JANUARY 2006 BAD FAITH CASES
RETAINING VALUATION EXPERT IN CASE IS NOT EVIDENCE OF POST-LITIGATION BAD FAITH CONDUCT (Western District)

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In Gallatin Fuels, Inc. v. Westchester Fire Insurance Company, plaintiff loss payee sued its insurer, seeking payment under an insurance policy issued to a mining company, and alleging bad faith.

In ruling on various Motions in Limine filed by both parties, the U.S. District Court for the Western District of Pennsylvania held that plaintiff was not entitled to an order that it was up to the jury whether attorney’s fees should be awarded under Pennsylvania’s bad faith statute; this was a question for the court to decide only if the jury found in plaintiff’s favor on its bad faith claim.

Plaintiff also asserted that defendant’s retention of a valuation expert was evidence of bad faith; however, the court found that though an insurer’s conduct during the pendency of litigation may be considered as evidence of bad faith under Pennsylvania’s bad faith statute, it is only relevant where the conduct shows the insurer’s intent to evade its obligations under a policy.

Date of Decision:  January 13, 2006

Gallatin Fuels, Inc. v. Westchester Fire Ins. Co., United States District Court for the Western District of PA, Civil Action No. 02-2116, 2006 U.S. Dist. LEXIS 1327 (W.D. Pa. Jan. 13, 2006) (Ambrose, C.J.)

This case was ultimately affirmed in part and reversed in part by the Third Circuit.

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RETAINING VALUATION EXPERT IN CASE IS NOT EVIDENCE OF POST-LITIGATION BAD FAITH CONDUCT (Western District)”


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