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Pennsylvania District Court Addresses Common Law Bad Faith

Posted Scott B. Cooper on Sep 06, 2012 in Personal Injury

What are the laws in your jurisdiction on statutory and common law bad faith?  What are the statutes of limitations for both?

Last week, in a the memorandum opinion in Katzenmoyer v. Allstate Ins. Co., 2012 WL 3764998 (E.D. Pa. Aug. 30, 2012) issues of the statute of limitations (SOL) for  a  breach of contract common law bad faith claim and the validity of the common law bad faith claim itself were addressed by Judge Shapiro.  The Court denies the Allstate Motion on the statute of limitations and holds that the SOL  is 4 years from the date the jury render a verdict in an underlying personal injury case which gives rise to the potential common law bad faith claim and not from the much earlier date that Allstate denied  to make a settlement offer in the underlying case. 

However, the Court also finds that there is not clear and convincing evidence of common law bad faith because the  insurer has a right to defend itself when it reasonably disputes coverage .   In this case, there was evidence that Allstate had at least 6 reasons to deny  an  initial settlement offer,  including a favorable trial court ruling, no binding precedent, similar case was on appeal, etc. .  Then when the insurer no longer had a favorable trial court ruling to rely upon Allstate offered  its policy limits .  This did not amount to common law bad faith and the claim is dismissed.

If you would like a copy of the Pennsylvania Eastern District Court Memorandum by Judge Shapiro it can be obtained by directly contacting Scott Cooper or feel free to contact Central Pennsylvania based Schmidt Kramer Injury Lawyers in Harrisburg and Camp Hill who specialize in Pennsylvania car accidents and crashes and can answer your questions.