2017 BAD FAITH CASES: THIRD CIRCUIT AFFIRMS NO DUTY RUNNING TO INSURED’S AVERSARY (Third Circuit, Pennsylvania)

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The Third Circuit upheld the trial court’s dismissal of a bad faith claim. Among other things, it agreed that the plaintiff was not an insured, and the policy plainly set forth a duty to defend and indemnify the insured, not the insured’s adversary. The court observed: “[T]he duty to negotiate a settlement in good faith arises from the insurance policy and is owed to the insured, not to a third-party claimant.”

Date of Decision: December 12, 2016

Leboon v. Zurich Am. Ins. Co., No. 16-2088, 2016 U.S. App. LEXIS 22019 (3d Cir. Dec. 12, 2016) (Cowen, Fuentes, Shwartz, JJ.)

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