United States: Insurer obtains summary judgment in auto body dispute
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The Western District of Pennsylvania recently allowed a motion for summary judgment from an insurer and dismissed the claims for breach of contract, bad faith and unjust enrichment filed by the assignee of insured and third party claims. The Court found that the insurer had paid for the repairs in accordance with the automobile policies it had issued. The Court also ruled that a disagreement over the insurer’s repair estimates and the need for additional estimates does not establish bad faith. See Professional, Inc. v. Progressive Case. Ins. Co, 2021 WL 4267497 (WD Pa. September 20, 2021).
In Professional, the plaintiff, an auto repair shop, alleged that the defendant insurer failed to reimburse the plaintiff for the full cost of auto repairs covered by insurance policies issued by the insurer, which included the auto repair of customers who have a policy with the insurer (“Insured”) and customers who did not have a policy with the insurer but owned automobiles damaged by a responsible person who had a policy with the insurer. of the insurer (“Third party claimants”). The plaintiff alleged that he suffered more than $ 700,000 in damages, representing overdue balances, “costs of delay” and administrative fees. The plaintiff further asserted that he had obtained assignments from insureds and third party claimants which enabled the claimant to seek damages from the insurer under the insurer’s contractual obligations to insureds and third party claimants. The insurer filed a motion for summary judgment to dismiss the plaintiff’s claims for breach of contract, bad faith and unjust enrichment, which the Court granted.
First, the court ruled that the plaintiff could not maintain its claims against the insurer because different underwriting entities had issued the policies under which the ceded claims arose. The court further ruled that, even if the appropriate underwriting entities were named in the lawsuit, the plaintiff’s claims would still not survive summary judgment. For the first party breach of contract claim, the Court noted that the insurer was responsible under the automobile insurance policy to pay the cost of the competitive labor rates in effect and the cost of repairing or replacing parts and equipment, as reasonably determined by the insurer. Because the claimant had not contested the reasonableness of the insurer’s estimate of labor and repair costs (other than reiterating that it is less than what the claimant charges), nor shown otherwise that he had not been compensated in accordance with the motor vehicle policy, the court held that the plaintiff could not maintain his claim for breach of contract. The Court ruled that the plaintiff had also failed to prove any contractual right to its administrative costs and late fees. For the claim for breach of contract by a third party, the court held that the plaintiff had not provided evidence to support an applicable law or policy allowing it to maintain a contract claim on behalf of the parties. third party applicants.
As to the bad faith claim, the Court held that the assignments did not expressly confer on the plaintiff the ability to maintain a bad faith claim against the insurer. Even if they had, the court ruled that the plaintiff had not produced sufficient evidence to maintain bad faith claims against the insurer.
Finally, the Court dismissed the plaintiff’s claim for unjust enrichment after finding that the plaintiff could not maintain a claim for unjust enrichment on behalf of the assignors because there is an enforceable contract between the parties. In addition, the Court held that the plaintiff could not maintain a claim for unjust enrichment in his own name because the plaintiff had not shown that repairs had been made at the request of the insurer, that the the insurer had an obligation to repair the vehicles in accordance with the recommendation of the claimant, or that the repair of the vehicles according to the recommendation of the claimant saved the insurer from expense or loss.
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