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NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37
ANNE RACIOPPI, : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
v. :
:
PROGRESSIVE INSURANCE COMPANY :
D/B/A A/K/A PROGRESSIVE GARDEN : No. 3419 EDA 2015
STATE D/B/A A/K/A PROGRESSIVE :
ADVANCED INSURANCE COMPANY :
Appeal from the Order Entered, October 8, 2015,
in the Court of Common Pleas of Philadelphia County
Civil Division at No. November Term, 2013, No. 1783
BEFORE: FORD ELLIOTT, P.J.E., BENDER, P.J.E., AND MUSMANNO, J.
MEMORANDUM BY FORD ELLIOTT, P.J.E.: FILED MAY 11, 2016
Anne Racioppi appeals from the order of October 8, 2015, entering
summary judgment in favor of defendant/appellee, Progressive Insurance
Company d/b/a a/k/a Progressive Garden State d/b/a a/k/a Progressive
Advanced Insurance Company (“Progressive”). We affirm.
The trial court has set forth the procedural and factual background of
this matter as follows:
PROCEDURE
The operative Complaint in this case, the
Amended Complaint, consists of two claims: breach
of contract and bad faith.
Appellee-Defendants filed a Motion for
Summary Judgment covering both claims on
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August 3, 2015. Appellant-Plaintiff filed her Answer
on August 28, 2015. Appellee-Defendants filed a
Reply on September 9, 2015. This Court entered an
Order which granted Appellee-Defendants’ Motion on
October 8, 2015. Appellant-Plaintiff filed this appeal
on October 28, 2015.
BACKGROUND
The action underlying this appeal arose out of
a collision that occurred when an automobile, while
making a right-hand turn, struck Plaintiff-Appellant
as she was riding her bicycle. This accident occurred
at or about the intersection of 15th Street and Girard
Avenue of Philadelphia, Pennsylvania on
September 2, 2010. Plaintiff suffered damages
including, inter alia, “a severe fracture of her wrist
requiring surgery and internal fixation.” Plaintiff’s
Amended Complaint, ¶7.
The driver of the automobile was insured under
a policy of automobile insurance issued by Geico
Indemnity Company (“Geico”). Geico, not a
defendant in this case, offered to tender its liability
policy limit of fifteen thousand dollars ($15,000.00).
Appellant-Plaintiff’s damages exceed the limits of the
Geico policy. Therefore Appellant-Plaintiff sought
recovery through underinsured benefits of her
alleged automobile insurance policy, which was
denied. (See SJM, Exh. G).
The following five paragraphs are, when
viewed in a light most favorable to Appellant-
Plaintiff, the relevant facts of her insurance with
Appellee-Defendants.
(1) Appellant-Plaintiff was covered under an
insurance policy, which included underinsured
motorist coverage, with Appellee-Defendant
Progressive Garden State from February 6, 2010 to
August 6, 2010 (policy #48169100);
(2) Appellant-Plaintiff on some date prior to
June 24, 2010 informed Progressive Garden State
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that she was moving from New Jersey to Philadelphia
and she provided her Philadelphia address. See SJM,
Exh. B, 58:24-59:2 (informed online).
(3) Appellee-Defendant Progressive Garden
State issued a change in insurance policy
information, number #48169100-2, effective July 28,
2010, under Appellant-Plaintiff’s Philadelphia
address, for the policy period of February 6, 2010 to
August 6, 2010. See SJM Reply, Exh. D. Appellant-
Plaintiff remained covered under this policy
(#48169100-2) because the period simply overlaps
with her coverage under policy #48169100.
(4) Appellee-Defendant Progressive Garden
State offered, on July 29, 2010, to Appellant-Plaintiff
a renewal insurance policy number #48169100-3 for
the period of August 6, 2010 to February 6, 2011.
See SJM Reply, Exh. E.[Footnote 1] Appellant-
Plaintiff neither alleges nor offers evidence that she
paid for this policy to renew. Appellant-Plaintiff’s
explanations as to why she did not render payment
are that: (1) the insurer is located in New Jersey,
and (2) that she did not obtain a Pennsylvania
driver’s license for over a month after moving to
Philadelphia; as it turns out, on the very date of the
accident, just hours before the accident. See
(1) SJM, Exh. B, 53:13-54:11, and (2) SJM, Exh. B,
22:16-23:9.[Footnote 2]
[Footnote 1] Appellee-Defendant
submitted into evidence prior renewal
notices under #48169100-3, dated June
24, 2010 and July 21, 2010. See SJM,
Exh. B, p. 23-25.
[Footnote 2] The Declarations Page for
this insurance policy, #48169100-3, is
attached to the operative complaint,
which is the Amended Complaint.
(5) Appellant-Plaintiff indeed had an insurance
policy, which included underinsured motorist
coverage, with Appellee-Defendant Progressive
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Advanced Insurance Company for the period of
September 3, 2010, the day after her accident, to
some indefinite time beyond that date (policy
#66385951).
Again, the contract allegedly breached is with
Appellee-Defendant Progressive Garden State policy
#48169100-3. The breach of contract claim requires
no further factual explanation. However, Appellant-
[Plaintiff]’s bad faith claim requires elaboration. Her
bad faith claim rests on three acts of Defendant(s):
(1) the denial of coverage under the alleged contract
was made in reckless disregard for the contract,
(2) the failure to provide consent to settle with the
negligent driver’s insurance, and (3) the removal of
this case to federal court without justification. See
Amended Complaint, ¶¶ 18-33.
The factual basis for the last of the three
grounds for the bad faith claim, the trip to and from
federal court, requires some further detail.
Appellant-Plaintiff’s original Complaint, not the
operative complaint, listed as Defendant “Progressive
Insurance Company” with an Ohio address. Plaintiff
was living in New Jersey at that time, so Progressive
Insurance Company removed the case to federal
court. The federal court remanded the case back to
state court, upon agreement of the parties, once it
was discovered who Appellant-Plaintiff was trying to
sue. Appellant-Plaintiff filed an Amended Complaint
with a bad faith claim involving the round trip from
state to federal court and then back to state court.
The Amended Complaint also contained a new
statement of the identity of Defendant--“Progressive
Insurance Company d/b/a a/k/a Progressive Garden
State d/b/a a/k/a Progressive Advanced Insurance
Company.”[Footnote 3]
[Footnote 3] Appellant-Plaintiff uses the
term “Progressive” in the singular to
refer to the defendant(s), while the
Appellee-Defendants say that they are
Progressive Garden State (with a New
Jersey address) and Progressive
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Advanced Insurance Company (with a
Pennsylvania address). Appellant-
Plaintiff has not argued, much less
offered evidence, that said Appellee-
Defendants are not the proper parties on
the defense side. This issue will come up
later in this opinion in the legal analysis
of the bad faith claim.
Trial court opinion, 12/14/15 at 1-4.
Appellant has raised the following issues for this court’s review on
appeal:
1. Did the Trial Court err in dismissing Appellant’s
Underinsured Motorist [(“UIM”)] Claim as a
matter of law where Appellees failed to comply
with statutory law respecting notice of
cancellation to an insured, Appellant had no
actual notice of the cancellation, and Appellant
reasonably relied upon Appellees’ statements
which lead her to believe she was insured on
the day of her accident?
2. Did the Trial Court err as a matter of law in
granting Appellees summary judgment on
Appellant’s bad faith claim where Appellant
avers that Appellees acted in bad faith in the
denial of her [UIM] claim and in removing the
case below to federal court with absolutely no
legitimate basis whatsoever to do so?
Appellant’s brief at 8.
Summary judgment may be granted when the
pleadings, depositions, answers to interrogatories,
and admissions on file, together with the affidavits, if
any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to
judgment as a matter of law. Pa.R.C.P. 1035(b),
42 Pa.C.S.A. When considering a motion for
summary judgment, the trial court must examine the
record in the light most favorable to the non-moving
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party, accept as true all well-pleaded facts in the
non-moving party’s pleadings, and give him the
benefit of all reasonable inferences drawn therefrom.
Dibble v. Security of America Life Ins., 404
Pa.Super. 205, 590 A.2d 352 (1991); Lower Lake
Dock Co. v. Messinger Bearing Corp., 395
Pa.Super. 456, 577 A.2d 631 (1990). Summary
judgment should be granted only in cases that are
free and clear of doubt. Marks v. Tasman, 527 Pa.
132, 589 A.2d 205 (1991). We will overturn a trial
court’s entry of summary judgment only if we find an
error of law or clear abuse of discretion. Lower
Lake Dock Co., supra.
DeWeese v. Anchor Hocking Consumer and Indus. Products Group,
628 A.2d 421, 422-423 (Pa.Super. 1993).
It is well-settled that a party may not defeat a
motion for summary judgment by relying on the
allegations of his complaint. Rather, he must
present depositions, affidavits, or other acceptable
documents that show there is a factual issue for a
jury’s consideration. Brecher v. Cutler, 396
Pa.Super. 211, 578 A.2d 481 (1990).
Id. at 424.
In her first issue on appeal, appellant claims that Progressive failed to
provide proper notice of cancellation or non-renewal pursuant to 40 P.S.
§ 991.2006 (Act 68).1 However, Act 68’s notice requirements do not apply
1
40 P.S. § 991.2006 (Act 68) states:
A cancellation or refusal to renew by an insurer of a
policy of automobile insurance shall not be effective
unless the insurer delivers or mails to the named
insured at the address shown in the policy a written
notice of the cancellation or refusal to renew. The
notice shall:
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(1) Be in a form acceptable to the Insurance
Commissioner.
(2) State the date, not less than sixty (60)
days after the date of the mailing or
delivery, on which cancellation or refusal
to renew shall become effective. When
the policy is being cancelled or not
renewed for the reasons set forth in
section 2004(1) and (2), however, the
effective date may be fifteen (15) days
from the date of mailing or delivery.
(3) State the specific reason or reasons of
the insurer for cancellation or refusal to
renew.
(4) Advise the insured of his right to request
in writing, within thirty (30) days of the
receipt of the notice of cancellation or
intention not to renew and of the receipt
of the reason or reasons for the
cancellation or refusal to renew as stated
in the notice of cancellation or of
intention not to renew, that the
Insurance Commissioner review the
action of the insurer.
(5) Either in the notice or in an
accompanying statement advise the
insured of his possible eligibility for
insurance through the automobile
assigned risk plan.
(6) Advise the insured that he must obtain
compulsory automobile insurance
coverage if he operates or registers a
motor vehicle in this Commonwealth,
that the insurer is notifying the
Department of Transportation that the
insurance is being cancelled or not
renewed and that the insured must notify
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where the insurer has offered to renew the policy and its insured has refused
to pay the premiums. Section 2002(c) of Act 68 provides, in relevant part,
as follows:
(c) Nothing in this article shall apply:
(1) If the insurer has manifested its
willingness to renew by issuing or
offering to issue a renewal policy,
certificate or other evidence of
renewal or has manifested such
intention by any other means.
(2) If the named insured has
demonstrated by some overt action
to the insurer or its agent that he
wishes the policy to be cancelled or
that he does not wish the policy to
be renewed.
the Department of Transportation that he
has replaced said coverage.
(7) Clearly state that when coverage is to be
terminated due to nonresponse to a
citation imposed under 75 Pa.C.S. §
1533 (relating to suspension of operating
privilege for failure to respond to
citation) or nonpayment of a fine or
penalty imposed under that section
coverage shall not terminate if the
insured provides the insurer with proof
that the insured has responded to all
citations and paid all fines and penalties
and that he has done so on or before the
termination date of the policy.
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40 P.S. § 991.2002(c)(1-2). See Federal Kemper Ins. Co. v. Com., Ins.
Dept., 500 A.2d 796 (Pa. 1985) (knowing refusal to pay a premium is an
“overt act” evidencing a desire to cancel the policy).
Where the cancellation of a policy is relied upon as
an affirmative defense, the burden is on the
defendant (insurer) to prove an effective cancellation
of the policy prior to the loss. The crux of the
insurer’s burden turns on whether it can prove that
the insured had a clear and precise intent to cancel
the policy prior to the loss.
Scott v. Southwestern Mut. Fire Ass’n, 647 A.2d 587, 590 (Pa.Super.
1994) (citations omitted).
Here, Progressive sent appellant multiple renewal notices in late June
and July 2010, by both regular mail and e-mail, warning her that her
coverage was due to expire on August 6, 2010, unless Progressive received
payment by that date. Renewal reminders were sent to appellant’s address
in New Jersey, as well as her new address in Philadelphia. Appellant does
not dispute that she received these notices. Appellant alleges that she was
confused because she moved to Pennsylvania in late July 2010 and was told
that she would have to purchase a new policy. However, this does not
explain why appellant failed to make any payment for almost a month, until
September 3, 2010, the day after the accident. Appellant received
additional notices after August 6, 2010, notifying her that her policy had
lapsed. Appellant failed to renew her policy despite these multiple notices.
Appellant’s knowing refusal to pay premiums was an “overt act” evidencing
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her intent to cancel the policy. Federal Kemper. As there was no policy in
effect on the date of the accident, September 2, 2010, Progressive had no
duty to pay UIM benefits. There was no contract in existence between the
parties. Therefore, the trial court did not err in granting summary judgment
for Progressive on appellant’s breach of contract claim.
We now turn to appellant’s allegations of bad faith. The remedy for an
insurer’s bad faith conduct has been codified at 42 Pa.C.S.A. § 8371, which
provides:
§ 8371. Actions on insurance policies
In an action arising under an insurance policy, if the
court finds that the insurer has acted in bad faith
toward the insured, the court may take all of the
following actions:
(1) Award interest on the amount of the
claim from the date the claim was made
by the insured in an amount equal to the
prime rate of interest plus 3%.
(2) Award punitive damages against the
insurer.
(3) Assess court costs and attorney fees
against the insurer.
“This Court has noted that the bad faith statute extends to the
handling of UIM claims, despite their similarity to third party claims.”
Condio v. Erie Ins. Exch., 899 A.2d 1136, 1142 (Pa.Super. 2006), appeal
denied, 912 A.2d 838 (Pa. 2006) (citations omitted).
To prove bad faith, a plaintiff must show by clear
and convincing evidence that the insurer (1) did not
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have a reasonable basis for denying benefits under
the policy and (2) knew or recklessly disregarded its
lack of a reasonable basis in denying the claim.
Terletsky v. Prudential Property and Casualty
Insurance Company, 437 Pa.Super. 108, 649
A.2d, 680, 688 (1999). Bad faith claims are fact
specific and depend on the conduct of the insurer
vis à vis the insured. Williams v. Nationwide
Mutual Ins. Co., 750 A.2d 881, 887 (Pa.Super.
2000).
Condio, 899 A.2d at 1143. “[W]hen faced with a [UIM] claim, an insurance
company’s duty to its insured is one of good faith and fair dealing.” Id. at
1145. “[T]he broad language of section 8371 was designed to remedy all
instances of bad faith conduct by an insurer, whether occurring before,
during or after litigation.” O’Donnell ex rel. Mitro v. Allstate Ins. Co.,
734 A.2d 901, 906 (Pa.Super. 1999). “[W]e refuse to hold that an insurer’s
duty to act in good faith ends upon the initiation of suit by the insured.” Id.
However, “in [the] absence of evidence revealing dishonest purpose, it is not
bad faith for [an] insurer to aggressively investigate and protect its
interests[.]” Id. at 910, citing Jung v. Nationwide Mut. Fire Ins. Co.,
949 F.Supp. 353, 360 (E.D.Pa. 1997).
Appellant argues that Progressive acted in bad faith by failing to
comply with the statutory requirements for notice of cancellation or
non-renewal. (Appellant’s brief at 23.) As discussed above, appellant’s
policy lapsed due to non-payment. Progressive offered to renew her policy,
and she refused to make payment. This is not a basis for a bad faith claim.
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Appellant also argues that Progressive’s removal of the case to federal
court constituted bad faith. As the trial court explained, appellant initially
sued Progressive Insurance Company, with an Ohio address. (Trial court
opinion, 12/14/15 at 8.) Since there was diversity of citizenship,
Progressive removed the case to federal court. Later, when it became
apparent who appellant was trying to sue (Progressive Garden State, a dual
citizen of Ohio and New Jersey), Progressive agreed to remand the case
back to state court. However, there is no evidence that Progressive acted in
bad faith by removing the suit to federal court; in fact, the federal district
court denied appellant’s motion for attorney’s fees. Progressive’s removal to
federal court was a litigation tactic that had nothing to do with its denial of
UIM benefits under the insurance contract. The trial court did not err in
granting summary judgment for Progressive on appellant’s bad faith claims.2
Order affirmed.
Judgment Entered.
JosephD.Seletyn,Esq.
Prothonotary
Date: 5/11/2016
2
Although appellant does not argue the issue in her brief, she also alleged
bad faith for Progressive’s refusal to provide consent to settle with Geico, the
tortfeasor’s insurer. Since appellant had no coverage with Progressive at the
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time of the accident, it had no authority to issue consent. (Trial court
opinion, 12/14/15 at 7.)
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