The judges of the Third Circuit recently affirmed summary judgment for Nationwide in a bad-faith suit filed by the owner of an apartment building that had suffered severe fire damage. The case is called Washington Street, LLC v. Nationwide Property & Casualty Insurance Company, 2023 U.S. App. LEXIS 24243 (3d Cir. 2023). 

An apartment building burned down after one of the tenants negligently caused a fire. The building owner, Washington Street, LLC, promptly reported the fire damage and submitted a claim to Nationwide. The first payment under the policy was issued to Washington Street six weeks later, after its attorney complained to Nationwide about how slowly the process was moving. When the payment was made, Nationwide acknowledged the payment was incomplete and agreed it would be subject to change if additional repairs were needed or more damage was found. 

Washington Street submitted a repair estimate that had not been included with Nationwide's initial report. Nationwide hired a consultant to evaluate the estimate and, based on the consultant's findings, issued a second policy payment. Washington Street was dissatisfied with the amount of the second payment and invoked the policy's appraisal clause. At the end of appraisal, the umpire awarded damages to Washington Street that exceeded the Nationwide policy limit, and Nationwide paid the full policy amount.