Thursday, September 28, 2017

Pennsylvania Supreme Court Defines the Elements of a Statutory Bad Faith Claim (42 Pa.C.S.A. Section 8371)

In its decision in the bad faith case of Rancosky v. Washington Nat'l Ins. Co., No. 28 WAP 2016 (Pa. Sept. 28, 2017), the Pennsylvania Supreme Court, for the first time, considered the elements of a bad faith claim under 42 Pa.C.S.A. Section 8371.

In Rancosky, the Supreme Court adopted the two-part test enunciated in the case of Terletsky v. v. Prudential Prop. & Cas. Ins. Co., 649 A.2d 680 (Pa. Super. 1994), which provides that a plaintiff must present clear and convincing evidence of (1) that the carrier did not have a reasonable basis for denying benefits under the policy, and (2) that the carrier knew of or recklessly disregarded its lack of a reasonable basis.

The Pennsylvania Supreme Court went on to note that evidence of a motive of self-interest or ill will was not a prerequisite for a Plaintiff to prevail on a statutory bad faith claim.

The Majority Opinion written by Justice Baer can be reviewed HERE.

Chief Justice Saylor's Concurring Opinion can be viewed HERE.

Justice Wecht's Concurring Opinion can be viewed HERE.

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