Monday, February 24, 2020

Claim of "Institutional Bad Faith" Rejected

In the case of Wenk v. State Farm Fire & Cas. Inc. Co., 1288 WDA (Pa. Super. Jan. 14, 2020 Lazarus, J., Olson, J. and Shogan, J.) (Op. by Shogan, J.) , the Pennsylvania Superior Court, in an unpublished decision addressed the issue of whether a claim of “institutional bad faith” states a valid private cause of action under Pennsylvania law.

The court ruled that there was no such valid cause of action given that Pennsylvania bad faith law requires a focus on the case and the parties at hand, and not a carrier’s conduct towards other parties in general or its allegedly universal practices.

The Superior Court noted that the bad faith statute authorizes actions by a trial court if the court finds that the carrier has acted in bad faith “toward the insured…, and not to the world at large.”

This case arose out of a homeowner’s insurance claim.

This decision is otherwise notable for the fact that both the trial court and the Superior Court in this matter held that the Uniform Trade Practices and Consumer Protection Law (UTPCPL) does not apply to insurer claims handling cases.

Anyone wishing to review a copy of this case may click this LINK.

I send thanks to Attorney Mark Martini of the Pittsburgh law firm of Robb Leonard & Mulvihill for bringing this decision to my attention.

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