Month: May 2014

PA - Common Law Bad Faith (contractual or fiduciary basis)

MAY 2014 BAD FAITH CASES: COURT DENIES MOTION TO STRIKE AVERMENT OF CONTRACTUAL DUTY OF GOOD FAITH, BUT GRANTS MOTION REQUIRING A MORE DEFINITE STATEMENT FROM PLAINTIFF-INSURED TO PLEAD MORE FACTUAL AND LEGAL DETAIL SUPPORTING HER STATUTORY BAD FAITH CLAIM (Middle District)

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In Hoffer v. Grange Insurance Company, the Magistrate Judge addressed, via his Report and Recommendation which was later adopted by the District Court, two technical…

PA - Claims Handling (general)

MAY 2014 BAD FAITH CASES: ON MOTION IN LIMINE, COURT DECIDES: (1) PLAINTIFF’S INSURANCE CLAIM HANDLING EXPERT CANNOT TESTIFY ON MEDICAL ISSUES OR RESERVES; (2) EVIDENCE OF RESERVES NOT PROPER IN DISABILITY INSURANCE CLAIM; (3) PAST GENERAL CLAIMS HANDLING PRACTICES NOT ADMISSIBLE, BUT PRE-CLAIM EVIDENCE CONCERNING ACTUAL INSURED ADMISSIBLE; (4) PLAINTIFF CAN RECOVER FOR EMOTIONAL DISTRESS UNDER COMMON LAW CONTRACT BREACH OF DUTY OF GOOD FAITH; BUT (5) PLAINTIFF CANNOT RECOVER FOR “LITIGATION STRESS” EXPERIENCED IN THE BAD FAITH LITIGATION ITSELF (PHILADELPHIA FEDERAL)

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In Leporace v. New York Life & Annuity Corp. the court addressed various motions in limine on a bad faith claim against a disability insurer.…

PA - Claims Handling (general)

MAY 2014 BAD FAITH CASES: COURT ALLOWS AMENDMENT TO COMPLAINT ADDING BAD FAITH CLAIM OVER TWO YEARS INTO THE CASE WHERE COVERAGE DENIAL OCCURRED DURING THE LITIGATION, AND THE NEW ALLEGATIONS CONCERNED EVENTS OR OCCURRENCES THAT ONLY CAME TO LIGHT AFTER THE ORIGINAL COMPLAINT WAS FILED (Middle District)

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In Kump v. State Farm Fire & Casualty Company, the insured plaintiff sought to amend his complaint. The case arose out of a fire to…

PA - Claims Handling (general)

MAY 2014 BAD FAITH CASES: THIRD CIRCUIT (1) UPHOLDS DISCOVERY RULINGS THAT RESERVES AND COMMUNICATIONS WITH REINSURER WERE NOT DISCOVERABLE; (2) REITERATES THAT INSURER IS NOT OBLIGATED TO MAKE PARTIAL PAYMENTS ON A DISPUTED CLAIM; AND (3) FINDS NO BAD FAITH IN INSURER NOT ALTERING ITS ORIGINAL POSITION BASED ON ITS FIRST EXPERT’S VALUATION – DESPITE A SUBSEQUENT HIGHER VALUATION BY ITS SECOND EXPERT– PENDING THE OUTCOME OF THE APPRAISAL PROCESS (Third Circuit)

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In Mirarchi v. Seneca Specialty Insurance Company, the Third Circuit affirmed the District Court’s judgment in the carrier’s favor on a fire loss claim. The…

PA - Attorney Client Privilege

MAY 2014 BAD FAITH CASES: IN ENCYCLOPEDIC OPINION ON SEALING DOCUMENTS TO BE FILED IN COURT AS PART OF SUMMARY JUDGMENT MOTION, COURT OBSERVES THE PRESENCE OF A PUBLIC INTEREST IN BAD FAITH DISPUTES WITH INSURERS; AND ADDRESSES CIRCUMSTANCES OF WHEN COMMUNICATIONS BETWEEN INSURED AND INSURER, WHICH INCLUDED PRIVILEGED DOCUMENTS BETWEEN INSURED AND ITS COUNSEL, MAY RESULT IN THE LOSS OF THE ATTORNEY CLIENT PRIVILEGE (Western District)

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Mine Safety Appliances Co. v. North River Insurance Company involved breach of contract and bad faith claims by the insured against its insurer for alleged…

PA - Claims Handling (reasonable)

MAY 2014 BAD FAITH CASES: WHILE DENYING SUMMARY JUDGMENT ON COVERAGE IN EARTHQUAKE/EARTH MOVEMENT CASE, SUMMARY JUDGMENT GRANTED ON BAD FAITH CLAIM WHERE INSURER REASONABLY RELIED ON ENGINEER’S REPORT AND OTHER FACTS OFFERED BY THE INSURED COULD NOT ESTABLISH BAD FAITH UNDER THE SUBSTANTIAL CLEAR AND CONVINCING EVIDENCE STANDARD; THOUGH COURT WOULD NOT CONSIDER INSURER’S EXPERT REPORT CONCLUDING THAT INSURER’S CONDUCT DID NOT CONSTITUTE BAD FAITH (Middle District)

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Honesdale Volunteer Ambulance Corp. v. American Alternative Insurance Corp. involved a property damage claim in relation to an earthquake. The policy excluded coverage for “earth…