Opinion
J-A08011-19 No. 760 WDA 2018
10-10-2019
TIMOTHY A. MOHNEY Appellant v. AMERICAN GENERAL LIFE INSURANCE COMPANY, AS SUCCESSOR BY MERGER TO AMERICAN GENERAL ASSURANCE COMPANY, AS SUCCESSOR IN INTEREST TO U.S. LIFE CREDIT INSURANCE COMPANY
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
Appeal from the Judgment Entered May 14, 2018
In the Court of Common Pleas of Armstrong County
Civil Division at No(s): 1995-0764-Civil BEFORE: PANELLA, P.J., STABILE, J., and McLAUGHLIN, J. MEMORANDUM BY PANELLA, P.J.:
Timothy A. Mohney, appeals from the judgment entered after the trial court entered a non-jury verdict against Mohney's insurance bad faith claims against Appellee, American General Life Insurance Company ("American"). Mohney had sued American as a successor company to U.S. Life Credit Insurance Company ("U.S. Life"), based upon allegations of insurance bad faith against U.S. Life. The trial court ruled that Mohney had failed to carry his burden of proving the claims by clear and convincing evidence. Mohney raises six issues on appeal, which can be loosely grouped into two categories: (1) challenges to the trial court's decisions on discovery matters, and (2) challenges to the trial court's evidentiary rulings. After careful review, we affirm.
The torturous course of the proceedings before the trial court were protracted and problematical. Mohney's original complaint involved multiple claims based upon numerous theories and was dismissed after U.S. Life filed preliminary objections. After the trial court granted, in part, U.S. Life's preliminary objections to Mohney's first amended complaint, Mohney filed a second amended complaint, which forms the basis for the proceedings currently under review.
After this Court twice remanded this case to the trial court for further proceedings, the only remaining issue is based upon Mohney's claim that U.S. Life exercised bad faith in denying his claim for total disability benefits under his insurance policy with U.S. Life. This claim had been twice dismissed by the trial court, once pre-trial and another after trial. In both instances, this Court reversed and remanded for further proceedings
A second bench trial was held in September 2017, presided over by then Senior Judge William J. Ober (retired). Senior Judge Ober entered a verdict following the trial, finding that Mohney did not prove that U.S. Life, American's predecessor, had knowingly or recklessly "disregarded the lack of a reasonable basis for its" denial and termination of the payment of credit disability benefits. Adjudication and Verdict, 12/20/17 at 2-3.
After Mohney's filed post-trial motions, the case was reassigned to the Honorable Chase G. McClister of the Court of Common Pleas of Armstrong County, Pennsylvania, because Senior Judge Ober had retired. On May 4, 2018, Judge McClister denied the post-trial motions. Later, Judge McClister filed a comprehensive Memorandum Opinion, comprised of 16 pages, on July 20, 2018, fully explaining the reasons supporting Senior Judge Ober's verdict.
Appellant raises six issues on appeal:
1. Reversal of discovery sanctions tends to make it more advantageous for the offending party to withhold information. Instantly, long after expert witness disclosures were required, just before trial, Defendant disclosed its insurance expert. The first trial judge found Defendant's offending conduct was willful, intentional and ongoing, striking Defendant's insurance expert. After appeal and remand, Defendant sought reversal of the discovery sanctions, which the third trial judge granted. Was it error for the third trial judge to reverse the sanctions entered by the first trial judge?
2. An insurer must have a reasonable basis to terminate disability benefits. This Court previously determined that Defendant unreasonably relied upon an equivocal medical opinion to terminate Mohney's [d]isability [b]enefits. Defendant's expert rejected this finding by opining that reliance on the equivocal medical opinion was proper according to industry standards. The [t]rial [c]ourt accepted this testimony and found that Defendant did not act recklessly or with a knowing disregard of its lack of a reasonable basis. Did the trial court err in finding that Defendant's reliance upon the equivocal medical opinion complied with industry standards?
3. During claims handling, if an insurer makes misrepresentations to the insured, the insurer violates industry standards. The misrepresentations are evidence
that the investigation of the claim was neither honest nor objective. This Court determined that Defendant made misrepresentations to the insured during the investigation. The trial court determined that Defendant's claims handling complied with industry standards and therefore Defendant's conduct could neither be reckless nor knowing. Did the trial court err?Appellant's Brief, at 5-6 (footnote omitted).
4. Expert Opinions must be supported by credible facts and not be based upon speculation. Defendant's expert opined that Defendant met industry standards by providing adequate training on legal interpretations of policy terms, and by providing the adjusters with direction as to when they should seek guidance (i.e., legal research) from the available staff attorneys. Defendant's expert relied upon the adjuster's testimony. The adjuster's testimony about training was vague and superficial. Did the trial court err by relying upon the unsupported opinion of Defendant's expert?
5. The analysis of an insurer bad faith claim is dependent on the conduct of the insurer, not its insured. Instantly, this Court held: "on remand, evidence of Mohney's post-denial conduct should not be admitted." During the second bad faith trial, Defendant was permitted, over Plaintiff's objection, to introduce evidence of post-denial conduct of the Plaintiff. Did the trial court err by admitting evidence which this court previously determined to be inadmissable?
6. A reasonable investigation to determine whether a claim should be paid requires the insurer to review all available information whenever it is received. Bad faith conduct can occur before, during, and after litigation. Plaintiff sought discovery to learn what investigation Defendant conducted on the disability claim based upon information the insurer received after the breach of contract claim was filed, litigated, and appealed. The trial court refused to compel Defendant to respond to this requested discovery. Did the trial court err?
In reviewing the outcome of a nonjury trial, we are limited to determining whether the trial court's factual findings are supported by competent evidence, and whether the court properly applied the pertinent law. See Prestige Bank v. Investment Properties Group , Inc., 825 A.2d 698, 700 (Pa. Super. 2003). "[A]bsent an abuse of discretion, the reviewing court is bound by the trial court's credibility determinations." De Lage Landen Financial Services , Inc. v. M.B. Management Co., Inc., 888 A.2d 895, 898 (Pa. Super. 2005). Those findings must be afforded the same weight and effect as a jury verdict and will not be disturbed on appeal absent an error of law or an abuse of discretion. See Prestige Bank , 825 A.2d at 700.
After a thorough and meticulous examination of the record, and a careful review of the briefs, we find that the Adjudication and Verdict of December 20, 2017, the Order of May 4, 2018, and the Memorandum Opinion of July 20, 2018, adequately address all of the issues raised by the Appellant, and are more than sufficiently supported in the record. Therefore, we affirm on the basis of the aforesaid decisions by the trial court.
Judgment Affirmed. Jurisdiction relinquished. Judgment Entered. /s/_________
Joseph D. Seletyn, Esq.
Prothonotary Date: 10/10/2019
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