Borden v. NGM Ins. Co.

• Decision Date: 08 March 2023
• Docket Number: Civil Action 20-1878
• Parties: MATTHEW BORDEN Plaintiff, v. NGM INSURANCE COMPANY Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

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MATTHEW BORDEN Plaintiff, v. NGM INSURANCE COMPANY Defendant.

Civil Action No. 20-1878

United States District Court, E.D. Pennsylvania

March 8, 2023

MEMORANDUM OPINION

Rufe J.

This is an insurance dispute between Plaintiff Matthew Borden and his insurer Defendant NGM Insurance Company, arising out of NGM's handling of Plaintiff's underinsured motorist (“UIM”) claim. Defendant has moved for summary judgment on the sole remaining claim in this case, for insurance bad faith.^[1] For the reasons that follow, NGM's motion will be granted.

I. BACKGROUND^[2]

A. The Initial Claim

Plaintiff is the owner of Matthew Borden Heating and Cooling, Inc., an air-conditioning and heating business. On August 12, 2017, Plaintiff sustained injuries in a car crash when the tortfeasor, Linda Reilly, struck the rear passenger side of Plaintiff's company vehicle. Plaintiff's injuries included spinal cord compression and cervical spinal stenosis. At the time of the accident, Plaintiff was insured under a commercial automobile insurance policy issued by NGM (“the Policy”).

On October 13, 2017, Plaintiff notified NGM of the accident and his need for ongoing medical treatment. NGM recorded Plaintiff's claim as “medical only” and assigned claims adjuster Lynn Cantone to handle the payment of Plaintiff's first-party medical benefits.^[3] Plaintiff informed Cantone of the facts of loss and authorized NGM to communicate with his healthcare providers and obtain his medical records.

On February 10, 2018, Robert Casson, NGM's first-party medical benefits manager, reported in Plaintiff's claim log (“the Claim Log”) that “UIM [was] possible, but not needed at this point.”^[4] Two months later, Plaintiff contacted NGM and spoke with Susan Krull, the NGM claim adjuster who succeeded Cantone, and informed her that he may pursue a legal action for his injuries. At no point did Krull inform Plaintiff that he was entitled to UIM benefits under the Policy.

B. The Representation Letter

In May 2019, Plaintiff retained counsel to pursue a claim against Reilly. Plaintiff's counsel sent NGM a representation letter (“the Representation Letter”) on May 10, 2019, advising NGM that Plaintiff “may initiate a cause of action against the tortfeasor and seek to obtain a judgment in excess of the tortfeasor's policy limits,” and that NGM “[would] be bound by the judgment.”^[5] The Representation Letter further stated that Plaintiff had received “extensive treatment for cervical injuries, including injections” and that “his physician [was] recommending a multi-level surgical fusion surgery.”^[6] Upon receipt of the Representation Letter, NGM created a UIM file for Plaintiff's claim and assigned Denise Domiter to handle the claim. On May 17, 2019, Domiter provided Plaintiff's counsel with relevant Policy documents and requested information regarding Plaintiff's injuries and treatment. Plaintiff's counsel sent a reply email three days later, stating that he had “requested [Plaintiff's] medical records and [would] forward them once they [were] received.”^[7] Domiter sent two follow-up letters to Plaintiff's counsel in June and July 2019, requesting that counsel “provide information regarding [Plaintiff's] injuries and treatment to date.”^[8] Plaintiff's counsel did not respond to either correspondence.^[9]

Discovery in this action revealed that, at some point prior to May 2019, NGM had obtained several of Plaintiff's treatment records in connection with his first-party claim. However, Domiter never reviewed these records, nor did she review the entries in Plaintiff's Claim Log. In August 2019, NGM reassigned Domiter to a different department, thereby removing her from Plaintiff's case. While NGM was “in the process of trying to replace [Domiter],” Dana Gucciardi, who had been Domiter's manager, oversaw Plaintiff's claim.^[10]

C. The Demand Package

On November 14, 2019, Plaintiff's counsel provided NGM with a demand package outlining Plaintiff's UIM claim and demanding payment of benefits. The demand package included Plaintiff's treatment records, a life care plan, the expert report of Dr. Guy Fried, and a coverage letter from Reilly's insurance company, Erie Insurance Exchange. According to the Erie coverage letter, Reilly's policy provided policy limits of $100,000 in bodily injury coverage. Plaintiff's counsel asserted in the demand letter that Plaintiff's “medical special damages alone are estimated at just under $500,000” and that “the available $100,000 in third-party insurance is insufficient” to compensate Plaintiff for his injuries and damages.^[11] Plaintiff demanded “$100,000 in UIM benefits coverage, stacked across seven vehicles for a total available UIM coverage . . . of $700,000.”^[12]

Receiving no response from NGM, Plaintiff's counsel sent another letter on December 10, 2019, cautioning NGM that if it “continues to delay paying [Plaintiff's] UIM benefits, [counsel] will have no choice but to join a UIM breach of contract claim to the already pending third-party litigation.”^[13] Gucciardi replied on December 12, 2019, stating that he “tried to email [Plaintiff's counsel] unsuccessfully regarding [Plaintiff's] claim,” and that he was requesting to schedule an Examination Under Oath (“EUO”) of Plaintiff regarding the extent of his injuries.^[14]Gucciardi further provided that, with respect to Plaintiff's demand of $700,000, NGM's records showed only “[five] vehicles on the policy [as] opposed to [seven].”^[15]

On December 16, 2019, Plaintiff's counsel informed Gucciardi that he “checked [his] email inbox, and [had] not received any messages from [NGM]” and that “no messages were inadvertently filtered to junk mail.”^[16] Plaintiff's counsel stated that NGM still had not addressed whether it was “accepting or denying” Plaintiff's UIM claim, and that NGM had violated the Pennsylvania Unfair Insurance Practices Act (“UIPA”) by failing to complete its investigation within 30 days of the November 14, 2019 demand package.^[17] The email further provided, in relevant part:

Concerning your reference to the number of vehicles on the policy, I have attached a copy of the policy in force that was provided by [NGM] when my firm requested a copy of the same. As you will note, the declaration page includes seven (7) vehicles. If vehicles were added or removed before the August 12, 2017 date of incident, kindly provide me with a copy of the policy and the declarations page as it existed on August 12, 2017.

It is unclear . . . why [NGM] believes that an examination under oath performed by an attorney would reveal anything about the extent of [Plaintiff's] injuries, or for that matter, his current medical condition. This information is already borne out in [Plaintiff's] medical records following the incident and up through the present as well as in the reports authored by Dr. Fried and Mr. Karras-all of which has already been provided to [NGM]. The request to examine [Plaintiff] under oath outside the terms of the policy “regarding the extent of his injuries” is even more perplexing given that the policy provides that, if requested, [Plaintiff] must submit to be examined by a physician of [NGM's] choice. If [NGM] genuinely believed it needed more information about the extent of [Plaintiff's] injuries a physician would actually be able to provide that information as well as information about [Plaintiff's] current condition.^[18]

NGM did not reply to counsel's email. On February 25, 2020, Plaintiff's claim was reassigned to NGM claims adjuster Steven Miles. Miles notified Plaintiff's counsel of the reassignment and requested information and documents, including confirmation of Reilly's ownership of her vehicle, the declarations page for Reilly's Erie policy, an update on whether Plaintiff had scheduled surgery, and a copy of the estimates of damages for Plaintiff's vehicle. Plaintiff's counsel responded on March 6, 2020, answering each of Miles' inquiries and providing the materials sought. Plaintiff's counsel noted that NGM still had not provided Plaintiff with (1) its authority for requesting an EUO of Plaintiff, (2) a confirmation that NGM had provided counsel with a correct copy of the Policy, and (3) written confirmation that NGM was accepting Plaintiff's UIM claim.

Plaintiff's counsel further stated that neither Gucciardi nor anyone from NGM “ha[d] even acknowledged [counsel's] December 16, 2019 correspondence let alone provided the requested, basic confirmations.”^[19] Accordingly, Plaintiff's counsel enclosed a copy of Plaintiff's proposed Complaint against NGM, and advised that it would be filing the Complaint “as early as next week” unless NGM were to confirm that it was “accepting” Plaintiff's UIM claim and respond to Plaintiff's demand for the policy limit of (what Plaintiff believed at the time to be) $700,000.^[20]

Counsel for NGM responded on March 31, 2020 with a detailed letter that included: (1) the factual background of Plaintiff's UIM claim; (2) NGM's responses to the issues raised in Plaintiff's counsel's March 6, 2020 letter; (3) NGM's acknowledgement that Plaintiff was an “insured” under the Policy for purposes of his UIM claim; (4) an explanation regarding Plaintiff's counsel's misinterpretation of the number of vehicles covered under the Policy;^[21] (5) NGM's continued review of Plaintiff's claim; (6) NGM's request for an EUO; (7) NGM's investigation and Plaintiff's proposed Complaint; and (8) NGM's reservation of rights. With respect to Plaintiff's counsel's demand that NGM “accept” Plaintiff's UIM claim, NGM's counsel explained that:

To the extent that your letter's use of the term “accept” is intended to be a demand that NGM issue immediate payment of the UIM coverage under the Policy, NGM has authorized me to advise you that it is

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