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Pennsylvania District Court Addresses Common Law Bad Faith

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 renders 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 the Pennsylvania injury lawyers from the law offices of Schmidt Kramer.

Schmidt Kramer – Ph (717) 888-8888.