Racioppi, A. v. Progressive Insurance Company

Court: Superior Court of Pennsylvania
Date filed: 2016-05-11
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NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37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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