In Connolly v. Progressive Northern Insurance Co., et al., No. 3:13-cv-2717, 2015 WL 464877 (M.D. Penn. Feb. 4, 2015), the United States District Court for the Middle District of Pennsylvania denied Progressive Northern Insurance Company’s (“Progressive”) motion for summary judgment regarding whether the plaintiff could stack underinsured motorist coverage limits and whether the insurer had engaged in statutory bad faith.

Plaintiff was involved in a motor vehicle accident in February 2009.  The third party tortfeasor paid plaintiff his $250,000 policy limit.  Plaintiff subsequently made an underinsured claim to Progressive, claiming that the third party’s tender of $250,000 did not satisfy plaintiff’s claim.  Plaintiff subsequently provided Progressive with documentation regarding her claim.  At the time of the accident, plaintiff was covered by an automobile policy issued by Progressive proving underinsured motorist benefits of $100,000 per person and $300,000 per accident.  Progressive requested additional documentation regarding plaintiff’s alleged injuries and future treatment more than ten times following plaintiff’s initial disclosure of records, without meaningful response from plaintiff.  Plaintiff then brought suit claiming she was entitled to stack underinsured motorist limits and that Progressive had acted in bad faith.

The district court found an issue of fact regarding whether plaintiff was entitled to stacked underinsured motorist coverage.  Pennsylvania law provides that once an insured executes a rejection of stacked coverage, there is no need to obtain a new one on renewal or addition of a vehicle.  The district court found that Progressive established that the policyholders, plaintiff’s parents, had executed a rejection of stacked coverage in 1998.  However, the district court determined it was unclear whether this rejection extended to the policy relevant to plaintiff’s 2009 accident.  The district court found peculiar that the policyholders had renewed their policy 21 times, and while the core policy number never changed, at various points in time, a number between 0 and 9 was added to the end.  The district court was dismayed that Progressive failed to explain the significance of these trailing numbers, and thus, the district court was unsure whether the policy at issue was the same as the policy in 1998, for which stacked underinsured motorist coverage was rejected.  On this basis, the district court denied Progressive’s summary judgment motion.

The district court also found an issue of fact regarding whether Progressive committed statutory bad faith.  Plaintiff argued that Progressive acted in bad faith by failing to provide a certified copy of the insurance policies and failing to perform a reasonable and timely investigation.  Progressive made four arguments—there was a genuine dispute over the value of plaintiff’s claim, plaintiff already received $250,000, plaintiff’s medical records indicated that she had recovered, and plaintiff refused to provide updated documentation.  The district court decided to leave a decision about the propriety of Progressive’s conduct to the jury.  The district court suggested it was possible that Progressive’s failure to schedule a statement under oath or plaintiff’s deposition evidenced a slow investigation.  The district court also noted that additional medical information and witness testimony was necessary to ultimately determine whether Progressive failed to make an offer with reckless disregard of the medical documentation in its possession.