An insurer brought a declaratory judgment action, asking court to find no defense or indemnity due the insured. The insured successfully obtained summary judgment in its favor, the court finding the carrier did owe those obligations. The insured further sought its attorney fees under the Declaratory Judgments Act. Eastern District Judge Kearney denied that request.
Judge Kearney states:
Pennsylvania’s appellate courts allow the recovery of attorney’s fees under the Pennsylvania Declaratory Judgment Act, which is “remedial…and is to be liberally construed and administered.” An “insured who is compelled to bring a declaratory judgment action to establish [its] insurer’s duty to defend an action brought by a third party may recover his attorney’s fees incurred in the declaratory judgment action if the insurer has, in bad faith, refused to defend the action brought by the third party.”
[The insured] did not bring this action. It offers no evidence of [the insurer’s] bad faith. It relies on its belief [the insurer’s] denial of coverage is unfounded. We disagree with [the insurer] on its obligations. But its denial is not in bad faith or otherwise frivolous. We lack a basis to require [payment of] fees or costs for properly seeking declaratory relief.
Date of Decision: November 16, 2021
Atain Insurance Company v. Kaz Tire, Inc., U.S. District Court Eastern District of Pennsylvania No. CV 21-3651, 2021 WL 5330371 (E.D. Pa. Nov. 16, 2021) (Kearney, J.)