In Rutgers Casualty Insurance Company v. Richardson, Philadelphia’s Court of Common Pleas, Commerce Court, upheld as valid an insurance policy in the face of the carrier’s claims of misrepresentation in obtaining the policy.  Though the insured had moved from Pennsylvania to New York, resulting in some address discrepancies,  the court heavily weighed the fact that the insurer never sent a formal notice of cancellation of the policy.  The court noted that in order for an insurer to prove misrepresentation to void a policy, it must establish:  (1) that the representation was false; (2) that the subject matter was material to the risk; and (3) that the applicant knew it to be false and made the representation in bad faith.  Defendant’s address and driver license mistakes were inadvertent and not on the level of deliberate deception required to find bad faith on the part of defendant.  Because the insurer failed to establish that the policyholder knew his representation to be false, thus making the representations in bad faith, he carrier failed to meet its burden of proving that the insured had the requisite “deliberate intent to deceive.”

Date of Decision:  February 1, 2006

Rutgers Cas. Ins. Co. v. Richardson, Court of Common Pleas of Philadelphia, June Term 2004, No. 486, 2006 Phila. Ct. Com. Pl. LEXIS 70 (C.C.P. Philadelphia  Feb. 1, 2006) (Abramson, J.)

 

 

In McBride v. Hartford Life & Accident Insurance Company, the U.S. District Court for the Eastern District of Pennsylvania held that Plaintiff’s Wage Payment and Collection Law (WPCL) and Bad Faith claims were preempted by ERISA. Plaintiff alleged she was wrongfully denied disability benefits under her ERISA benefit plan, however her claims were a result of the denial of disability benefits, items which plainly “related to” her ERISA plan. 

Date of Decision:  February 3, 2006

McBride v. Hartford Life & Accident Ins. Co., United States District Court, E.D. PA, Civil Action No. 05-6172, 2006 U.S. Dist. LEXIS 4278 (E. D. Pa. Feb. 3, 2006) (Yohn, J.)

 

 

In Penn's Market I v. Harleysville Insurance Company, the insured leased a unit in a retail shopping complex to the Chanda corporation, which was engaged in the business of ice cream and retail food sales.  Chanda sued the insured/lessor for Breach of Contract, Breach of Covenant of Good Faith and Fair Dealing, and Tortuous Interference with Business Relations. The carrier refused to defend the lessor, and the lessor brought suit.  The Philadelphia Commerce Court found that the duties allegedly breached were "created" by, and "grounded in," the contract itself; the liability, if any, would have "stemmed" from the lease agreement alone; and the tort claim essentially "duplicated" a breach of contract claim.  Because the Court found that all three claims arose out of a contractual dispute, including the tort claim, it ruled that the carrier had no duty to defend in the Chanda litigation.  Under law repeatedly applied in the Commerce Case Management Program’s decisions, a breach of the implied of the duty faith and fair dealing is solely a contract claim, and such a contract claim cannot be maintained where there is a separate breach of contract count which encapsulates this implied duty claim.  The tort claim was rejected under the gist of the action theory.  Finally, the Court rejected the possibility of coverage under a constructive eviction theory.

Date of Decision: May 3, 2006

Penn's Market. I v. Harleysville Insurance Company, February Term 2005, No. 557, 2006 Phila. Ct. Com. Pl. LEXIS 193 (C.C.P. Philadelphia May 3, 2006) (Abramson, J.)