Monday, December 21, 2020

Federal Court Reviews Statute of Limitations for Insurance Bad Faith Claims

In the case of McAteer v. State Farm Ins. Co., No. CV-20-101 (E.D. Pa. Nov. 23, 2020 Goldberg, J.), the court granted a Motion to Dismiss a UIM bad faith claim but allowed the Plaintiff the right to file an Amended Complaint.  In so ruling, the court addressed statute of limitations issues.

The two year statute of limitations for 42 Pa.C.S.A. Section 8371 bad faith claims was reaffirmed by the court.

The court generally noted that the claim arises when the Plaintiff is harmed and not when the precise amount or extent of damages is determined. The court also noted that a bad faith claim can accrue when a carrier definitively denies coverage.

The court also confirmed that a Plaintiff cannot avoid the statute of limitations period by asserting that a continuing refusal to cover a claim was a another, separate act of bad faith. The court additionally noted that repeated or continuing denials of coverage do not constitute separate acts of bad faith that give rise to a new statutory period.

Applying this law to the case presented, the court found that the Plaintiff’s claim for statutory bad faith  under 42 Pa.C.S.A. Section 8371was barred by the statute of limitations.

Anyone wishing to review a copy of this decision may click this LINK.  The companion Order of Court can be viewed HERE.

I send thanks to Attorney Lee Applebaum of the Philadelphia law firm of Fineman, Krekstein & Harris for bringing this case to my attention.  Attorney Applebaum is the writer of the excellent Pennsylvania New Jersey Insurance Bad Faith Case Law blog, which can be viewed HERE.

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