Friday, September 27, 2013

Excess Verdict Bad Faith Complaint Allowed to Stand in Pennsylvania Federal Middle District Court

In a bad faith decision which was handed down back around the beginning of 2013 in the case of Dolph v. Ill. Nat’l Ins. Co., NO. 3:12-2167, 2013 U.S. Dist. LEXIS 20158 (M.D. Pa. Feb. 11, 2013 Mannion, J.), Judge Malachy E. Mannion of the Federal Middle District Court addressed a motion to dismiss a bad faith claim that was filed after the entry of an excess verdict in an underlying motor vehicle accident litigation.

In this matter, the defendant insurance carriers were sued for bad faith and breach of contract by plaintiffs from an underlying tort suit stemming from injuries they sustained in a car accident. 

The plaintiffs had secured an assignment of the right to sue for bad faith from the underlying defendant who had $50,000 in liability coverage but was hit with a jury verdict that amounted to a little over $1.9 million dollars.  According to the Opinion, the underlying alleged tortfeasor defendant was allegedly driving under the influence at the time of the subject accident and died as a result of his own injuries from the accident.

 The assignees filed suit against two insurers, the named carrier and another insurance company that claimed to be a holding company.

The assignees alleged that the insured had a contract of insurance with the second insurer, entitling the assignees to proceed with their bad faith and breach of contract suit against both carriers.

The second insurer filed a motion to dismiss, arguing that it is not an “insurer” under Pennsylvania’s bad faith statute, but rather only a holding company that did not issue policies or collect premiums.

While Judge Mannion acknowledged that dismissal may be appropriate if that entity was not found to be an insurer, the court nevertheless denied the secondary insurer's motion because there were sufficient allegations in the Complaint asserting that an agent of both insurer-defendants handled the investigation of the assignor’s claims following the underlying personal injury trial.

Click HERE to review a copy of the Dolph Opinion.

I send thanks to Attorney David Rosenberg of the Pittsburgh law firm of Weber Gallagher for bringing this case to my attention along with the synopsis of the case found on the excellent "Pennsylvania and New Jersey Insurance Bad Faith Case Law Blog" put out by the Philadelphia law firm of Fineman, Krekstein & Harris, which blog can be viewed HERE.

No comments:

Post a Comment