2014 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

7-17-2014

David Hatchigian v. State Farm Insurance Co

Precedential or Non-Precedential: Non-Precedential

Docket No. 14-1412

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Recommended Citation

"David Hatchigian v. State Farm Insurance Co" (2014). 2014 Decisions. Paper 741.

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NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

___________

No. 14-1412

___________

DAVID HATCHIGIAN,

Appellant

v.

STATE FARM INSURANCE COMPANY

____________________________________

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. Civil Action No. 2-13-cv-02880)

District Judge: Honorable Ronald L. Buckwalter

____________________________________

Submitted Pursuant to Third Circuit LAR 34.1(a)

July 9, 2014

Before: FISHER, VANASKIE and ALDISERT, Circuit Judges

(Opinion filed: July 17, 2014)

___________

OPINION

___________

PER CURIAM

David Hatchigian appeals from the District Court’s entry of summary judgment in 

favor of State Farm Insurance Company (“State Farm”). We will affirm.

I.
2

The background of this case is set forth in more detail in the District Court’s 

opinion. In 2007, Hatchigian filed suit against State Farm alleging that it wrongfully 

failed to pay certain benefits under his automobile insurance policy. (Hatchigian v. State 

Farm Ins. Co., E.D. Pa. Civ. No. 2-07-cv-03217.) In 2009, with Hatchigian represented 

by counsel of record Raymond Quaglia, the parties settled the dispute for $30,000. State 

Farm then delivered to Quaglia a check in the amount of $30,000 made payable to 

“David Hatchigian & Raymond J. Quaglia, His/Her Attorney.” 

Quaglia deposited the check into his account and sent Hatchigian a check for 

$16,500 along with a letter explaining that Quaglia retained the remaining $13,500 as 

payment of his fee and certain costs. Hatchigian disputed Quaglia’s right to retain the 

$13,500 and represented to State Farm that his signature on the check had been forged. 

That representation led State Farm to obtain a deduction of $30,000 from Quaglia’s bank 

account. After Quaglia demonstrated that he had paid Hatchigian $16,500 of the 

$30,000, State Farm sent two more checks to Quaglia—one for $16,500 to reimburse him 

for the check he sent to Hatchigian, and one for $13,500 for the remaining balance. Like 

its initial check, State Farm made its check for $13,500 payable to “David Hatchigian & 

Raymond J. Quaglia, His/Her Attorney.” Hatchigian and Quaglia later became involved 

in litigation over the $13,500 (among other things), and that litigation remains pending in 

state court.

In the action at issue here, Hatchigian filed suit against State Farm in state court 

claiming that State Farm should have sent the settlement checks directly to him and 
3

asserting claims for, inter alia, breach of contract, negligence, and bad faith.1 State Farm 

removed the action to federal court on the basis of diversity jurisdiction and, after 

discovery, moved for summary judgment. The District Court granted the motion after 

concluding that, as a matter of law, State Farm complied with the unambiguous terms of 

Hatchigian’s insurance policy and Hatchigian’s claims for negligence and bad faith are 

barred by the statute of limitations. Hatchigian appeals.2

II.

Hatchigian challenges the District Court’s entry of judgment on his claims for 

breach of contract, negligence, and bad faith. His challenges lack merit. Hatchigian 

claims that State Farm breached the terms of his insurance policy by sending the 

settlement checks to Quaglia instead of him. The District Court, noting that Hatchigian 

had not alleged which contractual provision State Farm allegedly breached, identified as 

the relevant provision the “Settlement of Loss” section of the policy. That section 

provides in relevant part that State Farm would “pay any amount due . . . to the insured or 

any person or organization providing services [or] . . . at our option to a person

 

1 Hatchigian also asserted claims for unjust enrichment, breach of the implied covenant of 

good faith and fair dealing, and a declaratory judgment. Hatchigian has waived any 

challenge to the District Court’s resolution of these claims by not raising them in his 

opening brief, and we thus will not address them further. See B.S. v. Somerset Cnty., 

704 F.3d 250, 267 n.28 (3d Cir. 2013).

2

The District Court had jurisdiction under 28 U.S.C. § 1332, and we have jurisdiction 

under 28 U.S.C. § 1291. We exercise plenary review over the entry of summary 

judgment, and we view the facts in the light most favorable to Hatchigian in determining 

whether there is “‘no genuine dispute as to any material fact’” and whether State Farm is 

“‘entitled to judgment as a matter of law.’” B.S., 704 F.3d at 260 (quoting Fed. R. Civ. 

P. 56(a)).
4

authorized by law to receive such payment.” (ECF No. 13-5 at 12.) The District Court 

concluded that these provisions unambiguously authorized State Farm to send the checks 

to Quaglia because Quaglia, as Hatchigian’s counsel of record, both provided services to 

Hatchigian and was “authorized by law” to receive payment on his behalf.

Hatchigian no longer contends that these provisions prohibited State Farm from 

sending payment to his legal representative, but he raises three other challenges to the 

District Court’s ruling. First, he argues that Quaglia was not actually his legal 

representative because he never consented to Quaglia’s representation. By way of 

background, Hatchigian was initially represented in his 2007 suit by Frank Marcone. 

Following Marcone’s suspension from the practice of law for two years, Marcone 

withdrew his appearance for Hatchigian and Quaglia entered his. (E.D. Pa. Civ. No. 2-

07-03217 ECF Nos. 23 & 25.) Quaglia later appeared with Hatchigian at the settlement 

conference and negotiated the settlement agreement, which both Hatchigian and Quaglia 

signed. Despite these uncontested facts, Hatchigian now asserts that Quaglia was not his 

authorized counsel because Marcone transferred his file to Quaglia, and Quaglia began 

representing him, without his knowledge or consent. As State Farm argues, however, 

Hatchigian did not raise this argument in the District Court and instead has raised it for 

the first time on appeal. We thus deem the argument waived. See B.S. v. Somerset Cnty., 

704 F.3d 250, 267 n.28 (3d Cir. 2013).3

 

3 Hatchigian argued below only that he had not authorized Quaglia to sign his name to the 

checks or “supervise” the settlement proceeds, not that Quaglia was not his authorized 

legal representative. (ECF No. 16 at 4-5.) Hatchigian does not contest that he failed to 

raise his present argument below, but he argues that State Farm waived its waiver 
5

Second, Hatchigian argues that the District Court erred in failing to construe 

ambiguities in the policy in his favor. Hatchigian does not identify any such ambiguities, 

however, and we perceive none.

Third, Hatchigian suggests that the District Court erred in failing to address 

whether State Farm breached, not only his insurance policy, but the parties’ settlement 

agreement as well. Once again, however, his assertion that State Farm breached the 

settlement agreement comes for the first time on appeal. As State Farm argues, 

Hatchigian’s complaint was premised entirely on State Farm’s alleged breach of the 

policy. (ECF No. 1 at 16-17, 20-21.) Hatchigian argues that his complaint should be 

liberally construed to include a claim for breach of the settlement agreement because 

Paragraph 23, which asserts that “State Farm has breached the terms of its Policy by 

refusing to perform its duty to reimburse Plaintiff pursuant to the terms of the policy,” 

cites the settlement agreement as one of six supporting exhibits. (ECF No. 1 at 20) 

(emphasis added). Accepting Hatchigian’s argument would strain the bounds of even 

liberal construction. Hatchigian also did not mention a claim based on the settlement 

agreement in his opposition to summary judgment, and he has failed to develop any 

meaningful argument in that regard on appeal because he has not specified which 

 

argument by not supporting it with citations to the record as required by Rule 28(b) of the 

Federal Rules of Appellate Procedure. State Farm correctly argues that Hatchigian failed 

to raise this argument anywhere of record, however, so it need not have specifically cited 

every document that Hatchigian filed.
6

provision of the settlement agreement State Farm allegedly breached.4

Hatchigian also raises two arguments addressed to the District Court’s ruling that 

his claims for negligence and bad faith are barred by the statute of limitations. State 

Farm sent its second round of checks to Quaglia and copied Hatchigian on its enclosure 

letter on March 29, 2010, and the District Court properly concluded that Hatchigian was 

aware of his alleged injury at that time. Hatchigian did not file suit until over three years 

later on April 18, 2013. Thus, the District Court concluded that these claims are barred 

by Pennsylvania’s two-year statutes of limitations for negligence and bad faith. See 42 

Pa. Cons. Stat. § 5524; Gardner v. State Farm Fire & Cas. Co., 588 F.3d 553, 561 (3d Cir. 

2008). The District Court further concluded that, even if a three-year Delaware statute of 

limitations applies as Hatchigian argued, Hatchigian filed suit outside that period as well.

Hatchigian concedes that he filed these claims outside the statute of limitations, 

but he argues that the District Court should have equitably tolled it under the doctrine of 

fraudulent concealment. See Connors v. Beth Energy Mines, Inc., 920 F.2d 205, 211 (3d 

Cir. 1990) (summarizing Pennsylvania’s fraudulent concealment doctrine).5 Under that 

doctrine, Hatchigian bore the burden of proving by “clear, precise and convincing” 

evidence that, inter alia, “defendant[’s] actions . . . amounted to an affirmative 

 

4 We nevertheless note that the settlement agreement contains no provision requiring 

State Farm to make payment to any particular person. (ECF No. 13-1 at 23-24.)

5 Hatchigian did not raise his specific arguments in this regard before the District Court, 

but we will liberally construe his opposition to summary judgment as sufficient to 

preserve this issue for appeal. (ECF No. 16 at 17.)
7

inducement to plaintiff to delay bringing the action.” Id. (quotation marks omitted). 

Hatchigian argues that State Farm “lulled him into inaction” by advising him that the 

statute of limitations was tolled during the parties’ ongoing negotiations and by 

representing that it would remedy the alleged injury. 

These assertions are flatly contradicted by the record. Hatchigian relies on a letter 

from his then-counsel to State Farm complaining of the payment to Quaglia (ECF No. 

16-2 at 12-13), and State Farm’s response dated August 19, 2010 (ECF No. 19-1 at 68-

69).6 State Farm’s letter said nothing about the statute of limitations or further 

negotiations and instead unambiguously informed Hatchigian of State Farm’s position 

that “State Farm has satisfied all obligations under and pursuant to the settlement with 

Mr. Hatchigian, and will make no further payment to him on account of same.” (ECF 

No. 19-1 at 69.) The letter also unambiguously stated that “[y]our suggestion that State 

Farm acted other than in an appropriate manner with regard to disbursement of the 

settlement funds is incorrect.” (Id.) Moreover, Hatchigian was represented by counsel at 

the time. Thus, no reasonable jury could conclude from this letter, or any other evidence 

of record, that State Farm affirmatively induced Hatchigian to refrain from bringing suit 

within the limitations period. See, e.g., Miller v. Keystone Ins. Co., 636 A.2d 1109, 1114 

(Pa. 1994) (declining to apply fraudulent concealment doctrine where there was “no 

evidence from which it could reasonably be interpreted that Keystone’s words or conduct 

 

6

It appears that Hatchigian first submitted State Farm’s August 19 letter as an exhibit to 

his notice of appeal. State Farm does not argue that this letter is not part of the summary 

judgment record and instead addresses its merits, however, so we will do the same in this 

instance.
8

lulled the Appellee into a false sense of security” and where “[w]e are not confronted 

here with an insurer’s actions which fostered an insured’s erroneous belief that a claim 

has been or will be processed”).

Finally, Hatchigian argues that the District Court’s statute of limitations analysis 

overlooked his purported claim that State Farm breached the settlement agreement. 

Hatchigian did not raise such a claim in the District Court as discussed above. He also 

does not explain how he believes it would have affected the statute of limitations analysis 

as to his claims for negligence and bad faith, and we perceive no way in which it might 

have done so.

For these reasons, we will affirm the judgment of the District Court. Hatchigian’s 

request for oral argument is denied.