Court Opinion

ID: 2796915
Source: CourtListenerOpinion
Date Created: 2015-04-28 17:00:32.657071+00
Date Added: 2024-06-11T11:21:18.716040
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                               ________________

                                      No. 14-1603
                                   ________________

                 KAREN MIEZEJEWSKI; STANLEY MIEZEJEWSKI,
                                                   Appellants

                                             v.

                      INFINITY AUTO INSURANCE COMPANY

                                   ________________

                      Appeal from the United States District Court
                         for the Middle District of Pennsylvania
                         (D.C. Civil Action No. 3-12-cv-01000)
                     District Judge: Honorable Malachy E. Mannion
                                   ________________

                       Submitted under Third Circuit LAR 34.1(a)
                                  on January 16, 2015

                Before: AMBRO, FUENTES and ROTH, Circuit Judges

                              (Opinion filed: April 28, 2015)

                                   ________________

                                       OPINION*
                                   ________________

ROTH, Circuit Judge

*
 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
       Karen Miezejewski was injured in a car accident on December 3, 2009. After

negotiations with her insurer, Infinity Auto Insurance Company, broke down, she and her

husband Stanley sued, alleging Infinity acted in bad faith in handling her claim. The

District Court granted Infinity’s motion for partial summary judgment, and the

Miezejewskis appealed.1 We will affirm for the following reasons.

I.     Background

       Miezejewski was in the driver’s seat of her parked car when a car, driven by

Anthony Rosenbaum, backed into her on the driver’s side. She settled with Rosenbaum

for his policy’s liability limit of $25,000, but that amount was insufficient to compensate

Miezejewski for her injuries, which she claimed included her post-accident job loss.

Accordingly, Miezejewski demanded payment of underinsured motorist (UIM) benefits

under her Infinity-issued policy.

       Infinity’s claim representative acknowledged the UIM claim and noted that the

Miezejewskis’ policy limit for such a claim was $15,000. He then requested from the

Miezejewskis’ attorney all documents and records supporting Miezejewski’s UIM claim.

The representative was provided with various materials discovered in the course of

litigation against Rosenbaum, including Miezejewski’s post-accident medical records and

a transcript of a deposition of her former employer’s human relations manager.

       After reviewing the documents, the claim representative had questions as to

whether Miezejewski’s pain stemmed from a pre-existing degenerative condition. The

1
  The District Court granted the Miezejewskis’ motion to withdraw their breach of
contract claim on March 3, 2014. That claim is no longer at issue and the judgment is
therefore final.
                                             2
medical records, which raised red flags, included the “recommendation” of an

orthopaedic specialist who treated Miezejewski for post-accident pain in her left knee: “I

think this accident definitely exacerbated some pre-existing arthritis.” Notably, another

orthopaedist who examined Miezejewski concurred, “I do think that she always has had

some arthritis in this knee that has been severe in nature but her symptoms are

significantly exacerbated by the auto accident.” What is more, Miezejewski herself

testified in the Rosenbaum suit that her arthritis was not confined to her left knee.

       Miezejewski’s post-accident medical information struck the claim representative

as “indicative of prior related conditions that [he] would want to review.” However,

Infinity was never provided with any prior medical records, nor did the Miezejewskis’

attorney at any point explain the absence of pre-accident treatment information.

       The claim representative also had doubts as to whether Miezejewski’s firing was

accident-related. In particular, he noted that she was rated by her employer as either

meeting or exceeding expectations in each of eight categories identified on a performance

evaluation rubric, as of March 2010—four months after the car accident. Eight months

later, she was fired. The claim representative characterized her former employer’s HR

manager’s testimony as “conflicting . . . as to why [Miezejewski] would be positively

reviewed four months after the accident and then ultimately be terminated from injuries

relating to this accident.”

       After reviewing the materials submitted by the Miezejewskis’ attorney, the claim

representative valued Miezejewski’s UIM claim at $5,000 to $7,500 (net of the $25,000

settlement with Rosenbaum). The representative noted, “[a]nything more than that could

                                              3
require some additional discovery,” including Miezejewski’s pre-accident medical

records and additional information concerning her termination. The Miezejewskis’

attorney rejected Infinity’s $5,000 initial offer and did not respond to a subsequent offer

of $7,500.2

          The Miezejewskis instead filed suit in the Pennsylvania Court of Common Pleas

for Lackawanna County, alleging that Infinity breached its insurance contract and acted

in bad faith in handling Miezejewski’s UIM claim. Infinity removed to the United States

District Court for the Middle District of Pennsylvania and moved for partial summary

judgment as to the bad faith claim.3 On January 22, 2014, the District Court granted

Infinity’s partial summary judgment motion, finding that “a jury could not find, by clear

and convincing evidence, that [Infinity]’s course of conduct did not rest on a reasonable

basis.”

II.       Analysis4

          The Miezejewskis filed their bad faith claim pursuant to a Pennsylvania statute

that provides, in the court’s discretion, for interest on the amount of the claim, punitive

damages, court costs, and attorneys’ fees against an insurer who “the court finds . . . has

acted in bad faith toward the insured.”5

2
  The Miezejewskis do not challenge the contents of the claim representative’s log notes,
which inform our understanding of the parties’ settlement discussions.
3
  In its brief, Infinity writes that in July 2013, after the close of discovery, it “tendered to
the Miezejewskis the $15,000 UIM policy limits” and the Miezejewskis accepted the
offer.
4
  The District Court had subject matter jurisdiction under 28 U.S.C. § 1332. We have
jurisdiction under 28 U.S.C. § 1291.
5
  42 Pa. Cons. Stat. § 8371.
                                               4
       The Pennsylvania Superior Court has held that to prevail under the bad faith

statute, “the insured must show that the insurer did not have a reasonable basis for

denying benefits under the policy and that the insurer knew of or recklessly disregarded

its lack of reasonable basis in denying the claim.”6 An insurer need not engage in fraud

to be subject to the statute; however, “mere negligence or bad judgment is not bad faith.

The insured must also show that the insurer breached a known duty (i.e., the duty of good

faith and fair dealing) through a motive of self-interest or ill will.”7

       We maintain plenary review of a summary judgment grant, “and we apply the

same test the district court should have utilized initially.”8 Here, the District Court

correctly established the plaintiff’s burden to demonstrate bad faith by clear and

convincing evidence.9 This heightened standard, under which we must view the evidence

presented, “requires evidence so clear, direct, weighty and convincing as to enable a clear

conviction, without hesitation, about whether or not the defendant[] acted in bad faith.”10

       The facts, taken in the light most favorable to the Miezejewskis, do not support

their claim, let alone by clear and convincing evidence.

       Consistent with Infinity’s “ongoing vital obligation,” its claim representative acted

in good faith—i.e. with a reasonable basis for his assessments and interactions with the

6
  Grossi v. Travelers Personal Ins. Co., 79 A.3d 1141, 1148 (Pa. Super. Ct. 2013)
(citations and internal quotation marks omitted).
7
  Id. at 1149 (citations omitted).
8
  Barkes v. First Corr. Med., Inc., 766 F.3d 307, 316 (3d Cir. 2014) (citation and internal
quotation marks omitted).
9
  See Rhodes v. USAA Cas. Ins. Co., 21 A.3d 1253, 1263 (Pa. Super. Ct. 2011).
10
   Post v. St. Paul Travelers Ins. Co., 691 F.3d 500, 523 (3d Cir. 2012) (citation and
internal quotation marks omitted).
                                               5
Miezejewskis’ attorney—throughout “the entire management of the claim.”11 Both of

Infinity’s pre-litigation settlement offers were within its representative’s initial valuation

of the UIM claim. In conveying the offers, the representative emphasized that they were

not final. He told the Miezejewskis’ attorney that a higher offer would “require some

additional discovery” concerning Miezejewski’s pre-accident medical history and

additional information about her termination.12 Notably, after the close of discovery in

this lawsuit, which included a deposition of the executive who made the termination

decision, Infinity tendered to the Miezejewskis the $15,000 policy limit they initially

sought.

       At every turn, Infinity’s claim representative acted reasonably in light of the

evidence, both presented and inexplicably withheld.13 There is no evidence whatsoever

that Infinity’s handling of the claim was motivated by “self-interest or ill will.”14 The

Miezejewskis accordingly fail to demonstrate Infinity’s bad faith by clear and convincing

evidence.

11
   Condio v. Erie Ins. Exch., 899 A.2d 1136, 1145 (Pa. Super. Ct. 2006).
12
   To the extent the Miezejewskis argue the claim representative was not permitted to
make an initial offer pending further discovery on the basis of the information already
submitted to the insurer, they misconstrue Pennsylvania law. See id. at 1151 (holding
that insurer did not engage in bad faith by relying on “[t]he equivocal contents of [a]
police report” in “taking an initial position, pending further investigation and evaluation,
that [claimant] was not entitled to UIM benefits”).
13
   There is simply no evidence that the claim representative “ignored” Miezejewski’s job
loss or “gave no weight” to her employer’s HR manager’s testimony concerning her post-
accident termination, as the Miezejewskis contend. In fact, the representative’s log
notes—the only evidence on point—indicate that he considered the HR manager’s
testimony “conflicting” as to whether Miezejewski’s termination stemmed from the car
accident.
14
   Grossi, 79 A.3d at 1148-49.
                                               6
III.   Conclusion

       For the foregoing reasons, we will affirm the District Court’s order granting partial

summary judgment in favor of Infinity.

                                             7