In Smerdon v. Geico Cas. Co., the United States District Court for the Eastern District of Pennsylvania examined an automobile insurer’s denial of an uninsured motorist claim. The claim concerned injuries sustained by the policyholder when she attempted to apprehend a robber of a store. Along with several other individuals, the policyholder chased the robber into the store’s parking lot. After the robber entered the vehicle, the policyholder opened the passenger door in an attempt to remove the keys from the ignition. The robber then started the vehicle, running over the policyholder and causing her to suffer serious injuries that included a skull fracture, a traumatic brain injury, and injuries to her right knee, right ankle, right thigh, and right shoulder.

The policyholder sought uninsured motorist benefits from her automobile insurer. While not formally denying her claim, the insurer indicated that the policyholder was not entitled to uninsured motorist benefits as she voluntarily assumed the risk of her injuries. The policyholder brought a lawsuit alleging claims for breach of contract and statutory bad faith.

Following discovery, the defendant insurer filed a motion for summary judgment on both claims, based primarily upon the issue of whether coverage was precluded due to the plaintiff’s alleged assumption of the risk. The policyholder filed a motion for partial summary judgment on the assumption-of-risk defense. In its examination of both motions, the Court held that the insurer failed to satisfy its burden of establishing assumption-of-risk as an affirmative defense. The Court observed that under Pennsylvania law, such a defense requires proof that the plaintiff “fully appreciated and voluntarily accepted” the specific risk that led to the injury. The Court noted that there was no evidence that the policyholder was aware of the risk that the robber would run over her. The Court therefore granted the plaintiff policyholder’s motion for partial summary judgment and denied the defendant insurer’s summary judgment motion as it pertained to assumption of the risk. However, the Court noted that questions of fact remained regarding the application of comparative negligence.

With regard to the bad faith claim, the Court determined that the insurer had a reasonable basis to contest coverage based upon the assumption-of-the-risk defense. The Court also noted that even if the insurer lacked a reasonable basis for its decision, there was no evidence that the insurer knew or recklessly disregarded the absence of a reasonable basis. The Court further determined that the defendant insurer did not unreasonably delay the claims-handling process. The Court noted that any delay in the claims-handling process was reasonable, as it was attributable to the insurer’s need to examine the police report before finalizing its coverage decision. The Court therefore granted the defendant insurer’s motion for summary judgment on its bad faith claim.

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