                                                                      NOT PRECEDENTIAL

                        UNITED STATES COURT OF APPEALS
                             FOR THE THIRD CIRCUIT


                                         No. 10-4595
                                         ___________

                  NICHOLAS D. MACCARI; VICTORIA R. MACCARI,

                                                              Appellants

                                              v.

                      BITUMINOUS CASUALTY CORPORATION


                      On Appeal from the United States District Court
                                for the District of Delaware
                                 (D. C. No. 1-09-cv-00258)
                       District Judge: Honorable Gregory M. Sleet


                                    Argued on July 14, 2011

                  Before: RENDELL, SMITH and ROTH, Circuit Judges

                            (Opinion filed: October 11, 2011)



                                         OPINION


John S. Spadaro, Esquire (Argued)
John Sheehan Spadaro, LLC
724 Yorklyn Road, Suite 375
Hockessin, DE 19707

Robert A. Penza, Esquire
Gordon, Fournaris & Mammarella
1925 Lovering Avenue
Wilmington, DE 19806

             Counsel for Appellant
Michael A. Pope, Esquire (Argued)
John A. Litwinski, Esquire
McDermott, Will & Emery, LLP
227 West Monroe Street
Chicago, IL 60606

Susan W. Waesco, Esquire
Jay N. Moffit, Esquire
Morris, Nichols, Arsht & Tunnell, LLP
1201 N. Market Street
Wilmington, DE 19801

              Counsel for Appellee

Delaware Trial Lawyers Association
Christopher J. Curtain, Esquire
MacElree Harvey, Ltd.
5721 Kennett Pike
Centrevill, DE 19807

William W. Erhart, Esquire
1101 Centre Road, Suite 117
Wilmington, DE 19805

              Amicus Curiae for Appellant


ROTH, Circuit Judge:

I. Introduction

       Nicholas Maccari, joined in this action by his wife Victoria Maccari, appeals the

entry of summary judgment for Bituminous Casualty Corporation on Maccari‟s bad faith

breach of contract claim against Bituminous. Maccari contends that the District Court

failed to construe the facts in the light most favorable to him and improperly considered

inadmissible evidence. He also challenges privilege rulings made by the Magistrate

Judge and adopted by the District Court. For the reasons that follow, we will affirm the

judgment of the District Court.


                                             2
II. Background

       A.     The Accident and Insurance Claims1

       In March 1999, a van driven by Maccari and insured by Bituminous was hit by

another car. The parties agree that the driver of the other car, Eman Zaki, was entirely at

fault for the collision. The insurance policy for Maccari‟s van included personal injury

protection (PIP) as well as underinsured motorist (UIM) coverage. The parties agree that

the UIM coverage entitled Maccari to compensation, up to $1,000,000, for damages

incurred in excess of Zaki‟s insurance coverage, which had a limit of $100,000.

       In February 2004, Maccari advised Bituminous that he sought compensation

pursuant to the UIM coverage. Maccari initially demanded $650,000 on this claim,

largely on the basis of a medical report stating that he was suffering from chronic cervical

pain and recurring migraine headaches that prevented him from performing his job as a

painting contractor and estimator. Over the course of 2004 and 2005, Bituminous

investigated Maccari‟s claim, the parties discussed its value, and Maccari increased his

demand to $900,000 and requested an arbitration hearing. In March 2006, on the

recommendation of his doctors, Maccari had a cervical fusion operation. Maccari‟s

doctors reported that the surgery went well but that it would not be possible to determine

its effects on his disability for six to twelve months.



       1
        Because we write only for the parties, we briefly summarize the undisputed facts,
drawing all inferences in favor of Maccari, the non-moving party. See Barefoot
Architect, Inc. v. Bunge, 632 F.3d 822, 826 (3d Cir. 2011).
                                               3
       During that period, Bituminous arranged for a second examination of Maccari by

its medical expert and for another report from its private investigator. In May 2006, one

of the company‟s claims examiners sent an email to her superiors providing an update on

Maccari‟s claim. A printed copy of the email contains her handwritten tally of the

various types of compensation sought by Maccari, which totals $534,000. This

calculation conflicts with the text of the email itself, which observes that “[i]f we use

their figures the projection is 419k but we do expect those to go down because of the

results thus far of his surgery and his atty will be completing new reports,” and

recommends an indemnity reserve of “350-400k.”

       Claims evaluation sheets from this period do not indicate that Bituminous valued

Maccari‟s claim at $534,000. Moreover, in a deposition, a Bituminous representative

denied that the handwritten notes represented the company‟s internal valuation of

Maccari‟s claim.

       In December 2006, Bituminous‟s medical expert provided a report in which he

stated his conclusion that Maccari could work a light-duty position. Additionally,

Bituminous‟s private investigator surveilled and videotaped Maccari going to work and

performing chores outside his home over the course of several days. Finally,

Bituminous‟s vocational expert provided a report finding that Maccari was qualified for a

number of light-duty positions with wages averaging about $30,000 per year and as high

as $45,000 per year.

       In January 2007, Maccari withdrew the $900,000 claim and instead demanded the

policy limit of $1,000,000 plus pre-judgment interest of $600,000, arguing that

                                              4
Bituminous had unreasonably delayed the handling of his claim. The parties agreed to

arbitrate their dispute and a hearing was scheduled for January 26, 2007. The week

before the arbitration hearing, Bituminous revised its internal estimate of Maccari‟s

claim, assessing the value of the claim at $381,000. Shortly before the hearing,

Bituminous offered Maccari first $500,000, and then $750,000, to settle his claim.

Maccari rejected these offers and the parties proceeded to arbitration, which resulted in

an award of $1,000,000 to Maccari but no award of pre-judgment interest.

       B. Litigation

       In February 2009, two years after prevailing in the UIM arbitration, Maccari sued

Bituminous in Delaware Superior Court for bad faith breach of contract and breach of the

implied duty of good faith and fair dealing, alleging that Bituminous had failed to

promptly pay his UIM claims. Maccari subsequently clarified that the UIM arbitration

award covered his actual damages and that his claim was limited to punitive damages.

Bituminous removed the case to the District Court and the parties proceeded with

discovery.

       At the close of discovery, Bituminous moved for summary judgment. The District

Court granted the motion, finding that, in light of the evidence Bituminous had gathered,

it had a good faith reasonable basis for rejecting Maccari‟s settlement demands. Maccari

v. Bituminous Casualty Corp., No. 09-258, 2010 WL 4959946 *7-8 (Dec. 1, 2010).

Specifically, the Court held that Bituminous‟s refusal to accept these demands was

justified by “unresolved questions concerning the extent to which Maccari could work

and the amount he could earn.” Id. at *8. It also noted that Bituminous had prevailed in

                                             5
a previous PIP arbitration. Id. at *1, *5, *8. Finally, the District Court found insufficient

support for Maccari‟s punitive damages claim because there was no evidence that

Bituminous‟s conduct was due to “willful, malicious or reckless indifference,” rather than

to simple negligence or inadvertence. Id. at *8.

III. Discussion

       We review de novo the grant of summary judgment and apply the same standard

as the District Court: whether, viewing the evidence in the light most favorable to

Maccari, genuine issues as to material fact exist such that a reasonable jury could return a

verdict for him. Knopick v. Connelly, 639 F.3d 600, 606 (3d Cir. 2011). We are not

limited by the reasoning below and “may affirm . . . on grounds different from those

relied on by the district court.” In re Mushroom Transp. Co., 382 F.3d 325, 344 (3d Cir.

2004). Under Delaware law, “a first-party claim against an insurer for bad faith denial or

delay in claim payments sounds in contract and arises from the implied covenant of good

faith and fair dealing.” Dunlap v. State Farm Fire & Cas. Co., 878 A.2d 434, 440 (Del.

2005). A breach of the duty of good faith occurs “[w]here an insurer fails to investigate

or process a claim,” “delays payment,” or denies a claim and “the insured can show that

the insurer‟s denial of benefits was „clearly without any reasonable justification.‟” Id.

(quoting Tackett v. State Farm Fire & Cas. Ins. Co., 653 A.2d 254, 264 (Del. 1995)).

       In March 2006, Maccari underwent neck surgery. As reported by his doctors, the

ultimate effect of this surgery on his disability would not be known for six to twelve

months. It was therefore reasonable for Bituminous to wait at least six months, until

September 2006, to assess Maccari‟s condition and re-evaluate his claim. Bituminous

                                              6
took until December 2006 to obtain the requisite medical, vocational, and investigatory

reports and until January 2007 to value his claim at $318,000. In our view, this period

over which to obtain and assess these reports was reasonable, and Bituminous‟s valuation

of Maccari‟s claim was reasonably justified by the reports. In February 2007,

Bituminous offered Maccari first $500,000 and then $750,000 to resolve his claim. A

delay of one month between Bituminous‟s valuation of Maccari‟s claim and its offer was

also reasonable. See Tackett, 653 A.2d at 266.

       Maccari‟s primary argument on appeal is that a reasonable jury could conclude,

based on the handwritten notes of Bituminous‟s claims examiner, that the company

valued his claim at $534,000 as of May 2006, but waited until February 2007 - over nine

months later - to make any settlement offer. We do not think that any reasonable jury

could conclude that Bituminous‟s valuation of Maccari‟s claim is reflected in the

ambiguous handwritten notes of a single claims examiner that were never documented in

internal claims evaluations or even communicated to other Bituminous employees. And,

even if these notes did represent Bituminous‟s valuation of Maccari‟s claim, it was still

reasonable, as we have explained above, for Bituminous to wait until Maccari‟s surgery

had time to take effect before assessing his condition.

       Finally, we agree with the District Court‟s conclusion that Maccari cannot recover

punitive damages in this case because there is no evidence of “egregious conduct” by

Bituminous that is either “malicious” or reflective of a “reckless indifference” to his

plight. Tackett, 653 A.2d at 265-66. Bituminous‟s delay in offering a settlement to



                                             7
Maccari, even if it were unreasonable, is insufficient to warrant punitive damages. See

id.

IV. Conclusion

       For the foregoing reasons, we will affirm summary judgment for Bituminous. 2




       2
         Maccari appeals several privilege rulings made by a Magistrate Judge and
adopted by the District Court. As Maccari acknowledges, he did not timely object to
these ruling before the District Court and thus we will not consider them. See Fed. R.
Civ. P. 72(a). Maccari also appeals the District Court‟s consideration of prior arbitration
outcomes in assessing whether Bituminous acted reasonably, arguing that they are
inadmissible. We need not reach this argument because, as our analysis shows, summary
judgment is warranted even if this evidence is disregarded. See Allegheny Intern., Inc. v.
Allegheny Ludlum Steel Corp., 40 F.3d 1416, 1427 (3d Cir. 1994). For the same reason,
we do not reach the argument that the District Court improperly considered a letter from
the Delaware Insurance Commissioner reporting an absence of complaints against
Bituminous.

                                             8
