Archive for the 'PA – General Bad Faith and Litigation Issues' Category


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This case involved the issue of whether the insureds resided at a property when a fire loss occurred. The insurer denied coverage, concluding they did not, and that certain misrepresentations were made by the insureds in connection with the fire loss claim. The insureds sued for breach of contract and bad faith.

In their complaint, the insureds asserted “that the property was in fact occupied at the time of the fire as the Plaintiffs were making ongoing and continuous repairs and renovations to the dwelling.” Judge Caputo agreed with the insurer that because “Plaintiffs allege not that they resided at the property, but only that they ‘occupied’ the property at the time of the loss as a result of ‘ongoing and continuous repairs and renovations to the dwelling’ … that Plaintiffs have failed to state a breach of contract claim.”

As to the bad faith claim, Plaintiffs allegations were conclusory and they offered no “factual averments supporting these sweeping allegations of bad faith.” The conclusory, sweeping, allegations included:

“(1) Defendant has ‘undertaken this course of action and unilaterally, without justification, deprived Plaintiffs of their rightful payment for damages to their property [] . . . all in the financial interest of [the insurer] and in disregard of the interest of their insureds . . .’”

“(2) Defendant’s ‘actions constitute a pattern in practice, not only in this claim, but in the handling of other claims in which totally unfair and unethical negotiation and settlement tactics are not only employed but encouraged by Defendant . . .’” and

“(3) Defendant ‘has acted with obvious bad faith and/or reckless disregard to the rights of their insured in failing to pay the Plaintiffs’ claim pursuant to the terms and conditions of the above mentioned homeowners insurance policy.’”

Judge Caputo did give the plaintiffs leave to file an amended complaint as to both the breach of contract and bad faith claims.

Date of Decision: May 2, 2019

Bloxham v. Allstate Insurance Co., U. S. District Court Middle District of Pennsylvania NO. 3:19-CV-0481, 2019 U.S. Dist. LEXIS 74139 (M.D. Pa. May 2, 2019) (Caputo, J.)


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The Pennsylvania and New Jersey Insurance Bad Faith Case Law Blog Has Been Nominated for The Expert Institute’s Best Legal Blog Contest, in the Niche and Specialty Blog category.

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We have posted nearly 1,500 bad faith case summaries over the last 12 years. During October and November 2018, we significantly upgraded the Pennsylvania and New Jersey Insurance Bad Faith Case Law Blog and all of those posts, making them easier to search and read. Many hours and thousands of edits have gone into this process.

New Searchable Categories

We have added tens of new search categories, grouping cases by topic into distinct, searchable, subsets. These categories can be found on the far left of the home page, and are broken down into New Jersey (NJ) post categories, and Pennsylvania (PA) post categories.  You can click on the category to pull up the posts tagged under that category.

By way of only a few examples, we have identified case categories for: delays by insureds, claims handling delay, federal pleading adequacy and inadequacy, negligence distinguished from bad faith, removal, bifurcation (severance) and stays, who is an insurer for statutory bad faith purposes, when a finding of no duty under an insurance policy cuts off potential bad faith claims, the role state insurance statutes and regulations play in bad faith cases, and cases involving the insured’s own bad faith conduct. There are many more categories we invite you to explore.

General Searches and Opinion Links

You can also search using words you choose yourself. In the upper left of the home page, under the calendar, is a search box where users can enter search terms and get a set of posts with those terms.

We include the names of the judges making the decisions summarized in our posts so you can search posted case summaries by an individual judge’s name. We similarly include the court names in each summary’s caption so you can search by court name as well. (Our shorthand for courts names can be found here.)

We have added hundreds of links to the opinions themselves for many of the summaries that previously had no links (though we do not have an opinion link for all 1,500 posts).

Finally, some trends appear when organizing the cases by topic. Among other things, it is interesting to see where the balance falls between decisions finding claims handling reasonable or unreasonable, or between courts addressing whether bad faith can or cannot exist if there is no contractual duty to provide a benefit of indemnification or defense. And while it is not surprising that many cases originate in the uninsured/underinsured motorist context, it still leaps out that nearly 20% of our posts come from UM/UIM cases, indicating the impact this case type has in shaping bad faith law generally.

Again, we invite you to explore the site.

If you have a Pennsylvania or New Jersey bad faith judicial opinion or jury verdict of interest, please feel free to email us the case for posting. You can email us at



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The insureds alleged the insurer took excessive premiums. The court found such claims were not subject to Pennsylvania’s Bad Faith Statute since there was no denial of any benefit, a prerequisite to any bad faith claim. The court stated its legal reasoning as follows:

“Defendants argue that Plaintiffs’ claims do not arise from an insurer’s failure to pay a claim pursuant to the terms of an insurance policy, and therefore, Plaintiffs have not stated a claim for bad faith. Courts have interpreted “bad faith” to include an insurer’s conduct other than an unreasonable denial of benefits. See, e.g., Davis v. Fid. Nat. Title Ins. Co., 120 A.3d 1058, 2015 WL 7356286, at *15 (Pa. Super. 2015) (recognizing that bad faith claim can arise from a delay in making payment); O’Donnell ex rel. Mitro v. Allstate Ins. Co., 1999 PA Super 161, 734 A.2d 901, 906 (Pa. Super. Ct. 1999) (holding that an action for bad faith may also extend to the insurer’s investigative practices and misconduct during litigation).”

“However, the insured must have made a claim under the policy to state a claim for bad faith. In Toy v. Metro Life Ins. Co., the Pennsylvania Supreme Court evaluated whether the plaintiff insured stated a bad faith claim based on allegations that an insurer resorted to unfair or deceptive practices to convince the insured to purchase a policy. 593 Pa. 20, 928 A.2d 186, 199-200 (Pa. 2007). Interpreting the meaning of ‘bad faith,’ the court determined that “the term captured those actions an insurer took when called upon to perform its contractual obligations of defense and indemnification or payment of a loss that failed to satisfy the duty of good faith and fair dealing implied in the parties’ insurance contract.”

The court concluded that the legislature intended not to give relief under the bad faith statute to an insured who alleges that his insurer solicited the purchase of the policy unfairly. It cited Ash v. Cont’l Ins. Co., 593 Pa. 523, 932 A.2d 877, 882 (Pa. 2007) (“[Section 8371] applies only in limited circumstances—i.e., where the insured first has filed ‘an action arising under an insurance policy’ against his insurer.”); and Aquila v. Nationwide Mut. Ins. Co., No. CIV.A. 07-2696, 2008 U.S. Dist. LEXIS 93823, 2008 WL 4899359, at *6 (E.D. Pa. Nov. 13, 2008) (holding that a plaintiff who did not bring claim under insurance policy could not state a bad faith claim because § 8371 presupposes a claim made of the insurer) (citing Toy and Ash).

Date of Decision: August 31, 2018

Yandrisovitz v. Ohio State Life Ins. Co., U. S. District Court Eastern District of Pennsylvania No. 5:18-cv-1036, 2018 U.S. Dist. LEXIS 149673 (E.D. Pa. Aug. 31, 2018) (Leeson, J.)


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On May 31, 2018, the Superior Court’s April 9, 2018, 2-1 decision reversing the trial court’s $21 Million award in Berg v. Nationwide was withdrawn, after the Court granted reconsideration. Just a few days later, on June 5, 2018, the Court issued another 2-1 decision along the same lines as the first decision, with the majority again vacating and directing entry of judgment for the insurer, and former Justice Stevens dissenting.

The analysis of the April 9th majority and dissent can be found here.

As noted in the Court’s May 31st Order, the plaintiffs are not precluded from seeking en banc reconsideration of the panel’s June 5th Opinion.



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On May 31, 2018, the Superior Court’s April 9, 2018, 2-1 decision reversing the trial court’s $21 Million award in Berg v. Nationwide was withdrawn, after the Court granted reconsideration. Just a few days later, on June 5, 2018, the Court issued another 2-1 decision along the same lines as the first decision, with the majority again vacating and directing entry of judgment for the insurer, and former Justice Stevens dissenting.

The May 31st Order had stated:


THAT upon consideration of the application for reargument filed April 30, 2018, in this appeal, the Court hereby grants panel reconsideration;

THAT the decisions of this Court filed April 9, 2018, are hereby withdrawn; and

THAT the parties need not file any additional briefs.

This Order is entered without prejudice for the parties to file or refile an application for reconsideration or reargument following the filing of this Court’s reconsidered decision.

Our thanks to Daniel E. Cummins of the excellent Tort Talk Blog for bringing this Order to our attention.



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Since 2007, Pennsylvania’s Superior Court has taken the position that proving statutory bad faith includes two elements: (1) the absence of a reasonable basis to deny a benefit and (2) knowledge or reckless disregard of the fact there was no reasonable basis to deny coverage. The elements were originally stated in Terletsky v. Prudential Property & Cas. Ins. Co., 649 A.2d 680 (Pa. Super. Ct. 1994). The Terletsky Court had also discussed the concepts of a carrier’s “motive of self-interest or ill-will,” and some courts concluded this was a third element of proof. The Superior Court rejected that position in 2007, holding that self-interest or ill-will (sometimes generically referred to as malice) can be evidence used to prove the second element, but was not an element of proof in itself. However, the position that self-interest or ill-will was a required third element of proof has continued in some Pennsylvania Federal District Court opinions.

Today, in Rancosky v. Washington National Ins. Co., Pennsylvania’s Supreme Court adopted the Superior Court’s position.

The Supreme Court stated:

we adopt the two-part test articulated by the Superior Court in Terletsky v. Prudential Property & Cas. Ins. Co., 649 A.2d 680 (Pa. Super. 1994), which provides that, in order to recover in a bad faith action, the plaintiff must present clear and convincing evidence (1) that the insurer did not have a reasonable basis for denying benefits under the policy and (2) that the insurer knew of or recklessly disregarded its lack of a reasonable basis. Additionally, we hold that proof of an insurance company’s motive of self-interest or ill-will is not a prerequisite to prevailing in a bad faith claim under Section 8371, as argued by Appellant. While such evidence is probative of the second Terletsky prong, we hold that evidence of the insurer’s knowledge or recklessness as to its lack of a reasonable basis in denying policy benefits is sufficient.

The Court instructed the Superior Court to remand the action to the Trial Court for factual findings. “However, because it is unclear to what extent the trial court’s findings on the reasonable basis prong of Terletsky were intertwined with its erroneous belief that proof of Conseco’s motive of self-interest or ill-will was required, upon remand the trial court should consider both prongs of the Terletsky test anew.”

Some of the other key points in the opinion include:

  1. Punitive Damages. The Bad Faith Statute provides for attorneys’ fees, super-interest, and punitive damages. There is no higher standard of proof for plaintiffs seeking to prove bad faith with punitive damages, i.e., self-interest or ill-will do not become elements of proof where the plaintiff demands punitive damages as part of the statutory bad faith claim. The Court stated, “we find no basis for concluding that the General Assembly intended to impose a higher standard of proof for bad faith claims seeking punitive damages when it created the right of action.”

  2. No Effect of Prior Supreme Court Precedent. In footnote 10, the Court cites to three of its bad faith opinions: Toy, Birth Center and Mishoe. The Court makes clear that these “prior decisions interpreting Section 8371 do not directly control our disposition of the instant matter. Moreover, nothing we say here should be read as casting doubt on the validity of the holdings in those cases. As we have stated over the years on this blog, Toy can be interpreted to limit cognizable bad faith claims to those cases where there has been a denial of benefits in a first party case, or denial of a defense or coverage in third party cases. That issue was not addressed in Rancosky.

  3. Statutory Interpretation. The Court offers general instruction on how to apply principles of statutory construction under Pennsylvania law. In this case, the focus was on the history of bad faith law leading up to the 1990 adoption of the 42 Pa.C.S. § 8371, and the contemporaneous meanings of bad faith at the time of its adoption. The driving factor was the universal understanding that the legislation was in response to the Pennsylvania Supreme Court’s 1981 D’Ambrosio decision, and how the issue of what constitutes bad faith was framed in that case.

  4. Interesting Comments in Justice Wecht’s Concurrence. Justice Wecht’s concurrence focuses of how inclusion of ill-will/self-interest as an element would functionally swallow the Terletsky test. In describing this flaw, he makes an interesting point about the relationship between poor claims handling being tied into the denial of benefits to make out a bad faith claim: “Knowing or reckless claims-handling leading to objectively unreasonable denial of benefits, if proven by clear and convincing evidence, embodies the principle that a patent absence of good faith is tantamount to the presence of bad faith.”

    Date of Decision:  September 28, 2017

    Rancosky v. Washington National Insurance Company, Pennsylvania Supreme Court, 28 WAP 2016 (Pa. Sept. 28, 2017)


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This case involves a dispute over the number of premium payments the insured was required to make. The insured thought it only had to make 6 payments each on two life insurance policies, and investment income would cover the rest. The income was insufficient and more premiums were sought. A number of misrepresentation theories were pleaded along with a statutory bad faith claim, which the insurer moved to dismiss. The bad faith claim was based on allegations that the insurer “intentionally reduced its investment return projections in order to conceal the risks associated with its vanishing premium scheme and to secure additional premium payments on the Policies.

In addressing the bad faith claim, the court observed that the Pennsylvania Supreme Court’s decision in Metropolitan Life Insurance Co. v. Toy found that the bad faith statute “does not give relief to an insured who alleges that his insurer engaged in unfair or deceptive practices in soliciting the purchase of a policy.” The court went on to state that “despite the Pennsylvania Supreme Court’s holding in Toy, which appeared to narrowly limit the circumstances under which a § 8371 claim of bad faith can arise, a number of courts have allowed bad faith claims in contexts beyond an insurer’s failure to indemnify or pay the insured.”

The court distinguished Toy, noting here that the bad faith claims not only included representations to induce sale of the insurance policies, but the insured also pleaded “deceptive practices occurring after the execution of the Policies,” i.e., the alleged manipulation of investment returns on the premiums paid.

The court found that these allegations fell within the realm of “conduct in connection with [the] discharge of … obligations … after purchase” (emphasis in original) and so were actionable bad faith claims. Thus, the motion to dismiss was denied, and “[w]hether the deceptive conduct alleged … arose in the context of [the insurer’s] discharge of its obligations under the Policies will become more apparent through fact discovery.”

Date of Decision: April 13, 2017

West Chester University Foundation v. Metlife Insurance Co., No. 15-3627, 2017 U.S. Dist. LEXIS 56547 (E.D. Pa. April 13, 2017) (C. Darnell Jones, II, J.)



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In this case, the insured improperly sought compensatory and consequential damages as part of his section 8371 claim. Such damages cannot be recovered under section 8371, but may be available for breach of the common law contractual duty of good faith and fair dealing. Thus, while striking the statutory claim for compensatory damages, the court gave the insured leave to amend to plead such damages under the pending common law contract claim.

Date of Decision: November 21, 2016

Koepke v. Allstate Vehicle & Prop. Ins. Co., No. 16-4633, 2016 U.S. Dist. LEXIS 161112 (E.D. Pa. Nov. 21, 2016) (Baylson, J.)


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This is one of the seemingly rare cases since 2007 recognizing that the Pennsylvania Supreme Court’s decision in Toy V. Metropolitan Life exists and is controlling case law. This will be discussed in more detail below.

In this case, the insured alleged he purchased a death and dismemberment policy that required no medical questions or examinations to obtain coverage. The insured alleged that he was a Type I diabetic and was injured in an accident resulting in an amputation due to infection. The carrier denied coverage, with issue apparently being whether the amputation was the result of his fall or his diabetes. The insured sued for breach of contract and bad faith.

After allowing the breach of contract claim to proceed, the court addressed the insurer’s motion to dismiss the bad faith claim. In carrying out its Rule 12(b)(6) analysis, the court disregarded the plaintiff’s conclusory allegations, focusing only on the factual pleadings, which it found adequate to allow the case to proceed. Specifically, the plaintiff pleaded that the carrier “1) … failed to conduct a proper investigation of the claim as evidenced by the fact that [it] failed to obtain [the insured’s] podiatric and family physician records; 2) [it] inaccurately denied [the] claim based upon his death and not the loss of his limb; 3) [it] made a finding that [the insured] suffered from Type II diabetes when he actually suffered from Type I diabetes; 4) [it] made a finding that [the insured] had previously had a toe amputated due to his diabetes, a fact that [the insured] alleges is not correct; 5) [it] relied only on medical records that supported [the insurer’s] decision to deny coverage and ignored medical records that did not support denial; 6) and [it] referred to [the insured] as Robert … instead of Ronald ….”

The Court did find, however, that the insured could not bring statutory bad faith claims based upon violations of Pennsylvania’s Unfair Insurance Practices Act (UIPA). In doing so, it recognized the fundamental place the Pennsylvania Supreme Court’s decision in Toy v. Metropolitan Life holds in bad faith case law. The decision will be quoted at length below.

The District Court itself stated:

“Each party cites a case in support of its argument. Hartford cites Toy v. Metropolitan Life Insurance Company, in which the court held that a plaintiff may not recover under § 8371 against an insurer who engages in unfair or deceptive practices in soliciting the purchase of an insurance policy. Mr. Long cites Hayes v. Harleysville Mutual Insurance Company, for the contention that ‘an insurer may be liable for bad faith conduct if the insurer has violated the [UIPA].'”

The holding in Toy, however, is controlling in this case. Toy was decided by the Supreme Court of Pennsylvania, whereas Hayes was decided four years earlier by the Superior Court of Pennsylvania. Furthermore, in Toy, the Pennsylvania Supreme Court engaged in a thorough review of the legislative and common law history of § 8371 and that of other states with similar provisions. In doing so, it explained [quoting two paragraphs from Toy]:

Presently, Toy adopts the trial court’s perspective, arguing that the Legislature did not articulate the reach of a bad faith claim under § 8371, and intended the statute to remedy any act that is prohibited to insurers under Pennsylvania’s common or statutory law. Thus, Toy argues, if an insured alleges that an insurer violated a provision of the UIPA, as she has, the insured necessarily states a bad faith claim under § 8371.

We disagree. In 1990, at the time that the General Assembly enacted § 8371 to provide a remedy to an insured when his insurer “‘acted in bad faith toward [him],’ the term ‘bad faith’ had acquired a ‘peculiar and appropriate meaning’ in this context.” When we incorporate that meaning into § 8371, as the Act instructs, and also consider that § 8371 speaks to an action “arising under an insurance policy,” and grants an award based on the “amount of the claim from the date the claim was made by the insured,” we need go no further than the words of the statute to ascertain that the Legislature did not intend to provide Toy with a remedy under § 8371 for the deceptive or unfair practices in which she alleges Metropolitan engaged in soliciting her purchase of the Policy.”

The District Court then concluded that the section 8371 bad faith claim “must be dismissed, with prejudice, to the extent that it rests on violations of the UIPA.”

Date of Decision: August 29, 2016

Long v. Hartford Life & Accident Ins. Co., No. Case No. 4:16-cv-00138, 2016 U.S. Dist. LEXIS 115328 (M.D. Pa. Aug. 29, 2016) (Brann, J.)

Long v. Stonebridge Life Ins. Co., No. Case No. 4:16-cv-00139, 2016 U.S. Dist. LEXIS 115324 (M.D. Pa. Aug. 29, 2016) (Brann, J.)