Eileen Gibson v. State Farm Mutual Automobile I ( 2021 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_______________
No. 20-1589
_______________
EILEEN M. GIBSON; ROBERT P. GIBSON, h/w
v.
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY
Appellant
_______________
No. 20-1609
_______________
EILEEN M. GIBSON; ROBERT P GIBSON, h/w
Appellants
v.
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY
_______________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 2:18-cv-4919)
Magistrate Judge: Honorable Timothy R. Rice
_______________
Argued January 21, 2021
Before: HARDIMAN and ROTH, Circuit Judges,
and PRATTER,* District Judge
(Opinion Filed: April 8. 2021)
Alfred V. Altopiedi [ARGUED]
Donna A. Casasanto [ARGUED]
902 Old Marple Road
Springfield, PA, 19064
Joseph M. Fioravanti
217 North Monroe Street
P.O. Box 1826
Media, PA 19063
Counsel for Eileen M. Gibson and Robert P. Gibson
Michael Saltzburg [ARGUED]
Katherine C. Douglas [ARGUED]
Sarah E. Crosley
Bennett Bricklin & Saltzburg
1500 Market Street, Center Square
32nd Floor
*
Honorable Gene E.K. Pratter, District Judge, United
States District Court for the Eastern District of Pennsylvania,
sitting by designation.
2
Philadelphia, PA 19102
Counsel for State Farm Mutual Automobile Insurance
Company
Elizabeth M. Tarasi
Tarasi & Tarasi, P.C.
510 Third Avenue
Pittsburgh, PA 15219
Counsel for Amici the Pennsylvania Association for
Justice in support of Appellees/Cross Appellants
Bryan M. Shay
Jeffrey M. Brenner
Post & Schell, P.C.
Four Penn Center, 13th Floor
1600 John F. Kennedy Boulevard
Philadelphia, PA 19103
Counsel for Amici the Pennsylvania Defense Institute
in support of Appellant/Cross Appellee
_______________
OPINION OF THE COURT
_______________
PRATTER, District Judge.
Underinsured motor vehicle coverage (“UIM”) is
designed to help defray the cost of an accident with an
3
uninsured or underinsured motorist. Although basic UIM
coverage is for an amount equal to bodily injury limits set in
the policy, an insured in Pennsylvania can reduce premium
costs by opting for a lower amount of underinsured motorist
coverage. To accomplish that, Pennsylvania law requires only
that the insured make a “request in writing.” 75 Pa. C.S.
§ 1734. The statute says little beyond that. But that silence
speaks volumes. As we reiterate today, the statute means what
it says: an insured can make that choice “in writing” in any
writing as long as the choice is clear.
The question here is whether Eileen Gibson’s three-
page application for insurance with State Farm in which she
opted for $100,000 in stacked UIM coverage for three cars and
$250,000 in bodily injury coverage was sufficient to satisfy
§ 1734. At the time she signed the application, she did not also
then sign an additional form acknowledging the lower
coverage selection, a form which State Farm categorized as
“required.” She eventually signed this form and confirmed the
chosen lower UIM coverage amount, but she did not actually
sign this other paperwork until after she had been injured in a
car accident.
Because we find that § 1734’s minimal requirement of
a “request in writing” was met here, we will reverse the
Magistrate Judge’s Order insofar as it granted the Gibsons’
motion to mold the verdict to the higher amount of the bodily
injury coverage instead of the lower optional $300,000 UIM
coverage limits. But we will affirm the Order which denied the
Gibsons’ motion for reconsideration of the dismissal of their
bad faith claim.
4
I. BACKGROUND
The Gibsons previously had a GEICO auto insurance
policy for $300,000 limits in stacked bodily injury coverage
and $300,000 limits for underinsured motorist coverage. In
late April 2016, Ms. Gibson signed a State Farm insurance
application for bodily injury coverage of $250,000 but
maintained $100,000 in stacked UIM coverage. Because the
Gibsons insured three cars and the UIM insurance is “stacked,”
the total UIM coverage provided for in the application was
$300,000. The State Farm agent presented Ms. Gibson with a
three-page application at that time, and the third page included
a signature block below language attesting that “the limits and
coverages [in the application] were selected by me.” Ms.
Gibson signed the application, and the policy was issued
effective April 22, 2016.
The last page of the pre-printed application referenced
other documents, listed as “required” documents, including an
acknowledgement of coverage selection form for UIM which
again listed UIM coverage of $300,000. State Farm did not
provide these additional forms to Ms. Gibson when she applied
for insurance in April.
Soon after signing the application, Ms. Gibson was
seriously injured in an accident. Roughly three weeks after her
accident, the Gibsons returned to the State Farm office to sign
the other documents referenced in her application. State Farm
presented her with, among other things, an acknowledgement
of coverage selection form. This form stated that UIM benefits
“are available with limits up to the Liability Coverage limits
for bodily injury.” It further stated that the applicant
“acknowledge[s] and agree[s] that I have been given the
opportunity to purchase Underinsured Motor Vehicle
5
Coverage with limits up to my Liability Coverage limits for
bodily injury but instead I select lower limits of $100,000 (per
person)/$300,000 (per accident) in lieu of the higher limits
made available to me.” Ms. Gibson signed this form
confirming her election of lower UIM limits (i.e., $300,000),
as well as the other “required” documents in May 2016 which
was post-accident. There is no evidence that she questioned,
or that she objected in either April or May, to the documents
she signed containing lower UIM coverage limits.
Following the accident, the Gibsons demanded
coverage for injuries. Negotiations were unsuccessful. The
Gibsons later sued State Farm for underinsured motorist
coverage, breach of contract, and bad faith under 42 Pa. C.S.
§ 8371. The Gibsons’ complaint demanded what they
described as the maximum amount of UIM coverage—which
the Gibsons alleged was $300,000.
State Farm successfully moved for partial summary
judgment on the bad faith claim. The Magistrate Judge1 found
that State Farm “reasonably based its settlement offer” on the
materials provided by the Gibsons. As a result, the court found
that no reasonable juror could conclude that State Farm lacked
a reasonable basis for failing to further investigate the Gibsons’
claim. Because the Magistrate Judge found no facts
establishing bad faith by State Farm, he entered summary
judgment on this claim.2
1
The Magistrate Judge presided by consent under 28
U.S.C. § 636(c).
2
The Gibsons argue that the claim was not dismissed
“with prejudice” on summary judgment. But at the hearing on
6
The parties proceeded to trial. The jury awarded the
Gibsons $1,750,000 in damages. State Farm moved to mold
the verdict to the UIM policy limit, arguing that the UIM policy
limit was $300,000—which was the amount listed on the
application and alleged by the Gibsons in their complaint. The
Gibsons cross-moved to mold the verdict to $750,000—
representing the $250,000 bodily injury limit in the policy
stacked for three cars—on the basis that State Farm’s
application to elect a lower UIM policy limit did not comply
with Pennsylvania law. This post-trial motion practice was the
first time the Gibsons challenged State Farm’s compliance
with Pennsylvania’s Motor Vehicle Financial Responsibility
Law (“MVFRL”). The Gibsons also moved for
reconsideration of the Magistrate Judge’s order granting partial
summary judgment to State Farm on the bad faith claim as well
as for an order to re-open discovery.
The Magistrate Judge granted the Gibsons’ motion to
mold the $1,750,000 verdict to the higher $750,000 limits on
the grounds that Ms. Gibson did not validly elect the lower
$300,000 UIM limits under Section 1734 of the MVFRL, 75
Pa Cons. Stat. §§ 1701 et seq. Because the Magistrate Judge
found State Farm’s reference in the application to “required”
documents created ambiguity, the ambiguity was construed
against State Farm. So, the Magistrate Judge concluded that
Ms. Gibson was entitled to the higher default UIM coverage
amount, rather than the lower limits she selected before and
after the accident and for which she sought recovery in her
complaint. The Magistrate Judge denied all other motions.
the motion for reconsideration, Magistrate Judge Rice
reminded the parties that granting summary judgment meant
the claim was “out of the case.”
7
State Farm now appeals the trial court’s molding of the
verdict to $750,000 instead of $300,000. The Gibsons appeal
the denial of their motion for reconsideration of their bad faith
claim.
II. STANDARD OF REVIEW
We exercise jurisdiction over these appeals pursuant to
28 U.S.C. §§ 636(c)(3) and 1291. We review a denial of a
motion to mold the verdict under Rule 59(e) for abuse of
discretion. Lazaridis v. Wehmer, 591 F.3d 666, 669 (3d Cir.
2010). Legal errors, including interpreting and applying a
statute, amount to an abuse of discretion. Fallon v. Mercy
Catholic Med. Ctr. of Se. Pa., 877 F.3d 487, 494 (3d Cir. 2017).
We review a denial of a motion for reconsideration for
abuse of discretion. Max’s Seafood Café ex rel. Lou-Ann, Inc.
v. Quinteros, 176 F.3d 669, 673 (3d Cir. 1999). To the extent
the denial is based on legal issues, we review that
determination de novo. Id. However, factual findings are
reviewed for clear error. Id.III. DISCUSSION
A. The Gibsons’ Application Was A Valid Election
Under § 1734
The parties do not dispute that Ms. Gibson signed a
writing that elected the lower, $300,000 UIM limit—the three-
page application which lists the $300,000 in stacked UIM
coverage. What matters is whether that writing complies with
§ 1734. State Farm contends that it did, and that the Magistrate
Judge erred in molding the jury verdict to reflect the higher
bodily injury liability limit.
8
We begin, as always, with the plain text of the statute.
Rotkiske v. Klemm, 890 F.3d 422, 424 (3d Cir. 2018) (en banc),
aff’d,––– U.S. ––––, 140 S. Ct. 355 (2019).
Section 1731 of the MVFRL obligates an insurance
company issuing a policy in the Commonwealth to provide
uninsured and underinsured motorist coverage in an amount
equal to bodily injury limit coverage except as provided in
Section 1734. Should an insured reject UM/UIM coverage
entirely, the insured must execute a separate document in the
specific form provided by § 1731(c) to demonstrate a knowing
and voluntary waiver of this coverage. Id. § 1731(c). Failure
to comply with the form renders the rejection void and the UIM
coverage reverts to the default bodily injury limit. Id. But, if
the insured desires to merely elect a lower amount of UM/UIM
coverage, Section 1734 provides, “A named insured may
request in writing the issuance of coverages under section 1731
(relating to availability, scope and amount of coverage) in
amounts equal to or less than the limits of liability for bodily
injury.” § 1734.
Section 1734 is a limited exception to Section 1731 that
serves a limited purpose. It requires action on the part of the
insured to take effect. Although compliance with Section 1731
requires the insured to execute a separate written rejection
using the form provided in the MVFRL to disclaim all
UM/UIM coverage, see § 1731(c), that same requirement is not
incorporated into Section 1734. Beyond requiring a “request
in writing,” the statute is silent.
We previously found that Section 1734 is intended to
provide a “very simple, clear-cut rule for an insurance
company to follow—to lower the limits [of underinsured or
uninsured motorist coverage] it must insist on a written
9
authorization signed by the named insured.” Nationwide Ins.
Co. v. Resseguie, 980 F.2d 226, 232 (3d Cir. 1992) (holding an
“oral” request to lower UIM coverage was not a request “in
writing”). Predicting then how the Pennsylvania Supreme
Court would interpret § 1734, we were guided by the plain
meaning rule. “If the language be clear it is conclusive. There
can be no construction where there is nothing to construe.” Id.
at 231 (quoting United States v. Hartwell, 73 U.S. 385 (1867)).
Pennsylvania’s Statutory Construction Act compelled the same
result. “When the words of the statute are clear and free from
all ambiguity, the letter of it is not to be disregarded under the
pretext of pursuing its spirit.” 1 Pa. Cons. Stat. Ann. § 1921(b).
The Pennsylvania Supreme Court has emphasized that
Section 1734’s requirements are minimal. It too found that
§ 1734 was “plain and unambiguous.” Orsag v. Farmers New
Century Ins., 15 A.3d 896, 901 (Pa. 2011). Moreover, it held
that an insurer satisfies § 1734 when the writing contains
(1) the signature of the insured and (2) an “express designation
of the amount of coverage requested.” Id. A specific dollar
amount of UIM coverage on the insurance application is the
clearest way an insured can “expressly designate” the amount
of coverage desired. Id. So finding, the Orsag court did not
endorse the insured’s argument there that an application must
include language demonstrating it is the insured’s intent to
select a lower limit to be a valid election. Id. at 899. Rather,
by the application process itself, the insured willingly selected
a reduced limit that “naturally rectified” any confusion about
intent. Id. at 901.
The Pennsylvania Supreme Court recognized that
insurance companies can exceed the requirements in the
MVFRL. Id. An insurer could choose to include additional
information on UM/UIM coverage, such as cost comparisons,
10
as it sees fit. But the court saw “no purpose in requiring a
separate statement when it is clear from the coverage selected
that the insured intended reduced UM/UIM coverage.” Id. To
require otherwise lacked support in MVFRL’s unambiguous
text. An insurance company’s decision to include additional
information and more forms does not rewrite the foundational
requirements of the statute. Nor does industry practice reform
the law to require more than what the legislation dictates. So,
Orsag can best be understood as reiterating what must be met
to constitute a valid election of reduced UM/UIM coverage.
Absent a statutory provision requiring an insurer to
provide an additional form or certain magic words, we will not
read in such a requirement here. Indeed, there are no such
magic words or documents. The Pennsylvania Supreme Court
has repeatedly rejected the argument that a separate writing is
required to elect lower UIM limits. Id.; Lewis v. Erie Ins.
Exch., 793 A.2d 143, 155 (Pa. 2002) (Section 1734 writing
need not be on a separate page). We agree with this logic
which highlights the statutory differences between the express
form requirement to waive all coverage under § 1731 and the
“in writing” requirement to modify it under § 1734. See A.
Scalia & B. Garner, Reading Law 107 (2012) (“Negative–
Implication Canon[:] The expression of one thing implies the
exclusion of others (expressio unius est exclusio alterius).”).
With that understanding, we find that Ms. Gibson
validly selected lower UIM coverage in her application. The
Gibsons have not shown that § 1734’s writing requirement
entails a more onerous standard.
Despite the similarities between this case and Orsag, the
Magistrate Judge declined to follow Orsag, interpreting
§ 1731(a) and § 1734 together to require a “written notice that
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UIM/UM coverage is available up to the amount of liability
coverage, i.e., $750,000.” Gibson v. State Farm Fire and Cas.
Co., No. CV 18-4919, 2020 WL 814977, at *5 (E.D. Pa. Feb.
18, 2020). To be sure, § 1731(a) requires that UM/UIM
coverage must be offered in the amounts provided in § 1734.
But § 1731 does not specify that the initial offering must be in
writing—as the Magistrate Judge suggests. Further, § 1734
states that it is the insured—not the insurer—who makes the
written request for lower UM/UIM coverage. The trial court
appears to suggest that State Farm needed to offer in writing
an insurance policy with bodily injury limits and UM/UIM
coverage set at the same amount in the first instance, and then,
the insured must request the lower UIM limit in writing. But
this interpretation finds no support in the text of the MVFRL.
So, that cannot be the basis on which to invalidate the election.
Nor do we find, as the Gibsons argue, that this case calls
for an application of a panel of this Court’s prior ruling in
Freeth v. Zurich Am. Ins. Co., 645 F. App’x 169 (3d Cir. 2016).
The policy application here is distinct and thus compels a
different result. In Freeth, the panel held that a summary
application form seeking to reduce UM coverage in multiple
states was not a “request” in writing under § 1734. Id. at 173.
Critical to understanding the holding in Freeth, the summary
form there carried the following disclaimer:
Failure to return the signed Uninsured/Underinsured
Motorist (UM/UIM) Selection/Rejection Summary
Form and required state-specific forms prior to the
policy inception date(s) will result in the policy being
issued with coverage limits imposed by operation of
state law. . . . THIS SUMMARY IS NOT A
SUBSTITUTE FOR REVIEWING EACH
INDIVIDUAL STATE’S SELECTION/REJECTION
12
FORM FOR UM AND UIM COVERAGE. YOU ARE
REQUIRED TO DO SO.
Id. at 171. We read this plain language to mean what it said:
the summary form explicitly and repeatedly warned that
signing it alone was insufficient to effect a reduction in
coverage. Id. at 172. The form required the insured to fill out
separate, state-specific forms to complete an election of
reduced UM/UIM limits. Id. So the panel declined a “hyper-
technical and unnatural” reading that would otherwise find that
that form satisfied § 1734. Id. Our task is to give meaning to
words in their plain and ordinary sense. In Freeth, that meant
holding that the summary form did not operate as a “request”
in writing where the insured was expressly warned about but
did not sign the Pennsylvania-specific form to reduce
coverage.
The result the Court reaches today is not in tension with
Freeth. To the contrary, the panel stressed in Freeth that that
the decision should not be read to suggest that short summary
documents can “never suffice to reduce coverage under section
1734.” Id. It simply did not suffice under the unique
circumstances in Freeth. Id. at 173. The Summary Form
“clearly and repeatedly stated that signing the Summary Form
was insufficient to effect a reduction in coverage.” Id. There
is no such disclaimer in State Farm’s three-page document here
that would suggest to the insured that signing just that
document would not operate to reduce coverage. Nor is it the
case that Ms. Gibson did not knowingly elect lower coverage
in the Commonwealth when the very heading in the application
she signed in April read “Signature Document—
Pennsylvania.” App. 615.
13
Freeth did not interpret Pennsylvania law to require
insureds do anything more than sign a preprinted document.
Id. at 172-73. Orsag did not so require, and the Pennsylvania
Supreme Court has not since amended its interpretation of
§ 1734. Ms. Gibson signed the three-page application which
clearly set forth the lower UM/UIM coverage limit. Section
1734 requires nothing more for a valid election for reduced
coverage.
We pause briefly to consider the Magistrate Judge’s
finding that State Farm’s labeling the acknowledgement form
as “required” introduced ambiguity into the application. The
Gibsons did not raise this argument throughout the
proceedings. Rather, it surfaced for the first time only in the
post-trial ruling.
The best articulation of the argument is that State Farm
referring to additional documents in the application as
“required” suggested to the Gibsons that they were entitled to
additional information. Because these additional documents
were, for whatever reason, neither presented to nor signed by
Ms. Gibson at the same time she signed the three-page
application, the Magistrate Judge found that the three-page
document was not intended to constitute an offer of reduced
UIM coverage. But in so finding, he elided two separate—
albeit related—concepts. There may well have been ambiguity
as to whether State Farm would supply additional information,
along the lines considered but not required by the Orsag court.
We can appreciate the Magistrate Judge’s sense that State Farm
could perhaps have been more dedicated to the highest
standards of clarity. But focusing on what is important here,
we do not find the amount of UIM/UM coverage the Gibsons
selected to itself be ambiguous. Cf. Olender v. Nat’l Cas. Co.,
No. CIV.A. 11-4098, 2012 WL 3590693, at *1 (E.D. Pa. Aug.
14
21, 2012) (construing ambiguity in policy in favor of insured
where insured requested UIM coverage at both $100,000 and
$35,000 limits in same policy).3
For these reasons, we will reverse the Magistrate
Judge’s Order granting the Gibsons’ motion to mold the verdict
to $750,000.
B. The Magistrate Judge Correctly Denied the
Gibsons’ Bad Faith Claim
The Gibsons also appeal the Magistrate Judge’s denial
of their motion for reconsideration hoping to revive their
statutory bad faith claim post-verdict.4 A motion for
3
Although not dispositive to our decision, the Court
notes that certain documents are not “required” under the
MVFRL, although State Farm referred to them as “required”
(i.e., the good student discount and the “Important Notice”
found in § 1791). And when Ms. Gibson submitted the other
documents to State Farm, she again signed a form
acknowledging she desired lower UIM coverage. Moreover,
to the extent the Magistrate Judge suggests that Ms. Gibson’s
election was not knowing—because she lacked additional
information—such an additional requirement would be
contrary to Pennsylvania law. See Hartford Ins. Co. v.
O’Mara, 907 A.2d 589, 602–03 (Pa. Super. Ct. 2006) (en banc)
(“[T]he language utilized need only convey an insured’s desire
to purchase uninsured and underinsured coverage in amounts
less than or equal to bodily injury limits and the amount of the
requested coverage.”).
4
The Magistrate Judge entered an order granting partial
summary judgment for State Farm and dismissing the Gibsons’
15
reconsideration requires the movant to show (1) an intervening
change in the controlling law; (2) new evidence that was not
available when the court issued its order, or (3) the need to
correct a clear error of law or prevent manifest injustice.
Lazaridis v. Wehmer, 591 F.3d 666, 669 (3d Cir. 2010). The
Gibsons contend that “new” evidence—State Farm’s post-
accident attempt to cabin the policy limits—and the need to
avoid manifest injustice warrant reconsideration.
As a threshold matter, the Magistrate Judge properly
disregarded the jury verdict of $1.75 million as irrelevant to the
bad faith claim. Indeed, at oral argument, the Gibsons admitted
this fact. Instead, the Magistrate Judge looked only at the
actions and omissions of State Farm to evaluate Ms. Gibson’s
claim when it was submitted and then processed.
In support of their motion, the Gibsons argued that
Ms. Gibson’s failure to sign the UIM coverage selection form
until after the accident was “new” evidence of State Farm’s bad
faith. The Magistrate Judge correctly declined to consider
these facts as “new.” State Farm had consistently maintained
that the application established the UIM policy limit and
provided the Gibsons with access to relevant documents. So,
the supposed “post-trial revelation” of State Farm’s alleged
bad faith was not “new” evidence that would be appropriate for
a motion for reconsideration. See United States ex rel.
Schumann v. Astrazeneca Pharm. L.P., 769 F.3d 837, 849 (3d
bad faith claim on July 19, 2019, and a separate order denying
the Gibsons’ motion for reconsideration on February 18, 2020.
The Gibsons appeal only the denial of the motion for
reconsideration and not the underlying order denying partial
summary judgment and dismissing their bad faith claim.
16
Cir. 2014) (affirming denial of reconsideration where evidence
could have been submitted at motion to dismiss stage).
The Gibsons shade their argument on appeal to argue
that the “new evidence” is State Farm’s “deceptive conduct” to
hide the “actual UM/UIM limits.” Gibson Br. at 9, 11.
Because State Farm maintained that its exposure was at most
$300,000, the Gibsons contend State Farm had less of an
incentive to resolve the case earlier. The Gibsons also rely on
the intervening time between signing the April application and
the additional documents in May to claim that State Farm
“intentionally misrepresent[ed]” the UIM policy limits. Id. at
16.
At its core, this is the same argument that the Gibsons
raised before the Magistrate Judge. And like the Magistrate
Judge, we also find it unavailing.
Pennsylvania provides for a statutory remedy for an
insurer’s bad faith in acting upon an insured’s claim. 42 Pa.
C.S.A. § 8371. To prevail on a bad faith claim, the insured
must demonstrate “by clear and convincing evidence, (1) that
the insurer did not have a reasonable basis for denying benefits
under the policy and (2) that the insurer knew or recklessly
disregarded its lack of a reasonable basis in denying the claim.”
Rancosky v. Wash. Nat’l Ins. Co., 170 A.3d 364, 377 (Pa.
2017). The evidentiary burden on a plaintiff opposing a
summary judgment motion is “commensurately high.” J.C.
Penney Life Ins. Co. v. Pilosi, 393 F.3d 356, 367 (3d Cir. 2004).
By contrast, all that is needed to defeat a claim of bad faith
under § 8371 is evidence of a reasonable basis for the insurer’s
actions or inaction. Id.
17
Here, State Farm believed the Gibsons’ application
complied with § 1734—a belief we find not only reasonable
but correct. So, State Farm’s reliance on the lower UM/UIM
coverage limits in informing its investigation and settlement
offers was therefore not deceptive.
We are not persuaded that State Farm “intentionally
misrepresented” the policy limits when the documents
executed after the accident reflect the same lower UIM
amounts as in the April application. This may well have been
a closer case if there were some material differences in the
coverage amounts or if Ms. Gibson had objected to the lower
coverage limit in May. But she did not.5 So, the Magistrate
Judge properly denied the motion to reconsider when there was
no “new” evidence proffered.
As to the Gibsons’ second argument, motions for
reconsideration are not a vehicle to argue facts or issues that
were not raised. See, e.g., Exxon Shipping Co. v. Baker, 554
U.S. 471, 485 n.5 (2008) (holding a Rule 59(e) motion “may
not be used to relitigate old matters, or to raise arguments or
present evidence that could have been raised prior to the entry
of judgment”). But that is what seems to have happened here.
The Gibsons admittedly failed to request certain
documents in discovery (including the “Best Practices
5
Ms. Gibson’s injuries at the time the signed the
documents in May do not alter the analysis here. She was
accompanied by her husband who is also a named insured in
the policy and was not injured. They drove together to the
State Farm office. There is no allegation that she suffered head
trauma, or any other injury that would have affected her
understanding of the document she was signing.
18
Manual”)—and have not persuasively justified this failure.
Likewise, the joint Rule 26(f) report presented to the
Magistrate Judge explicitly discusses coverage limits and State
Farm’s position that Ms. Gibson elected the lower UIM
coverage. Thus, the issue was front and center and ripe for
discovery activities.
Moreover, even with this information at their disposal
pre-trial, the Gibsons did not argue bad faith based on an
alleged misrepresentation of coverage. They chose instead to
base their bad faith claim on an alleged failure by State Farm
to investigate the Gibsons’ claim. Their failure to challenge
the amount of their coverage pre-trial, when the information
about the Gibsons’ UIM election was included in the discovery
report authored and presumably read by both parties’ lawyers,
does not now afford the Gibsons a second bite at the insurance
apple.
State Farm’s actions did not misrepresent the applicable
coverage limits. The Magistrate Judge correctly denied the
Gibsons’ motion for reconsideration when the only basis was
what the Gibsons should, could, and ought to have raised
earlier but did not.
* * *
For the foregoing reasons, we will affirm the Magistrate
Judge’s order insofar as he denied the Gibsons’ motion for
reconsideration of the grant of summary judgment. We will
reverse the order granting the Gibsons’ motion to mold the
verdict to $750,000 and remand with instructions to mold the
jury verdict to the $300,000 UIM limit under the Gibsons’
policy.
19