In Hered, LLC v. Seneca Insurance Company, the insurer denied the insured’s claim for a fire loss and damage to its business premises on the basis that the insured fraudulently misrepresented the functioning of the sprinklers in the insured building.  The insured sued the insurer for breach of contract and bad faith. The insurer filed a motion to exclude expert testimony of the public insurance adjuster who had been hired by the insured to adjust its fire loss. The insurer argued that a public adjuster should not be allowed to testify that the insurer acted in bad faith in handling the insured’s claim and failing to pay the claim. 

At oral argument, the insured’s counsel conceded that the expert was not qualified and competent to testify that the insurer acted in bad faith. The court held that while expert testimony may be appropriate to establish that an insurer lacked a reasonable basis for denying an insured’s claim, in the present case, the insured could not present expert testimony regarding the bad faith claim.  Accordingly, the court granted the insurer’s motion to exclude expert testimony with respect to the bad faith claim. 

The court denied the insurer’s motion to exclude expert testimony with respect to the expert’s opinion that the insurer had violated the Unfair Insurance Practices Act  (UIPA).  The court found that the probative value of the expert testimony substantially outweighed any danger of  unfair prejudice to the insurer and that any possible prejudice could be cured by an appropriate jury instruction.

Date of Decision: February 21, 2008

Hered, LLC v. Seneca Ins. Co., Civil Action No. 3:CV-06-0255, United States District Court for the Middle District of Pennsylvania, 2008 U.S. Dist. LEXIS 111943 (M.D. Pa February 21, 2008) (Blewitt, U.S.M.J.).

In Prime Medica Associates v. Valley Forge Insurance Company, the Superior Court did not address any bad faith issues on appeal, but did observe bad faith procedures in the trial court, in setting forth the case background.  The insured sought to put on an attorney as an expert on bad faith.  The trial court granted a motion in limine preventing the lawyer from testifying about bad faith.  The court permitted him the attorney to testify about coverage, but the judge would determine the bad faith issue without the expert at a bench trial, if the jury found there was coverage.  The judge also granted a motion in limine precluding the insured from putting on evidence of bad faith to the jury.  If the jury found no coverage there would be no bad faith determination necessary.  The jury did in fact find coverage, and then at the subsequent bench trial on bad faith, the judge ruled for the insured.  None of these issues were the subject of the appeal, but are useful observations of practice in the trial court.  The trial court’s opinion is out of Philadelphia’s Commerce Court.  In that opinion, in discussing the bench trial on bad faith after the jury verdict, the trial judge stated:  “After much soul searching, this court denied plaintiff's bad faith claim.”  The appellate court reversed the verdict on the contract claims on the basis that suit was untimely. 

Date of Decision:  March 5, 2009

Prime Medica Assocs. v. Valley Forge Ins. Co., No. 3279 EDA 2006, No. 3331 EDA 2006, SUPERIOR COURT OF PENNSYLVANIA, 2009 PA Super 39; 2009 Pa. Super. LEXIS 48, March 5, 2009 (Gantman, J.)

 

 

In Aquila v. Nationwide Mutual Insurance Company, the court granted the insurer’s motions to preclude testimony at trial by two of the insured’s expert witnesses because the witnesses did not have any knowledge or experience relevant to the sole remaining issue of bad faith.

The witnesses had provided reports on how the motor vehicle in this case might have been stolen.  The court acknowledged that the witnesses might have the specialized knowledge required of expert witnesses but found their reports lacked the required reliability and relevancy to the bad faith claim, which is the sole remaining claim.

Date of Decision:  January 9, 2009

Aquila v. Nationwide Mut. Ins. Co., CIVIL ACTION No. 07-2696, 2009 U.S. Dist. LEXIS 1746 (E.D. Pa. Jan. 9, 2009)(Strawbridge, M.J.)

This case is also discussed on two March 8, 2009 blogs, http://pabadfaithlaw.com/day_blogs.cfm?d=30&m=1&y=2009 .