After a car accident, Zhaojin Ke filed a claim with Liberty Mutual, his insurer, for repair of his van. Since the cost of the repairs would have reached the market value of the van itself, if it did not exceed the value, Liberty Mutual offered him the van's market value instead. Mr. Ke was not happy and demanded that Liberty Mutual pay for the repairs. When it refused, Mr. Ke and claimed that Liberty Mutual had tricked him into buying insurance, violated the insurance policy and handled his claim in bad faith. I Z haojin David Ke v. Liberty Mutual Insurance Company, Civil Action No. 20-1591, United States District Court, E.D. Pennsylvania (November 9, 2021) resolved the USDC claims while giving extra concern to the claims of Mr. Ke who sued in propia persona.
Mr. Ke drove through Philadelphia. on an icy road, which caused him to bump into the car in front of him. His right headlight and the right corner of his bumper were damaged. Following Liberty Mutual's instructions, Mr. Ke of his car at a workshop for a repair estimate.
That day, Liberty Mutual's claims controller approved repairs to the van, but quickly went back. The body shop estimated that repairs would cost at least $ 3,389.17. Liberty Mutual's appraiser valued the car at $ 3,725.00. Since the repair estimate was almost the value of the van, Liberty Mutual labeled the van as a "total loss". So Liberty Mutual offered Mr. Ke 3,613.04 USD, or the van's cash value (3,725 USD) plus taxes and fees (388.04 USD), less the insurance deductible of 500 USD.
Mr. Ke did not agree that the van was "total" and demanded that Liberty Mutual pay for the repairs. Mr Ke did not accept Liberty Mutual's offered payment. Instead, he withdrew his vehicle from the workshop, without a salvage certificate. He then sued Liberty Mutual.
Mr. Ke sued for breach of contract and unfair profit. He also accused Liberty Mutual of handling his claims in bad faith and engaging in unfair trading practices . The parties have submitted a request for a summary judgment in all claims. Ke has also chosen to exclude the expert report from Kevin M. Quinley, Liberty Mutual's expert on "insurance management".
Liberty Mutual's expert can testify to industry practice but not opinions on bad faith
Mr. Ke's claim in good faith, Liberty Mutual offers an expert report from Kevin M. Quinley, an insurance claims expert who would probably testify along the same lines as his report, namely that Liberty Mutual handled Mr. Kes' statement in line "with … industry standards, customs and practices." Mr Ke is trying to rule out this report. He did not claim that Mr. Quinley was not qualified. Given that Mr. Quinley has over 40 years of experience in insurance claims and so has "specialist knowledge" he was exceptionally qualified.
In forming his view, Mr. Quinley what he describes as a qualitative method: he compared Liberty Mutual's actions here to what he has seen happen with other insurance claims over the last four decades to determine if Liberty Mutual complied with industry standards. Experts do not have to be scientists or mathematicians. The rules of evidence allow experts with "scientific, technical or other specialized knowledge." Fed.R.Evid. 702 (a); se Kumho Tire Co. v. Carmichael, 526 U.S. Pat. 137, 150 (1999) Mr. Quinley's method is how experts usually testify to the customs and practices of the industry
Mr. Quinley's testimony is relevant
Expert testimony that Liberty Mutual complied with industry standards may be evidence that an insurer acted in good faith and vice versa.
The parties are bound by the written terms of their insurance. If these terms are "clear and unambiguous", the court gives them their clear meaning. Mr Ke bought a collision insurance policy. For him, this means that Liberty Mutual must pay to repair its vehicle, regardless of cost. But that's not what his policy says, or ever said.
According to the policy, Liberty Mutual was able to pay the "real cash value" of the van or "the amount required to repair or replace it". In other words, Liberty Mutual does not have to pay for the repairs if it will cost as much or more than the vehicle is worth. The van was worth $ 3,725.00. In comparison, the repairs were valued at $ 3,389.17. But that was just a "preliminary estimate based on visible damage." Once the van has been "disassembled", mechanics can find "additional damage" that requires "additional repairs". After all, Mr Ke's car was almost 14 years old. Mr. Ke even realized that the original quote would probably not cover all the necessary repairs. By offering Mr. Ke the value of his van rather than repairing it, Liberty Mutual did not break the agreement.
To try to get around this plain language, Mr. Ke on an ad from Liberty Mutual that explains that "Collision Insurance is a supplementary protection that pays the cost of repair or replacement [a vehicle] minus the amount of [the] deductible." However, this advertisement from Liberty Mutual's website is not in itself part of the insurance contract. Instead, it is "an invitation to [Mr. Ke] to … buy" this additional coverage. Even if it had been part of the contract, Liberty Mutual would have adhered to the terms of the advertisement. The ad promised to pay for "the cost of repairing or replacing" his van. Liberty Mutual chose to replace, not repair.
Despite the clear wording of the policy, Mr. Ke that the sales agent promised otherwise. Mr Ke claims that Liberty Mutual's sales agent promised him by telephone that Liberty Mutual would provide "full insurance". But to promise "full insurance" is at best a promise to put Mr. Ke in a situation comparable to where he was before the accident. It is not a promise to pay for repairs, regardless of cost. No reasonable jury member could find that Mr. Ke reasonably expected Liberty Mutual to pay for repairs without conditions, terms or exceptions – especially when his insurance contract contained plenty. Liberty Mutual complied with the agreement by offering to replace Mr. Kes van. No reasonable jury member could find that Mr. Ke reasonably expected something else. Thus, the court grants Liberty Mutual a summary judgment on this claim.
In addition, Mr. Ke did not present any evidence that the sales agent knew that his promise was false or intended to mislead Mr. Ke. Since Mr. Ke has not pointed to evidence in the journal to show fraudulent behavior, his claim can not stand.
Liberty Mutual did not have to pay for repairs, rather than a compensation
In Pennsylvania, a vehicle is a economic "total loss" if it costs more to repair it than the vehicle is worth. His van was valued at $ 3,725.00; the repairs were estimated at $ 3,389.17 and are likely to be even higher. Since the "cost of repairing" the van is equal to or "exceeds its estimated value minus the salvage value [its]or the price at which the damaged van could be sold, the van was a total economic loss.
When Mr. Ke said he wanted to keep his van, Liberty Mutual told him he could do it "and still get a payout" – as much as $ 3,613.04 – but he "would need to get a Pennsylvania DMV salvage title on the van and give [19459059
Since Mr. Ke has not borne his burden, and Liberty Mutual has, the court granted Liberty Mutual's claim for summary judgment. USDC concluded that no reasonable member of the jury could find that Liberty Mutual did any of the Mr. Ke accused. Neither the insurance nor good faith required Liberty Mutual to arrange the repair of Mr. Ke's van, rather than pay him the value of the van.
This case is proof of the old adage that "no good deed goes unpunished." Here, Liberty Mutual agreed to pay the value of the van, an amount that exceeded the estimated repair cost and waives its right to reduce its loss by selling the salvage. more than $ 2,000, Liberty needed to defend the trial, hire an adviser and an excellent expert witness. In that way, Mr. Ke punished Liberty for adjusting his statement fairly and in good faith and in accordance with the clear and unambiguous language of the policy. If a lawyer brought an action, it is very likely that the lawyer would have been sanctioned by the court.
© 2021 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his internship to the position of insurance consultant specializing in insurance coverage, insurance claims handling, bad faith and insurance fraud almost equally for insurers and policyholders.
He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as a lawyer for insurance coverage and claims management and more than 54 years in the insurance industry.
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He is available at http://www.zalma.com and email@example.com. Zalma is the first recipient of the first annual Claims Magazine / ACE Legend Award. For the past 53 years, Barry Zalma has devoted his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their claimants to become professionals in insurance claims.
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