TRIAL COURT ABUSED ITS DISCRETION IN ALLOWING INSURED TO AMEND AT TRIAL TO ADD A NEW JERSEY BAD FAITH CLAIM AFTER INSURER HAD CLOSED ITS CASE (Superior Court of Pennsylvania) (Non-precedential)
At trial, the Pennsylvania court permitted plaintiff orally to amend her claims to add a count for bad faith under New Jersey law, after the insurer had closed its case. The trial court had earlier dismissed a Pennsylvania statutory bad faith claim, without prejudice. That claim was never re-asserted.
The Superior Court reversed.
After carefully reviewing the case history and trial proceedings, the appellate court found the trial court abused its discretion in permitting this late amendment in light of the prejudice to the insurer. “Prior to trial, [the insured] never amended her complaint to bring a bad faith claim under New Jersey law following the dismissal of her Pennsylvania bad faith claim. As a result, [the insurer] stipulated to certain damages and chose its trial strategy believing that the only claim it was defending against was for breach of contract.” The insured unfairly used this stipulation at trial by claiming that the insurer chose not to put on evidence regarding the reasonableness of its conduct. However, “it did not present evidence on reasonableness because its conduct was not at issue.”
“Given that [the insurer] based its trial strategy on defending against a breach-of-contract claim only, the trial court abused its discretion in allowing [the insured] to amend her complaint to add a bad faith claim under New Jersey law after [the insurer] had rested its case. Accordingly, we reverse the trial court’s decision to permit that amendment. Consequently, we also reverse the trial court’s award of punitive damages and attorney’s fees … which were based upon a finding of bad faith.”