A low but reasonable estimate of the insured's losses will not support a bad faith claim.

The U.S. Court of Appeals for the Third the Circuit found a district court did not abuse its discretion and properly entered summary judgment in favor of the insurer defendant in a bad faith UIM case. The insured denied averments in the insurer’s motion for summary judgment statement of facts, however, the insured did not actually reject the paragraphs that she responded to. The court refused to hold evidentiary value to the insured’s counter statement of facts since they went beyond the scope of the insurer’s original statement of facts. The record also showed there was a reasonable basis for denying the claim based on undisputed facts that showed, “(1) a large portion of [the insured’s] valuation of her claim was attributable to potential future surgery, (2) an independent medical examination disputed [the] claim that she needed the future surgery, (3) [she] had additional health coverage that would defray the cost of future surgery, and (4) [the insurer] believed [she] was exaggerating her symptoms in her deposition during the underlying UIM litigation.” Although not a binding precedent opinion, it solidifies the argument that even if a claim is arbitrated above a carrier’s valuation, it does not support a finding of bad faith.

Case Law Alerts, 1st Quarter, January 2020 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2020 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.