Federal Insurance Company is the carrier issuing the policy. Federal is one of the Chubb Group of insurance companies. The insured sued Federal for breach of contract and bad faith, but in addition named Chubb INA Holdings, Inc., and Chubb Group Holdings, Inc. as defendants. These two Chubb entities were non-diverse, and after removal, the insured sought remand on the basis that there was no federal subject matter jurisdiction. The carrier alleged fraudulent joinder, and that these two Chubb entities were not proper defendants.
Philadelphia Federal Judge Tucker agreed, finding that the two Chubb entities were not the insurance company issuing the policy. Rather, the policy made clear Federal was the insuer. Thus, there was no privity of contract between the two Chubb entities and the insured on which to base any breach of contract claim because there was no insurance contract between them.
The same result ensued on the insured’s bad faith claim. Only an insurer is subject to 42 Pa.C.S.A. § 8371, and these two Chubb entities were not insurers in this matter.
Date of Decision: December 7, 2021
KEYSTONE SPORTS AND ENTERTAINMENT LLC v. FEDERAL INSURANCE COMPANY, U.S. District Court Eastern District of Pennsylvania No. 21-609, 2021 WL 5789021 (E.D. Pa. Dec. 7, 2021) (Tucker, J.)