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Contracts
Breach of Contract
Breach of the Duty of Good Faith and Fair Dealing

Stanley Ellis v. Government Employee Insurance Company

Published: Jun. 28, 2024 | Result Date: Mar. 19, 2024 | Filing Date: Sep. 8, 2022 |

Case number: 2:22-cv-01580-WBS-JDP Summary Judgment –  Defense

Judge

William B. Shubb

Court

USDC Eastern District of California


Attorneys

Plaintiff

Ognian A. Gavrilov
(Gavrilov & Brooks)

Alexandra Darling
(Gavrilov & Brooks)

Matthew R. Richard
(Gavrilov & Brooks)


Defendant

James P. Wagoner
(McCormick, Barstow, Sheppard, Wayte & Carruth LLP)


Facts

Plaintiff Stanley Ellis was involved in a rear-end car accident with an uninsured motorist. At the time, Defendant Government Employee Insurance Company ("GEICO") covered Ellis with an auto insurance policy, which included uninsured motorist bodily injury coverage up to $100,000. Ellis promptly notified GEICO of the crash. Thereafter, when GEICO sent Ellis a series of medical record authorizations, he objected on privacy grounds and did not sign them. The claims adjuster offered Ellis $2,000 to settle, but Plaintiff refused. Over the next year, Ellis updated GEICO about the course of his treatment and sent limited medical records. GEICO offered Ellis $2,120 and stated that it still did not have enough medical records to offer substantially more money because he still refused to sign the requested authorizations. Ellis again refused the offer and said he would pursue arbitration if he did not receive a fair settlement offer; although he declined to say what a satisfactory settlement amount would be. The case eventually proceeded to arbitration. After some dispute about the medical necessity of surgery, GEICO ultimately paid Ellis his demanded maximum coverage amount of $100,000. He nevertheless filed suit, seeking costs incurred to prosecute his insurance claim, interest on the delayed insurance payout, and punitive damages.

Result

The court found that GIECO's alleged delay in paying Ellis a then-undefined amount (with respect to the $2,000 and $2,120 offers) was indisputably reasonable, given the limited records and information it its possession. Likewise, the dispute regarding the need for surgery did not evince bad faith. Further, it was undisputed that GEICO ultimately paid the full $100,000. The court thus granted summary judgment for GEICO.


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