Beach, K. & T. v. The Navigators Group, Inc. ( 2020 )

J-A16012-20
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
KEVIN BEACH AND TERESA BEACH : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
THE NAVIGATORS INSURANCE :
COMPANY :
: No. 1550 MDA 2019
:
APPEAL OF: KEVIN BEACH :
Appeal from the Order Entered August 29, 2019
In the Court of Common Pleas of Lancaster County
Civil Division at No(s): CI-12-14596
BEFORE: PANELLA, P.J., STABILE, J., and MUSMANNO, J.
MEMORANDUM BY PANELLA, P.J.: FILED SEPTEMBER 11, 2020
Kevin Beach and Teresa Beach (collectively, “the Beaches”) appeal from
the August 29, 2019 order granting summary judgment in favor of Navigators
Insurance Company (“Navigators”)1 in an underinsured motorist insurance
(“UIM”) dispute arising out of a 2009 automobile accident. On appeal, the
Beaches contend the trial court erred in finding, as a matter of law, that the
UIM coverage was $35,000 and that there were no genuine issues of material
fact to support a bad faith claim. Based on the following, we affirm.
The trial court set forth the facts and procedural history as follows:
The [Beaches’] claim stems from a motor vehicle accident
that occurred on April 22, 2009 on Route 322 in Earl Township,
____________________________________________
1 The company was incorrectly identified as “The Navigators Insurance Group,
Inc.” or “The Navigators Group, Inc.” throughout the underlying matter.
J-A16012-20
Lancaster County, Pennsylvania. [The Beaches’] car was hit by the
tortfeasor, which caused [the Beaches] to swerve right and crash
into a nearby farm. As a direct result, [the Beaches] suffered
personal injuries and loss of consortium.
At the time of the accident, [the Beaches] were driving a
1992 Navistar 4900 owned by their employer, Walter & Jackson,
Inc. (hereinafter “Employer”). The vehicle was insured by
Navigators with a policy period of October 1, 2008 to October 1,
2009. After [the Beaches] settled with the tortfeasor’s insurance
company, [the Beaches] sought Underinsured Motorist (“UIM”)
coverage from Employer’s policy issued by Navigators.2
_________________________
2In [the Beaches’] Complaint, it states that the tortfeasor’s
policy limits were $100,000. In the Joint Statement of
Undisputed Facts, the parties inadvertently state that the
tortfeasor’s policy limits were $1,000,000. All parties agreed
that $100,000 were the actual limits. Nonetheless, [the
Beaches] settled with the tortfeasor’s insurance company
for $95,000.
_________________________
At all relevant times, the purchase of Employer’s insurance
was handled by their Controller, Catherine Hinnenkamp. While the
Employer requested $1,000,000 in liability coverage, at the time
of initial purchase in 2007[,] Ms. Hinnenkamp signed a document
titled “Pennsylvania Uninsured Motorist and Underinsured Motorist
Option Selector” which selected $35,000 in UIM coverage and
submitted it to their insurance broker. The policy was thereafter
issued accordingly. The following year, Ms. Hinnenkamp worked
with the insurance broker to renew the policy with Navigators for
2008-2009, which policy was to include the previously established
$35,000 UIM coverage on their automobile coverage.
When Navigators delivered a declaration page for the
renewed policy on December 10, 2008, it contained several errors
and typos, including $1,000,000 UIM coverage, contrary to what
was requested in the waiver and proposal.3 On the same day,
Employer’s insurance broker sent an e-mail to Navigators
outlining the errors, typos, and inconsistencies on the declaration
page. On January 14, 2009, Navigators issued a corrective
endorsement to the erroneous declaration page which included an
-2-
J-A16012-20
endorsement showing UIM coverage of $35,000 selected by
Employer.4
_________________________
3Other errors noted on the declaration page were under the
Boiler & Machinery, General Liability, Inland Marine, and
Crime coverages.
4The lower liability rates for uninsured and underinsured
motorist coverage resulted in a lowered premium paid by
Employer
_________________________
This was the policy in effect at the time of [the Beaches’]
accident. Nonetheless [the Beaches] made a claim for $1,000,000
of UIM coverage. In response, Navigators tendered the $35,000
UIM policy limits.5 As [the Beaches] believed the policy limits to
be higher under the policy, they brought the instant suit alleging
1) breach of contract; 2) Bad Faith; and 3) a derivative claim for
loss of consortium.
_________________________
5At some point, there was a discrepancy whether or not
[the Beaches] accepted or rejected the $35,000.00 policy
limits but this issue has been resolved through the [Joint
Statement of Undisputed Material Facts].
_________________________
On April 6, 2017, Navigators filed a Motion for Partial
Summary Judgment on the issue of the disputed amount of policy
limits for underinsured motorist coverage. After Navigators’
Motion, [the Beaches’] response thereto, and an oral argument
thereon, [the trial court] granted the Partial Motion for Summary
Judgment by Order on September 6, 2018 and concluded as a
matter of law that on April 22, 2009, the UIM coverage policy limit
was $35,000. As the only remaining issue was the Bad Faith claim,
Navigators filed a second Summary Judgment motion on April 2,
2019. After another briefing on Navigators’ Motion, [the Beaches’]
response thereto, and an oral argument thereon, [the court]
granted the Motion in favor of Navigators and dismissed [the
Beaches’] Complaint. This timely appeal followed.
-3-
J-A16012-20
Trial Court Opinion, 1/13/2020, at unnumbered 1-4 (record citations omitted).
In reviewing a trial court’s order granting summary judgment, we are
guided by the following principles:
A reviewing court may disturb the order of the trial court
only where it is established that the court committed an error of
law or abused its discretion. As with all questions of law, our
review is plenary.
In evaluating the trial court’s decision to enter summary
judgment, we focus on the legal standard articulated in the
summary judgment rule. The rule states that where there is no
genuine issue of material fact and the moving party is entitled to
relief as a matter of law, summary judgment may be entered.
Where the non-moving party bears the burden of proof on an
issue, he may not merely rely on his pleadings or answers in order
to survive summary judgment. Failure of a nonmoving party to
adduce sufficient evidence on an issue essential to his case and
on which it bears the burden of proof establishes the entitlement
of the moving party to judgment as a matter of law. Lastly, we
will view the record in the light most favorable to the [nonmoving]
party, and all doubts as to the existence of a genuine issue of
material fact must be resolved against the moving party.
Additionally, we note that the interpretation of an insurance
policy is a question of law that we will review de novo.
State Farm Mut. Auto. Ins. Co. v. Dooner, 189 A.3d 479, 481-482 (Pa.
Super. 2018) (internal citations omitted).
In interpreting the language of an insurance policy, we recognize:
[W]e must apply general principles of contract interpretation, as,
at base, an insurance policy is nothing more than a contract
between an insurer and an insured. In so doing, we must ascertain
the intent of the parties as manifested by the terms used in the
written insurance policy. Just as in statutory construction, [w]hen
the language of the policy is clear and unambiguous, a court is
required to give effect to that language. Importantly, however,
provisions of insurance contracts are invalid and unenforceable if
-4-
J-A16012-20
they conflict with statutory mandates because contracts cannot
alter existing laws.
Gallagher v. GEICO Indem. Co., 201 A.3d 131, 137 (Pa. 2019) (citations
and quotation marks omitted)
In their first issue, the Beaches contend that the trial court erred in
granting Navigators’ motion for summary judgment because Navigators failed
to meet the requirements for a valid underinsurance coverage sign-down form
that complied with 75 Pa.C.S.A. § 1734. See Appellant’s Brief, at 16.
Specifically, they complain that Navigators “failed to produce any sort of
formal request for a lowering of [Employer]’s limits, signed by the insured,
that complies with Pennsylvania law.” Appellant’s Brief, at 18. The Beaches
note that while Navigators points to the December 10, 2008 e-mail as
evidence of a request to lower the UM/UIM limits for Employer, this email was
sent from a third-party representative and therefore, is not legally sufficient
under the MVFRL. Id., at 18-19. They rely on Transguard Ins. Co. of
America, Inc. v. Hinchey, 464 F.Supp.2d 425 (M.D. Pa. 2006), to support
their argument.
“Pursuant to the Motor Vehicle Financial Responsibility Law (“MVFRL”),
75 Pa.C.S. §§ 1701-1799.7, motor vehicle liability insurance carriers are
required to offer their named insureds uninsured motorist (“UM”) and UIM
liability coverage.” Nationwide Mut. Ins. Co. v. Catalini, 18 A.3d 1206,
1209 (Pa. Super. 2011). Section 1731 generally requires that an insurance
company may not issue a policy unless it provides UM/UIM coverage that is
-5-
J-A16012-20
equal to the bodily injury liability coverage, except as set forth in Section
1734. See Blood v. Old Guard Ins. Co., 934 A.2d 1218, 1226 (Pa. 2007).
[Section] 1734 permits the named insured to request reduced UM
and UIM coverage. In order to effect a valid request for reduction
pursuant to [Section] 1734, the named insured’s written request
must (1) manifest the insured’s desire to purchase uninsured and
underinsured coverage in amounts equal to or less than the bodily
injury limits; (2) be signed by the named insured; and (3) include
an express designation of the amount of uninsured and
underinsured coverage requested. Hence, to conform with
[Section] 1734, the written request must be signed by the insured
and must contain an express designation of the amount of
coverage requested, all manifesting the insured’s desire to
purchase coverage in amounts less than the bodily injury limits.
Catalini, 18 A.3d at 1209 (footnote, citations and quotation marks omitted).
A review of the record reveals the parties filed a joint statement of
undisputed material facts, in which the Beaches stipulated to the following:
1. Navigators Insurance Company (“Navigators”) provided
automobile liability insurance coverage to [Employer] under Policy
No. MLNC 0800003100 (“the Policy”) for the policy period October
1, 2008 to October 1, 2009.
2. The Policy contains an endorsement which purports to modify
the limits of the UIM coverage provided to $35,000.
3. Prior to the Policy being issued, [Employer] reviewed and
approved an insurance proposal for its 2008-2009 insurance
program.
4. The insurance coverage specifications set forth in the proposal
submitted to Navigators for the 2008-2009 policy period called for
[Employer] to carry a limit of liability of $35,000 for uninsured and
underinsured motorist coverage.
5. [Employer]’s controller, Catherine Hinnenkamp, was authorized
to handle all insurance matters for [Employer] including, without
limitation, the UIM/UM execution of waivers and had previously
-6-
J-A16012-20
signed a waiver acknowledging that [Employer] was requesting a
UIM limit lower than the bodily injury limit on the previous policy.
6. The Navigators Policy was delivered to [Employer] on December
10, 2008.
7. Subsequently, in an e-mail dated December 10, 2008,
[Employer], through its insurance representative, requested that
the Navigators Policy be corrected in several ways to be consistent
with the insurance proposal.
8. One of the corrections involved correcting the Policy to reflect
that the underinsured/uninsured limit on the Policy should be
$35,000.
9. The endorsement provides as follows
“THIS ENDORSEMENT CHANGES THE POLICY PLEASE
READ IT CAREFULLY”
***
CHANGES
THE UNINSURED/UNDERINSURED MOTORIST COVERAGE
LIMIT HAS BEEN AMENDED TO $35,000 IN LIEU OF
$1,000,000.
ALL OTHER TERMS AND CONDITIONS APPLY.
10. The correction requested by [Employer] was made to the
Policy by Navigators by way of endorsement.
11. Navigators issued a corrective endorsement which was
delivered to [Employer] on January 14[,] 2009.
12. As a result of Navigators issuing the corrective endorsement,
[Employer] was issued a return premium by Navigators in the
amount of $969.00.1
________________________
1[Employer] was charged a premium for a $1.000,000 limit.
The Return Premium of $969.00 referenced on the
Endorsement reflects the difference in premium for a
-7-
J-A16012-20
UM/UIM policy with a $1,000,000 limit of liability and
$35,000 limit of liability.
Joint Statement of Undisputed Material Facts, 9/6/2018, at 1-3.
The Beaches do not dispute that when the policy at issue was initially
purchased in 2007, Employer signed a waiver of limits that complied with
Section 1734 and Catalini. Likewise, the Beaches do not challenge the written
2008-2009 insurance proposal wherein Employer requested the same limit of
$35,000 for UIM liability coverage. They only take issue with the renewal
policy, and complain that a second written Section 1734 waiver was required
when the incorrect limits were listed. They allege the Employer’s December
2008 email (notifying Navigators of the inconsistency and reiterating that the
policy limits should include the $35,000 UIM coverage) was insufficient in
terms of a written request as set forth in Section 1734.
Their argument fails as the “written request” requirement of Section
1734 has not been held to such an arduous standard by the courts of this
Commonwealth. As noted above, in Blood, the Pennsylvania Supreme Court
held that pursuant to the MVFRL, an insurance company cannot issue a policy
with lower liability for UIM amounts unless it received a written request which
complied with Section 1734. See Blood, 934 A.2d at 1226.
Subsequently, in Orsag v. Farmers New Century Insurance, 15 A.3d
896 (Pa. 2011), the Pennsylvania Supreme Court concluded that an insurance
application satisfied Section 1734’s “in writing” requirement because “it clearly
indicated appellants’ desire for reduced UM/UIM coverage, and was signed by
-8-
J-A16012-20
the insured.” Id., at 901. Further, the Supreme Court stated, “There may be
a more detailed way of satisfying the ‘writing’ requirement, but it is
unnecessary given the simple language of [Section] 1734 and the manner in
which insurance coverage amounts are selected.” Id.
Here, in disposing of the issue, the trial court found the following:
In this case the requirements of Blood and Orsag are more than
satisfied since Navigators received not one but three written
requests by its insured to carry lower UIM limits, first by signed
[Section] 1734 waiver, then by written proposal, and lastly by e-
mail. Not only was there specific expressed intent by the insured,
but a mutual understanding and assent by the Navigators when
they issued the corrective endorsement. While the erroneously
issued renewal declaration page might have reflected something
contrary to the three writings, the underlying policy contained
valid UIM coverage in the amount of $35,000 as understood by
the Navigators and its insured. Here, [the Beaches] attempted to
take advantage of a common typographical error to create an
extra $965,000 in coverage which was not requested, not paid for
and never existed. As there was no genuine issue of material fact
related to the existence of a valid election of lesser underinsured
motorist liability coverage, granting summary judgment on this
issue was proper.
Trial Court Opinion, 1/13/2020, at unnumbered 6-7 (record citations omitted).
We agree with the court’s well-reasoned analysis. Based on the evidence
before us, Navigators received three written requests by Employer to provide
lower UIM limits as required in Section 1734: (1) the original, signed Section
1734 waiver; (2) the 2008-2009 written proposal which reflected the same
lower UIM limits of $35,000 as previously issued; and (3) the December 2008
e-mail notifying Navigators of the incorrect limit amount and requesting policy
reflects the $35,000 UIM limits. All three documents demonstrated an explicit
-9-
J-A16012-20
intent by Employer to purchase coverage in amounts less than the bodily
injury limits, as well as a mutual understanding and agreement by Navigators
when it issued the original policy and the corrective endorsement. See
Catalini, 18 A.3d at 1209.
Furthermore, while the renewal declaration page reflected a coverage
amount contrary to the original wavier and the proposal, Employer
immediately notified Navigators of what can only be described as a scrivener’s
error, and Navigators shortly thereafter corrected the error by way of an
endorsement so that the policy reflected Employer’s expressed intent that the
policy limits should still include the $35,000 UIM coverage.
Additionally, the Beaches have not provided this Court with case law
supporting their position that Section 1734’s writing requirement dictates a
more onerous standard. Their reliance on Hinchey is misplaced for several
reasons. First, “it is well-settled that this Court is not bound by the decisions
of federal courts, other than the United States Supreme Court[.]” Eckman v.
Erie Ins. Exch., 21 A.3d 1203, 1207 (Pa. Super. 2011) (citation omitted).
“We recognize that we are not bound by these cases; however, we may use
them for guidance to the degree we find them useful and not incompatible
with Pennsylvania law.” Id. (citation and quotations marks omitted).
Second, the facts in Hinchey are distinguishable from the present
matter. In Hinchey, the defendant was injured in an accident while driving a
vehicle that was owned by his employer. The employer, where the defendant
- 10 -
J-A16012-20
worked, used an insurance broker to apply for insurance with the plaintiff-
insurance company. The insurance broker sent an email to the plaintiff-
insurance company, which included, inter alia, a request for UIM limits of
$500,000 per vehicle. This amount was less than the bodily injury liability
limits of $1,000,000.00 per vehicle. The plaintiff-insurance company replied
with a quote and the broker signed the policy acceptance form on behalf of
the employer. The defendant was subsequently injured while driving one of
the employer’s covered vehicles.
The plaintiff-insurance company subsequently sought a declaratory
judgment concerning the amount of UIM coverage available to the injured
defendant and his spouse. The plaintiff argued that the amount of UIM
coverage was limited to $500,000 per vehicle. In support of this argument,
the plaintiff pointed to the request via e-email made to it by the insurance
broker. The plaintiff asserted the e-mail satisfied the statutory requirements
for a request for UIM coverage in an amount less than the bodily injury limit
as provided in Section 1734. The defendant countered that the coverage
amount requested by the broker for the reduced UIM coverage was not valid
under Section 1734 because it was not a written request by the named
insured.
The federal district court found that the “e-mail request made by the
broker was not a valid request under the Pennsylvania MVFRL under [Section]
- 11 -
J-A16012-20
1734 to limit the amount of UIM coverage on each vehicle to $ 500,000.00[.]”
Hinchey, 464 F. Supp. 2d at 429. The court opined:
The broker’s e-mail requested a number of changes to the
policy at issue, e.g. deletion of vehicles, addition of a covered
vehicle, request to amend building and personal property
coverage. Among these requests was a change in UIM coverage
to $ 500,000.00. The bodily injury liability limit was $
1,000,000.00. But, it is undisputed that neither a corporate officer
nor a designated employee sent a written request to the broker or
the insurer requesting UIM coverage in an amount less than the
bodily injury liability limit.
…
Although this Court found that the broker was the agent of
the named insured, no corporate officer nor designated employee
of the named insured corporation sent a written request to either
the broker or the insurer requesting UIM coverage less than the
bodily injury limits. Even assuming that the broker was authorized
to request UIM coverage in an amount less than the bodily injury
limit, [Section] 1734’s requirements cannot be satisfied without a
writing by the named insured, not the named insured’s agent.
Id., at 435 (citations and record citations omitted).
Here, Employer’s controller, Hinnenkamp, was authorized to handle all
insurance matters for the company. Joint Statement of Undisputed Material
Facts, 9/6/2018, at ¶ 5. Hinnenkamp specifically requested $1,000,000 in
bodily injury liability coverage, and selected the option of $35,000 in UIM
coverage and submitted it to the insurance broker. The original 2007 policy
was thereafter issued in accordance with the Employer’s selections. The next
year, Hinnenkamp again worked with the insurance broker to renew the policy,
which included the previously established $35,000 UIM coverage. Unlike in
Hinchey, the evidence establishes the Employer’s corporate officer,
- 12 -
J-A16012-20
Hinnenkamp, sent a written request to the broker requesting UIM coverage
less than the bodily injury limits.
A corporation like employer cannot act except through its agents. See
Walacavage v. Excell 2000, Inc., 480 A.2d 281, 284 (Pa. 1984). Since
there is no dispute that Hinnenkamp was a duly appointed agent for employer
in procuring insurance, the established facts of record are fatal to the Beaches’
claim.
Furthermore, the December 2008 e-mail sent from the broker to
Navigators merely reflected the numerous errors on the declaration page for
the renewed policy. The email was not an original document requesting
insurance coverage like in Hinchey. Therefore, Hinchey is factually distinct
and not persuasive, and we decline to apply it here. Accordingly, the Beaches’
first argument fails.
In their second argument, the Beaches claim the court erred in granting
Navigator’s motion for summary judgment because there remained a genuine
issue of material fact concerning whether Navigators acted in bad faith. See
Appellant’s Brief, at 19. They state that Navigators improperly relies on the
sworn affidavit from prior defense counsel “in an effort to establish credibility
and rebut the allegations of bad faith[,]” but pursuant to the rule of Nanty-
- 13 -
J-A16012-20
Glo Borough v. American Surety Co., 163 A. 523 (Pa. 1932),2 “the
reasonableness of the alleged offer is for the jury to decide.” Appellant’s Brief,
at 20.
“Bad faith” has been defined as “any frivolous or unfounded refusal to
pay proceeds of a policy.” Terletsky v. Prudential Property and Cas. Ins.
Co., 649 A.2d 680, 688 (Pa. Super. 1994). The Pennsylvania legislature
created a statutory remedy for an insurer’s bad faith in acting upon an
insured’s claim. See 42 Pa.C.S.A. § 8371.3
____________________________________________
2 “The Nanty-Glo rule prohibits summary judgment where the moving party
relies exclusively on oral testimony, either through testimonial affidavits or
deposition testimony, to establish the absence of a genuine issue of material
fact except where the moving party supports the motion by using admissions
of the opposing party or the opposing party’s own witness.” Lineberger v.
Wyeth, 894 A.2d 141, 149 (Pa. Super. 2006) (citation and quotation marks
omitted). See also Pa.R.C.P. 1035.2, Note.
3 Section 8371 provides:
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.
42 Pa.C.S.A. § 8371.
- 14 -
J-A16012-20
In Rancosky v. Wash. Nat’l Ins. Co., 170 A.3d 364 (Pa. 2017), the
Pennsylvania Supreme Court held:
[T[o prevail in a bad faith insurance claim pursuant to Section
8371, a plaintiff 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. We further hold that proof of the insurer’s subjective motive
of self-interest or ill-will, while perhaps probative of the second
prong of the above test, is not a necessary prerequisite to
succeeding in a bad faith claim. Rather, proof of the insurer’s
knowledge or reckless disregard for its lack of reasonable basis in
denying the claim is sufficient for demonstrating bad faith under
the second prong.
Rancosky, 170 A.3d at 377.
Here, there can be no dispute that Navigators had a reasonable basis
for denying the Beaches’ claim for coverage beyond $35,000, as we have
already determined the trial court did not err in concluding that the UIM policy
limit was $35,000. We therefore turn to the Beaches’ claims based upon the
timeliness of Navigators’s actions in dealing with their claims:
[Navigators acted in bad faith by] (7) failing to promptly offer any
payment to [the Beaches], (8) engaging in dilatory and abusive
claims handling, (9) acting unreasonably and unfairly by
withholding underinsured motorists benefits justly due and owing
to [the Beaches], (10) subordinating the interests of its insured
and those entitled under its insured’s coverage to its own financial
monetary interest and (11) causing [the Beaches] to expend
money on the presentation of their claim.
Id., at 28.
The Beaches argue that “[u]nreasonable delay in payment may also be
a basis for bad faith.” Id., at 25. They state Navigators failed to communicate
- 15 -
J-A16012-20
with them and contrary to the affidavit of Navigators’ former counsel, they
have no record of a tendered payment in April 2014 by Navigators in the
amount of the $35,000 UIM coverage. See id., at 29. The Beaches contend
Navigators’ actions demonstrate it breached its duty of good faith to them
“through conduct that promoted [Navigators’] self interest.” Id. Lastly, they
state if a tendered payment was made, it came four years after Navigators
gave consent to settle in October 2010, and such a delay, in and of itself,
would constitute bad faith. See id., at 30.
In denying the Beaches relief regarding their bad faith claim, the trial
court found the following:
[The Beaches] allege that this Court erred in granting
summary judgment on the Bad Faith claim because there were
genuine issues of material fact and such an action violates Nanty-
Glo. In reality, however, [the Beaches] provided no evidence to
support their Bad Faith claim beyond conclusory assertions. While
[the Beaches] did provide an August 1, 2013 letter sent to
Navigators demanding the amount of $900,000, based on [the
Beaches’] interpretation of Navigators’ insurance policy, all other
documents provided as exhibits in the Response show Navigators
attempting to get information to resolve the case. The record
clearly demonstrates that multiple times Navigators tendered
policy limits of $35,000, based on what was, in fact, a correct
interpretation of the policy, but [the Beaches] refused or ignored
those offers. After the first refusal of the $35,000 limits,
Navigators again tendered the limits without condition so [the
Beaches] could continue their pursuit of the alleged higher
$1,000,000 limits they claimed were in effect. Further, [the
Beaches’] objections to this Court’s consideration of the
information that was provided is meritless as, for the most part,
it was documentary in nature and therefore, outside the scope of
the Nanty-Glo. [The Beaches] have simply provided no evidence
of Navigators’ bad faith dealings and the [a]ppeal should be
denied on this matter.
- 16 -
J-A16012-20
Trial Court Opinion, 1/13/2020, at unnumbered 8-9 (record citations omitted).
We agree with the trial court’s conclusion for several reasons. First,
concerning the Beaches’ Nanty-Glo assertion, they point to a document
provided by Navigator, a May 2017 affidavit of Navigators’ former counsel,
Keith G. Gomer, Esquire. They contend the trial court violated the Nanty-Glo
rule by relying on this affidavit in granting Navigators’ motion. In the affidavit,
Gomer averred the following, in pertinent part:
11. On March 27, 2014, per [counsel for the Beaches’] request, I
forwarded to him a copy of the Navigators Policy issued to
[Employer] and advised [counsel for the Beaches] that the Policy
contained an Endorsement amending the UM/UIM coverage to
$35,000 from $1,000,000. In my March 27, 2014 correspondence,
I advised [counsel for the Beaches] that I would be confirming
with the Navigators claim professional assigned to the UIM/UM
claim that the copy of the Policy being provided was complete and
contained all of the terms and conditions of the Policy.
12. Within the next seven to ten days after my March 27, 2014
correspondence, I had an opportunity to speak with the claims
professional assigned by Navigators to the case. I then advised
[counsel for the Beaches] in a phone call that Navigators
confirmed the UM/UIM limit available under the Policy issued to
[Employer] was $35,000.
13. During the conversation referenced in subparagraph (12)
above, I tendered to [counsel for the Beaches] … the $35,000 limit
of liability available under the UIM/UM coverage issued by
Navigators to [Employer].
14. In response to my verbal tender of the $35,000 UIM limits
available under the Navigators issued to [Employer], [counsel for
the Beaches] responded during the call by rejecting Navigators
offer of the $35,000 policy limits to resolve the Beach UIM claim.
Motion for Summary Judgment of Navigators Insurance Company to Plaintiff’s
Complaint (Count III) – Statutory Bad Faith, 4/2/2019, at Exhibit E.
- 17 -
J-A16012-20
It merits mention that pursuant to the Nanty-Glo rule, “[t]estimonial
affidavits of the moving party or his witnesses, not documentary, even if
uncontradicted, will not afford sufficient basis for the entry of summary
judgment, since the credibility of the testimony is still a matter for the
factfinder.” Penn Center House, Inc. v. Hoffman, 553 A.2d 900, 903 (Pa.
1989). “If, however, the moving party supports its motion for summary
judgment with admissions by the opposing party, Nanty-Glo does not bar
entry of summary judgment.” DeArmitt v. N.Y. Life Ins. Co., 73 A.3d 578,
595 (Pa. Super. 2013) (citation omitted).
Here, the Beaches ignore the fact that the trial court did not rely solely
on the Gomer affidavit in reaching its conclusion. In addition to the affidavit,
there was various documentary evidence, which supported the court’s finding
that Navigators attempted to get information to resolve the case and tendered
payment to the Beaches. Mostly notably was the joint statement of undisputed
material facts, in which the Beaches admitted the following: “Navigators has
previously tendered to [the Beaches] the UIM limit it maintains is owed
under the Policy - $35,000.” Joint Statement of Undisputed Material Facts,
9/6/2018, at 4, ¶ 23 (emphasis added).
Additionally, in the October 23, 2017 letter from Navigators’ present
counsel to the Beaches’ counsel, Navigators’ counsel stated:
As you will recall, at the recent oral argument hearing on
Navigators[’] Motion for Summary Judgment, [the trial judge]
suggested that Navigators again tender the $35,000 UIM limit
under the [Employer] Policy (the “Policy”) to [the Beaches]
- 18 -
J-A16012-20
subject to a full Reservation of Rights by Navigators. These limits
were previously tendered to [the Beaches] but were rejected. See
Affidavit of Keith G. Gomer, enclosed herewith.
Motion for Summary Judgment of Navigators Insurance Company to Plaintiff’s
Complaint (Count III) – Statutory Bad Faith, 4/2/2019, at Exhibit F (emphasis
added).4 Navigators also presented the October 17, 2017 check that it issued
to the Beaches in the amount of $35,000.00. See id., at Exhibit G.
Furthermore, in the Beaches’ response to Navigator’s motion to
summary judgment, they included Gomer’s March 27, 2014 email, referenced
in his affidavit, in which Gomer stated he had attached the Navigators
insurance policy issued to Employer, that the policy contained an endorsement
amending the UM/UIM coverage to $35,000 from $1,000,000, and that he was
going to confirm with the Navigators claim professional assigned to the
UIM/UM claim that the copy of the policy being provided was complete and
contained all of the terms and conditions of the policy. See Plaintiff’s Response
to Defendant’s Motion for Summary Judgment, 4/29/2019, at Exhibit A. 5
____________________________________________
4 The Beaches do not take issue with the language in this letter.
5 The court also indicated it relied on the following: Plaintiff’s Response to
Defendant’s Motion for Summary Judgment, 4/29/2019, at Exhibits C (an
August 1, 2013 letter from the Beaches’ counsel to Navigator’s former counsel
stating he sent medical records and the vocational expert report, and was
demanding $900,000.00 from the policy), D (a May 29, 2013 letter from
counsel for the workers’ compensation insurance carrier for Employer to the
Beaches’ counsel regarding the benefits paid to Kevin Beach, and notifying
that the workers’ compensation carrier is affirming its subrogation rights, on
any recovery, which would include any UM/UIM recovery that may be made),
- 19 -
J-A16012-20
Accordingly, the Beaches have not demonstrated the court violated the
Nanty-Glo rule in granting Navigators’s motion for summary judgment.
Second, as noted by the trial court, the Beaches’ bad faith argument
largely amounts to conclusory allegations as they failed to provide any
evidence to support their claim. The Pennsylvania Supreme Court has
previously stated:
Allowing non-moving parties to avoid summary judgment
where they have no evidence to support an issue on which they
bear the burden of proof runs contrary to the spirit of
[Pennsylvania Rules of Civil Procedure] 1035. We have stated that
the mission of the summary judgment procedure is to pierce the
pleadings and to assess the proof in order to see whether there is
a genuine need for a trial. We have a summary judgment rule in
this Commonwealth in order to dispense with a trial of a case (or,
in some matters, issues in a case) where the party lacks the
beginnings of evidence to establish or contest a material issue.…
Forcing parties to go to trial on a meritless claim under the guise
of effectuating the summary judgment rule is a perversion of that
rule.
…
Thus, we hold that a non-moving party must adduce
sufficient evidence on an issue essential to his case and on which
he bears the burden of proof such that a jury could return a verdict
in his favor.
Ertel v. Patriot-News Co., 674 A.2d 1038, 1042 (Pa. 1996) (citation and
quotation marks omitted). See also InfoSAGE, Inc. v. Mellon Ventures,
L.P., 896 A.2d 616, 625-626 (Pa. Super. 2006).
____________________________________________
and E (a November 10, 2009 letter from the insurance broker for Employer to
the Beaches’ counsel which included the requested auto policy declaration
information). See Trial Court Opinion, 1/13/2020, at unnumbered 8.
- 20 -
J-A16012-20
Here, for instance, the Beaches’ claim lacked “the beginnings of
evidence” concerning how Navigators engaged in dilatory and abusive claims
handling, and subordinated the interests of its insured and those entitled
under its insured’s coverage to its own financial monetary interest. Ertel, 674
A.2d at 1042.
Moreover, they allege that Navigators had given consent to settle the
matter in October 2010, and that because Navigators purportedly waited until
2014 to tender payment, the delay was evidence of bad faith. This argument
fails because the Beaches never presented evidence or pointed to a part of
certified record that supports the notion that Navigators was willing to settle
approximately 18 months after the accident.
Additionally, the Beaches relied on one document as evidence of bad
faith, which was an August 1, 2013 letter from their counsel to Navigator’s
former counsel, stating:
I had called you on July 16, 2012, and left you a message
regarding the above-captioned uninsured motorist claim, to which
no response was ever received. On August 17, 2012, we sent to
your attention all of client’s medical records. On December 12,
2012, we sent to your attention our Vocational Expert report. On
March 6, 2013, I sent you a letter asking you to contact me, to
which I have yet to receive a response.
Kindly contact me regarding this uninsured motorist claim.
Please be reminded that you do have the duty of good faith and
fair dealing with regards to this claim, as it is an uninsured
motorist. I wish to attempt to resolve this matter without the need
of protracted litigation but, even in spite of filing a Writ against
your insured, we have yet to discuss this matter and obviously
have yet to even receive an offer on this case.
- 21 -
J-A16012-20
At this time, my client has authorized me to demand
$900,000.00 out of the $1,000,000.00 policy limits. I expect a
response promptly.
Plaintiff’s Response to Defendant’s Motion for Summary Judgment,
4/29/2019, at Exhibit C. See Appellant’s Brief, at 29.
However, without more, they have not demonstrated that Navigators’s
delay of eight or nine months in tendering payment after the Beaches made
their demand constitutes by clear and convincing evidence that Navigators
“did not have a reasonable basis for denying benefits under the policy” and
that Navigators “knew or recklessly disregarded its lack of a reasonable basis
in denying the claim.” Rancosky, 170 A.3d at 377. It merits mention that at
that time, the UIM limit amount was still being debated by the parties and
there was a significant disparity in what they believed was the correct amount.
Therefore, the Beaches’ second claim is unavailing.
Accordingly, we conclude the trial court properly determined there were
no issues of material fact and Navigators was entitled to summary judgment.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 9/11/2020
- 22 -