MAY 2017 BAD FAITH CASES: WHERE INSURED HAS SUFFERED NO HARM, THERE IS NO BAD FAITH CLAIM TO BE ASSIGNED (Pennsylvania Superior Court) (Not Precedential)

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Three brothers owned interests in a single property, but arguably only one of them insured his interests. Their tenants (the insured brother’s daughter and son-in-law), brought suit against her father and uncles for mold exposure. The father’s carrier provided a defense, and the case against him was dismissed on preliminary objections.

The uncles hired private counsel, who filed preliminary objections as well, but before those were decided, the uncles entered a joint tortfeasor release. The uncles assigned their contribution claims against the father and a bad faith claim against his insurer to their niece and nephew.

Subsequently, the attorney representing the niece entered appearances for the uncles (one was deceased, so his estate), and there was ultimately a $5.1 Million judgment entered against the uncles. Efforts to enforce that judgment against the father were denied by way of summary judgment. Still, the father later assigned any bad faith claims he might have against his insurer to his daughter and son-in-law, and they released the father from any claims arising out their original law suit.

The children brought bad faith claims against their father’s insurer. The resolution was simple because the $5.1 Million judgment obtained was not a judgment against the father. The father was both dismissed from the original case, and won a summary judgment motion that the judgment could not be enforced against him. Moreover, that judgment could not be enforced against any party in light of the releases.

As to the assigned claim, the Court concluded: “Since Appellants cannot enforce the [$5.1 Million] Judgment against [father], [father] suffered no harm and, therefore, had no bad faith claim to assign to Appellants.”

Date of Decision: April 26, 2017

Schriner v. One Beacon Ins. Co., No. 852 MDA 2016, 2017 Pa. Super. Unpub. LEXIS 1602 (Pa. Super. Ct. April 26, 2018) (Dubow, Lazarus, Stabile, JJ.) (Not Precedential)

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