Monthly Archive for April, 2015
In Tippett v. Ameriprise Insurance Company, the court observed that unlike claims for breach of the contractual duty of good faith and fair dealing, the remedy for statutory bad faith under section 8371 does not allow a plaintiff to recover compensatory or consequential damages.
These plaintiffs also brought a count for violation of the Unfair Insurance Practices Act (UIPA). They conceded that there is no private right of action under the UIPA, but argued the court could still “consider UIPA violations to determine whether an insurer acted in bad faith under Pennsylvania’s Bad Faith Statute….” The court dismissed the attempt to plead a private action, regardless of whether it could consider evidence of UIPA violations for a bad faith claim.
The court also dismissed claims against the insurer’s independent insurance adjuster, finding no duty owed to the insured by the insurer’s independent adjuster. “Pennsylvania courts permit insureds to sue their insurers for the actions of their insurers’ agents, including adjusters[, and] Pennsylvania courts also recognize that independent insurance adjusters ‘owe a duty of performance to their principals, the insurance companies.’” Thus, “[t]he Supreme Court of Pennsylvania is unlikely to impose a duty of care on adjusters to insureds.”
Date of Decision: March 25, 2015
Tippett v. Ameriprise Ins. Co., CIVIL ACTION No. 14-4710, 2015 U.S. Dist. LEXIS 37513 (E.D. Pa. March 25, 2015) (Sanchez, J.)
We posted a case summary yesterday, where the opinion, like many others, indicated that section 8371 bad faith can exist even where no benefit is denied. There are times when the bad faith conduct at issue involves a delay in paying a benefit (or providing a defense), which many courts have equated with the denial of a benefit. However, where there is no denial of a benefit, including no undue delay in providing a benefit, does section 8371 still provide a remedy to the insured for an insurer’s allegedly poor conduct?
We added a Note to yesterday’s post with links to case summaries on the intertwined issue of whether a UIPA violation can be considered in the section 8371 context; whether it can be evidence of section 8371 bad faith, though not in itself bad faith per se; or whether it can be bad faith per se. We likewise observed the related issue of whether the absence of any duty to indemnify automatically eliminates bad faith claims because there is an objectively reasonable basis to deny coverage.
As the issue of section 8371’s remedial scope has come up regularly since the statute’s inception, and as the Supreme Court appeared to address the nature and scope of section 8371 in its 2007 Toy decision, we have just added a link to an article on the subject.
In the court’s first decision in Hayes v. Reliance Standard Life Insurance Company, the insured’s bad faith claim against the insurer was preempted by ERISA. Six days later, the same argument failed as to a claim against an insurance broker, as insufficiently related to the plan at issue.
Date of Decision: March 17, 2015 and March 23, 2015
Hayes v. Reliance Std. Life Ins. Co., CIVIL ACTION NO. 3:14-0714, 2015 U.S. Dist. LEXIS 32543 (M.D. Pa. March 17, 2015) (Mannion, J.)
Hayes v. Reliance Std. Life Ins. Co., CIVIL ACTION NO. 3:14-0714, 2015 U.S. Dist. LEXIS 35682 (M.D. Pa. March 23, 2015) (Mannion, J.)