OCTOBER 2013 BAD FAITH CASES: NO FIDUCIARY DUTY EXISTED WHERE INSURER DID NOT ASSERT RIGHT TO HANDLE CLAIMS; STATUTORY BAD FAITH CLAIM DOES NOT PROVIDE FOR ACTUAL OR CONSEQUENTIAL DAMAGES (Philadelphia Federal)

In Bare v. State Auto Group, the court dismissed the common law breach of fiduciary duty claims because a fiduciary duty higher than the duty of good faith and fair dealing does not arise out of an insurance contract until an insurer asserts a stated right under the policy to handle all claims asserted against the insured, which situation did not exist in that case.  The Court also found the claim inapplicable to the first party aspect of this UIM case.

As to the statutory bad faith claim, the court dismissed plaintiff’s claims for actual damages, consequential damages, and costs to the extent that the statute only provides for interest, punitive damages and attorney’s fees.

Date of Decision:  July 26, 2013

Bare v. State Auto Group, CIVIL ACTION NO. 13-2812, 2013 U.S. Dist. LEXIS 105335 (E.D. Pa.  July 26, 2013) (McLaughlin, J.)