Trial Court Addresses Issues Regarding Denial of Coverage Under Homeowner's Policy

In the case of Watkins v. State Farm Fire and Casualty Co., No. 10363 of 2020-CA (C.P. Lawr. Co. April 19, 2022 Motto, P.J.), the court granted a Defendant carrier’s Preliminary Objections to a Plaintiff’s claim for negligence and breach of fiduciary duty relative to the sale of a homeowner’s insurance policy that ended up not providing the Plaintiff with coverage for a fire loss.

In its decision, the court found that the Plaintiff’s claim for negligence against his insurance company was barred by the gist of the action doctrine.

The court additionally found that the Plaintiff’s Complaint did not allege sufficient facts to allow the Plaintiff to move forward on a breach of fiduciary duty claim against the carrier in connection with the sale of the insurance policy. The court noted that, by asserting the right to handle all claims against the insured, the insurance company assumed a fiduciary duty and was obligated to act in good faith and with due care towards its insured. However, the court noted that the courts in Pennsylvania did not impose a fiduciary duty upon an insurance company merely for selling a policy of insurance to an insured.

The court found that the Plaintiff’s Complaint did not allege any facts to show that the Defendant insurance company or its agents applied any undue influence over the Plaintiff. As such, the court found no basis to support an allegation of an existence of a fiduciary duty under the facts alleged. As such, the Defendant’s Preliminary Objections were sustained in these respects and the Defendant was ordered to file an answer to the remainder of the Plaintiff’s Complaint.

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Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (May 31, 2022).