United States: No obligation to pay “undisputed amount”
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The Eastern District of Pennsylvania recently denied an insured’s summary judgment motion after finding that an insurer failed to recognize liability and causation by asserting in a related subrogation action that the insured did not was not responsible for the accident in which the insured was injured. In addition, the Court concluded that an insurer is not required to make a partial prepayment to an insured for a UIM claim. See Marrone v. GEICO Ins. Co., 2021 WL 2681388 (ED Pa. 29 June 2021).
In Brown, the insured was driving a motorcycle when he was struck by an automobile and injured. The insured subsequently sued his insurer for breach of contract and bad faith in order to recover first rank benefits. The insurer argued that the insured was responsible for the accident.
The insurer filed a separate subrogation action in respect of the accident to recover property damage and rental costs from the driver of the automobile which allegedly struck the insured. In the subrogation action, the insurer argued that the negligence and recklessness of the driver of the automobile was the sole cause of the accident. The insurer further claimed that the insured was not responsible or at fault for the accident.
The insured sought summary judgment in his lawsuit, arguing that summary judgment was appropriate on the issue of causal liability because the insurer had argued in the subrogation action that the insured was not liable of the accident. The insured further argued that a partial award of damages, interest, legal fees and costs was appropriate.
In dismissing the insured’s motion for summary judgment, the Court ruled that the insured had not advanced a consistent legal theory preventing the insurer from challenging liability. The Court concluded that the doctrine of judicial estoppel did not preclude the insurer’s defense because the insured had not established that the insurer’s inconsistent positions on liability had been taken in bad faith or in an attempt to mock the justice system. The Court further noted that the claims of the subrogation action regarding liability which the insured sought to admit in support of its position regarding liability were legal conclusions, and the Third Circuit held that the legal conclusions in pleadings cannot be used as a confession of evidence. The Court further ruled that the doctrine of collateral estoppel did not apply because the insured had not demonstrated that the subrogation action was resolved on the merits, which is an essential element of collateral estoppel. .
Finally, the Court ruled that the insurer was not entitled to an advance of proceeds under the insurance policy. The Court noted that Pennsylvania law did not require insurers to make partial payment on a UIM claim in the absence of a contractual provision requiring partial payment or an agreement between the parties as to the value. of a UIM complaint.
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