                                                                                                                           Opinions of the United
2002 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


1-29-2002

Fasanya v. Allstate Indemnity
Precedential or Non-Precedential:

Docket 1-1522




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Recommended Citation
"Fasanya v. Allstate Indemnity" (2002). 2002 Decisions. Paper 53.
http://digitalcommons.law.villanova.edu/thirdcircuit_2002/53


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                                              NOT PRECEDENTIAL

             UNITED STATES COURT OF APPEALS
                 FOR THE THIRD CIRCUIT
                     ___________

                    No. 01-1522
                    ___________

                    PETER FASANYA,

                                              Appellant

                          v.

             ALLSTATE INDEMNITY COMPANY
                     ___________

  On Appeal from the United States District Court
      for the Eastern District of Pennsylvania

District Court Judge: The Honorable Louis C. Bechtle
            (Civil Action No. 00-cv-02068)
                     ___________

    Submitted Under Third Circuit L.A.R. 34.1(a)
                  January 17, 2002

Before:   RENDELL, FUENTES, and MAGILL, Circuit Judges.

           (Opinion Filed: January 29, 2002)
                ________________________

                   MEMORANDUM OPINION
                ________________________
FUENTES, Circuit Judge:
     Plaintiff Peter Fasanya commenced this action against defendant
Allstate
Indemnity Company ("Allstate") under 42 Pa.C.S.   8371 alleging bad faith
denial of
insurance coverage. The defendant responded that it had a reasonable
basis for its
coverage decision, namely, that Fasanya's policy had lapsed because he had
failed to pay
his premiums. Both parties filed summary judgment motions, and, on
December 28,
2000, the District Court granted Allstate's summary judgment motion and
denied all other
pending motions as moot. Plaintiff appeals.
     Because we agree with the District Court that no genuine issue of
material fact
exists and that Allstate was entitled to judgement as a matter of law, we
will affirm.

                               I.
     Since the facts of this case are well known to the parties, we state
them only in
summary. Fasanya purchased an automobile insurance policy from Allstate
sometime
before May 2, 1998. On May 13, Allstate sent a bill to Fasanya requesting
a minimum
payment of $161.09. When no payment was received, Allstate sent Fasanya
an
Automobile Cancellation Notice for Non-Payment of Premium dated June 12,
1998. The
notice stated that the minimum amount due was now $327.18 and that
Allstate would
cancel the policy if it did not receive that amount by 12:01 a.m. on July
2, 1998.
     On July 1, 1998, Fasanya's wife mailed $200.000 along with the
payment stub
from the cancellation notice to Allstate. This was $127.18 less than the
minimum amount
due. Allstate received the payment on July 3, and then, on the same day,
sent an
Automobile Insurance Special Notice to Fasanya, which stated:
     Please be advised that your cancellation effective date is/was 12:01
a.m. on
     July 2, 1998. Your payment of $200.00 was received on July 3, 1998.
This
     amount has been applied to your policy; however, as of the date of
this
     notice, we still have not received the full minimum amount due.
Please
     note that the Cancellation Notice previously sent to you on June 12,
1998
     will be enforced unless the full Minimum Amount Due is received on or
     before July 2, 1998. In order to avoid having your policy cancel, we
must
     receive an additional payment of $132.18 before 12:01 a.m. on July 2,
     1998. Otherwise, your policy will terminate according to the
Cancellation
     Notice we previously sent you. The amount due includes a payment fee
of
     $5.00. If you have any questions, please contact your agent.

Plaintiff received the Special Notice on July 7.
     On July 11, Fasanya was involved in an automobile accident. On July
13, he
mailed the remaining payment of $132.18, which Allstate received on July
16. On July
23, Fasanya notified Allstate of the accident. Allstate denied coverage
on Fasanya's
claim, informing him that his policy had lapsed from July 2, 1998 until
July 16, 1998.
Allstate claims that it had sent an Automobile Policy Reinstatement Notice
to Fasanya on
July 16, indicating that his policy had experienced the above-described
lapse in coverage.
Fasanya, however, claims that Allstate failed to provide him with a notice
of
reinstatement. Fasanya also alleges that, during a telephone call on July
30, 1999, Esther
Egbert, an Allstate adjuster, informed Fasanya's counsel that the Fasanya
policy had not
lapsed once during its entire term from November 1997 through March 1999.
Fasanya's
counsel conceded, however, that Egbert subsequently connected him to
another Allstate
employee who reiterated that the policy had lapsed.

                              II.
     We have appellate jurisdiction over this matter pursuant to 28 U.S.C.
  1291. Our
review of a district court's grant or denial of a motion for summary
judgment is plenary.
See Witkowski v. Welch, 173 F.3d 192, 198 (3d Cir. 1999). The general
standard that we
apply is the same as that employed by the district court under Federal
Rule of Civil
Procedure 56(c). See Kelley v. TYK Refractories Co., 860 F.2d 1188, 1192
(3d Cir.
1988). Accordingly, a district court's grant of summary judgement will be
deemed proper
only if it appears "that there is no genuine issue as to any material fact
and that the
moving party is entitled to judgment as a matter of law." Fed. R. Civ. P.
56(c). In
reviewing the record, we are required "to view inferences to be drawn from
the
underlying facts in the light most favorable to the party opposing the
motion, and to take
the non-movant's allegations as true whenever these allegations conflict
with those of the
movant." Bartnicki v. Vopper, 200 F.3d 109, 114 (3d Cir. 1999).

                              III.
     To state a claim for bad faith denial of insurance coverage under
Pennsylvania law,
a plaintiff must prove by clear and convincing evidence that his insurer
(1) lacked a
reasonable basis for denying coverage, and (2) knew or recklessly
disregarded its lack of
a reasonable basis. See Adamski v. Allstate Ins. Co., 738 A.2d 1033, 1036
(Pa. Super. Ct.
1999) appeal denied, Goodman v. Durham, 759 A.2d 387 (Pa. June 29, 2000).
We
conclude that Allstate had a reasonable basis for denying Fasanya's claim
and, thus, agree
with the District Court's finding that Allstate is entitled to judgment as
a matter of law.
     The undisputed facts show that Allstate sent a cancellation notice on
June 13,
1998, that Fasanya failed to pay the minimum amount due by July 2, 1998,
and that
Allstate did not receive the remaining portion of the minimum payment
until July 16,
1998. Accordingly, there was a lapse in coverage from July 2, 1998 to
July 16, 1998.
Fasanya seeks coverage benefits from Allstate for an accident that took
place on July 11,
1998. Since the policy was not in effect on the date of the accident, we
conclude that
Allstate had a reasonable basis for denying coverage.
     Fasanya argues that his insurance policy should not be deemed to have
lapsed
because Allstate took actions which led Fasanya reasonably to expect
continued coverage.
 More specifically, he contends that the language of Allstate's Special
Notice created a
reasonable expectation of uninterrupted coverage. We disagree. The first
line of the
Special Notice reads, "Please be advised that your cancellation is/was
12:01 a.m. on July
2, 1998." The notice further states, "In order to avoid having your
policy cancel, we must
receive an additional payment of $132.18 before 12:01 a.m. on July 2,
1998." While we
recognize that the Special Notice was sent a day after the cancellation
date, we find that it
unambiguously informed Fasanya (in accordance with the Cancellation Notice
dated June
12, 1998) that his policy lapsed on July 2, and that, absent full payment
of the minimum
amount due, his policy would remain cancelled.
     We have carefully considered Fasanya's remaining arguments in this
appeal and
conclude that they lack merit.

                              IV.
     For the reasons stated above and in the District Court's thorough and
well-reasoned
opinion, we will affirm the Judgement of the District Court.

_____________________________
TO THE CLERK OF THE COURT:

Kindly file the foregoing Opinion.




                                        /s/Julio M. Fuentes
                                        Circuit Judge
