BAD FAITH CLAIM FOR USING WRONG FEE SCHEDULE TO PAY FIRST PARTY MEDICAL BENEFITS PREEMPTED BY MVFRL; BUT CASE CAN PROCEED UNDER UTPCPL (Middle District)
This class action complaint alleged the insurer underpaid on motor vehicle personal injury benefits claims by using an improper fee schedule, resulting in lower payments than were due.
The court held the statutory bad faith claims were pre-empted by the Motor Vehicle Financial Responsibility Law (MVFRL). The court extensively discussed case law addressing when 75 Pa.C.S. § 1797 preempted 42 Pa.C.S. § 8371. It held the MVFRL preempts section 8371 bad faith claims where the gravamen of the insured’s claim “is the denial of first party medical benefits and nothing more.” By contrast, e.g., abuse of the PRO process might not be preempted.
On the other hand, the court found the complaint adequately pleaded a claim under the Unfair Trade Practices and Consumer Protection Law, as paying an improper sum is more than mere nonfeasance.