Insurer that Acts in the Custom & Practice of Industry Acts in Good Faith


No Good Deed Goes Unpunished

After a car accident, Zhaojin Ke filed a claim with Liberty Mutual, his insurer, for repairs to his van. Because the cost of the repairs would have reached the market value of the van itself, if not exceeded the value, Liberty Mutual offered him the van’s market value instead. Not content, Mr. Ke demanded that Liberty Mutual pay for the repairs. When it refused Mr. Ke sued, claiming that Liberty Mutual had tricked him into buying insurance, violated the insurance policy, and handled his claim in bad faith. In Zhaojin David Ke v. Liberty Mutual Insurance Company, Civil Action No. 20-1591, United States District Court, E.D. Pennsylvania (November 9, 2021) the USDC resolved the claims while giving extra concern to the claims of Mr. Ke who sued in propia persona.


Driving through Philadelphia, Mr. Ke was rear-ended on an icy road, causing him to bump into the car in front of him. His right headlight and right corner of his bumper were damaged. Following Liberty Mutual’s instructions, Mr. Ke dropped his car off at a body shop for a repair estimate.

That day, Liberty Mutual’s claims adjuster authorized repairs on the van, but quickly backtracked. The body shop estimated that repairs would cost at least $3,389.17. Liberty Mutual’s appraiser valued the car at $3,725.00. Because the repair estimate was nearly the van’s value, Liberty Mutual labeled the van a “total loss.” So Liberty Mutual offered Mr. Ke $3,613.04, or the van’s cash value ($3,725) plus taxes and fees ($388.04), minus the policy’s $500 deductible.

Mr. Ke disagreed that the van was “totaled,” and demanded that Liberty Mutual pay for the repairs. Mr. Ke did not accept Liberty Mutual’s proffered payout. Instead, he took his vehicle back from the repair shop, without salvage title. He then sued Liberty Mutual.

Mr. Ke sued for breach of contract and unjust enrichment. He also accused Liberty Mutual of handling his claim in bad faith and engaging in unfair trade practices. The parties filed cross-motions for summary judgment on all claims. Also, Mr. Ke moved to exclude the expert report of Kevin M. Quinley, Liberty Mutual’s expert in “insurance handling.”


Liberty Mutual’s Expert May Testify To Industry Practices But Not Opine On Bad Faith

To show that it handled Mr, Ke’s claim in good faith, Liberty Mutual offers an expert report from Kevin M. Quinley, an expert in insurance claims who presumably would testify along the same lines as his report, namely that Liberty Mutual handled Mr. Ke’s claim in line “with … industry norms, customs, and practices.” Mr. Ke moves to exclude 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 “specialized knowledge” he was eminently qualified.

In forming his opinion, Mr. Quinley used what he describes as a qualitative methodology: he compared Liberty Mutual’s actions here to what he has seen happen with other insurance claims over the past four decades to decide if Liberty Mutual followed industry standards. Experts need not be scientists or mathematicians. The Rules of Evidence permit experts with “scientific, technical, or other specialized knowledge.” Fed.R.Evid. 702(a); see Kumho Tire Co. v. Carmichael, 526 U.S. 137, 150 (1999) Mr. Quinley’s methodology is how experts typically testify about industry customs and practices

Mr. Quinley’s Testimony Is Relevant

Expert testimony that Liberty Mutual followed industry standards can be Evidence That An Insurer Acted In Good Faith, And Vice Versa.

No Reasonable Juror Could Find That Liberty Mutual Breached Its Contract

Parties are bound by the written terms of their insurance policy. If those terms are “clear and unambiguous,” the Court gives them their plain meaning. Mr. Ke purchased collision insurance. To him, that means that Liberty Mutual must pay to repair his vehicle, no matter the cost. But that is not what his policy says, or ever said.

Per the policy, Liberty Mutual had the option to pay the “actual cash value” of the van or “the amount necessary to repair or replace” it. In other words, Liberty Mutual does not have to pay for the repairs if it will cost the same 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 was “taken apart,” the mechanics might find “additional damage” requiring “additional repairs.” After all, Mr. Ke’s car was almost 14 years old. Mr. Ke even recognized that the initial quote likely would not cover all the necessary repairs. By offering Mr. Ke the value of his van rather than repairing it, Liberty Mutual did not breach the contract.

To try to get around this plain language, Mr. Ke points to an advertisement from Liberty Mutual explaining that “Collision Insurance is an add-on coverage that pays the cost of repairing or replacing [a vehicle], minus the amount of [the] deductible.” But this advertisement from Liberty Mutual’s website is not itself a part of the insurance contract. Instead, it is “an invitation to [Mr. Ke] to … purchase” this additional coverage. Even if it had been part of the contract, Liberty Mutual would have adhered to the terms of the advertisement. The advertisement promised to pay for “the cost of repairing or replacing” his van. Liberty Mutual chose to replace, not repair.

Despite the policy’s plain language, Mr. Ke insists that the sales agent promised otherwise. Mr. Ke asserts that Liberty Mutual’s sales agent promised him on the phone that Liberty Mutual would provide “full insurance.” But promising “full insurance” is, at most, 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, no matter the cost. No reasonable juror could find that Mr. Ke reasonably expected for Liberty Mutual to pay for repairs free of terms, conditions or exclusions-especially when his insurance contract contained plenty. Liberty Mutual complied with the contract by offering to replace Mr. Ke’s van. No reasonable juror could find that Mr. Ke reasonably expected otherwise. Thus, the Court grants Liberty Mutual summary judgment on this claim.

Moreover, Mr. Ke has produced no proof that the sales agent knew his promise was false or intended to mislead Mr. Ke. Because Mr. Ke has not pointed to evidence in the record to show fraudulent conduct his claim cannot stand.

Liberty Mutual Did Not Have To Pay For Repairs, Rather Than A Replacement

In Pennsylvania, a vehicle is an 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 likely to be even higher. Because the “cost of repairing” the van equals or “exceeds its appraised value less [its] salvage value,” or the price for which the damaged van could be sold, the van was a total economic loss.

Once Mr. Ke said that he wanted to keep his van, Liberty Mutual told him that he could do so “and still receive a payout”- the entire $3,613.04-but he “would need to get a salvage title from Pennsylvania DMV on the van and provide [Liberty Mutual] with a copy.”

Because Mr. Ke has not carried his burden, and Liberty Mutual has, the Court granted Liberty Mutual’s motion for summary judgment. The USDC concluded that no reasonable juror could find that Liberty Mutual did any of the things Mr. Ke charged. Neither the insurance policy nor good faith required Liberty Mutual to arrange for the repair of Mr. Ke’s van, rather than pay him the van’s value.


This case is evidence of the old saying that “no good deed goes unpunished.” Here, Liberty Mutual agreed to pay the value of the van, an amount in excess of the estimated cost of repair and waive its right to reduce its loss by selling the salvage. For that good deed, on a dispute of less than $2,000, Liberty needed to defend the pro-per lawsuit, hire counsel and an excellent expert witness. In that way Mr. Ke managed to punish Liberty for adjusting his claim fairly and in good faith and in accordance with the clear and unambiguous language of the policy. If a lawyer brought the action there is a high probability that counsel would have been sanctioned by the court.

© 2021 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.

He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business.

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He is available at and Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award. Over the last 53 years Barry Zalma has dedicated 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 make it possible for insurers and their claims staff to become insurance claims professionals.

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