The underlying plaintiff settled her state court suit, and the defendant’s insurer issued a settlement check for $100,422.47. Plaintiff never deposited the check, taking the position she was defrauded, and was entitled to more from her own insurer and the defendant’s insurer. She made bad faith claims against the defendant’s insurer on the basis that insurer owed her a duty of good faith and fair dealing.
Western District Judge Stickman observed:
As the Pennsylvania Superior Court noted in Strutz [v. State Farm, 609 A.2d 569 (Pa. Super. 1992)], an insurer owes no duty of good faith in dealing with third-party claimants: “the duty to negotiate a settlement in good faith arises from the insurance policy and is owed to the insured, not to a third-party claimant. By asserting its policy right to handle all claims, the insurer assumes a fiduciary position toward the insured and becomes liable to act in good faith and with due care in representing the interests of the insured.” Strutz, 609 A.2d at 571 (holding that a third-party claimant cannot bring a cause of action for bad faith against an alleged tortfeasor’s liability insurer). Thus, [plaintiff] does not have standing to sue [the defendant’s insurer] for bad faith.
Date of Decision: March 24, 2022
Gitelman v. Wilkinson, U. S. District Court Western District of Pennsylvania No. 2:21-CV-1696, 2022 WL 874624 (W.D. Pa. Mar. 24, 2022) (Stickman, J.)