A Reasonable Dispute of Facts Concerning Coverage is not Bad Faith

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USAA General Indemnity Company and the plaintiff, Bobby Fuentes,  as Administrator of the Estate of Alejandro Santos, decedent, (“Santos”), both moved for summary judgment. based on disputed facts concerning the residence of the decedent. In Fuentes v. USAA , USDC, Pennsylvania (April 1, 2021) Fuentes presented a claim for underinsured motorist (“UIM”) benefits with defendant seeking coverage related to Santos’ fatal accident. The parties basically dispute whether Santos qualifies as an insured “family member” under the insurance policy defendant issued to plaintiff.

ZALMA OPINION

It seems, recently, that every claim denial – no matter how well reasoned and handled – will result in a bad faith claim. This case teaches that although there was a dispute of material facts as to coverage sufficient to defeat a motion for summary judgment the decision to deny coverage was reasonable since Santos did not live in the Plaintiffs’ house. Therefore, as a matter of law, there was no case of bad faith.