Rachel Sasse v. Progressive Advanced Insurance Company

• Court: District Court, D. Arizona
• Decided: February 9, 2026
• Docket: 2:23-cv-02029
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Rachel Sasse, No. CV-23-02029-PHX-ROS

10 Plaintiff, ORDER

11 v.

12 Progressive Advanced Insurance Company

13 Defendant. 14 15 Defendant Progressive Advanced Insurance Company’s Motion for Summary 16 Judgment is before the Court. (Doc. 66). Plaintiff Rachel Sasse alleges bad faith in 17 Progressive’s handling of her underinsured motorist claim. Defendant moved for summary 18 judgment, arguing that no evidence in the record supports a finding of bad faith and 19 contending the Court should find its conduct in handling Plaintiff’s claim adequate as a 20 matter of law. (Doc. 75 at 7). For the reasons set forth below, the Motion will be denied. 21 I. Background1 22 a. Initial Claim 23 On October 7, 2021, Plaintiff was injured in a motor vehicle accident. (Doc. 1-3 at 24 2). Plaintiff suffered injuries including a mild traumatic brain injury. (Id.). The insurance 25 provider of the at-fault driver, State Farm, paid Plaintiff the limit of the at-fault driver’s 26 coverage, $100,000.00. (Id.). On April 14, 2022, Plaintiff submitted a claim to Defendant 27 Progressive Advanced Insurance Company under her own underinsured motorist policy

28 1 Unless otherwise noted, the facts as set forth here are undisputed or not subject to reasonable dispute based on the parties’ proffered evidence. 1 (“UIM Policy”), requesting the policy limit of $100,000. (Id.). In her demand, Plaintiff 2 submitted information on her injuries and diagnoses, medical bills totaling $44,041.00, 3 (Doc. 67-1 at 48-50), and a report (Doc. 67-1 at 29-33) from neurologist Dr. Allan Block 4 reviewing her injuries and treatment. (Doc. 67 at ¶ 7). 5 Defendant’s adjuster Rachel Grambo reviewed Plaintiff’s claim and determined 6 Plaintiff “ha[d] been fully compensated for her injuries.” (Doc. 67-1 at 52). Ms. Grambo 7 denied the claim on April 21, 2022, stating “. (Doc. 67-1 at 52). On April 26, 2022, Ms. 8 Grambo’s supervisor, Brian Sowards-Sulcer, reviewed the file, and indicated that there was 9 no “indication of permanency” or “cognitive impairment rating.” (Doc. 67-2 at 222). He 10 noted that Plaintiff’s records indicated she was “doing well overall,” “well-adjusted to 11 medication,” taking several medications, and working with therapists, including cognitive 12 therapists, and the BNI Concussion Institute, and she “ha[d] slowed down with her work.” 13 (Doc. 67-2 at 220). On May 18, 2022, Plaintiff demanded arbitration of the dispute. (Doc. 14 67 at ¶ 9). 15 b. Discovery and Settlement Offers 16 Plaintiff submitted her initial disclosure statement on September 23, 2023 (Doc. 67- 17 1 at 61-66). Plaintiff then underwent an Examination under Oath on September 30, 2022, 18 during which she testified to “a lot of things that [Defendant] didn’t previously know about 19 and to things that weren’t documented in her medical record” and “her ongoing 20 complaints.” (Doc.67-1 at 72). Defendant determined that an independent medical 21 evaluation (“IME”) was necessary “to assess [Plaintiff’s] ongoing complaints” should she 22 reject their $2,500 settlement offer. (Docs. 67 at ¶ 30; 67-1 at 75). Plaintiff rejected the 23 offer, and the IME was scheduled for and conducted on January 24, 2023. (Doc. 67 at ¶ 14, 24 16). Plaintiff submitted a third Supplemental Disclosure Statement on February 9, 2023, 25 identifying Lora White, an expert witness for life care plans, and providing her report 26 valuing the cost of Plaintiff’s future care at $280,784. (Doc. 67-1 at 92, 95-99). On 27 February 17, 2023, Progressive made Plaintiff a settlement offer of $20,000. (Doc. 67 at ¶ 28 10). On February 20, 2023, Dr. Block submitted a supplemental report reviewing Plaintiff’s 1 treatment history and ongoing symptoms, noting continued struggles with headaches, 2 cognitive and personality changes, and pain, and opining on her future prognosis and 3 continuing medical care needs. (Doc. 67-1 at 81-90). 4 c. Arbitration 5 On March 29, 2023, the parties appeared before an arbitration panel of three: one 6 arbitrator chosen by Plaintiff’s attorney, one chosen by Defendant’s attorney, and one 7 agreed upon by the other two. (Doc. 1-3 at 4). A majority of the arbitration panel2 found 8 Plaintiff’s total damages from the accident to be $350,000.00. Doc. (67-1 at 116). Pursuant 9 to the award, Defendant paid Plaintiff the $100,000.00 limit of her UIM Policy coverage 10 on April 6, 2023. (Doc. 67 at ¶ 20). 11 II. Legal Standards 12 a. Summary Judgment 13 A court must grant summary judgment if the pleadings and supporting documents, 14 viewed in the light most favorable to the nonmoving party, “show that there is no genuine 15 issue as to any material fact and that the moving party is entitled to judgment as a matter 16 of law.” Fed. R. Civ. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). 17 The moving party bears the initial responsibility of presenting the basis for its motion and 18 identifying those portions of the record that it believes demonstrates the absence of a 19 genuine issue of material fact. Celotex, 477 U.S. at 323. The non-moving party must then 20 point to specific facts establishing there is a genuine issue of material fact for trial. Id. 21 At summary judgment, the Court considers only admissible evidence. See Fed. R. 22 Civ. P. 56(c)(1)(B). When considering a motion for summary judgment, a court should 23 not weigh the evidence or assess credibility; instead, “the evidence of the non-movant is to 24 be believed, and all justifiable inferences are to be drawn in his favor.” Anderson v. Liberty 25 Lobby, Inc., 477 U.S. 242, 255 (1986). A genuine issue of material fact exists “if the 26 [admissible] evidence is such that a reasonable jury could return a verdict for the non- 27 moving party.” Id. at 248. In ruling on the motion for summary judgment, the Court will 28 2 Defendants’ chosen arbitrator dissented. 1 construe the evidence in the light most favorable to the non-moving party. Barlow v. 2 Ground, 943 F.2d 1132, 1135 (9th Cir. 1991). 3 b. Bad Faith 4 Because “an insurance contract is not an ordinary commercial bargain,” but 5 “implicit in the contract and the relationship is the insurer’s obligation to play fairly with 6 its insured,” an insurer owes its insured a duty of “equal consideration, fairness and 7 honesty.” Zilisch v. State Farm Mutual Auto. Ins. Co., 995 P.2d 276, 279 (Ariz. 2000) 8 (quoting Rawlings v. Apodaca, 726 P.2d 565, 570-71). Thus, 9 The tort of bad faith arises when the insurer ‘intentionally denies, fails to process or pay a claim without a reasonable 10 basis. Coming up with an amount that is within the range of possibility is not an absolute defense to a bad faith case. This 11 is so because an insurer has an obligation to immediately conduct an adequate investigation, act reasonably in evaluating 12 the claim, and act promptly in paying a legitimate claim. It should do nothing that jeopardizes the insured's security under 13 the policy. It should not force an insured to go through needless adversarial hoops to achieve its rights under the policy. It 14 cannot lowball claims or delay claims hoping that the insured will settle for less. 15 Young v. Allstate Ins. Co., 296 F. Supp. 2d 1111, 1116 (D. Ariz. 2003) (emphasis added) 16 (citation modified). “Equal consideration of the insured requires more than that.” Zilisch, 17 995 P.2d at 280. Stated otherwise, “the insurer breaches the implied duty of good faith and 18 fair dealing if it (1) acts unreasonably toward its insured, and (2) acts knowingly or with 19 reckless disregard as to the reasonableness of its actions.” Clearwater v. State Farm Mut. 20 Auto. Ins. Co., 792 P.2d 719. “An incomplete pre-denial investigation of an insured’s claim 21 can expose the insurance company to liability for bad faith . . .” but “an insurance 22 company’s failure to adequately investigate only becomes material when a further 23 investigation would have disclosed relevant facts.” Aetna Cas. And Sur. Co. v. Superior 24 Ct. in and for Cty. Of Maricopa, 778 P.2d 1333 25 III. Discussion 26 Plaintiff alleges Defendant “put [its] own interests ahead of [Sasse’s] by forcing 27 [her] to go through needless adversarial hoops, before being forced to pay [her] the benefits 28 of [her] UIM Policy” (Doc. 1-3 at 4). Defendant contends no evidence in the record 1 supports a finding of bad faith and argues the Court should find its conduct in handling 2 Plaintiff’s claim adequate as a matter of law. (Doc. 75 at 7). 3 When Plaintiff first filed her claim, including medical bills and Dr. Block’s report, 4 Defendant reviewed the submitted materials and denied the claim with no additional 5 investigation. Defendant argues based on Plaintiff’s medical bills, Dr. Block’s report, and 6 the last recorded date of treatment, several months prior to filing the claim,3 it had a 7 reasonable basis for its valuation of Plaintiff’s injuries as a matter of law and cannot be 8 found to have acted in bad faith. The fact that a majority of the arbitration panel disagreed, 9 Defendant argues, does not mean Defendant acted in bad faith. While Defendant is correct 10 that merely being found wrong in its valuation of the claim does not by itself indicate bad 11 faith, (Doc. 66 at 10), the magnitude of the damages awarded by the arbitration panel is 12 such that it provokes a reasonable inference that Defendant should have investigated the 13 claim more thoroughly at the beginning or did not act in good faith in valuing the claim. 14 Defendant relies on Dr. Block’s statement that “Fortunately, she appears to have 15 had a good recovery” to support the contention there was a reasonable basis for its 16 valuation. However, there is sufficient evidence to render the question whether this 17 provided a reasonable basis for denying Plaintiff’s claim a genuine issue of material fact. 18 Construing the facts in the light most favorable to Plaintiff, the phrase “a good recovery” 19 does not necessarily indicate a full recovery or a lack of continuing medical problems. Dr. 20 Block’s report also details extensive treatment history, symptoms, and medication, and 21 notes the results of a brain MRI “consistent with old posttraumatic parenchymal 22 microhemorrhages/old hemorrhagic shearing-injury to the brain.” (Doc. 67-1 at 32). Dr. 23 Block confirmed Plaintiff’s diagnoses of mild traumatic brain injury and musculoskeletal 24 neck strain and opined “her symptoms are consistent with the injuries she suffered in the 25 accident . . .” and “all of the treatment . . . was reasonable and necessary, and causally 26 related to the car accident . . .” (Id.at 32-33). Additionally, Defendant’s letter denying the 27 claim explained the decision only by stating “we understand that Rachel Sasse incurred

28 3 The most recent date of treatment noted in Dr. Block’s report was September 14, 2021. Plaintiff has since received further treatment. 1 $44,041.00 in medical specials for her injuries” and “it is our understanding the tortfeasor’s 2 carrier, State Farm, has presented an offer for their liability limits of $100,000.00.” Based 3 on these facts, reasonable minds could conclude Defendant made its determination without 4 an adequate basis and should have investigated further if it had doubts regarding the 5 severity of Plaintiff’s injuries. Thus, whether Defendant had an adequate basis to conclude 6 Plaintiff’s damages amounted to only $100,000 rather than an amount more than triple that 7 is a question of fact. 8 As Defendant and Plaintiff continued toward arbitration, Defendant acquired more 9 information and made two settlement offers. Defendant made a $2,500.00 settlement offer 10 on Oct. 25, 2022 (Doc. 67 at ¶ 12). Plaintiff had provided an initial disclosure statement 11 asserting her “symptoms and treatment [were] ongoing” and providing her medical records. 12 (Doc. 67-1 at 61). Medical records in Defendant’s possession state Plaintiff had 13 “transitioned into the chronic phase of recovery” and reference the need for future 14 treatment. (Doc. 67-2 at 95). During the September 30, 2022 EUO, Plaintiff testified to her 15 symptoms, ongoing treatment, and changes in her regular activities since the accident, 16 stating she “had not returned to hiking or swimming,” that did not have headaches or 17 migraines prior to the accident, and that she continues to receive treatment with a 18 neurologist. She described physical and mental fatigue preventing her from doing the 19 things she used to do, pain that “still comes and goes as of the time of [the EUO]”, treatment 20 for anxiety and PTSD, and “cognitive struggles, memory issues, balance dizziness, fatigue, 21 [and] severe migraines.” (Doc. 67-2 at 102-03). Defendant questions Plaintiff’s apparent 22 failure to seek treatment for some time, but also notes in Plaintiff’s EUO, she testified that 23 she is still being treated by a neurologist. Defendant’s records of Plaintiff’s prior medical 24 treatment, moreover, reflect financial concerns could have been a reason for delay or pause 25 in treatment. Medical records from May 2021 state, “she is holding off on therapies until 26 she figures out billing issues/concerns for past therapy sessions” and “she is going to pause 27 vision and cognitive…while insurance pending auth.” (Doc. 67-2 at 94-95). Defendant’s 28 records additionally confirm that Defendant had determined a supporting mechanism of 1 injury for the concussion existed. (Doc. 67-2 at 105). The record states: 2 A [mechanism of injury] appears to exist for [Plaintiff’s] head/ear striking the headrest so even a favorable biomech 3 opinion that [Plaintiff] could not have struck steering wheel if restrained is unlikely to do much for us…the impact [with] 4 the headrest would be the supporting [mechanism of injury] for the claimed concussion. 5 6 (Id.) (emphasis added). Thus, a reasonable jury could determine Defendant did not have a 7 reasonable basis to challenge the validity of Plaintiff’s claimed injuries. 8 When Defendant made its $20,000 settlement offer on February 17, 2023, 9 Defendant had significant evidence supporting Plaintiff’s claim available. Plaintiff had 10 undergone an Independent Medical Examination (“IME”) with Defendants’ chosen 11 examiner and provided her third supplemental disclosure statement. Based upon the IME, 12 the examiner opined that Plaintiff had suffered a vestibular concussion and possible mild 13 traumatic brain injury and indicated the need for future treatment but did not causally link 14 her depression to the accident. Plaintiff’s supplemental disclosure statement (Doc. 67-1 at 15 92) identified and provided the report of Lora White, an expert in life care plans. The report 16 valued Plaintiff’s future care at $280,784.00. (Doc. 67-1 at 95-106). Additionally, at the 17 time of the February 2023 offer, Defendants’ own records indicate their valuation of the 18 injury was up to $135,651, that is $35,651 more than she had already been compensated. 19 A jury could find the $2,500 and $20,000 settlement offers were intentional “lowball” 20 offers. Whether it was ‘fairly debatable’ at this point that Plaintiff’s damages totaled no 21 more than $120,000 as indicated by the $20,000 settlement offer or the full $350,000 22 awarded at arbitration is a question most appropriate for a jury. 23 Defendant also received Dr. Block’s supplemental report prior to arbitration, which 24 stated Plaintiff’s “[migraines aren’t] going to further improve” and treating medications 25 “should be continued indefinitely;” “a neuropsychological evaluation” “would be helpful 26 in clarifying the nature and degree of her ongoing symptoms;” and “the changes resulting 27 from the head trauma are, at this point, structurally irreversible. The brain itself will not 28 heal further.” (Doc. 67-1 at 88-89). Defendant, by proceeding to arbitration, maintained the | || position that Plaintiff's damages, at most, did not exceed $120,000, the amount she had 2|| already been compensated plus Defendant’s highest settlement offer. A jury could 3|| conclude the wide discrepancy between this position and the $350,000.00 arbitration 4|| award, $250,000 more than the compensation Plaintiff had already received, was 5 || unsupported by the evidence and reflects bad faith on Defendant’s part. 6 Plaintiff has presented sufficient admissible evidence to create a genuine issue of material fact whether Defendant’s handling of her claim was in bad faith. As such, 8 || summary judgment is inappropriate and the Motion will be denied. 9 Accordingly, 10 IT IS ORDERED the Motion for Summary Judgment (Doc. 66) is DENIED. 11 Dated this 9th day of February, 2026. 12 fo -

14 Honora e Roslyn ©. Silver 15 Senior United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27 28

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