J-A07010-19


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 PAUL CAMIOLO                            :     IN THE SUPERIOR COURT OF
                                         :          PENNSYLVANIA
                    Appellant            :
                                         :
                                         :
              v.                         :
                                         :
                                         :
 ERIE INSURANCE EXCHANGE D/B/A           :     No. 478 EDA 2018
 ERIE INSURANCE GROUP A/K/A ERIE         :
 INSURANCE COMPANY A/K/A ERIE            :
 INDEMNITY COMPANY                       :

            Appeal from the Judgment Entered January 10, 2018
    In the Court of Common Pleas of Philadelphia County Civil Division at
                     No(s): July Term, 2015, No. 01750


BEFORE:    OLSON, J., DUBOW, J., and STEVENS*, P.J.E.

MEMORANDUM BY OLSON, J.:                              FILED APRIL 17, 2019

      Appellant, Paul Camiolo, appeals from the entry of judgment in favor of

Erie Insurance Exchange, d/b/a Erie Insurance Group, a/k/a/ Erie Insurance

Company, a/k/a Erie Indemnity Company (Erie Insurance) entered on January

10, 2018 following a bench trial on Appellant’s complaint that Erie Insurance

exercised bad faith in handling his claim for underinsured motorist (UIM)

benefits. We affirm.

      We briefly summarize the facts and procedural history of this case as

follows. On June 30, 2009, Appellant was involved in a motor vehicle accident

wherein he was struck from behind by another motorist. He sustained injuries

to his left wrist and elbow. Appellant filed a lawsuit against the other driver

and eventually settled for $50,000.00.       At the time of the accident, Erie


____________________________________
* Former Justice specially assigned to the Superior Court.
J-A07010-19



Insurance insured Appellant with a policy that provided $100,000.00 in UIM

coverage. A doctor who performed an independent medical examination in

conjunction with Appellant’s claim against the motorist in February 2011

opined that Appellant’s injuries were not caused by the accident. In March

2011, Appellant underwent surgery on his left elbow. Three months after the

surgery, Appellant was involved in a motor vehicle accident with a deer, which

aggravated his elbow. In April 2012, Appellant submitted a claim with Erie

Insurance seeking his $100,000.00 policy limit for UIM benefits. In October

2012, Appellant’s treating physician opined that Appellant sustained his

injuries in the 2009 motor vehicle accident. In April 2013, Erie Insurance

offered Appellant $7,500.00, after considering Appellant’s prior $50,000.00

settlement.   Thereafter, over the course of the next ten months, Erie

Insurance increased its offer six times.   In February 2014, Erie Insurance

tendered, and Appellant accepted, the UIM policy limit of $100,000.00.

      In July 2015, Appellant filed a bad faith claim against Erie Insurance.

The trial court held a bench trial over the course of six days between May 15,

2017 and July 10, 2017 and ruled in favor of Erie Insurance. In an opinion

filed on November 2, 2017, the trial court issued its findings of fact and

conclusions of law.    Appellant filed timely post-trial motions requesting

judgment notwithstanding the verdict (JNOV) or a new trial.    The trial court




                                    -2-
J-A07010-19



held argument on the post-trial motions and denied relief by order entered on

January 10, 2018. This timely appeal resulted.1

       On appeal, Appellant presents the following issues for our review:

       1. Whether the [trial c]ourt with respect to its bad faith analysis
          erroneously considered Erie [Insurance’s] [t]rial counsel’s
          intentions and motivations instead of the intentions and
          motivations of Erie Insurance [] when arriving at its decision
          by capriciously ignoring the Erie [Insurance] files and
          witnesses.

       2. Whether the [trial c]ourt erroneously failed to find that Erie
          Insurance [] had deliberately concealed a medical report from
          [Appellant] and continued to make offers in an attempt to take
          advantage of its superior knowledge when trying to settle the
          case with [Appellant], thus acting in bad faith.

       3. Whether the [trial c]ourt erred when [it] found that Erie
          Insurance [] did not take a double credit for the tortfeasor’s
          liability limits in spite of the testimony of Erie Insurance[’s]
          [c]laim [r]epresentative who testified that she took a double
          credit when evaluating [Appellant’s] claim and the [trial c]ourt
          also took the double credit when analyzing the value of
          [Appellant’s] claim.

       4. Whether the [trial c]ourt erroneously failed to apply the
          adverse inference in favor of [Appellant] that had been
          [g]ranted to [Appellant] against Erie Insurance [] with respect
          to records which were not produced by Erie Insurance [] when
          deciding whether Erie Insurance [] had acted in bad faith.



____________________________________________


1    Appellant filed a notice of appeal on February 1, 2018. On February 6,
2018, the trial court issued an order directing Appellant to file a concise
statement of errors complained of on appeal pursuant to Pa.R.A.P. 1925(b).
After receiving an extension from the trial court, Appellant filed a timely Rule
1925(b) statement. On June 5, 2018, the trial court issued an opinion
pursuant to Pa.R.A.P. 1925(a), largely relying upon its rationale as set forth
in its opinion filed on November 2, 2017.

                                           -3-
J-A07010-19


      5. Whether the [trial c]ourt erred when it erroneously prevented
         [Appellant] from obtaining the time and billing files of [Erie
         Insurance’s] [l]aw [f]irm as it related to the underlying case
         and then allowed witnesses to testify about matters contained
         within those records over objection of counsel.

      6. Whether the [trial c]ourt erred when it found that Erie
         Insurance [] had never rejected [Appellant’s] UIM claim when
         Erie Insurance [] made counter offers which were rejections of
         Appellant’s UIM claim.

      7. Whether the [trial c]ourt erred when it based its findings on
         facts that did not exist and/or were not in evidence.

      8. Whether the [trial c]ourt erroneously failed to enter a JNOV for
         [Appellant].

Appellant’s Brief at 5-6.

      We briefly summarize the sum of Appellant’s arguments as follows.

Appellant argues that Erie Insurance had a continuing duty to act in good faith

when negotiating to settle his UIM claim. Appellant maintains that once he

demonstrated clear liability, Erie Insurance demonstrated bad faith by: (1)

offering low valuations; (2) ordering a second medical evaluation and

intentionally withholding results that were favorable to Appellant; (3) twice

crediting the third-party settlement with the driver of the 2009 accident; and,

(4) violating its own policy by increasing offers that had not been countered

by Appellant.   Appellant contends that the trial court relied upon incorrect

information or data outside of the record to arrive at its decision. Appellant

also claims that the trial court’s finding that Erie Insurance never denied

coverage contravenes established contract law.      As such, Appellant claims

that he was entitled to JNOV or a new trial.



                                     -4-
J-A07010-19



      We adhere to the following standards:

      The propriety of a JNOV is a question of law, and therefore, our
      scope of review is plenary. When the denial of JNOV is challenged
      on the basis that the evidence was such that no two reasonable
      minds could disagree that the outcome should have been rendered
      in favor of the movant, as here, this Court reviews the evidentiary
      record and must conclude that the evidence was such that a
      verdict for the movant was beyond peradventure.

      In reviewing a trial court's decision whether or not to grant
      judgment in favor of one of the parties, we must consider the
      evidence, together with all favorable inferences drawn therefrom,
      in a light most favorable to the verdict winner. Our standards of
      review when considering motions for a directed verdict and
      judgment notwithstanding the verdict are identical. We will
      reverse a trial court's grant or denial of a JNOV only when we find
      an abuse of discretion or an error of law that controlled the
      outcome of the case. Further, the standard of review for an
      appellate court is the same as that for a trial court.

Corvin v. Tihansky, 184 A.3d 986, 990 (Pa. Super. 2018) (internal citations

and brackets omitted). Whereas, “when reviewing an order denying a motion

for a new trial, we must determine whether the trial court clearly and palpably

abused its discretion or committed an error of law which affected the outcome

of the case.”   Brinich v. Jencka, 757 A.2d 388, 395 (Pa. Super. 2000)

(citation and internal quotations omitted).

      An insured has a cause of action “if the court finds that the insurer has

acted in bad faith toward the insured[.]” 42 Pa.C.S.A. § 8371. This Court has

previously determined:

      The Pennsylvania legislature did not provide a definition of bad
      faith, as that term is used in [S]ection 8371, nor did it set forth
      the manner in which an insured must prove bad faith. […T]his
      Court has ruled that, to succeed on a bad faith claim, the insured
      must present clear and convincing evidence to satisfy a two part

                                     -5-
J-A07010-19


      test: (1) the insurer did not have a reasonable basis for denying
      benefits under the policy, and (2) the insurer knew of or recklessly
      disregarded its lack of reasonable basis in denying the claim.
      There is a requisite level of culpability associated with a finding of
      bad faith. Merely negligent conduct, however harmful to the
      interests of the insured, is recognized by Pennsylvania courts to
      be categorically below the threshold required for a showing of bad
      faith. Bad faith claims are fact specific and depend on the conduct
      of the insurer vis à vis the insured. The fact-finder must consider
      all of the evidence available to determine whether the insurer's
      conduct was objective and intelligent under the circumstances.

      A dishonest purpose or motive of self-interest or ill will is not a
      third element required for a finding of bad faith. A motive of
      self-interest or ill will may be considered in determining the
      second prong of the test for bad faith, i.e., whether an insurer
      knowingly or recklessly disregarded its lack of a reasonable basis
      for denying a claim.

Rancosky v. Washington Nat. Ins. Co., 130 A.3d 79, 92–93 (Pa. Super.

2015) (internal citations and quotations omitted).

      In this case, the trial court found that Erie Insurance never denied

Appellant’s claim.    Instead, it determined that “[b]y all accounts, Erie

[Insurance’s] investigation was vigorous; it sought and received numerous

medical records, ordered independent medical examinations and sought to

reconcile often conflicting or changing information, all the time communicating

with [Appellant] and his attorney.” Trial Court Opinion, 11/2/2017, at 13. It

further opined that “the ten-month negotiation period under examination

cannot be deemed unreasonable” where it was “undisputed that [Appellant’s]

treatment was off-again and on-again throughout this period, substantiating

Erie [Insurance’s] observation that [Appellant’s] claim, from a medical

standpoint, was a ‘fluid file’ with ongoing developments that complicated the



                                      -6-
J-A07010-19



evaluation process.” Id. at 14 (record citations omitted). As such, the trial

court concluded that at “[e]ach step of the way, Erie [Insurance]

acknowledged and credited new information and responded accordingly []

from the lapse of time between April 1, 2013 and February 7, 2014.” Id. at

15-16. The trial court also methodically details the procedural timeline of Erie

Insurance’s six increasing offers based upon the information as it became

available to Erie Insurance over the 10-month time period involved. Id. at

5-10.

        We have carefully reviewed the certified record, the submissions of the

parties, and the thorough opinions issued by the trial court in November 2,

2017 and June 5, 2018. Based upon our review, we conclude that the trial

court did not err by finding in favor of Erie Insurance on Appellant’s bad faith

claim. Accordingly, there is no merit to Appellant’s claim that he is entitled to

JNOV or a new trial.      Because the trial court’s opinions adequately and

accurately address the claims Appellant presents on appeal, we adopt the trial

court’s November 2, 2017 and June 5, 2018 opinions as our own. The parties

are hereafter directed to include copies of the trial court’s November 2, 2017

and June 5, 2018 opinions with all future filings pertaining to our disposition

of this appeal.

        Judgment affirmed.




                                      -7-
J-A07010-19




Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 4/17/19




                          -8-
                                                                                             Circulated 03/26/2019 02:39 PM




            IN THE COURT .OF COMMON PLEAS OF PHiLAOELPHIA C.OliNtY
                  . FIRST JUDICIAL DISTRiCT OF PENNSYL VANlA
                       . TRI.A.L DIVISION - CIVIL SECTION  .


 PAUL C:Al\fIOLO,                                                  JUL v TER!Vl, .20JS

                              Pla1�1tiff
                                                                   No. 1'750
                    v,

 ERIE INSURANCE EXCHANGE,                                                                                             ,.._,
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                                                     OPINION                                                             -
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                                                                                                             \...           ,;_..;....
Colins, . J.                                                                                     June, l.01� ·F
                                                                                                                 ..
           In July of 2.01'51 plaintiff Paul Camiolo (Carniolo) fi'.leq a. lawsu i't .against his 1.11s1..1rer,

charging defendant.Erie Insurance Exchange' (Erie) with statutory bad faith in its handling of his

underinsured motorist (UIM) claim .. Following a bench trial on -six days between May. I 5.� 20·17,

and.July 10, 2017, this court.found in favor of thedefendant Erie.and on November 2, 2Ql7,

issued amemorandum and crder.memorializing its findings of fact and conclusions oflaw

.(Memp·.anq Order). After briefingand .oral argument, the court denied the plairit'iff's: pos.Hi:-ial.

motions for judgment notwithstanding the verdict or, in the alternative, for a new trial, Plaintiff

-appeals,


ISSUES RAISED· ON
       "       .
                  APPEAL

Is the appellant entitled to eitherjudgment as a matter of law (JNOV) or a new ·triai because:

    (I) The court impermissibly considered evidence of the plaintiff s.intentions where, as a
        matter..of law, a finding of BadFaith must be predicated solely on the· intentions of the.
           defendant insurer?

, ·.d/bra Erj\:' Insurance Group .aik(.P. Erie Insurance Company· alk/a Ede Indemnity Company.




                                                                                                 l llllll lllll lllllJIIIII IIII Ill
                                                                                                                 15070175000171
                        (2) The court failed to find from the evidence that the defendant deliberately concealed a
                            medical report, a finding which would have impugned the defendant's intentions for the
                            purpose of finding Bad Faith?

                        (3) The court impermissibly doubled the credit attributable to the proceeds of appellant
                            obtained in settlement-with the tortfeasor?

                        (4) The court failed to apply an adverse inference granted to appellant during the course of
                            discovery as. a sanction for.the defendant's failure to produce certain documents?

                        (5) The court erroneously considered testimony about attorney time and billings of the
                            defendant's counsel when the court had quashed appellant's subpoena for that evidence?

                        (6) The court erroneously found as a matter of fact that the defendant never rejected the
                        ·   appellant's UIM claim?

                        (7) The court imperrnissibly relied on erroneous facts regarding a meeting between counsel
                            and the defendant's examining doctor and that doctor's testimony?


                BACKGROUND
                            The court addressed certain ofthe foregoing.. assignments of error in Memo and Order, a

                copy of which is appended to this opinion forreference. For the convenience of the reader, the

                Findings of Fact/Conchisions of Law therein are set forth verbatim below:

                                                                   FINDINGS OF FACT


                            On.June 30, 2009, plaintiff Paul Camiolo (Camiolo) was involved a in moror vehicle
                            accident in which his car. was struck from behind by· a: vehicle driven by Wei wen Zhgen
                            (Zhgen). Defendant Exhibit 1 (D-1) at CMS 2..      ·                                 ·

                    2       Camiolo filed a lawsuit against Zhen that was settled in Camiolo' s favor on March, '14,
                            2012, for $50,000. N.T; 5/rS/17 at 29.2                                ·          ·    ·


                    3       Camiolo was an insured by Erie under a Personal Amo Policy No. Q06-0J 1'5735 (Erie
                            Policy) for the period of June i, 2009 to June 1,2010: DM0257-88.

                    4       On the .day of Camiolo' s accident, the. Erie Policy provided .$1001000 in U nderinsured
                            Motorist (UIM) coverage. td:

                2   This action included bad faith cfaims that. were dismissed by Stipulation in March of2013.   P�s.



----·--·--·-·   ·-----------------------------·--·-
5.       ln � Febrl.(ary 28, 2011, report of his independent medical exam OME) performed in
         connection with Camile's July of 2009 claim for first party medical benefits (PIP), Dr.
         WiHiam H; Kirkpatrick stated:                             .

                "However, I cannot clearly relate this condition [left cubiral tunnel syndrome']
                to his motor vehicle accident.of nearly 2 years ago. He did notsustain any left
                elbow injury atihe time of the motor vehicle accident. His symptoms were.
                localized to lefthand and wrist. Furthermore, progressive ulnar nerve"
                symptoms CM be. related to his employment as a com:puter consultant and can
                also be related to. his newly diagnosed diabetes.

                As stated, l cannot .relate treatment for this cubital tunnel syndrome
                specifically to the motor vehicle accident."

         DM0166; CMS0006.

    6    In a letter dated April 5, 2012, Camiolo'sattomey notified Erie of his UIM claim.and
         presented a demand package seekingthe policy limit of$JQO;OOO. DM05l4-22.

    7    In a report dated October 12, 2012, Dr. ThomasJ. Gillon, Camiolo's treating surgeon,
         opined that the injuries to Camiolo' s wrist and elbow were sustained, in the accident in June
         of 2009. 0M12s9.:90.

    8    Dr. Gillon noted that about seven months earlier. on March 15, 20Jl, anQ after Dr.
         Kirkpatrick's February exam, Camiolo "underwent a left elbow ulnar nerve release in situ
         with medial epicondylectomy." (March 2011 Elbow Surgery). Id.

    9    Three months after this surgery. Camiolo 'Was in an auto accident involving a collision with
         a deer (deer accident). Thi$ incident aggravated symptoms of numbness and tingling in left
         fingers stemming. from the ulnar neuropathy, but that these symptoms did "dissipate over
         time without.any intervention." Id:                    ·

    lO     Dr. Gillon opined that Camiolo's symptoms, post-operative and post-deer-accident, were
           "not permanent and continue to get better as time goes on;" this conclusion was affirmed
         · by the results ofa new EMG and nerve conduction study from September 28'., 2012: id



3"Cub ital Tunnel Syndrome is a.condirion that involves pressure or strciching of ihe ulnar. nerve (also known as the
"funny bone" nerve), which can cause numbness ortinglii1g ii, the ring.and small fingers. pain in the forearmund/or
weakness in the band. The ulnar nerve runs in a groove on the lnner side of the elbow." l\tnericail Society for
          of
Surgery the Hand [hnp:t/www.assh.org/handcarc/hand.arm·conditions!cubital.:1unnel],
                                         .                                               .                 .

4The ulnar nerve is "a large superficial nerve of ihearm that is a continuation of'the medial cord of the brachia!
plexus, passes around the elbow superficially in a groove between the olecranon and the medial epicondyle of the
humerus, and continues down the inner. side of the forearm to supply the skin and muscles of the little-finger side .;of
the forearm and hand." Miriam Web;;ter [https:11:www .rrterriam�w.eb�t1,r.�o.mim1..�i�allul'!lar%2.0nerve l
                                                            3
11        Dr. Gillon stated that Camiolo would "still have some numbness in his small finger for an
          additional six months but I think it should get better to the point where it does not bother
          him any longer unless he develops a generalized motor and sensory peripheral neuropathy
                                             . .              .           .                . .
          from his diabetes, which would be unrelated to his compressive neuropathy at the elbow."
          u
12        He stated further that Camiolo d.id. riot need: further surgery, that he had "an excellent
          prognosis with respect to his Ieftelbow ulnar neuropathy" and that he had "no functional
          deficits ox disability with respect to his left elboworhand from his ulnar neuropathy." Id

          In a June 13,2012, confereneecall with defense counsel, Dr. Kirkpatrick acknowledged
          that he could not,to a reasonable degree ofmedical certainty, reject Dr. Gillon 's opinion
          that Camiolo's injuries were related to the 2009 accident. DM0676.

14        In March of.2013, Erie received froin defense counsel information that jury verdict
          research regarding the value of an ulnar nerve injury revealed that (he claim had a total.
          valueof$50�000 to $75.,000. I)M1250·51; NT. 05.22.17                at 23.
    15.   As ofApril 1, 2013., Erie's initial offer on Camiolo's UIM claim after taking credit for the
                . settlementremained
          $50,000
            .      .    . �             at $7 ,500. DM2.1 l 7.              .

    16    Teri months later, in February of 2014, Erie. tendered and Camiolo accepted the policy
          limits of$lOO,dOO. N.T. 5/18/17 at30,

    17    On February 19, 2014, Carniolo executed a General Release Agreement that included the
          following statement: .

                  "It is expressly understood and. agreed that l, Paul Camiolo, my heirs,
                  representatives, executors, administrators; successors, and assigns am/are not
                  releasing the. release from any and all claims of bad faith accruing from April 1,
                  2013, to the present."                                                           ·

          DM 1664"'65 (emphasis added).

    18    In the ten months between April l ,. 20.13, and February 7, 2014, the date of the final
          settlement, Erie increased its originaL$7,500 offer six times: June 27, 2013 ($15,000)
          (DM 1673 ); August .15, 2013 ($25,000) (DM 1702); October 8,. 2013 ($35,000) (DM0626);
          October 30� 2013 ($36,750) (DM2607); January 15; 2014 ($60,000){DM2046); arid
          February 7, 2014 ($100,000) (DMl646) .. At no point during negotiations did Camiolo
          abandon his $100,000 demand.              ·        ·           ·

    19     In �uly of 2015, Camiolo filed the instant lawsuit charging Erie with statutory bad faith
           under 42 Pa. Stat. and ConsStat. Ann. §8371 (West). 5

5Section 837'1 provides, "[i)n an action arising under-an insurance policy. if tire court finds that the insurer has
actedin bad faith toward the insured, the court may take all of the following actions: (I) A w�rd interest on the
amount of th� claim from the date the claim was made by the insured .in an amount equal. to the p�ime rare of interest
                                                          4
                                                  OFFER OF JUNE 27,        2013 ($15,000)

         20    On March 26, 2013; through Its counsel, Erie advised Camiolo' s attorney that the then
               outstanding offer of $7 ,500 remained in. place because the insurer had received no new
               evidence, documents or facts thatwarranted art increase. DM2 l17-18; N.T. 05.16.17 at 31,
               35; N.T: 05.18.17 at 122; N.T. 06:29.17 at59.

         21    This number assumed thatta) Camiolo's injuries were caused by the·2009 accident and (b)
               thatthe total value of Camiolo's claim was between $501000 and $70,000,,.vhich, when
               discounting the $50,000 received-in settlement from the tortfeasor, produced a range for
               Erie's liability of $0 to $20,000. J)Ml250; N.T. OSJ 5.17 at 91.                       ·

         22    At this point, Erie had reviewed extensive medical records for Camiolo dating back to
               1997, including the reportof the independent medical.exam performed on February 28,
               2011, by Dr, Kirkpatrick. and the October 12, io 12, report of Dr. Gillon, PM0.185;.88;
               DMl284; DM1312-31. N.T. 05.15.17 at 78-79;N.T. 05.16.17 at 32; N.1'. 05:22.17 at 26-
               27.

         23    Dr. Gillon bad related.Camiolos injuries tothe 2009 accident. Dr, Kirkpatrick.had
               ooncededthathe could not refute Dr. Gillon's opinion on causation. FF Para. 5, supra.

         24    On June 6, 2013, Erie received additional information during Camiolo's lawsuit against
               the tortfeasor, Discovery revealed the new information that. notwithstanding Dr. Gillon 's
               prognosis to the contrary in October of2012, Cam iolo .had had additional surgery on his
               left wrist in March of 2013 (March 201'3 Wrist Surgery); two months earlier and. three
               years and nine months after the initial accident. CMS0307; DMl 673; N. T., 05 .15 .20.17, at
               89; N;T; 05.18;17 at 110-1 L

         27    Dr; Gillon opined furtherthat the March 2013 Wrist Surgery was causally related to the
               2009 accident and that Camiolo would be partially disabled from employment for
               approximately six. months, but was expected .to make a· full recovery. CMS0283,.85;
               DM.0658.         .                                                                 .

         28.   On June 27; 2013,. having reviewed this new information, Erie increased its offer to
               $15,000, citing Erie's "continuingduty to re-evaluate," and noting thateven though Erie
               did not yet have the medical records ofthe surgery, "an additional surgery [in March 2:013)
               is a significantinterveningdevelcprnent." DM 1272; DM0658; DMl.673; N.T.. 05.15.17 at
               91; N.T. OS.;18.17 ac56; N,T .. 05.22.17 at 27-29.; N.T. 06,29. l 7at64.




        plus )o/o. (2) Award punitive damages against the. insurer. (3)Assess court costs and attorney fees .agalnst the·
        insurer.'.'                                 .                                  .


                                                                   5



···-··---·-··..··-··--···--·-----·--------------------------------
                                       OFFER OF AUGUST          15, 2013 ($25,000)

29       Having increased its offer to $'15,000, Erie determined that it needed further medical
         investigation of causation regarding the March 2013 Wrist 'Surgery. N.T ..05.22.17 at 29-
         30.
30       On August 5, 2013, Dr. Barry Snyder performed an independent medical examination of
         Camiolo to determine if the March 2013 Wrist Surgery was related to the 2009 accident.
         DM1687; DMl702; N.T. 05..18J7 at 62.                          .

3l       SnyderopinedthatCaniiolo'sTFCC6 repair (the March 20 t 3 Wrist Surgery) was "likely
         attributable'; to the 2009 accident, that his treatment had "not rnatured.vand that Camiolo
         would "never return to JOO·percent functionality.'' DMl687-8.9, N.T;.05.15.17 at94; N.T.
         OSJ8. l7 at 64; N.T. o�.22.f7 at 120.              ·

32       On August IS,. 201.3, on the basis Snyder's opinion, Erie increased its offer to Carniolo to
         $25,000, premised on a total recovery of$75,000 to $80,000. Id.; DM 1702; N.T. 05J 5, 1.7
         at95,.:96; N.T. 05.16.17 at 66; N.T. 05.18.17 at 66. 71; N.T. 05.22.17 at 29-30.

                                        OFFER OF 0CTOBER3,.2'013            ($35,000)

33       On September18,.2013, defense counsel reported to Erie his discussions with Dr. Snyder
         in which Dr. Snyder stated that the ligament injury and the resulting surgery may be
         attributable to the 2009 accident and may cause some permanent residuals. DMI 74 7.

34       Oil September 23., 2013, Erie also reviewed records subpoenaed from OrthopedicSurgery
         and Rehabilitation Associates (Rehab Associates), indicating that CamioJo was enjoying
         "excellerit.progress" with significant improvement tothe pain in his left hand, that he had
         "no current complaints." DM 1766-68; N.T: 05.22. IJ at 36; N.T. 0629.J 7 atIOl .

    35   Dr; Gillon discharged Camiolo ".PRN'' 7 in September of2013, DM0619�20; NT.
         OS.18.17 11fl9.

    36   On or about October 3, 2013, defense counsel provided to plaintiffs counsel De Snyder's
         written lME report ofhis August 5., 2013, independent medical exam. N.T. 06.29.17 at 88.

    37   On October 3, 2013, defense counsel transmitted ro plaintiffs counsel a new offer of
         $35,000, which was rejected with no counteroffer a week later. DM0626; DM 1343;N:T�
         05.16.17 at 74; N.T. 0.5.18. lTat 77-78; RT. 0522.}7 at 37".38.


6
  Triangular Fibrocartilage Ci;,rppiex refers to the ligamentous and cartilaginous structures that suspend the distal
radius and ulnar carpus from the distal. ulna .. Injuries to. the TFCC present as ulnar-slde wrist pain. Medscape
[hrtps://emed i cine. in edscape .corn/art iclez 1240.7 89�overv iew],                ·           · ··     ·

7   Pro re nata. Latin (or the present matter; under present circumstances; as needed -abbreviation prn =-used in
medical prescriptions. M iria.m Webster (URL'. https:11\VW.W. merriarn-webster. com/d i�tiooaryfprq%20re%20natii).

                                                           6
                                  0FF.ER0F 0CTOBER30, 2013 ($36,750)

38.   Having received additional information from the plaintiff about $1,750 in wage loss, Erie
      increased. its October 8, 2013, offer to $36,750. DM2607�DM2046; N.T: 05.18'17 at 79;
      N..T. 05.22. l 7 at 42; N.T .. 06.29:11 at 109;

                                   OFFER OF JANUARY         152 2014 ($60,000)

39    In his October 24, 2013, deposition, Dr. Gillon testified that Camiolo experienced a good
      recovery after both surgeries; he also acknowledged Camiolos pre-existing ulnar
      neuropathy .. DMO�l 9-20.

40    On November 12, 2013, however, plaintiffs counsel notified defense counsel that
      Camiolo had suffered a recent setback to his injuries while. helping his auntmove, to a new
      residence. DM.080.3,

·41   On November 27, 2013, defense counselreported to Erie. that Dr. Gillon had examined
      Camiolo again and concluded that he indeed had suffered a relapse and loss of grip strength
      and that he might need injections inthe future. DM 1396.                                '

42    On December 13, 20l3. defense counsel received Dr. Gillon's December 3., 2013�
      supplemental report stating that: (a) Carniolo had been doing Well until two months prior;
      (b) he had started regressing; (c) Dr.. Gillon recommended that Camiolo wear a wrist brace;
      (djthere was no guarantee that Carniolo would be pain free for the rest ofhis life; and (e) if
      the painwasvextremely severe," Camiolo mayneed additional surgery. DMI397;N.T.
      05.22.17 at 40, 5.2-54.

43    On December 23, 2013, Dt. Snyder was deposed.

44    On January 10, 2014,.foUowingDr. Gillon's supplemental deposition on that day.Erie's
      filenotes recountthat Camiolo: (a) now had a different prognosis than he had at the time of
      .his discharge in September of2013; (b) had undergone         a wrist injection on December I l.,
        2013; (c) suffered a relapse that was. triggered when helping hisaunt move; (d) possibly
        will require further treatment, including bone shortening surgery as "a last resort;" and €
        maysuffer recurring pain throughout-hislife, DM1433; J\LT ..05,i6.i7 at 79�82;N.T .
      . 05.18J7 atI 12-lJ.

45    On. the basis of the foregoing, defense counsel opined that Erie's offer should be closer to
      the plaintiffs demand. DM1687.                                                 ·

46    OnJanuary 15, 2.014, Erie increased. its offer to S<,0,000. DN.12046. It was-rejected with
      no counteroffer on January 20,20J4. DM 1440; N.T. 05.18.17 at8.6.:89; N.T. 05.22.17 at
      56.'-57..




                                                        1
                                      OFFER OF FEBRUARY           7, 2014($100;000)

47       On or about Janlillry 24, 2014, plaintiff produced for the first time ajournal dating back to
         Deceinber'of20l2 noting that his current symptoms were comparable to those he
         experienced-when he was first injured. four years earlier. DM2008; N.T. 05.18.17 at 18;
         N.T. 06.29.17 at 120.

4.8      On January 29, 2014, the Camiolo's attorney advised .defense counsel that Camiole had
         seen Dr. Gillon that.same day. that the strength in Camiolo's left hand had regressed even
         further, and that Dr. Gillon had ordered an MR Arthrogtarh.8 DM2597�NT. 05.16.17 at 8-
         9; N;T. 05.22.17 at 59� 110.
49       Based on the foregoing new information, Erie offered the $100,000 UlM policy limits ..o.n
         February 7, 2014, which Camiolo accepted. DMI646;.N.T. 05. 18 r l 7al 97 .

                                              .CONCLUSIONS OF LAW

50       'Erie never denied plaintiffs UIM claim.

51       The record contains no clear and convincing evidence that during the. period April 1, 2013,
         to February 7. 20 i 4, Erie:                                                                     ·

                 -failed to communicate with its insured or his counsel;
                 -failed to investigate;
                 -caused ah unreasonable delay in handling the plaintiffs claim; or
                 -lacked a reasonable basis for any.of its settlement offers.

    52   In short, the record contains no clear and convincing evidence that Erie did not have
         reasonable basis for denying benefits" under policy and. knew qr recklessly disregarded any
         Jack of a reasonable basis .in negotiating the settlement of the plaintiffs claim.

    53   Qn the basis   of the foregoing record, and as explained in the discuss ion below, the court
         finds that plaintiff has failed to establish that Erie acted in bad faith in. violation of
         Pennsylvania's-Bad Faith Statute in the period from April I. 201 J, until February 7, 2.014.
         When Erie.offered and Camiclo accepted the policy limits.                        ·




8 An arthrogram is the "[i)magirig of a joint following the introduction. of a contrast agent into the.joint capsule to
enhance visualization of the intra-atticular structures." Farlex Partner Mec1.ical Dictionary � Farlex20 iz,
 https ://medical· dictionary .the freed let ionary. com/arthrogram.
9   The claim was never "de�icd." Only the. valuation was disputed.

                                                            8.
II.    . DISCUSSION ON APPEAL

       The foregoing findings were based on the court's review of the considerable record

created at trial arid on Its credibi li ty judgments. as to each wiinessin light of the· facts and

circumstances that-emerged. They reflect thiscourt's.judgment.that the plaintiff failed to show

with clear and convincing evidence that in the ten months between April 1, 20. 13, and February

7, 2014; the insurer did not have a reasonable basis for Its decisions regarding plain ti ff s claim.

Berg v. Nationwide ft111t. Ins.. Co, Inc., 713 MDA 2015, 18 WL 17.055274, *4 (Pa. Super: April

9, 2018) (affirming that a badfaith claim must be supported by clear and convincing evidence

that the insurer did not have a reasonable basis (or denying benefits under the policy and that the

insurer knew or recklessly disregarded its lack ofa reasonable basis iri denying the claim);

R,mcosky v. Wasl,ington Nnt'IJ�s.       c«,   170 A.3d 364, 377 (Pa. 2017) (same); Grossi».

 Travelers Pers. Ins. Co., 2013 PA Super 284, 79 A.3.d 1141, 1165 (2013) (stating that plaintiffs

heavy burden requires showing that "the evidence is so dear, direct, weighty and convincing as

to enable a clear conviction, without hesitation, about whether.the defendants acted in bad

faith");


           On appeal this coun must determine "whether its factual findings are supported by the

 evidence. and whether the court made a legal error'." Stokes v. Gary Barbera Enterprises, Inc.;

 2001PA Super 239; 783 A.2d 296f 297 (2001) (internal citation omitted). In so doing, the court

 looks to the legal principles that guide decisions on motions for judgment notwithstanding a

 verdict(JNOV) and for a new trial.


           AJNOV may be entered if, after considering. the evidence supporting the verdict and

 giving the verdict winner. the benefit of the doubt, the trial.coun finds. that tile evidence was such


                                                      9
thatno two reasonable minds could disagree that the case should have been decided in favor of

the movant. Be G. Balmer &    Co. v. Frank Crystal & Co.iInc., 2016 PA Super 202., 148 A.3d
454, 461(201.6}, appeal.denied, 169 A.3d 9 .(Pa. 2017).. That is, the trial court must find that the

movant is entitled to judgment asa' matter oflaw and/or that even if all factual inferences are

decided adverse to the mov.ant, a verdict for the movant was beyond peradventure. B.G. Balmer

& Co. v. Frank Cry$.tat & 'Co., 1nc., supra.

       The decision to grant or deny a motion for a new trial, on the other hand, Hes in the trial

court's discretion, absent "clear and palpable" abuse. of discretion or error of law that.affects the

outcome of the case. Joseph ve . Scranton Times L.P�. 2008 PA SuperJ,17, 959A.2� 322, 333

(2008), Brinich v. Jencka; 2000 PA Super 209, 7 57. A:2d 3 88, 39$ (2000). When evaluating the

merits ofa request for a new trial, the court first determines if a mistake was made at trial. If

mistakes were made, the court then. determines whether the mistake or mistakes provide a

sufficient basis for granting a new trial, Flenke v. Huntington; 2015 PA Super 50, I l.l A.Jd

1191, 1199-2000 (2015),. citing Harman ex rel.     Harman v. Borah, 562 Pa. 4SS; 75.6 A..2d      11 I 6;

l 121 (2000). The court's determination must not be manifestly unreasonable, contrary to law or

informed by partiality, prejudice, bias or ill will. Harman ex rel; Harman v. Borah, 562 Pa,

455., 756A.2d 1 l 16 (2000); citing Morrison v. Com., Dep't of Pub� Wef/(lre, Office of Mental

Health (Wgodville State. Hosp,}� 538 Pa. l 22, 646 A.2d 565, 571-72 (1994).


        These principles in mind, the. court addresses below four of the six issues raised on

appeal, namely, those numbered (numbered .1, 4, 5 and 7). Wi'th respect to the .remaining two

(numberedZ and 5), the court rests on its discussions in its original findings, .a copy of Which'. as

 mentioned; is appended hereto.




                                                   10
No. r      Did the court impermisslbly consider evidence of the plaintiff's intentions where; as
           a matter of Iaw, a finding of.Bad.Faith must be predicated solely on the intentions
           of.the.defendant insurer?                                                              ·.

        Before trial, plaintiff introduced a motion in limine to preclude, inter alia, anyevidence of

the conduct of the insured/plaintiff. N.T., 05,15.2017, at 4 l, Counsel argued that since liability in

a bad faith claim rests oil the carrier's, not the insured's, conduct, evidence of the.plaintiff's

conduct should be precluded.          The court denied the motion, reasoning that if such evidence casts
light oil the reasons the defendant acted as it didclt was relevant and.admissible. Jd. at 48.
                                                                                                                     10




         Plaintiff's proposition conflates a rufe of law with a rule of evidence, Itis true that

plaintiff's claim of bad faith turns on the insurer's conduct.not that.of the plaintiff. Mohney v.

Am. Gen. life Ins. Co., 20 IS PA Super HJ, 11 Q AJd 1123,. 1138 (2015). It is not true, as

plaintiff suggests, that evidence of the. plaintiff's conduct is irrelevant; Pa.RE. 401 provides that.

evidence is relevant ifit .has any tendency to make a determining fact moreor less probable than

it would be without the evidence. Asa matter of.relevance, it is plain that evidence ofplaintiff's

counsel 's influences on      Erie's conduct is germane to the question of defendant's state of iriirid and
culpability; plaintiff offered no argument tothe contrary nor has he. pointed to any evidence. that

unfairly prejudiced his.claim because it was admitted. As a matter of law, the court's ruling on

this ground is sound and plaintiffs generalized objection is baseless.




 l!l Much of the argument arisingfrom plaintiff's proposition concerned his motion in limine to preclude the
 testimony of p la inti ff' s counsel, nonhe testimony of the. plainti ff about his own conduct N. T., 05: 15 .20 17, at 4 2.
 4.7. As it happened, plainiifrs counsel did not testify.


                                                              ll
No. 3     Did the court err in failing.to apply an adverse inference granted.to appellant
          during· the course of discovery as a sanction for the defendant's· failure to produce
          certahi documents?
        .On December 21, 2016, another court.in this matter granted plaintiffs motion for

sanctions because Erie failed to comply with an Order dated Ottober·S,2016. 11 The order stated.

        ''Plaintiff, Paul Camiolo, is gr.anted an Adverse Inference rcgardine those documents
        identUled in. Plaintiff's Motion for Sanctions fhat have not' been produced by Defendant
        (Erie) In.aceerdance witb Jhis Court.'s Order of October 5, 20.16:''

        The documents in question concerned Erie's policies, procedures and practices, and

traintngand course material related.to Erie's.claims handling and settlements, issues-of privacy,

.and its litigation. Para. 33, Motion ofPlaintiff, Paul Camiolo.for Sanctions Against Defendant

Erie-Insurance Exchange d/b/a Erie Insurance Gr<Jup a/k/a Erie Insurance Company a/k/a Erie

Indemnity Company for Failure to Comply With (he Court's Order of October 5, 2016 (Motion

for Sanctions),


        On appeal, plaintiffargues that the December 21, 2016.. Order was binding on the .trial

court and its failure to apply a case-determinative adverse inference favoring the plaintiff is an

errorof law or an abuse of discretion,        This argument is without foundation. First; nothing on the
face of the December· 17, 2016, order itself mandates that an adverse inference against the.

defendant, if credited, should determine the. outcome ofthe case.


        Second! and more to the point; plaintiff misconstrues the law of "adverse inferences." An

adverse inference allows, but does not require, the facifinder to inter an elemental fad from proof




 ii The order.directed the defendant within thirty. days to provide supplementat.responses'to plaintiffs interrogatories
 and request for production of documents.

                                                           12
of a basic fact. Com v. MacPherson, 561 Pa. 571, 752 A.2d 384 (2000). An adverse inference

instruction is an evidentiary device that "is no more than a logical tool enabling the trier offact.to

proceed from one fact to another, if the trier believes that theweightof the evidence and the

experiential accuracy of the inference warrant so doing." N. 620 Pa. 345, 6 7 A.Jd 1194 .. (2013).

As a trier of fact, this court was well Within its discretion to assess the effect arty adverse

inference permitted by the December 21, 2016, against an the evidence of record. including

making the necessary credibility assessments; Plaintiffs contention is contrary to law and is

without merit

No. 4    Did the court erroneously. consider testimony about attorney time and billings of
         the defendant's counsel when the court had quashed appellant's �ubpocna.for.that
          evidence?

        In his l 925b statement .of errors. complained of on appeal, the plaintiff challenges the

court's decision to bar his attempt to obtain the time.and billing files of M&.P "as it related.to the

underlying case," while at the same time allowing "witnesses to testify about information

contained in those records over the objection of'Plaintiff.?" Item 5,. Plaintiff; Paul Camiolo '.s,

Concise Statement.ofMatters 'Complained ofon Appeal inAccordance with Pa.R.A.P. l 925(b).



        Plaintiffs refers to the testimony of witnesses Robert ,J; Cahall and Scott J. Tredwell, the

attorneys who worked for the firm law firm ofMcCorrnkk & Priore (M&P); Erie's counsel in

plaintiffs J>IP and UIM claims files. This firm was the subject of defendant's motion to quash



'2 The.issue.was framedsomewhat differently in plaintiff's post-trial motion irrwhich lie contended tha1, in light of
those rulings. the court erred in permitting defense counsel at trial to question M&P's attorneys about "letters, notes
and memoranda concerning conversations with.Dr. Barry Snyder, correspondence io Di'; Snyder and others,
instructions to subordinates.and conversations.wlth Erie Adji.istors and Supervisors which could have been used 10
cross examine Counsel oil those points ... •· Item 12, Plaintiff; Paul Camiolo 's, Post Trial Motion» (Control No.
 171}1861).


                                                          13
 plaintiff's pre-trial subpoena Jar its custodian of records to produce the material in plaintiffs PIP

 and UIM claims. The court granted Erie's. motion. N:T'., 05.15.2017, at 60-62. Much earlier, in

 September of2016, another court granted defendant's motion to quash essentially the very same

subpoena, at which time the underlying PlP and UIM actions had been con duded and· the

documents in question had been produced; N.T., 05.15.2017, at 60-61.


        The court was well within its discretion in granting the motion to quash a subpoena that

had been granted once before, sought documents already provided, and the grant of which caused

110 prejudice to the plaintiff. Slusaw .v. Hoffman, 2004 PA Super 354, 861 A.2d 269, 272 (2004)

( absent.abuse, rulings on motions to quash rest. in the discretion of the court).


        The. court searched the record to find a basis for appeal arising out of the court.' s decision

to quash plaintiffs subpoena. Firsttplaintiff'presented noevidenceor argumentthat changed

circumstances that warranted revisiting the order granting defendant's post-discover motion to

quash the same subpoena that has been quashed eight months earlier. The UIM and PIP claims

· had been resolved. prior .t.o the bad. faith case, and the scope of the bad faith claim by sti pulation of

counsel was confined to defendant's conduct in a ten. month period following the UlM settlement.

There is no evidence of record thatthe requested documents ultimately were unavailable ..


        Second; attorneys Cahall and TredwelJ wereexamined and cross .. examined. N. T.,.

 0629.2017 and N:T.�, 07.}0.2017. Plaintiffs counsel did not objectto questions.on direct

 examination referring to records concerning attorney fees or time. In turn, plaintiff's counsel

 encountered no objections on this ground to his questions about the attorneys' likely billing

 habits during the relevant period, E.g; N;T.; 06:29.2017; at 114, 127. The court's decision on




                                                     14
the eve of'trial to grant defendant's motion to quash was well within its discretion and the record.

contains no evidence that the plaintiff suffered prejudice as a result, nor did plaintiffclaim any

when submitting his findings of fact and conclusions of law.':' Plaint(ff'\; Paul Camiolo. Brief

Re:" The Liability Phase of the Trial, filed Sept. 2, 20 l 1:


No. 6     Did the court impertnissibly rely on erroneous facts regarding a meeting between.
          counsel and the defendant's examining doctorand that doctor's testimony?

        . In his post-trial motion, plaintiff faulted the court for relying on errors in its findings of

fact. At oral ar�umerit; plaintiff's counsel identified two errors. First, referring.to finding of fact

no. 33; he contends that the court erred in finding that there had been a conference between

defense counsel and Dr; Snyder in September of 2013, when in fact, the conference occurred in

August. Second, he contends that the court' s statement that Dr. Snyder was. deposed .in December

Of2013 is simply wrong because Dr. Snyder was not deposed. N.t .• 12/19/2017. at 608. The .

. court disagrees on the first contention and, on the second, concedes an error.


        Finding of fact no. 33 states:

                  ..On September 18, 2013,defense counsel reported to Erie his dis.cussion withDr.
                  Snyder in. which. Dr. Snyder s.t.afed thai' the ligament injuries and the. resulting
                  surger.y may be at.tributahle to the 2.009 accide.nt and 111ay cause somt! residuals/'

        This finding refers to a lefter entitled "Pre-Trial Report" and dated September 18, 20.13.

from M&P attorney, Robert J. Cahall, to Nicole Beerman of Erie Insurance. Exhibit DM 1747.

This letter is a status repon on plaintiff's UIM claim and contains the following paragraph:




 u Phi1ntiff's counsel objected 1.0 the. testimony of attorneys Cahall and Tredwell on the ground .that it implicated an
 "advice .of counsel" defense that the defendant had not affirmatively pied and. therefore was waived, N :T .•
 06.29.2017, at 9. Such a defense bears on whether a defendanr's.anorney-cfient privllegeis waived when ii is
 asserted; it is present when the defendant answers the complaint with 't.he allegation that it acted reasonably when
 investigating pl!li!'ltifrs claim, Jones v. Nationwide Ins: Co .., 2000lLS.Dist.Lexis 18823, *2.(MD PaJuly 20,
 2000). WaiYer of the pr.ivilege was.not.an i!isue in the testirnony ofthese two attorneys.

                                                            15
                .. 'We havediscussedthis procedure fMarc°hts·, iOl3 wristsurgerylat
                 length·, and �IJ IME with Dr; Snyder was completed to assess the
                ligament claims, Dr, Sriyde-r�s report is currently pending. However,
                as--advise.�OIJr- preliminary discussions with hiin disclosed that Dr.
                Snyder believes (hat the ligament injury and resulting surgery may be
                attributed 'io his accident.and may cause some. permanent residuals ..''

'DM1749 at page 3.

        P.laintifts complaint regarding finding no.· 33 is baseless, The finding states merely what

defense counsel reported to Erie on September 18; �O 13 -, Ir states thar.defense counsel conferred

with Dr. Snyder, but does not.siatc on which date. Neither ofthese facts is disputed. Whether

the "conference" occurred in August; as . plaintiff argued (N:T.1 12/19/2017, at 6),.-ot some other

day, is pf no consequence. Th.e signi ficance of the statement is thatas of September I_ 8.} 2913 .• Dr.

Snyder's, views were part of Erie's deliberations, as . already.addressed in findings Nos: J0-32,

regarding the.results of Dr. Snyder's IME. ln this regard, the finding is an accurate _reflection of

the record.


        Finding of fact no. 43,, on the oiher hand, erroneously states that Dr. Snyder was deposed

.and.in this pl.aintiff.aqrrec.t. "Thequestion for the court. then, is -whether thismi stake. provides. a

sufficient basis for �ran.ting a new trial. Flenke v. Huntington, 111 A.Jd at 1199-2000. After a

focused. review of the record, the court respectfully submits. that there is no evidence that the.error

was "manifestly unreasonable, contrary lo law or informed by partiality, prejudice, bias or ill

wilt" Htirnflm,.75.6 A.2d at l 121-23. The import ofthe related findings, nos. .39 to 46, is that.in

thefall of2(Jl4, the plaintiffs treating physician, Dr. Gillon, hadcome to the conclusion that the

plaintiff'scondition had worsened and" that.his injurieslikely were permanent, a- conclusion-that

prompted defense counsel to advise Erie to increase Its offer, advice that Erie accepted. Finding

Nos. 45-46.    Dr. Snyder's views, addressed elsewhere, arc consistent with Dr; Gillon's.. Pindings


                                                     16
      Nos. JO and 31. There is no. indication that the court relied on any real or imagined Snyder

     · deposition in reaching its concl us ions. This finding, as defense counsel .descti bed it was· a

      "scrivener's error'; that had no bearing on the outcome of the case. N.T., 12/19/2017, at 20. It

      provides no basis for awarding a new trial,



      III.    CONCLUSION

              Fundamentally, plaintiff contends that no two reasonable mi nets could disagree that the

      weight of'the record evidence compels a verdict in his favor. The record demonstrates

      otherwise, containing as it does considerable back.:and-forth debate about value, theexact

      .injuries.involved and.the plaintiff's changing prognosis over time. Taking into consideration the

      voluminous record and the court's credibility determinations, .rhis court concluded that

      reasonable minds could and.Indeed, did disagree about whether Erie's deliberations, valuations;

      and its.eonclusions.lacked a reasonable basis. Put.another way, the court found that the

      plaintiff's failed to meet.his burden with "clear and convincing" to the contrary.


              Also, the court in its exercise of discretion committed. no error of law concerning the

      operation at trial. of any ''adverse inference." The record shows no abuse of discretion in the

      court's decision to grant the defendant' s pre-trial motion· 10 quash plaintiffs subpoena of record

      related to the closep.PIP and UIM claims or in its subsequent supervision ofcounsels'

      examination .and cross-examination of Erie's attorneys. finally, there is no evidence that jhe

      court's erroneous statement regarding a.deposition by Dr. Snyder affected the outcome of the

      case.




                                                         17



--··--·----------------------------------------------
             For foregoing reasons and the reasons set forth in the court's memorandum and order of

      November 2,.2107,. the court respectfully submi ts that the verdict in this matter be affirmed.




                                                    MARY D. COLINS,.J.

      DATE:
              .   Gi£/d
                  /      I : .




----·------··---------·-----------------------------
                      lN THE COURT OF COMMON PLEAS OF Pl.lll,ADELPHIA ·COUNTY
                              FI-RST JUDICI.AL.DISTRiCT OF rtNNSYLY.ANJA
                                     TltIAL DIVISION.- CJVIL SECTION



             PAUL CAl_\,IIOLO,                                                      '.JULY TERM, 2015

                                           Plaititi.ff

                                 v.
                                                                                                                                        c'
                                                                                                                                        I
             l{JliE INSl,JRANC.E EXCHANGE <lib/a                                                                                       ;. :
                                                                                                                                       :-. -:·,
                                                                                                                                      .·
             E'.RIE INSURANCE GROUP a/kin ERIE
             INSURANCE COMPANY-�/W'a tn-it.                                                                                        ;        .
             INDEMNITY      COMPANY,                                                                                                               �r:·
                      .            .                                                                                             ·:
                                                                                                                                 .i."              .
                                                                                                                                 -·.              w
                                           Defe1it1,1111                     ·.:.   Findings of Fa�t/Condqsfonsit Law:
                                                                                                                       ..     ..,•.. ·'..         c:r,·.



                                                     MEMORANDUM AND·ORD£R

              Colins;, .J.•                                                                                                 October, 2017

                     In Jul·y-of'20-\5; plaintiffPaul Carniolo (Carniolo) filed a lawsuit agn11'1"st"li1; insurer.

           Erie Insurance.Exchange' (Erie). charging Ericwith statutory bad faith fo its handling of his

           underinsured motorist-(UIM) claim. The matter was tried before this court on six days

           between May 15, 20 i 7, and)uty. l Q. 20:1 7.


                     Thecourt has 1:�-vi�v�:�.d the notes of' testimony and the.exhihits admiucd io ihe record ...

           along with :tlit: parties' respective proposed findings
                                                                 . of fact: conclusions ofluxv.
                                                                                           .    and

                                 vi
            memoranda. Ha n� evah rated the. evidence and.ad]ud�cd the cred i.bi Ii ty -of.a II the \vi t nesscs,

           the court finds in accordance. wiih the Iindings of Iact (F°Fhmd conclusions. qf law �d l�lrth




            I dlbl.a Eric tnsurance Groi1() a/k,'.a F.;r.ie tnsurancc Conip,ul}' fl/kiaE.ric Indemnify C.0111p,1n.y.         1/llll/1111111/lllllll
                                                                                                                                    15070)75000147
                                                                                                                                                    1111   lllf
 COPIES.SENT PURSUANTTOP�.R.C.P,.236(b} N. ERICKSON. 11/03/2JY1".7


·--·--·----·-·-·----·--·---------------------·                                                                                                         ----
              below that the plaintiff has failed to establish his. bad faith claim by clear rind convincing

              evidence. Accordingly; a verdict iSt;nlcre<i
                                                       .   in favor of. rhe. defendant Erie.

                                                                              flNDINc;s OF FACT



               I        On June 30, 2009. plaintjffPaul.Camiolo (Camiolo) was involved                                            a in motor vehicle
                        accident in which his car was struck from behind bya vehicle.driven by Wciwen Zhgen
                        (Zhgen) .. Defendant Exhibi; 1 ( 0-1) at CMS                            i.

               2        Camiolo filed a lawsuit. against Zhen that was settled in Carniolo · s Javor on March, 14.,
                        2012, for $50,000. N:T. 5/i8/17 at29:2


                   3    Camiolo was an insured by Eric under a Personal Aute Policy No. Q06�01 I 5735 (Erie

                        Policy) forthe period of June l , 2009 to June I, 2010. PM0257,.88.


                   4    On the day of Carniolo' s accident, the Erie Policy provided $ l00.000 in l J nderi nsured
                         Motorist (UIM) coverage.                   14.

                   5     In a ft�cbruary 28, 2011, report of his independent medical exam (IME} performed in
                         connection with Camile's July of.2009 claim for first party medical.benefits (PlP), Dr.
                         William H. Kirkpatrick stated: ·
                                    ''However, l-cannot clearly relate thisconditiontleftcubital tunnel syndrome"]
                                    to his motor vehicle uceident of nearly 2 years ago. He did not sustain any left
                                    elbow injury at the time of'the motor vehicle accident. His. symptoms were
                                                   to
                                    localized left hand and wrist. Furthermore, progressive ulnar nerve"



               l   This acucn i11cludcd had faith claims that were.dismissed by Supulauon iri. Mar.ch ot'20 I J .. P-8.

               ; -c ubiial' Tunncl Syndromc i� U C ond ii ion Ili,il ii1vi.>I ves prt'SSU re 111' SI re rch i ng I if lite· ll I llal'· ll ervc (
                                                                                                                                .t ls(} k i1i)\\ II TIS

               rhe "fu11nybo11c'." nerve}, which can cause numbnessor tingiing Ill the l'ing uud s111uU l:ing.�·rs. p((iil in .lhc fnn:;1mj.
               and/or weakness j I) 1.lw l�illld, The ulnar nerve hlllS in a groove on tlii: ii11h'{ side (11' th\'. elbuw .. A.111cr.ican Society
               for Surgery of the Huml I hitp:!lwww.a�sh:orglhai1ch:an:iha11tl,arm-c6ndit fo1i!;icl1bital·llllllll�I I,
               ·� The ulnar nerve is "a large supcrficia! nerve of the arm thal is a continuation of the medial cord ofIhe brachia!
                plex us, passes around the. e lbo.w super ficia lly. in a groove. between the o lecranon and the med ial epic on dy le pf the
                humerus, and continues down the inner sidc'.ofilie forearm ti> supply theskinand muscles or the Iinle-Iingerside
                of the forearm and hand." Miriam Webster [https:f/www,merriam-webster..com/inedicaliulilar%20iicrvc:J/
                                                                                          ::!




···--··------·-··-----·-----              -----------------------------------
                            symptoms can be related to his employment as a computer consul lant and can
                            also be related to hls newly diagnosed diabetes.

                            As stated, I cannot relate treatmentfor this cubital tunnel syndrome
                            specifically to· the motor vehicle accident."

                  DM0166.} CMS0006..

       .6         • In .a letter dated April 5; 2012. Camiolo's attorney notified Frie of his UIM claim and

                  presented a demand package.seeking the.policy limitofSlOO,QOO. I)MOSJ4-22.


       7          In a report dated October 12; 2012.       Dr. Thomas J, Gillon, Carriiolo 's treating surgeon;
                  o.pined   that the injuries to Carniolu's wristand elbow were sustained in the accident ii, June
                  of2009, DM1289-90.


        8.         Dr. Gillon notedthat about seven months earlier, on March 15, 2011, and after Dr ..
                   Kirkpatrick's February exam, Camiolo "underwent aleft elbow ulnar nerve release in situ
                   with medial epicondylectomy." (March 20 U Elbow Surgery). Id.


        9          Three monthsafter thissurgery. Camiolo was in an auto accident involving a collision \�ith
                   a deer (deer accident) .. This incident.aggravated    symptoms of numbness and tingling in left
                   fingers stemming from the ulnar neuropathy, but that these symptoms did "dissipate over
                   time without any intervention:'.' Jd..


            10     Dr .. Gillon opined that Camiolos symptoms, post-operative and post-deer-accident. were
                   "not permanent and continue to get better as time goes on:" this conclusion was affirmed
                   by the resultsof a new EMG and nerve conduction study from September 2:8� 2012. id.

             11     Dr. Oilton stated that Camiolo would ''stiit have some numbness in his small finger for an
                    additional six months but l think it should get better to the point where it does not   bother
                    him any longer unless he develops ageuerulized motor and sensory peripheral .1fouropaihy
                    from his diabetes, which would be unrelatedto his compressive neuropathy at. the elbow."

                    u.

                                                                 "
                                                                 .J.




-·--·----·--··-----------------------
   ·
12     Hestated further rha: Camiolo did not need further surgery. thathe had "an excellent

       prognosis with respect to his l�fl   d bow ulnar ncuropathy" and that he had "no   functional
       deficits or disability with respect to his left elbow or hand from his ulna:r neuropathy." Id.


13     In a June 13� 2012, conference call with defense counsel, Dr. Ki,:kpat:rick acknowledged
       that he could not. to areasonable degree of medical certainty. reject Dr. Gi I Ion's opinion
       that Camiolos injuries were related to. the 2009.accid�nt. DM.P676.


1.4    In March of2013, Erie. received from defense counsel information thatjury verdict
       research regarding the value of an ulnar nerve injury revealed that the claim had a total
       value of $50,000tQ $75.00Q: DM 1250-51; N:T. 05.22.17 .,H 23.


15     As of April 1, ?013, Erie's initial offer on Camiolo'sUlfvl.clairn after taking credit for the
       $50,000 settlement remained at $'7,500.DM:2117.


16     Ten months later. in February of20l4,Erie tendered and Camiolo accepted the policy
       limitsof$Hl0.00Q, N.T ..5/18117 at JO ..


17     On February 19, .2.014, Carniolo executed a General Release Agreement that inc luded the
       following statement:
               ''l t is expressly understood and agreed that I, Paul Carniolo. my heirs.
               representatives, executors, administrators. successors. and assigns am/are not.
               releasing the release from any and all claims of bad faith accruing fr:0111 Aprill,
               2013,   to the present:'        .

       DM 1664-65 (emphasis added) .


. 18   In the ten months between.April l, 20.l 3, and February 7. 2014. the date of the final
       settlement, Ede increased its original $7,SOO offer six times.. June 27, 2013 ($15,000)
       (DM l 6 73); August 15, 2013 ($25,000) (Dtvt 1792); October 8., 20 IJ ($35;000) l DM062fr):
       October 3.0, 2013 ($36,750) (DM26()7); January 15,. 2014 (S60,000) (DM2046J; and
               . 7,. 2014 ($1 OOjOOO)
        February                 .   . (OM
                                        .  1646). Arno point dudng· negotiations did Carniolo.
        abandon his. $,l 0(),000 demand.


  19    In july. ·of20l5, 'Camiolo '.tiled' the instant lawsuit charging' Erie              w1 th 'statutory bad fai'.th
        under 44 Pa .. Stat. and.Cons. Stat. Ano. {837.1 (West):�


                                             OFFER OF JUNE 27, 20JJ('$ I 51000)


  20·   On March·Z(>, 20J3·, throughits counsel, Erie advised Camielo'sattorney that thejhen
        outstanding offer of $7 ,500 remained in pi ace: because the insurer had recei vcd no new
        evidence, documents or facts that warranted an increase- D.M2 J I.7-·1                    s; .N.T. .05.1·6.. t'1 ar'3 I.
        JS; N.T. 05.18.17 at 122; N.T. 06.29.1'7 .at 59..


 21     :Tfos .riumber assumed that (a) Camiolc's injuries were. causedby the '2009 accident und (b)
        that the· total value of Camiolo' s claimwas between $.S0,00.0 and}s70,,000, which, when
        discountingthe' $50,000 received in settlement from theJ9.rtfe�sor� produced a. range. for
        'Eric's lia_bility of $0 to $20;000. DM i.250; N'.T. 05.15.,17 at l) i.


 22     :At thispoint, Erie hud reviewed extensive medical. records for Camiolodating back                            t(l'

        1997, including the report of theindependent. rnedicai.examperformed on February 2.S�.
        201 I, by· Dr. Kirkpatrick and the October 12.201.1. report of Dr. Gillon, .OMQJ85.-88;
        DM1284; OMIH2-lt.. N.T. 0'5.i5. r7 a.� 78-79;·N.T. 05 . .16..1':7 at n;· N:T. os-, 22.17 at                          :-!6-

        .27.


 23     Dr. Gil!onhad related Camiolo.s injuries to the 2009 accident. Dr. Kirkpatrick had
        conceded that he could not refute Dr. Gillon's opinion 'on causation. FF.Para. 5. supru.



 -� Section'8J7 I provides, '''.fi]n an.action arising under an insurance policy, ifth.e c'Ol!rt finds that.the insurer hus
 acted in bad faith toward the-insured. the.court may take a:lf ofthe followingactiorts: { i }' Award iniere..�I nn- tiie·
.aJJ1QUnt of the claim from \he date the chi11;l' was made .by the. insured in an amount equal t<�· the prime: rate ,o(
 interestplus 3%. (2) Award punitive damages against'thc insurer .. (3) .Assess court costs, and. .,1norney fees iig:rihst
 itie insurer ."

                                                             s
              24    On June.S, ioi'3, Erie received additional inforntation durinS: Camio)'Q "s lawsuit against
                    -the tortfeasor. Discovery revealed-the n�w information rli�n. nojwithstanding Dr, Qil!o1J°s
                    'prognosisto thecontrary in October of2012.famiolo had had additionalsurgery otv his
                    left wrist in March of 20 JJ(Marph .20 l.,3 Wris.f Surgery), two rnomhs ead:ier and three
                    years and nine-monthsafter jheirritial accident. CM:S0-307; DM 1673; Day I aJ.89;.N."r.
                    05: I 8. 17 at I l 0:., I I.


              27    Dr. Gillon opined further that the March 20 I J Wrist 8i.irgc1'y was causally related to the
                    2009 accident .and that :ca.miofo would be partia] ly disabled Irom.ernploymcm Tor
                    approximately six months, butwas expected to make :1:.full recovery. CMS0283-85:
                    DM0658.


              2.8   On June 27, 20.13, having reviewed this new informal ion. 'Erie increased 'its t, ffer to
                    $-15,000;titing Eri1fs "continuing <luiy tp re-evaluate," and noting that even though Eric

                    did not yet have the medical records of the surgery.van additional surgery [in 'March 20'13'1
                    .iS:u- signiffcant intervening development." PNH2 72; DM0658: OM 167);             N. T . .os.is, 1_'7 at
                    ·9l; N:T .. 05J8.i'.7 at 56�, N.1': 6�.22.17 at27;;29; N.T. 06.29: 17 ilL.64,

                                                   0FFE·R OFAUGUST .15,2013       ($25,000)


              29    Having. increased Its offer 10 $.i-5,0()(),. Erie determined that it neededfurther medical
                    in vestigation of causation regarding the· March 20-f 3 Wrist Surgery. N. T. Q.,5, 2-2. 1.7 ·at    29-
                    ·JQ.


              30    On Augus, 5, 2QJJ, Pc. Barry Snyder performed an independent medical examrnation of
                    'Camiolo to determine if th'e' March 2013 Wrist Surgery was related to          the 2009 accident.
                    0Ml687; DM.1 ?02; N:T. 05,18.17 ai 62:




                                                                 6




---·--·--·---------
       31      Snyder. opined. that Carniolo'sTFCC6 repair (the Marth 2013 Wris! Surgery) was ··11ke.ly
               attributable" to the 2009 accident) that his treatmem had "not matured." and that Camio!o
               would "never return to 100 percent functionality." OM 1687-89, N.T. 05.15.17 at 94;·N.T.
                                                                                               .           I



               05.18.17 al 64; NT. 0>,2�.17al .120.


      32       On August 15, 2013, on the basis Snyder's opinion. Erie increased its offer to Carniolo fo
               $25,000; premised on a total recovery or $75,000 to $80.00Q. td.: DM 1702; N.T.'05.15.17
               at 95-96; N.T. 05:.J 6:t 7 at.66�     N;T. 05;1&.17 at 66. 72: N.T. 05,�'2. J 7 at 29�30.

                                               OFFER OF OCTOBER 3.           iOfH$35,000)


       33      On September 18, 20J3� defense counsel reported to Eriehis discussions with Dr. Snyder
               in which Dr; Snyder stated that the ligament injury and the resulting surgery may be
               attributable to the 2009 accident and may cause some permanent residuals. DMI 747.


          34   On September 231 2013, Erie also reviewed records subpoenaed from Orthopedic Surgery:
               and Rehabilitation Associates (Rehab Associates). indicating that Carniolo was enjoying
               "excellent progress'; wit� significant improvement to the.pain inhis left hand. chat he had
               "no current complaints." D Ml 76.()�68; N. T.          ()5:22 .. 1 7 at J 6; N .T.. 06.29. 17 at 10 L

       JS      Dr. Gillon discharged Camiolo f'PRN" 7 In September of20J 3, DM06 I 9-2Q; N.T.
               os.11u1 at 19,


          36   On, or about October 3, 2013. defense counsel provided to plaintiff's counsel Dr. Snyder's
               writtenlME. report of his August 5. 2013.. independent medical exam. N .r. 06.29; .\ 7                      at 88.


      6
          Triangular Fibrocartilagc Complex refers to the ligurnentous and cartilaginous structures tlrni suspend the distal
      radius and ulnar carpus from the d1s10.I ulna, Iujuries IU the rscc present   as(ii mfr-side �,·rist pain: Medscupe
      (hups:!/emedicine.
              .          medscape. cQ111iari. ic. !el 12 ii 071!9�overv. iew J.                                        ·
      1 Pro re nata: Latin for the present matter: underpresent ciecumstances: as needed. =-ubbreviatibn pm ----used in.
      medical prescriptions. Miriam Webster .(URL: h11ps:/lwww.m1:rriam-                        ·
      wc:bsti!r.comidiciiona.ry/proo/o20rc%2()nata}:
                                                                  7




-·--··-·----·------------------------------------
37   On October 3, ?013, defense counsel transmitted to plaintiff'scounsel a new nffer of
     $35�000.� which was rejected with no counteroffer a week later. DM0626; DM 1343: >J .T.
     05.16.17 at 74:   x.r. 05.18.17 at 77·78: N.T. 05.22.Hat .37·38.

                                  OFFER m· OCTOBER 30,.io 13 (S36, 750)


JS   Having received additional.information from the plaintiff about $1.750 in wage loss, Erie
     increased its October 8,    znu, offer to $3.6,750 . .DM2607; DM2046., NJ. 05.1.8.17 al 79;
     N.T. 05.22.17   at 42; N.T -. 06;29. l 7 at   109.


                                  0FFF.R OF JANUARY        15, 2014 ($60,000)


39   In his October 24, .iO u, deposition, Dr. Gillon testified chat Camiolo experienced          �1   good
     recovery after both surgeries: he also acknowledged Camiolo 's pre-existing uln a r
     neuropathy, DM06 l 9-20.


40   On November U, i013.; however, plaintiff'x counsel notified. defense counsel that
     Camiolo had suffered.a recent setback         to his injuries while.helping his aunt move to a new
     residence. DM080J.


41   On November tt, 2013, defense counsel reported to Erie, that Dr. Gillon had examined
     Camiolo again and concluded that he indeed had suffered a relapse and loss ofgrip strength
     and that he mighl necdinjectlons in the.. future .. l)MJ396.


42   On December 13� 2013 .. defense counsel received         Pr, Gillon 's Decem her 3, 20 IJ.
     supplemental report stating that: (a) Camioto had been do11ig well 1•rntil two months prior:
     (b) he had started regressing; (c) Dr .. Gillon recommended ihat.Camiolo wear a wrist brace:
     (d) there was no �uarantee that Carniolo would be pain free for the rest ofhis life; and           (1:)   it'
     the pain was "extremely severe," Camiolomay need additional surgery. DM 1397:                 :- J:r.
     05,22.17 at 40; 52-54.



                                                     8
43       On December 23, 2013; Dr. Snyder was deposed.


44       On.January 10. 2014, following Dr. Gillon's supplemental deposition on thar day. Erie's
         flle notes recount that Camiolo: (a) now had a different prognosis than he had at the time of
         his discharge in September of 2.0 l 3: (b) had undergone a wrist injection on December 11.
         2013: (c) suffered a relapse that was triggered when helping hisaunt move; (d) possibly
         will require further treatment, including bone shortening surgery as ··a last resort:" and f
         may suffer recurring pain throughout his life. l)M 1433; :N.T. 05.16.17 al 79:-82; NT.
         05.18.17 at 112-13.


45       On the.basis-of'tne foregoing, defense counsel opined thatErie's-offer should be closer to
         the-plaintiff's demand. DM16.87.


46       On January 15.� 2014, Eri� increased ibrofferto $60,000. DM2Q46. It was rejected ,villi
         no counteroffer on January 20, 2014. DM.l440; NT 05.18.l 7 �t 86-.89; N,J. 05.22.17 at
         56-57.


                                         OFFER OF' FEBRUARY           7, 2014 {SI00,000}


47       On or about January 24, 2014, plaintiff produced for the firsttinre a journal daiing back to
         December of 20l2 noting .that his current symptoms ..were comparable to those he
         experienced when he was first injured four years earlier: DM2008� N.' r. .05. I 8. I 7 at 18:
         N.T. 06.29.17 at 120.


    48   Oil January 29; 20l4. the Camiolo's attorney advised defense counsel that C'amiolobad
         seen Dr. Gillon that same day, that the strength in Carmelo's left hand bad regressed even
         further; and that.Dr: Gillon had ordered an MR Arthrogram." DM2597.; N..l: .05.16.17 at 8•
         9;N.T. 05.22.17 at 59,J 10.


8 An arthrogram is the !'{ili:nagii1g of'a joint.following.the in.1roduc1i,1.ri of aconrr-ast.ag�nl uuo 1hc joint capsule to
enhance visuallzaticn .ofthe intra-articular structures." Farlex Partner Medical .Dictionary C, F arlex 20.1 :?. . .
 hrtps:/lmci:lica:1. diet ionary, the treedict ionary, com/arthrograi».                                            ·

                                                             9
    49 Based on the foregoing new information. Erie offered the.$100,000 UIM policy limits             on.

           February 7, 2014. which Camiolo accepted. DM1$46: N:T:            ps.l &.17 at 97..

                                            CONCLUSIONS OF LAW


    50     Erie never denied plainiiffsUIM claim.


    ·� 1   The. record contains no clear and convincing evidence that during the period April I, 20.11
           to February 7, 2014, Erie:
                  -failed to communicate wi th its insured or his counsel;
                  -failed lo investigate;
                  -causcd an unreasonable delay in handling the plaintiff's claim; or
                  -lacked a reasonable.basis for any of its settlementoffers.


    52     In short, the record contains no clear and convincing evidence that Erie· did not have
           reasonable basis for. denying benefits9 underpolicy andknew or recklessly disregarded any
           lack of a reasonable basis in negotiating the settlement of the plainriff s claim.


    53     Qn the basis of the foregoing record, and as explained in the discussion below, the court
           finds that plaintiff hasfailed to establish that Erie acted In bad. faith in violation of
           Pennsylvania's Bad Faith Statute in the period frorn April     L 20131 until Februury 7.2014.
           when Erie offered and Camiolo accepted the policy limits.




9
    Theclaim was never "denied," Only thevaluation   wa� disputed.
        DISCUSSION

           I.       INTl�ODUCTION

                A, U�M INSU�Al'lCE

                Underinsured motor vehicle (UIM) coverage is governed by the Mi>iof Vehicle

        FtnanotatResponsibitny Law (MVFRL}. 75 Pa, Stat. and Cons, Stat. Ann.§ 1701-1799:7

        (West). The statute conuanplatcs that when the. policy applicable to the vehicle which is at !hull

        in causing claimant's injuries contains liability coverage that is insufflcieru to fi.1lly compensate

        the victim,.the victim may seek coverage under his own policy if itprovides for underinsured

        motorist coverage. Wolgemuth. ,,. Harleysville 'Mut: Ins. C(I;; 535 A.2d 1145, 1149 ( Pa. Super.

        1988). hi this case, plairitiff'Camiolu's claim againstErie for the benefits of the UIM coverage

        in his. policy was premised on the inadequacy nf the $50.00Q he obtained in. his action against

        the tonfeasor, Even though Erie never denied UlM coverage.Carniolo claims that Erie's

        handling of his claim was so deficient as to constitute statutory "bad faith."


                Insurance providers are.bound by a duty to afford good faith ahd foir dealing when

        handling the claims oftheir own insureds. Bonenberger v. Nationwide Mut. Ins, Co .• 791

        t\.2d 378, 380. (Pa. Super. 2002). Insureds .may bring claims.against their carriers pursuant to

        Pennsylvania's.Bad Faith Statue, 42 Pa. Stat. and Cons: Stat. Ann. § 8371. the purpose of

        which is to provide a statutory remedy to arrinsured when an insurer denies. benefits in bad

        faith. Genera/Ace. /11:,. Co. v. FederalKemper bis. Co., 682 A.2d 819 (Pa. Super. 1996).


                Erie's llabil itY, for coverage ofin.iurie!i sustained in the ioo9 accident.is not the issue in

        thiscase.Tnsfead.Jhe dispute revolves around. Erie'svaluation of Camiolosinjurles in the

        period between April l , 2013, and February 7.2014, Wil/illms v. Hartford Cos. Ins; Co., 83 F.


                                                           II




----·----·-·-----------------------------------------
Supp. 2d 567, 571:-72 (ED: Pa. 2000). ,�trd; 26l F.3d 495 (3d Cir. 2001) (noting that even.

though liability is uncontested, the carrier's duty ofgood faith extends to its investigationof

the claim's value); For the purposes ofexamining Erie's decisions during this time, the court

bears in mind that insurance carriers handle lJIM claims as i11 the nature of a third-party claim.

Zappile   v. Ame.x Assur. Co., 928 A.2d 251. 255--;56 (Pa. Super. 2007). citing Co1itUo v.                            Erie

Ins. Exd,.,.899 .A.2d Jl3.6, 1143-45. (Pa.Super. 2006}(ac�ne>1.vl�dging the. inherently

adversarial nature of first party claims); Bonenberger, 791 A.2d. at.38 I (observing that in a.

direct claim against one's own insurer, the parties may be expected to have .differing positions

on the claims' value).


         8.   STATlff(>.RY 8AU. ft,\ITH·

         To succeed in a badfaith claim against an insurer, the insured mus: present clear and

· convincing evidence that: ( 1} the insurer did not have a reasonable basis for denying. benefits

tinder the policy. and (2) the insurer knew of'or.recklessly disregarded its Jack ofreasonable

basis   tn denying the claim.         Rank<Jsky v. Wasl,ingto11 Nqti1J11a.l Ins.             Co .. No. 28 WAP 2016

(Pa. September
       .   .                     . at 2. ilJ The first
             . 28', 2017). slip op                . .  prong
                                                       .     ofthe claim requires an objective

. dcterminat19.ri Je.ste.d by the. inquiry whether under the facts and circurnstanccs of th¢ case a

reasonable insurer would. have denied or delayed paymentof'benefits. Rankosk», No.. 28 W AP

2016, slip op. at 17-J 8. Accordingly ..bad faith mey beestablished with proof of an unfounded

refusal, to pay, lack of investigation.and failure to. cerrimunicate with insured. Condio, 899

A.2d at 1143; Rowe v, NtuionwideIns,                 c«, 6 F. Supp. Jd 621, 630 (W.D, Pa. 2014): compare




                                        an
  The court also he Id. th at .. proof of insurance company's mot i ve of se I f-nuerest cir ii 1-ivi l I is not a prerequ is he
 10

io prevailing 111 a bad faith claim under Section837 I , : , _;. Rm,ko.,;kji; No: 28 WAP20 I 6. Slip Op, at 2.

                                                               1.2
11.onetiberger., 7? 1 A.2d al 380-8 J (affirming a finding of bad faith in evidence. that the carrier

Jailed to order an independent medical .exam or to consider Ihe medical.records),


           As a. threshold matter. the court finds that inasmuch us Erie never denied the claim

outright    there is no "unfounded refusal to payY There can also be no serious claim that there
was a "lack of invesiigation'' or that there was a "failure to communicate with the insured .. "

Erie's voluminous, continuous and detailed claim file on Camiolo '!:i case • along with the

testimony of those responsible for handling his claim, tell a different story. Conversely, where

the claim's value is uncertain •. as it was in this case, Erie cannot be faulted for conducting a

thorough investigation: Lublin v.Am. Fi11 -. Grp., Inc., 960 F. Supp'. 2d 534. 541 (E..D .. Pa.

20l3) (observing that "[ilnvestigative efforts arc not unreasonable when the claim's value is

ambiguous), By all accounts; Erie's investigation was vigorous; it sought and received

numerous medical records.ordered independent medical examinations' and sought to reconcile

often conflicting or changing information, all the time communicating with the claimant and

his attorney,


       Instead, Camiolp contends he .has satisfied his burden Linder the first prong ofthe test

by demonstrating that Erie di.d not have a reasonable. basis for its negotiating position al any

lime duringthe ten month periodat issue. First. he posits that the ten months it took fur E6c to

move from its offer of$7 ,500 to the policy limit of $IOO.OOO constitutes a.. bad faitb delay:

Second, he argues that had faith .is evidenced by Erie's consistent undervaluation or his claim

in face of medical evidence requiring a different result. Thecourt addressesthese arguments 111

tum, mindful that the focus of this fact-intensive inquiry is the conduct of insurer t·i�· a vis

insured.    Williams v. Nationwide Ins. Co., Inc. 7$0 A.2d 881.• 887 (Pa. Super. 2000).


                                                  13
                                     (a) Oil plaintifrs contention that bad faith must be.inferred from Erie'.s dehw.
                                        in processing his   claim.

                             Delay in processing a claim: standing alone, docs not establish bad faith; Thomer v.
                   Allstate Ins. Co., 790 F. Supp; .2d 360. 370 (E.D. Pa-, 2011) (a period.of delay between demand

                   and settlement does, not, standing alone, constitute bud ruith), .ln this case. the court finds no

                   support on the record for inferring bad faith from "delays" occurring afier April 1., 20 I :L

                   There is no support either in the law or onthe record for the proposition that ten months. or

                   even.more, is inherently unreasonable.S,to        V;.   State Farm J11s. Co., 655 F. Supp. 2d 424, 4J(j

                   (W .D. Pa: 2012} (holding that where. the carrier was actively engaged in investigation,

                   valuations and negotiations. a twelve month delay did no, evidence had faith}; Williams, 83 F.

                   Supp. 2d     at   571--72 (fifteen month delay not unreasonable where value of ihc claim was

                   uiicertain);.Kosierowskiv. AttstateIns. Co., 51 F. Supp. 2d 583, 591-92 (ED Pa. 1999)

                   .(rejecting a: bad faith claim premised on evidence of a one-year delay where (he value of the.

                   claim was uncertain and where the delay was not caused by thecarrier, hut by the

                   unavailability of information about the insured}


                              When viewed in ligl:it of all the facts and. circumstances. the ten-month negotiation

                   period under examination.cannot be deerned'unreasonable. It is undisputed that Camiolos

                   treatment was off-again and on-again throughout this period. substantiating Erie's observation

                   that Carniolu's claim, from a medical standpoint. was a "[luid file" with ongoing developments

                   that complicated the evaluation process. N:T. 05116.17 at 37; NS, 07 .\0.17 at 112 (defense

                   counsel characterizing Carniolo' s case as a "moving target"); Brown v. Progressive 111s. Ci> ..

                       860 A:2d 493,.508 (Pa. Super. 2004) (opining that the "reascnableness" of valuation may.

                       consider that a three-year old claim has been "in flux" until only four months before

                                                                           14




·---- .. ··-·--··---
settlement). On April 1, 20.1 J, the medical record before Erie showed that Carniolo wa::. in

treatment and that the nature arid extent ofhisinjuries were evolving. In Octobe.rof20l2. Erie

learned that Camiolo had been in a second accident that niay have aggravated the injuries he

sustained in 2009; h was not until June 6; 2013, that Erie learned that Camiolo had undergone

a second surgery three months earlier. in March (the March 2013 Wrist Surgery), FF Para: 22.

In response to this information, and withoutthebenefit of medical records confirming thal

surgery, Erie raised its offer to .$15;000. FF Paras. 20<181 above.


        In pursuit of medical verification Erie ordered an IME that was performed in August.

The IME confirmed that the March 2013 Wrist Surgery was. aceidenl-related. Wirbin two

weeks, Erie raised its offer again. In September, despite some ambiguity regarding Carniolo.s

medical status," Eric credited Dr. Snyder's opinion that "permanent residuals" were likely. and

once again increased its offer, this time to $25,000, DM 1747; FP Paras, 29�3(),


        Then, within a month after receiving Dr. Gillon 1� report that Camiolo had suffered a

relapse, that his symptoms were regressing, that he might suffer pain for the restof his life, and

that he might need additional surgery, Erie increased the offer again. FF Pam. 44, above.

Finally, when Erie offered the policy limits on February 1 ..2013, it was wi chin days oflearning

of Camiolo's even further regression and that inresponse Dr. Gillen had ordered an MR

Arthrogram. FF Paras. 47-49..


        Each step of the way; Erie. acknowledged and credited new information and responded

accordingly .. While Carniolo may dispute the reasonableness of Erie's valuations. he has no



II
  Orthopedic Surgery and Rehabilitation Associates had reported on Stptlirnber:23, 2013, thatTarnioki enjoyed
"excellent progress' and "had no complaints." 0.M 1.776;
                                                      15
basis for inferring bad faith fromthe lapse        or time between April l, 201J. and February 7.
2014.


            (b)On plabitiffs coritention that other evidence supports a had faith claim.

        As already stated, .low but reasonable valuations do not.amount to bad. faith. J<>.h11s0.11 v.

Progressive Inc. Co., 987 A.2d 7BL 785 (Pa. Super. 2009) (uoung thut where there-ts only a

dispute as to the measure. of damages in a.first party claim ..a low. but reasonable valuation,

will not support
           .     a-claim
                     .   of bad
                             .  faith); Seto, &55 F, Supp;
                                                       .   2d 424, Terletsky
                                                                        .    v. Prudentia!
                                                                                .


Property and Casualty. Ins. Co., 649 A.2d 680, 6sg:.g9 (Pa. Super . .1994) (finding that where

questions exist regarding value, low settlement offers do not. support a bad faith. claim),

Moreover; no insurance company is obligated Io tender the pol icy lim its. without.an evaluative

process comparable to that used 'in a third-party claim. Condio, 899 A .2<l at 1145 (observing

that
  . a carrier's-duty
        .       .    of good
                          .  faith
                              .    does hot "requite
                                             .       an insurer to sacrifice its. own interest hy

blindly paying each and every claim submitted by an insured ... ;').


        Carniolo nevertheless argues that an inference of bad. faith is supported by evidence: (a)

ofErfe's low valuations;12(b) that Erie ordered a second IME; (c) that Erie asked Dr: Snyderto

deter writing his report on the August, 201 J, examination; ( d) thal Eric impcrmissi bly credited

itseiftwice with the $50,000 that Camiolo received in the third-party settlement; and (ejthat

Eriehas a policy not to "negotiate against itself' where, as here. the. insured never counter-

offers. As discussed below, the court finds that none of these contentions has merit, either on

its own or together with the others.




12 The record contains no. evidence that Camiolo documented any claim. for (Lnure medical expenses. l').ay �   ;ii   63 .•


                                                       16
                        (i)      .On plainttff's contendon that bad faith must be inferred because
                                  Erie's offers were unsupported by the medical e,·idcnce.

                The plaintiff argues that since there was no medical basis for its offers, Erie exhibited

        bad faith. first, he says that the valuation behind outstanding offer of $7.500. 011 Apri] I, :rn 13.

        lacked sufficient medical evidence and. therefore, was patently unreasonable, Second. and

        more particularly. hecontends that in its June 27; 20 lJ. offer of$15,000. Erie foiled to

        consider his March 2013 Wri$i Surgery. These facts; asserts the plaintiff, show that Eric acted

        unreasonably .. The. court rejects both contentions.


                                                                                              15
                Regarding the offer of S 7 ;500 that remained outstanding. 011 April l , 2017, there is

        little dispute regarding the abundance of medical history in Erie's Jiles 011 that date. FF Paras.

        21 °23. Further, the court credits Erie's evidence. including testimony at trial, considered

        Camiolo's medical history, the factthat his treatment was ongoing. and conducted .iury verdict

        research to guide. its valuation. On the basis.the research.Erie estimated that the total valuefor

        Camiolo's injuries f'eU in a range.of $50,000 and $75;000.            After discounting theSS0.000
        Carniolo received in his third-party claim, Erie offered $7500; based on total value of $57,500.

        Ff Paras. 20-23. Reasonable minds might differ oh whether this was.a fair-assessment of

        Carniolo's injuries in April 2013. The court. cannot deduce from the record, however .. that the

        offer was without support or that Erie was unreasonable in awaiting further information about
        Carniolo • s ongoing treatment.




        I� The court does not.consider any implication thallhi!i. number, formulated well before April I, 2013; was the

        produc: of pre-Apti! had faith conduct on the part of Erie, Carniclu' s burden is 10 .shllw with clear and
        convincillg evidenee thni Ede engaged in bad faith lifter April I, 2013,
                                                                17



--·--·-----·-------------------------------·----------·----
         The. second argument -- .that Erie ignored Camiolo's, March 20 I J Wrist Surgery when

making its Jun�.27. 20.J �. offer of'S] 5,000 -- is patently baseless. The evidence is thatthe June

offer actually was triggered by noticeof the March 2013 Wrist Surgery, FF Paras, 24-28.

Since Erie had only notice. of the surgery, it was not. unreasonable to reserve judgment until a

medical.assessment was available.. When Erie-received that assessment from Dr.                     Snyder.   Erie

· increased the offer again.    ff Paras . .30-32. The court finds that Erie articulated a plausible
basis for its valuation and cannot find any hint of bud fai th in this course o Ievents.


                  (ii)     Ori plaintiffs .contention ihat bad faith must be inferred from Erie's
                           request for a second .independent medical examination.

         Plaintiff argues that    bad faith must be interred from the fact that Eric ordered a second

independent medical examinations; even though normally it <toes not do sq.14 On this ground.

he need show 011ly that the Erie's conduct lacked any reasonable basis. Id. This he. was unable

to do.


         The accident was on June 30; 2009. The first IM E .on February 28. 20 I I. was ordered

in order to establish what Pl P benefits Camiolo was owed. The second tME was performed on

August S, 20.13, two andhalfyears after the first. In between the two examinations, Erie's files

showed an on-again off-again treatment history, including additional surgery i n March of 2Jl I I

(elbow} and then again in Marcf of 20.1 J (wrist) .. Further, these twomedical events bracketed

a second automobile accident. .Erie ordered the second IME expressly to address the

 implications of the March 2013 Wrist Surgery and under all the facts and circumstances of the




 14 In this argument, Camiolo appearsto have· considered an request for. a second IME to.be evidence Qf ill mo1.hic.
 Th{s is no longer a claimant 's burden, however. H,urk,,.�ky. 11upr;1,
                                                         l&
              claim history, the court finds   no basis to question the reasonableness of Eric 'sjudgmcnt .. more
               than four years after the 4009 accident, that another IME was warranted.


                               (iii)   On plaintiff's contention that bud faith must be inferred from Erie's
                                       deferral of Snyder's ,fritten report.                    .

                      Deferred writing. It is undisputed that defense counsel asked Dr. Snyder to defer

               writing the report of his August' 5, .201 .3. I M:t. and that the report was not written and produced

               until Octoberof 2011. N.T. 0.7.10.17 at 107. This. says Carniolo, is clear and convincing

              evidence. that Erie deliberately withheld vital information from the plain ti ff for   the purpose of
               unfairly handicapping him in. negotiations. In addition, he argues that the failure Lo produce the

               IMEreport in accordance.with Pa.R.C.P. No.4010 was a procedural defect that i1.i itself

               requires a finding of bad faith,


                      Regarding the decision to defer the writing of the IME report, Eries defensecounsel

              testified that they had hoped to settle the matter without havmgtoincurthe extra litigation cost

              associated with preparinga report for litigation. 06.29J 7 at 89 .. 94-95; 07.10.17 at 104. I 07.

               Indeed, defense counsel instructed Dr, Snyder finally to write up the report only after a pre-trial

               conference   had been scheduled. lei:



                      The court finds thetestimony to be credible in light   of the events following Dr..
               Snyder'sAugust oT2013 IME. A monthbefore that examination. Erie reviewed Dr. GiJlon's.

               May .of 2QJ 3 opinion that (a) the March 20 f1 Wrist Surgery was due to the 2009 accident and

               (b) that Carniolo was expected to make a full recovery, with partial disability for slx m(>nlhs.

               DM1677. Since the March 2013 Wrist Surgery itself was at odds withDr: Gilion's2Q,12 report

               that Camiolo's prognosis wasexcellent and that he would not need surgery, it Was reasonable

                                                                19




·-·-.. ·-···-·--------------
 for Erie to order the JME that was conducted on August 9, 20 I J, On the basis of Snyder's

 verbal report, additionaljury verdict research, and defense counsel's recommendation. Erie

increased its offer $25,000. on August 9, 2013, representing a ioral recovery ina range of

. $75.000 to $80,000 •. DMl 702� DMl 687; N.T. 05.22.17 at 32. Erie advised plaintiff's

counsel, this offer was based on. among other things •. Dr.-Snyder'soonclusion that 'Cumiolu

was correct in his contention that the 2009accid�rit and the March 2013 Wrist Surgcrr were.

related.


           ln further discussions on. September 18! 2013, Dr. Snyder continued to. defense counsel

his opinion thatnot only was the March 2013 Wrist Surgery related to the 2009 accident. hut

also thai the surgery "may cause some permanent residuals: .. 1 � DMI 74.7. Yet, at the same

time, as already mentioned, Rehab Associates reported on Sepicmbcr 23: 2013. that Camiolo

was enjoying "excellent progress" and had "no complaints." DM I 766. Despite the ambiguity

presented by.the Rehab Associates' records, Erie increased the offer io $35;000 on October 8..

2013, at which time plaintiffs counsel had Dr. Snyder's written report in hand. DM0626..


           Accordingly, the court finds no basisio doubtthe testimony ofdefense.counsel that his

decision delaying the request for a written report was a matter of a trial strategy to contain.

costs, Nor does the court have any basis to reject the testimony of the Eric representative thnt

Erie's offers did not depend oh receiving a Written IMEreport. N.T. 05.22 .. 1 Tat 120. It




Jj The October 3. 2013. report the Dr. Snyder wrQte. indicated iba1   die TFCC l wrist] tear was "surgically resolved"
in March of20lJ,      .                 .               .               .


                                                         2_0
                      Rule 4010. Next, however. plaintiffclaims that a had faith finding is commanded by

           the fact that defense counsel violated Pa.R.C:P.. No: 401.0. in Jailing. to produce a copy ofa

          written IME.report for plaintiff in the course of'Iitigation. Rule4010 provides. among other

           things, that a written report of' a physical examination shall be provided to. the opposing party.

           upon request 16 Accordingly, there is a duty in litigation to producethe ti ndings of an IME · for

          the opposing party .. The rule does not, however. specify a lime frame for delivery of a report,

           Instead, it authorizes a court, upon motion. to enter a remedial order if such a. report is not

          produced .. The record is clear that plaintiff's counsel failed at any time from August to October

          ro file amotion for an order compelling its production or seeking exclusion as a sanction. Erie

          cannot be faulted for relying on.such an expectation in.litigation. And. since this court has

          credited defense counsel's reason for deferring the report. ir can find no basis in fact or in law

          for declaring that a putative violation of Rule.40 l017 amounts. to clear and· convincing evidence

          of bad faith.


                              (iv)      On plaintifPs contention .thatbad faith must be.inferred fr.om a
                                        calculation giving Erie double credit for the settlement in. the UIM
                                       .claim.      ·                                                    ·

                     Next, Camiolo argues that bad faith may he inferred from Erie's method of calculation.

          Camiolo asserts that there were two injudcs and. that Erie valued each injury separately. but

          failed to aggregate their total val ue before discounting the SS0,000 in settlement monies.




          '" Specifically, Pa.R.C.i:> .. No .. 40 to provides ''[i)" requested by the party 11gains1 whom an order is made und.er1hi$
          rule or the person �xamii1ed, the party causing the examination to be made shall deliver to the requesting party or
          person a copy of 11 detailed wrin�n report ofthe el(amincr. setting out the examiner's, lindings, lncl�ding results of
          alltests made, diagnoses and conclusions •. ' . The court on motion may. make an or.der agiiiinst a par.iy requiring
          delivery of a report oii such terms as are [usr, and If an examiner fails or refuses Jo make a report the court shall.
          exclude thc.exarnlner'j, testimony ifoffered attriul," Pa:R.C.P. No. 40.IO(b)(I ).
          17
               The rule does not prescribe a delivery time and expressly authorjzes a motion lei compel delivery if Ilic opposing
          party is dissatisfied ..Since no such morion was filed; ic is not even c lear that lhere was a "vlotat ion."       ·     ·

                                                                     21




_____,, __v                                                                                                                             _
Specifically, plaintiff.argues that .. (iJf[ErieJ had.done the calculation properlythere would

have been.$50.000.00 to $75.000.00 tor the ulnar nerve injury plus $8.5,000 to $90.000 for the

'fFCC [wrist] ·injury or a combined range of $135;000;00 to $165,000.00 less$50,000 leaving a

net combined r�nge of$85.000.00 to $115;000:00;'' Plainr(lj':,:. PautCamiolo. Brief Re:'. The

Liability-Phase of the Trial, at [un-paginated] page 22.



        The.court credits the testimony of Erie's representative on this subject and rejects

plaintiffs characterization of Ede's method of valuing the UlM claim because. it is inconsistent

with the evidence of record. First, 'Erie's representative testified cf early that upon learning of

the results ofDr. Snyder's lME in September, the offer of $3.5 ,000 was based on the entire

claim, including counsel's recommendation and verdict research. 'oM 1747; DM I 36J. N.T.

05.15.17 al I 04-05,. She. testified that the range for the total value of the left ulnar injury fell

between $50.000 and $75.000: discounting the $50.000 settlement funds thus produced a range

forErie's liability for the·UIM portion of $0    ti)   $20,000 (ulnar nerve), N :r. 05, .15.17.at I 09-

I 0. Similarly, the range of the total value ofthe TFCC ligament repair was $80�000 to

$'90,QOO. yielding a UIM portion of$30,000 to $40,000 (TFCC repair). Thus, the total

valuation for the UJM li�bility was i11 the.range.of $30;000 Jo $60,0.00. The ofter of $35.000

on OctoberJ, 2013, foll within that range and, as explained earlier. was riot so unreasonable as

to support a bad faith claim.


               (v)     On plaintifrs contcntfon that bad faith must he inferred from Erie�s
                       negotiating posture in face of an insured's unyielding policy fhnifs
                       demand.                   ·

       Plaintiff challenges as indicative of bad taiih the testimony or' an Eri� represcn tati vc

that the insurer resists negotiating against irself'where, as here. the Insured responds to offers

                                                  22
with no counter demand and never retreats from his. demand from the policy limits. Plaintiffs

interpretation of this bit of testimony from Erie is counterintuitive. Fir$l. any good negotiator

routinely resists the efforts ofan opponent to get him or her to increase offers without ihe

prospect of concomitant counteroffer. !11 managing ii DIM claim, it is.perfectly reasonable for
Erie to. handle its. negotiations as it would any third-party claim; Zappile, 92 A ..2d 255-56.

(stating that UIM. claims are inherently adversarial); Condlo, 899 A.2d at 1145 (stating that

irisµtei,s are not obligated to make unquestioned payments on .claims), Second, regardless o.f

any "policy" on the. matter, Erie in fact negotiated against itself'when making successively

greater offers in face of Camiolo's unyielding demand for the policy limits, Thus. under the

facts and circumstances ofthis case. the evidence of Erie's negotiating posture is
                                                                                . probative
                                                                                        .   of

nothing of consequence, much less of the existence of statutory bad faith.



·coNCLUSION

        ln accordance with ihe foregoing findings of fact and conclusions oflaw, and the

attendant discussion.the court finds in favor of the defendant Eric and against plaintiff

Carniolo on plainti Cf's claim Q f statutory bad faith.




                                                          .
                                                              ) L 1\;//'---· >
                                                                .                .

                                                 .MARY D. COLINS,.J.


                            1···· ---·
               ·'�
       .             ,7
DATE:_.�             .J· _ ..



                                                   23
                                                                                                                      Circulated 03/26/2019 02:39 PM


)
:l
j
:j
j
                             IN THE.COURT OF COMMON PLEAS OF PHILADELPHIA COUNTY
                                     FIRST JUD.ICIAL l)ISTRI.CT OF PENNSYLVANIA
,.
                                           TRIAL DIVISION - CIVIL SECTION
.1,.
 )
j
,.."..              PAUL CAI\'.IIOLO;                                                  :      JOLY TERM, 2015
)
-·;I
"'
                                                  n«illtiff
                                        v •.                                                  No. 1750

                    ERIE INSURANCE EXCHANGE d/b/a
                    ERIE INSURANCE GROUP a/k/a ERIE                                    .
                                                                                       ·'
                    INSURANCE COMPANYa/k/a ERIE
                    INDEMNITY COMPANY,

                                                  Defendant                                   Findings of Fact/Conclusions of Law




                                                             MEMORANDUM AND ORDER

                      Colins, J e .                                                                                    October, 201 7

                             In July of 2015. plaintiff Patil Camiolo (Camioloj.filed a lawsuit against his insurer.

                   Erie lnsuranceExchauge' (Erie), charging Erie with statutory bad faith in its handlingof his

                   underinsured motorist (UJ M) claim. The. matter was. tried before this court on six davs                 .
                   between May 15, 2017. and July 10, 2017.

                             The court hasreviewed the notes of'testimony and the exhibits admitted to.the.record.

                   along with the parties' respective proposed findings of fact; conclusions of law. and

                    memoranda. Having evaluated the evidence and adjudged the credibility of all the witnesses ..

                    the court finds in accordance with the findings of fact .(FF) and conclusions of law set forth

                                                                                                                         Camiolo·vs En� ln�uranco Exchange B.rai-ORbMJ




                    i d/b/a Erie Insurance Group u/k!a Erie Insurance Company a/K./<l Eric Indemnity Compnuy.
                                                                                                                          1111111115070175000147
                                                                                                                                    llm 111111111111111 Ill
                                                                                                                                                     · . .




     :nPII=� �l=I\IT Pl. lR�I IA I\IT T() .Pa R. �. P ?�j::;(h \ .l\1   l=R lr.J<!;()f\l.   11 /i"i�J?n17
                                                  ·--------···--"··---------------------
   below that the plaintiffhas failed to establish his bad faith claim by clear and convincing

   evidence. Accordingly, a verdict is entered in favor of the defendant Erie.

                                                     FINDINGS OFF ACT



            On .June 30, 20Q9 •. plaintiff PaulCarniolo ( Camiolo) was involved a in motor vehicle
            accident in which his car was struck from behind by a vehicle driven by Weiwen Zhgen
            {Zhgeh). Defendant Exhibit 1 rnn atCMS .2.


    2       Camiolo filed a lawsuit against Zhen. that was settled in Camiolo's favor on .March;.14,
            2012, for $50;.000. N.T. 5/18/17 ai 29.2


    J       Camiolo was an insured by Erie under a Personal Auto Policy No. Q06-0115735 (Erie
            policy) for the period of June 1, 2009 to June 1, 2010. Drvf 0257-88.


        4   Ort the day of Camiolo's accident, the Erie Policy provided.$100,000111 Underinsured
            Motorist (UIM) coverage. Id.


        5   In a February 28, 20111 report of his independent medical exam (IME) performed in
            connection with Camila's July of2009daim forfirst party medical benefits (PIP), Dr,
            William H. Kirkpatrick stated:
                    "However, l cannotclearly relate 'this conditionjleft e ubitul nanne l $yndro1ne3]
                     to his motor vehicle accident.of nearly 2 years ago. He did not sustain any left
                     elbow injury at the time of the motor vehicle accident. His symptoms were
                     localized to left hand and wrist. Furthermore, progressive ulnar nerve"



    � This action included bad· faith claims that were dismissed by Stipu lation in March of 20 It P-S ..

    3 ·•CubitalTlinnc\ Syndrome is a condition thill involves pressure pr stretching of the ulnar nerve (alsb known as
    ihe "funny bone" nerve). which cancause numbness or tingling in the i-ing and smal] flngers. 1'i,1ii1 id the forearm.
    and/or weakness in the hand. The ulnar nerve runs in a groove 011 the inner side of the elbow." American Society
    for Surgery of the. Hand rli ttp:/!y,• WW .a ssh. or.g/handcareihand-arm-condit ions/c u bi ral-ru 1i II el 1.

    4The ulnar nerve is "a large superficial nerve ofthe aim that is a continuation of'the medial.cord ofthe brachia]
    plexus, passes around the elbow superficially in a groove between the olecranon and the medial epicondyle of'the
    humerus, and continues down the inner side ofthe forearm to supply the skin and. muscles of the I ittle-finger side
    of the forearm and hand." Mirlarn Webster [liups;//www.me.niam-wcl:!stcf.(.iOmlnicdicnllulm.11"f�2011crve]!

                                                              2



·-·-··-·-----------------------------·
                           .symptorns can be related to his employment as a computer consultant and can
                            also be related to his newly diagnosed diabetes.

                           As stated, I cannotrelate treatment for this cubital tunnel syndrome
                           specifically to the motor vehicle accident.')

                    ·. DMOI 66; CMS0006.

           6        In a letter dated Apdl5, 2012, Camiolo's attorney notifled.Etie of his. UIM claim and

                    presented a demand package seeking the policy limit of$ LOO,OOO. DM0514-22.


           7        In a report dated October 12, 2()12, Dr. Thomas J. Gillon, Camiolo's treating surgeon,

                    opined that theinjuries   to Camiolo's wrist and elbow were sustained in Ine accident inJune
                     of2009. DMl289-90.


           8         Dr. Gillon noted that about seven months earlier.onMarch 15� 201.L and after Dr.
                     Kirkpatrick's February exam, Camiolo "underwent a left elbow ulnar nerve release in situ
                     with medial epicondylectomy." (March 2011 Elbow Surgery). id,


           9         Three monthsafter this surgery. Camiolo.was in.an auto accident involvinga-collision with
                     a deer (deer accident). This incident aggravated symptoms of numbness and tingling in left
                     fingers stemming from· the ulnar neuropathy, but that these symptoms did "dissipate over
                     time without any intervention." id.


               1O    Dr. Gillon opined that Camiolo's symptoms, post-operative and post-deer-accident, were
                     "not permanent and continue to get better astime goes on;" this conclusion was affirmed

                     by the. results of a new EMG and nerve conduction study from September 28, 2012. id.


               lI    Dr. Oil1011 stated that Camiolo would "still have some numbness in his small finger for an
                     additional six months.but I think it should getbetterto the point where it does 110.l bother
                      him any longer unless he develops a generalized motor and sensory peripheral ueuropathy
                     from.his diabetes, which would be unrelated to his compressive neuropathy at.the elbow."

                      id




--------   ·---·---------------------
12     He stated further that Camiolo-did not need further surger�, that. he had. "an excellent
       prognosis. with respect to his left elbow ulnar ncuropathy"            and that he had    1·00   .functional
       deficits or disability with respect. tohis left elbow en hand· from his ulnar neuropathy:" Id


)3     Ip aJune 131. 2012, conference      c·all with defense counsel, Or. Kirkpatrick acknowledged
       that he could. not,   to: a reasonable   degree of medical. certainty, reject Dr... Qi II o a's ·op in i oh
       that Camiolo's injuries wererelated-to the 2009. aecident. DM.06.76.;_

14     In March of 2013, Erie received from defense counsel .mfermation that jury verdict
       'research regarding the value ofan ulnar nerve -.injuryrevealed that the claim had a total
       value of $50;000 to $75.,000.. OM 1250-51 � N.T. 05.22, 17-:at 23.


i5     Asof �priJ 1., 20J3., Erie'sinitial offer on.Camiolo's Ullvlclaimaftertaking credit.for the
       $50,000 settlement remained at $7,500. DM2.1 l 7.


1·15   'Ten monthslater, irr Febrmn-y·ofl014. Erie tendered and. Carnielo                accepted thepolicy
       limits. of $100,000. N ;T. 5/1811-7 at 30-.


.i"7   O.r1 ·Felir.uary 19,.20i4;: Camiolo' executed a General Release Agreement that included the
       following statement:
               "his .expressly understood and agreed that I, Paul Camiolo, my heirs.
               representatives, executors, administrators, successors, and assigns am/are. not.
               releasing-the release from any andall claimsof bad faith accruing from Aprill,
              '2013,.:to the present,"

       DM 1664-65 (emphasis added).

1:8    In the . ten months between Aprill, 2013, and February 7, 2014. the date of the final
       settlement; Erie increased its original       $.7,50.0 .offersix times: June 27, i() 13 ($15,0QO)
       .(DMl.673};· August 15, 20l3 (525,000) (DM.i"702); October 8? 2013 ($35;000) (D.M0626'):
       October 30, i013 ($.36,750) (DM2607}�:January :15, 2014 ($60�000){DM2046); and


                                                        4
        February 7, 2014. (SlOO,OOOf(DM1646). At no po.iI:it during negotiationsdld Camiolo
        abandon his$ too.oo« demand.


 )9     In.July of2015. Camiolo filed the instant [awsuit charging. Erie with statutory bad faith
        under 4'.? Pa. Stat. and Cons. Stat Ann. §· 8371 (We·sif'


                                            OFF-EROF JUNE 27, 2013 ($15,000)


 20     On March 26,: 2013_,. throughits counsel> Erie advised Carmelo's attorney that the then
        outstanding offer of$7.500 remained in place because.the insurerhad received iiiinew
        evidence, documents or facts that warrantedan increase. 0.M2ll.7--18;:N.T. 0$) 6.17 _at .JL.
        35;_N;T. 05.18.17.at 122; NT: 0(?.29.17 at 59·.


 21     This number-assumedthat (a) Camiolc's injuries were caused by the 2909 accident �nd (b)
        that the total value of Camiolo''s claim was between $50;000 and $70,000, which, when
        discounting the $50,000 received ·in settlement from the tortfeasor, produced-a range for
        Erie'sliability pf$0.to $20,00-0.- DM1250; N.T. 05-.1.5. J 7 at 91.


 22    .Attbis point, Eric had reviewed extensive medical records..for Camiolo dating .back                         to
        l 997, including the..report of the independent medical. exam performed on. February 28,
        201.l, by Dr: Kirkpatrick and the October 12, 4Ql2, report err». Gillon, DMb. l 85�$-&;
       DM1284; DM1312-3L ·N.T'. 05.lS.17 at 78-79;N:T. 05.16.:17                         at,32; N.T. 05.22.-I7-at26-
       27.


 23     Dr. Gillon had related Camiolo"s in:i uries. to the 2009 accident. Or: Kirkpatrick had
        conceded that.he 'could.notrefute Dr. Gillon's opinion .on causatiorr. Ff-. Para.. --5•.supra:




� Section 837_1 provides, ·"[i]n. an .action arising under an insurance p_oli"cy,.if'the court finds that the insurer hus
acted in bad fafrh toward "the insured, thecourt may.take <!,II oh.he following actions: (I). Award interest on-the
amount of the claim from the datethe claim was· made by the insured fi) an amount equal to the prime.rare of
interest.plus 3%. (2} A�ardpi.ri,itive damages against-the insurer: (3}.A��s court costs and anomeyfees a_gtl!i1st
lh� Insurer."                                        ·                                  ·                             ·
24    On June 6; 2013,. Erie received additional.information during Camiolo's lawsuit against
      the tortfeasor.       Discovery revealed the new .informatiorr .that.jiotwithstariding Qr. Gillon 's
      prognosis to the contrary in October of 20.12, Camiolo had had addittonal surgery on his
      'left wrist in March-of 20'1'3 (March 2013 Wrist Surgery), two months earlierand three
      years andnine months.aftertheinitial accident. CMS0307'; DM1673; Dayl at 89;N:T .
      . 05:.18. l 7 at t   10- u,

27    Dr. Gillon opined further thatthe March 2013 Wri.st Surgery-was causally related tothe
      2:009. accident and that Camiolo would be. partially disabled from employment tor
      'approximately six months, butwas expected to make a full recovery. ·CMSQg83-85�
      DM.065�,.


28    On Junej7; 201'3, having reviewed this new information, Erie increased its offer to
      $ls,·ooo, citing Erie's "continuingduty to re-evaluate. ..'\and noting thateven though Erie
      did notyet have the medical records of the· surgery, "an additional surgery [in March .2013]
      is a significant intervening development." DMI172; DM0658; DMI673':;:N.T: 05... 15..17 at
      91; N .T ..05.J 8.17 at 56; N.T 05:22,17 at 2·7-29; N.T. 06.29. I 7 at 64 .


                                       .,OFFER.OF AUGUST    15; 2013 ($25,000)


29    Having increased Its offer to $15,QOO,.Eri� determined that It needed further medical
      Investigation of causation regarding the Mirch·--20,i.� Wrist Surgery: N.T.=os.22·. 17- a.r.29-
      30.


30.   On August S, 2().1.3, Dr. Barry Snyder performed an independent.medicalexamination of
      Carniolo to determine ifthe March 2013 Wrist-Surgery was 'related 'to the 2009::accident..
      DM 1687-;. PMI 702; N.T, '05.18, 17 at 62.
    31   Snyder opined that Camiolo' s TFCC6repair (the March20l3 Wrist.Surgery) was "likely
         attributable;' to the 2009 ace ident, that .his treatment had "not matured," and that Camiolo
         would "neverreturn to 100 percent functionality." DMJ 687-89, N.t. 05.15.17 at 94; N.T:
         05.L&: l7 at64; N.T. 05..22.17 at 120.


    32   On August 15, 2011, on the basis Snyder's opinion, Erie increasedits.offer toCamiolo to
          $25,000, premised on a total recovery of $.75,000io $80,000 .. Id.: DM 1702:.N.T. 05.15:.17
          at 95-96; NT. 05.16.17 at 66; N;T 05: 18J 7 at 66�             72� N:TOS,22J 7 at 29-30:

                                           0FFEROF0CTOBER 3,            2013 ($35:,000)


    33   On September 18, 2013,dcfcnsc counsel reported to Eriehis discussions with Dr. Snyder
         · in which Dr. Snyder stated that the. ligament injury and the resulting surgery may be
          attributable to the2009 accident and may cause some permanent residuals. DM 174 7.


    34 · On September 23� 2013, Erie .also reviewed records subpoenaed from Orthopedic Surgery
          and Rehabilitation Associates (Rehab Associates), indicating that Camrolo was enjoying
          "excellent progress" with significant improvement to the pain in his left hand .. that he had
          "no eurrent.complaints." DMI 766�.68� NT. 05.22.17 at 36; N.t. 06.:29.17 at. l O l.


    35    Dr, Gillon discharged Camiolo "PRN" 7 in September of 20J3, 0MO<il9�20: N.T.
          05, 18. lTat 19.


    36    On or about October 3,2013, defense counsel provided to plaintiff's counsel DtSnyders
          written IME report of his August 5� 2013, independent medical exam. N.T. 06.29. l 7 flt 8&;




6
    Triangular Fibrocartilage Complex refers to.the ligamentous.and cartilaginous. structures that suspend the distal
radius and ulnar carpus from the .distal u Ina. I njuries to the TFCC present as u lnar-side wrist. pain .. Medscape
[https.//erned icine, m edscape.com/artic le/ 12 40789�overv iew].

7 Pro re. nata. Latin for the present matter; under present circumstances: as. needed =-abbreviarlon prn =-used in
medical prescriptions. Miriam Webster (URL.: htl'ps://www..merriam-
\Vebster.com/dictionary/pro%20re'.l-'o.20nl:!ta):     .
                                                            7
37   On October 3; 2013, defense counsel transmitted to plaintiffs counsel a new offer of
     $35,000, which was rejected withnocounteroffer a week later. DM062(i; DMJ 343; N.T.
     05.16.17 at 74; N.'I'. 05..18.17 at 77- 78;N.'t 05.22.17 at 37�38.


                               OFFl!;R 01<' OCTOBER 30, 2013. ($36,750)



38   Having received additional information from the plaintiffabout $1.750 in wage loss. Ei'ie
     increased its October 8, 2013, offer to $36,750. DM2607; DM2046; N.T. 05: 18.17 at79:
     N.T. 05.22. 17 at 42;N.T. 06.29.17 at 109.


                                OFFER OF JANUARY 15; .2014     (S60,000).


39   In hisOctober 24, 2013, deposition, Dr. Gillon testified that Camiolo.experienced a good
     recovery after both surgeries; he also acknowledged. Camiolo 's pre-existing ulnar
     neuropathy. DM06l9-20.


40   On November 12, 201�. however, plaintiff's counsel notified defense counsel that
     Camiolo had suffered a recent setback to. his injuries while helping his .aunt.move to a new
     residence. DM0803.


4l   On November 27, 2013, defense counsel reported to Eriethat Dr: Gillon had examined
     Carniolo again and concluded thathe.indeed had suffered a relapse and loss of grip strength
     and that he might need injections in the future. DM 1396.


42   On.December 13� 2013. defense counsel received Dr. Gillon's December 312013,
     supplemental report stating that: (a) Carniolo had been doing   well until two months prior:
     (b) he had. started regressing; ( c) Dr. Gillon recommended that Camiolo wear a wrist brace;
     (d) therewas no guarantee that Camioio would be pain free fer the rest ofhis life; and(e) if
     the pain was "extremely severe/ Camiolo may need additional surgery. DM l 397; N:T.
     05.22.17 at 40.,52-.54.



                                               8
 43     OnDecember2·3,20l3,.Dr. Snyder was deposed.


 44     On January       in, 2014, following.Dr, Gillan's supplemental deposition on that day, Eric's
        fife notes. recount-that Camiolo:         (a) now had a different prognosis than he had. at the time of
        his-discharge in-September of 2Q'l3; (b) had undergone a wrist injection on December IL
        2.0l3; (¢) suffered.a relapse.that was triggered when helping.his aunt move; (d) possibly
        will rel1uirc further treatment, including bone shorterring surgery as "a last resort;" and€
        may sufferrecurringpain throughonthis life,                  DJvll 433;·.N .T 05.16. P at 7-9.-.82; N .T.
        05.18,J?. at l 12-i3,

 45     On thebasis of fhe foregoing, .defense counsel opined that Erie's offer should be closer 10
        the plaintiff's demand. D.Ml687.


 46     On January .15, 2014,: Erie increased 'its offer to :$(>0,0'00. DM2046. It was rejected. with
        .no counteroffer on January 20, 20'14. DM1440; N.T. 05)8.17 at 8()-89; N.:1'. 05.22: 17                          at
        56'�57,.


                                         OFFER OF F.EBRUAR'i'         7, 2014 ($100,000)_

 47     On- or 'about Ja110�ry ·24·, 2014,.:plaintiff produced-for the first -time a journal dating back to
        December of 20.12 noting that his current symptoms were comparable to those he
        experiencedwhenhe was first injured four. years                 carrier . .DM2008';·N.T. 05. 1'-8.17 at 1s8\
        N.T. 06.29.17at.'120.


 48     On Jan��ry 29,;;zo.14, the Carmelo's attorney advised defense counsel that Camiolo had
        seen Dr. Ci I Ion that .same day, that the 'strength iii Carnie lo' s lefthand had -regressed even
        further, and that Dr. Gillon had ordered an:,MR Arthrogram.f DM2597� N.T. 05.16. 17 at.8-
        .9; N,T. 0�.22.1'7 at 59, l J.O.


·s··An arthrogram is the "(i']magingbf,ajqjnt following ·tb�fo.trodu�tion of a contrast. agent into· the.joint capsu le to
 enhance visualizaiion of'the 'Inrra-articular structures." Farlex Partner Medical Dictionary© Fiirlex<m 12,
https:limedical- dictionary .thefrcedictionary .corn/arthrogram ..                             ·
49        Based on the foregoing new information, Erie offered the $100,000 UlM. policr limits oil
          February 7, 2014, which Camiolo accepted. DJvil646; N.T. QS.18.17at97�


                                                CONCLUS10NSOF LAW


50        Erie never denied plaintiffs UlM claim .


. 51      The record contains     i10   clear and. convincing evidence that.during the period April l , 2() L3,
          to.February   7, 20}4, Erie:
                  -failed to communicate with. its insured or his counsel;
                   -failed to investigate;
                   -caused an unreasonable delay in handling the plaintiffs claim; or
                   -lacked a reasonable basis for any ofits settlement offers.


 52       In short, the record contains no clear and convincing evidence that Erie did not have
          reasonable basis fordenyingbenefits" under policy and knew or recklesslydisregarded any
          lack of a reasonable basis in negotiating the settlement of the plaintiffs -.c laim.


     53   On the basis ofthe foregoing record, and as explained in the discussion below, the court

          finds that plaintiff'has failed lo establish that Erie.acted in. bad faith in violation of
          Pennsylvania's Bad Faith Statute in the period from April J, 2013,. until February 7. 2014�
          when Eric offered and Camiolo accepted the policy limits:




11
     Tht! claim was never "dented."   C)nly the vaiuauon was disputed.

                                                            10
DISCUSSION

   I.       INTRODUCTION

         A .. UIM l'NSURANC..E

         Underinsuredmotor vehicle (lJlM)coverage is governed by the lvlbrorVehide

Finaiu:ial'Re;\pon.�ihfliiy Law (MVFRL). 75 Pa, Statand Cons .. Stat. Ann.§ 1701-1799.7

{West), The statute contemplates that when the policy applicable tothe vehicle which is at fault

in causing claimant's injuries contains. liability coverage that is insufficient to fully compensate

the victim, the victim may seek coverage under his own polity ifit provides forunderinsured

metoristcoveragc. Wolgemuth' v. Harleysville Mut, Tns. Co.., 535 A.2d 1145. 1149 (Pa. Super.

1988).   In this case, plaintiff Camiolo's claim against Erie for the benefits ofthe UIM coverage
in his policy was premised on the inadequacy of the $$0,000 he obtained in his action against

the. tortfeasor. Even though Erie never denied lJIM coverage, Camiolo claims that Erie's

handling of his claim was sodeficient.as to constitute statutory "bad faith."


         Insurance providers are bound by a duty to afford good faith and fair dealing when

handling the claims oftheir own insureds. Bonenberger v-. Nationwide Mut. Ins. 'Ca.. 791

A.2d 378, 380 (Pa. Super. 2002). Insureds maybrmg claims against their. c arr ier-s-p'urauurrt to

Pennsylvania 's Bad r aith Statue, 42 Pc1. Stat. and Cons .. Stat. Ann. § 8371, the purpose of

which is to provide a statutory remedy to an insured when. an insurerdenies benefits in bad

faith. General Acc. Ins. Co. V; Federal Kemper. /11s. Co .... 682 A.2d 819 (Pa. Super.1996):.


         Erie's liability for coverage of injuries sustained in the 2009 accident is not the issue in

thiscase. Instead. the dispute revolves around.Erie's valuation of Camiolos injuries in the

period between April 1,2013, and February 7,2014. Williams          v. HartfordCas. Tns. Co., 83 F.

                                                  11
Supp. 2d567, 571�72 (E.D. Pa. 2000), tdf'd� 261 F.3d 495 (3d Cir. 2001) (notingthat even

though liability .is uncontested . the carrier's duty ofgood faith extends to its investigation of

the claim's value). For the purposes of examining Eric's decisions during this time, the. court

bears in mind. that insurance carriers handle UIM claims as in the nature of a third-party claim.

Zappile v.AmexAssur.          c«, 928 A.2d 251,.255-56 (Pa. Super. 2007), citing Condio v. Erie
Ins. E.tcl,., 899 A2d I 136, 1143-45 (Pa. Super. 2006) (acknowledging the inherently

adversarial nature.of first party claims); Bonenberger. 791 A2d al381 (observing thatina

direct claim against one's own insurer, the parties may be expected to have differing positions

onthe claims' value).


         8.   STATUTORY BAD .FAITH

         To succeed in a bad faith claim against an insurer, the insured must present clear and

convincing evidence that: ( I) the insurer did not have a reasonable basis for denying beriefits

under the policy, arid {2) the insurer knew of Qr recklessly disregarded its lack ofreasonable

basis in denying the claim. Rankosky v. Washtngton NationalIns. Co .. No, 28 WAP 20J6

(Pa. September 28, 2017), slip op at 2. rn The first prong of the claim requires an objective

determination tested P.Y the. Inquiry whether under the {acts and circumstances. .of the case a

reasonable insurer would have denied or delayed payment ofbenefits, /.lank.osky, No. 2.8. WAP

2016. slip op. at 17-18, Accordingly, bad faith may be established with proof-of an unfounded

refusalto pay, lack of investigation; and failure to communicate with insured.. Condio, 899

A.2dat 1143; Rowe .v. Nationwide.Ins. Co., 6 F. Supp. Jd 62.1. 630 (W..D. Pa .. 2014); compare




10 The court also
                  held that "proof ofan insurance company's motive of self-interest or 111-wiH is not a.prerequlsire
to prevailing in a bad.fitith claimunder Section 8371 ....';, Rt11iko.�k.v, No. '.18 WAP·2016, Slip Op. at 2.

                                                         12
       Bonenberger. 791 A .2d at 380-81 (affirming a finding of bad faith in evidence that the carrier

       failed to
               . order
                     . ah independent medical
                                      .       exam or to consider the medical records).


               As a threshold matter. the court finds that inasmuch as Erie never denied the claim

       outright. there is no "unfounded refusal   to pay." There can also be no serious claim that there

       was a. "lack of investigation" or thatthere. was a "failure to.. communicate
                                                                         .          with the insured."
                                                                                                   .


       Erie's voluminous, continuous and detailed claim file on Camiolos case, along with, the

       testimony of those responsible.for handling his claim, tell a different story: Conversely, where

       the claim's value is uncertain, asit was in this case, Ede cannot be faulted for conducting a

       thorough investigation. Lublin v.Am.     n« Grp�, Tile., 960 F. Supp. 2d 534;.54 l (ED. Pa.
       20 IJ) ( observing that "[ijnvestigative efforts are not unreasonable When the claim's value is

       ambiguous} By all accounts, Eric: s investigation was vigorous; it sought.and received

       numerous medical records, ordered independent medical examinations and sought to reconcile

       often conflicting or changing information. all the time communicating with. the claimant. and

       his.attorney.


               Instead, Camiolo contends he has.satisfied .his burden under.the first prong of the test

       by demonstrating that Erie did not have a reasonable oasis for its negotiating position at any

       timeduring the ten month period at issue. First, he posits that the ten months it took for Erie    to
       move from its offer of $7;500 to the policy limit of $100;000 constitutes a bad faith delay.

       Second, he argues that bad faith is evidenced by Ede's consistent undervaluation ofhis claim

       in face of medical evidence requiring a different result. The court addresses these.arguments in

       tum, mindful that' the focus of this fact-intensive inquiry
                                                             .                  . of insurer vis a vis
                                                                   is the conduct                    .


       insured .. Williams v. Nationwide Tns: Cd�,   Inc. 750 A.2d 88L 887 (Pa. Super. 2000).

                                                        ]3




···-·---·--·-..-···-----·---------------------------
           (a) On plaintiff's contention that bad faith must be inferred from Erie's dehw
               ht processing his ·claiin;

       Delay in processing a claim. standing alone, does not establish pad faith. Thomer "·

Allstate Ins. Co., 790 F, Supp. 2.d 360. 370 (E.D. Pa. 2011) {a period of delay between demand

and settlement does.not, standing alone, constitute bad. faith). In this. case, the. courtfinds.no

support on the record for inferring bad faith from "delays" occurring after April 1, 20J3.

There is no support either in the law 01· on the record for the proposition that ten months. or

even more. is inherently unreasonable. Seto v. State Farm J11s.. Co.• 855 F. Supp. Zd 424. 430

(W.D. Pa. 2012) (holding that where the carrier was actively engaged in investigation.

valuations and negotiations, a twelve month delay did.not evidence bad faith); Williams, 83 F.

Supp, 2d at 571-,72 (fifteen month delay ri:dt unreasonable where value of the claim \Va�

uncertain); Kosierowskl v•. Allstate.Ins, Co., 51 F.Supp. 2d 583, 591 -92 (ED Pa. 1999)

(rejecting a bad faith claim premised on evidence ofa one-year delay where the value of the.

claim was uncertain and where the delay was not caused by the carder, but by the,

unavailability of information about the insured).


       When viewed in light of all the facts and circumstances .. the ten-month negotiation

period under-examination cannotbe deemedunreasonable. It is undisputed that Camiolos

treatment was off-again and on-agai 11 throughout this period. substantiating Erie's observation

that Carniolo's.claim, from a medical- standpoint, was a "fluid fife" with ongoing developments

that complicated the evaluation process. N.T. 05,.16:17 at37; N.T. 07.10.17 at 112 (defense

counsel characterizing Camiolo' s case as a. "moving target"); Brown v. Progressive Ins. Co ..

860 A.2d 493. 508 (Pa. Super. 2004) (opining that the "reasonableness" of valuation may

consider that a three-year old claim has been "in flux" until only four months before

                                                 14
          settlement). On Aprill. 2013, the medical record before Erie showed that Camiolo was in

          treatment and that the nature and extent of his injuries were evolving. In October of2012, Eric

          learned thatCarniolo had been.in a second accident that may have aggravated the injuries he

          sustained in.2009. It was not until June 6, 2013, that Erie learned that Camiolo had undergone

          a secondsurgery three months earlier, in March (the March 2.013 Wrist Surgery). FF Para. 22.

          Inresponse.to this information, and without the benefit.ofmedical records.. confirming that

          surgery, Erie raised its offer to.Sl 5,000. FF Paras. 20-28, above.


                   In pursuit of medical verification Erie ordered        an IME. that was performed in August.
          The IME confirmed that the March 2.013 Wrist Surgery was..accident-related. Within two

          weeks; Erie raised its offer again. In September, despite some ambiguity regarding Camiolo' s

          medical status, 11 Erie credited Dr: Snyder's opinion that ..'permanent residuals" werelikely, and

          once again increased its offer, this time to $25,000. DM l 747; FF Panis. 29-30.


                   Then, within a month after receiving Pr. Gillan's report that Ca61i0Jo had .suffered.a

          relapse, that his symptoms were regressing, thathe might suffer pain for the rest of his life, and

          that he might need additional surgery, Erie increased the offer again. FF Para, 44; above.

          Finally, when Erie offered the policy limits on February 7. JOJ 3, it was within days of learning

          of Camiolc' s even further regression and that. in response Dr.. Gil)on had ordered an MR

           Arthrogram. FF Paras. 4 7'-49.


                   Each step of the way, Erie acknowledged and credited.new information arid responded

           accordingly. While Camiolo may dispute the reasonableness of Erie's valuations, be has. no.



           iIOrthopedic Surgery and Rehabilitation Associates had reported on Septern ber 23, 20 I J, that Carmelo-enjoyed
           "excellent progress' arid "had no complaints .: DM .1776.
                                                                  15



·-·..   --··-----------------------------------------
      basis. for inferring had faith from the lapse of time between April. 1., 20 l3, and February 7.

      2014.


                   (b) On plaintiff's contention that other evidence supports a bad·faith claim.

               As already stated.Iow but reasonable valuations do not amount tobad faith. Jotmson                      i'.


      Progressive /11c. Co .• 987 A.2d. 781. 785 (P1,1,. Super. 2009) (noting that where there. is only a

      dispute as to the measure of damages in a first party claim, .a low, but reasonable valuation,

      will not-support .a claim of bad faith); Seto, 855 F. Supp: 2d 424/ Terletsky v. Prudential

      Property and. Casuatty.Ins, Co., 649 A.2d 6.80, 688.-89 (Pa. Super. 1994) (finding that where

      questions exist regarding value, low settlementoffers do not support a bad faith claim).

      Moreover, no insurancecompany is obligated to tender the policy limits without an evaluative

      process comparable to. that.used in a.third-party claim. Condio, .899 A.2d at .L 145 (observing

      that a carrier 's duty of good faith does not. "require an insurer to sacrifice its own interest by

      blindly paying each and every claim submitted by an insured .. :,.').


               Camiolo nevertheless argues. that an inference-of bad.faith is supported by evidence: (a)

      of Erie's low valuationsr'" (b) that Erie ordered a second IME; (c) that Erie asked Dr. Snyder to

      defer writing his report on the August, 2013, examination; (d) that Erie irnpermissibly credited.

      itself twice with the $50,000 that Camiolo received in the third-party settlement; and (e) that

      Erie has a policy not to "negotiate against itself" where, as here, the insured never counter-

      offers. As discussed below, the. court finds thatnone of these contentions has merit, either on

      its own.or together with the others.




      12 The record contains   no evidence that Camiolo documented any claim for future medical expenses.   Day 4 at 63.


                                                              16



-k-••·---·---·--·--------------------------------------- ·---
                (i)      On plaintifrs, contention that bad.faith must be inferred because
                         Erie's.offers. were unsupported by the medical.evidence,

       The plaintiffargues that since there was no medical basis for its offers, Eric. exhibited

bad faith, First, he says that the valuation behind outstanding offerof $7,500, on April I. 2013.•

lacked sufficient medical evidence and. therefore, was patently unreasonable. Second, and

more particularly, he.contends that in its June 27, 2013, offer of S..t 5.000, Erie failed to

consider his March 2013 Wrist Surgery. These facts, asserts the plaintiff. show that Erie acted

unreasonably. The court rejects both contentions,


                                                                                13
        Regarding theoffer of $7 ;500 that remained outstanding on April l.2017, there is

little dispute regarding theabundance of medical history in Erie's. files on that date .. FF Paras -,

21-23. Further, the court.credits Erie's evidence.Including testimony at trial. considered

Camiolo' s medicalhistory, the fact that his treatment was ongoing, and conducted jury verdict

research to guide its valuation. On the. basis the research, Erie estimated that (he total value for

Camiolo's injuries foll in a. range of $50,000 and $75,000. After discounting the $50;000

Camiolo received in his third-party claim, Erie offered $7 ,500,. based on total value of $57,500.

FF Paras. 20-23. Reasonable minds might differ on whether this was a fair assessment of

Camiolo's injuries in April 2013. The.court, cannotdeduce from the record. however, that the

offer was without support or that. Erie was unreasonable in awaiting further information about

Camiolo's ongoing treatment




13The court does not consider any implication that this number, formulated well before April I.2013, was the
productof pre-April bad faith-conduct on the part of E'.rie. Camiolo' s burden is to show with clear and
convincing evidence that Erie en�agect in bad faith aner April t. zo 13,
                                                      17
               The secondargument e-rhat Erie ignotedCamiol-0's March 2013 Wrist Surgery when

      making. its June 27, 2013; offer of $15.000-- is patently baseless. The evidence is that the June

      offer actually was triggered by notice of the March 2013 Wrist Surgery; FF Paras, 24-28 .

      Since Erie had only notice of the surgery, it was not unreasonable to reserve j udgment until a

      medical assessment was available. When Erie received thatassessment from Dr. Snyder, Erie

      increased the.offer again. FF Paras. :30-32. The court finds that Erie articulated a plausible

      basis for its valuation and cannot find any hint of bad faith in this course of events.


                       (Ii)     On plaintiff's contention that .bad faith must be inferred from Eric's
                                request for a second indcpcndenttnedical examination.
               Plaintiff argues that bad faith must he inferred fromthe fact that Erie ordered a second

      independent medical examinations, even: though normally it does riot do . so.!" Oi1 this ground,

      he-need show only that the Erie's conduct lacked any reasonable basis. Id This he was unable

      to do.


               The.accident was on June 10,.2009. The firstJME on February 28, 2011, was ordered

      in order to establish what. PIP benefitsCamiolo was owed. The second lME                     was performed on
      August.o, 2013,. two and half years after the first. In between the. two examlnauons, Eriets files

      showed a11 on-again off-again treatment history, includingadditional surgery. in March of 2011

      (elbow) and then again      in March of 2013 (wrist).         Further.jhese two medical events bracketed

      a second automobile accident. Erie ordered the second IME expressly to address the

      implications of the March 2013 Wrist Surgery and under all the facts and circumstances of the




      1�In. this. argument, Camiolo appears to have considered.an request for. a second !ME to be evidence of ill.motive.
      This is no longer a claimant's burden, however. «tmkoskJ' • supra,

                                                               18



···-···--·-------------------------------------------------
          claim history, the. court finds rib. basis to. question the reasonableness of Erie's judgment, more

          than four years after the 20(}9 accident, that another IME was warranted.


                          (iii)   On plafotiff's contention that bad faith must be inferred from Eric's
                                  deferral of Snyder's ,v:rittcn. report

                   Deferred writing. It is undisputed that defense counsel asked Dr. Snyder to defer

          writing the.report ofhis August 5, 2013. lME, and that the report was not written and. produced

          until October. of 2013.. N .T. 07J 0.17 at I 07. This. says Camiolo, is clear and convincing

          evidence that Eric deliberately Withheld vital information from the plaintiff for the purpose of

          unfairly handicapping him in negotiations. In addition, he argues that the failure fr> produce the

          IME.re.port in accordance with Pa.R.C.P. No. 4010 was 'i:1 procedural defect that in itself

          requires a. finding of bad faith;


                   Regarding the decision to defer the writing of the IME report, Erie's defense counsel

          testified that they had hoped to settle the matter without having to incur the extra] i tiJ�Ation cost

          associated with preparing   a. report for litigation,   06.29. 17.at.89, 94.:95� 07. I 0.17 at 104. l 07;

          Indeed, defense counsel instructed Dr. Snyder finally to write up the. report only after a pre .. trial

          conference had been scheduled. id:



                   The court finds the.testimony to b.e credible in light ofthe events following Dr,

          Snyder's August of 20l3'1M.E. A month before that examination; Erie reviewed Dr, Gillon's

          May of 2013 opinion that (a) the March 2013 W rist Surgery was .due to the. 2009 accident and

          (b) thatCarniolo was expected-ta make a full recovery, with.partial disability for six months.

          DMl677.     Since the March2013 Wrist Surgery itself was at odds withDr. Gillon's 2012 report
           that.Camiolos prognosis wasexcellent and thathe wouldnotneed surgery.iit was reasonable

                                                              19


···-··-·-·------   --------------------------------------
forErie to order the IMEthat was conducted on August 9, 2013 .. On the basis-ofSnyder's

verbal report.additiorialjury verdict research, and defense counsel's reeommeridation, Erie

increased its.' offer $25,000, on August 9: 2013, representing a total recovery in .a range of

$75,000 to $80.000. DMl702; 0Ml687; N.T. 05.22.17 at 32. Erie. advised plaintiff's

counsel, this offer was based on, among other things, Dr. Snyder's conclusion thatCamiolo

was correct in.his contention that the 2009 accident and the March 200 Wrist Surgery were

related.


           In further discussions.on September I&, 2013, Dr. Snyder confirmed to defense counsel

his opinion thatnot .only was. the March 2013 Wrist.Surgery related to the 2009 accident. but

also that the surgery "may cause some permanent residuals."!' DM 1747. · Yet at the same

time, as already mentioned, Rehab, Associates reported on September 23, 2013; that Carniolo

was enjoying. "excellent progress>' and had "no complaints." DM 1766. Despite the ambiguity

presented bythe Rehab Associates' records, Erie increased the offer to $35;000 Oil October 8,

2013, at which time plaintiffs counsel had Dr. Snyder's written              report in hand.       DM062fr


           Accordingly, the. court finds no basis to doubt the testimony of defense counsel that his

decision delaying the requestfor a written report was a matter of a trial strategy to contain

.costs. Nor does the court have any basis to reject the testimony of the. Erle representative that

Erie'soffers did not depend on receiving a written IME report. N.T. 05:22.17 at 120. It




15 The October 3, 2013. report the Dr. Snyder wrote indicated that the TFGC [wrist]    tear. was "surgically resolved"
           of
in March 2013.                                                                     .


                                                        20
           Rule 4010. Next, however; plaintiff claims that a bad faith finding is commanded by

 the factthat defense counsel violated Pa;R.C.P. No. 40 fO in failing to produce a copy ofa

    wri tten IME report for plaintiff in the course of litigation. Rule 40 IO provides, among other

 things, that a written report of a physical examination shall be provided to the opposing party,

 upon request.!" Accordingly, there is a duty in litigation to produce the findings ofan IME for

 the. opposing party, The rule does not, however, specify a time frame for delivery .of a report.

 Instead, jt authorizes a court, upon motion, to enter a remedial order if such a report is not

 produced. The: record is clear that plaintiff's counsel failed at any time               from August to October
 to file a motion for an order compelling its production or seeking exclusion as a sanction. Ede

 cannot be faulted for relying on such an expectation in litigation. And, since this court has.

 credited defense counsel's reason for deferringthe report it can find no basis in factor in law

 for declaring that a putative violation of Rule 401017 amounts to cleat and convincing evidence

of bad faith.


                   (iv)     On plaintiff's contention that bad faith must be inferred from a
                            calculation giving Erie double credit for the settlement in the UlM
                            claim.

           Next, Camiolo argues that bad faith 111ay be ·inferred from Er'icl s methodof calculation ..

Camiolo asserts that there were two injuries and that Erie valued. each injury separate It, but

failed to aggregate their total value before discountingthe $50,000 in settlement monies,




   " Specifically, Pa.R.C. P. No. 40 IO provides ''[i]" requesteel by the party against whom an ordee is made underthis
1

  rule.er the person examined, the pariy causing the examination to be made. shall deliverto the requesting party or
  person a: copy ofa detailed written reportofthe examiner setting out the examiner's findings, including results of
. all rests. made, diagnoses arid conclusions, ... The court oil motion may make ail order against a party requiring
  delivery Of areport Oil Stich terms as.are just, .and if an examiner failsor refuses.to Otake a report the COUrt shalJ
  exclude the examinen's testimony .if offered at trial." l'a.R.C.P. No. 4010(b)( I).            ·
17
   the.rule does not prescribe a delivery time and expressly authorizes.a motion to compel delivery if the opposing
party ls dissatisfied, Since no such motion was filed, it Is noteven ch:ur marmere was a =viotanon.:'        ·
                                                          21
                Specifically, plaintiffargues that "[i]f [Erie]. had done the calculation properly there would

               . have been $5Q,000.00to $75,00Q.OO for the ulnar nerve injury plus $85.000 to $90�000 for the

                TFCC [wrist] injury ora combined range of$l35,000.00 to $165,000.00less·$50,000 leaving a

                net combined range of$85,000.00 to $115,000.00." Plaintiff's. Paul Camiolo. BriefRe: The

                Liability Phase ofthe Trial, at [un-paginated] page +2.



                           The court credits the testimony of Erie's representative on this subject and rejects

                plaintiff's characterization of Erie's method of valuing theiUIM claim because it is-inconsistent

                with the evidence of record. First, Erie's representative testified clearly that upon learning of

                the re stilts of Dr: Snyder' s IME in September, the offer of $35;000 was based on the entire

                claim; incl tiding counsel's recommendation and verdict research. DM 1747; DMlJ63. N.T.

                05 .1 s: 17 at 104-05. She testified that the range for the total value of the left ulnar inj ury fell

                between $50,000. and $75;000:� discounting the $50,000 settlement funds thus. produced a. range

                for Erie's Iiability for the UIM portion of $0 to $20;000 (ulnar nerve), NT. 05.15.J 7 at H)9-

                 IO. Similarly. the range of the total value. of the TH:::c; ligament repair was $80,000 to

                $90�000� yielding. a: UlM portion of $30,000 to $40;000 (TFCC repair). Thus, the total

                valuation for the UIM liability was in the range of$30,000 to $60,0�0. The offer p($35;000

                onOctober 3� 2013, fell within that range and, as explained earlier, was not so unreasonable as

                to support a bad faith claim.


                                      (v)   On plaintiffs contention that bad faith must be inferred from Erie's
                                            negotiating posture in face of an insured's unyielding policy limits
                                            demand •.

                           Plaintiff challenges as indicative of bad faith the testimony of an Erie. representative

                that the insurer resists negotiating against itselfwhere, as 'here, the insured responds     to offers

                                                                   22


-·-·-···-·--··-·--··--···-·----..   --...                                                                                _
with no counter demand and never retreats from his demand from the policy limits. Plaintiff's

interpretation of this bit of testimony from Erie is counterintuitive. First. any good negotiator

routinely resists the efforts ofan opponent to get him or herto increase offers without the

prospect of concomitant counteroffer .. In managing a lJIM claim, it is. perfectly reasonable for

Erie to handle its negotiations as it would any third-party claim. Zappile, 9.2 A.2d 255-56.

(stating that UlM claims .are inherently adversarial); Condio, 899 A.2d at ll 45 (stating that

insurers are not obligated. to make unquestioned payments on claims) .. Second, regardless of

any .. policy" on the matter; Erie in fact negotiated againstitself when making successively

greater offers in face -of Carniolo 's unyielding demand for the policy limits. Thus, under the

facts and circumstances ofthis case, the evidence of Erie's negotiating posture is probative of

nothing of consequence, much less of the existence of statutory bad faith.



CONCLUSION

        ln accordance with the foregoing findings offact and conclusions of law. and the

.attendant. discussion, the court finds in favor of the defendant Erie and against plaintiff

Camiolo on plaintiff's claim M statutory bad faith .


                                                               . -�..    .
                                                  .,, .
                                               BY TUECOURT:


                                                  ·.'
                                                       l   .;�-?


                                                               ·' i: IL,cJ
                                                                   \..       '
                                                     '
                                               MARY U. COLINS, J..


DATE: __     J_1                       .

                                                 23.
