Bad Faith Blog

Summary: The insured filed suit against his insurer for breach of contract and bad faith after repeatedly failing to attend an independent medical examination (“IME”) scheduled by his insurer. On appeal, the Third Circuit held the insured materially breached the insurance contract by failing to appear for the IME. The court further held the insurer had a reasonable basis for the IME and its subsequent denial of the claim. Because there was a reasonable basis for its actions, the insurer did not commit bad faith.

Summary: Plaintiffs sued GEICO alleging it used arbitrary computer “rules” to determine personal injury protection (“PIP”) payments when a Delaware statute required GEICO to pay “reasonable and necessary” PIP benefits. The court initially certified classes to pursue counts for bad faith breach of contract, breach of the duty of good faith and fair dealing, and consumer fraud. Thereafter, the court granted summary judgment in favor of the defendant and against the plaintiffs’ class representative. Thereafter, the court denied the motion to substitute a class representative while at the same time granting the defendant’s motion to decertify the class primarily because the individual issues regarding the damages claims would predominate over any common questions of law or fact.

Summary: Insurer failed to timely pay on Med Pay coverage as required by statute. Plaintiff entitled to jury trial on her claim for emotional distress and costs of bringing suit against insurer.