OCTOBER 2013 BAD FAITH CASES: STATUTORY BAD FAITH CLAIM PRE-EMPTED BY ERISA; NO PRIVATE CAUSE OF ACTION UNDER PENNSYLVANIA’S UNFAIR INSURANCE PRACTICES ACT (Philadelphia Federal)
In Minchella v. Sun Life Assurance Company, the decedent was insured under a group life insurance policy as a benefit of his employment. The court found that statutory bad faith claims were pre-empted by ERISA, as were the claims under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law. The court further found that the plaintiff’s effort to bring a bad faith claim based on violations of Pennsylvania’s Unfair Insurance Practices Act (UIPA) were not permitted, as (1) that statute does not provide a private cause of action and (2) violation of that UIPA is not the basis for a claim of statutory bad faith under 42 Pa.C.S. § 8371. Moreover, to the extent this was an effort at making such a section 8371 statutory bad faith claim, as stated above it was pre-empted.
As set forth in other entries in this Blog, there appears to be a difference in the willingness of Pennsylvania’s lower state courts and the federal courts in looking to the UIPA as the basis for a statutory bad faith claim.