Federal Court UIM Bad Faith Claim Dismissed Where Plaintiff Did Not Plead Sufficient Facts

In the case of Hampton v. Progressive Insurance Company, 2:24-CV-01011-MAK (E.D. Pa. May 21, 2024 Kearney, J.), the court granted a Motion to Dismiss a Plaintiff’s bad faith claims and claims under the Pennsylvania Unfair Trade Practices and Consumer Protection Law in a UIM case.

According to the Opinion, the Plaintiff secured the $15,000.00 liability limits from the third party tortfeasor and then pursued this UIM claim.

After the UIM carrier offered $1,000.00 in settlement, the Plaintiff filed a breach of contract action that included claims for statutory bad faith and unfair trade practices claims.

The court ruled that the Plaintiff’s bad faith claim failed where the Plaintiff failed to plead sufficient facts alleging any unreasonable conduct by the carrier or any facts that would support an inference of unreasonableness with respect to the carrier’s settlement offer.

The court otherwise stated that the Plaintiff failed to identify specific actual omissions by the Defendant carrier that were unreasonable or indicative of bad faith. Rather, the Plaintiff only made conclusory allegations that the Defendant’s settlement offer below is UIM policy limits demonstrated bad faith. The court stated that the Plaintiff did not pled any specific facts with regards to how the Defendant carrier evaluated the UIM claim or any facts that would support an inference that the $1,000.00 settlement offer was unreasonable.

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


Source: Law.com, “The Legal Intelligencer Federal Case Alert” (June 13, 2024).

Source of image:   Photo by Mikhail Nilov on www.pexels.com.

Pennsylvania Supreme Court Holds that Party Can Secure BOTH Treble Damages AND Punitive Damages in UTPCPL Claim

In the case of Dwyer v. Ameriprise Financial, No. 2 WAP 2023 (Pa. April 25, 2024) (Op. by Wecht, J.)(Brobson, J., Concurring and Dissenting), the Pennsylvania Supreme Court held that a court may, under the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL), award both punitive damages and treble damages.

This case involved Plaintiffs who sued Ameriprise Financial for negligent and fraudulent misrepresentation relative to a life insurance policy. The Plaintiffs alleged that the carrier misrepresented to them that their quarterly premium payments would remain the same for the life of the policy. In reality, if the Plaintiff’s premium payment had remained the same, the policy allegedly would have lapsed for insufficient funds in 2020.

The trial court found Ameriprise guilty of violating Pennsylvania Unfair Trade Practices and Consumer Protection Law and award compensatory damages. The trial court declined to award treble damages under the UTPCPL under a rationale that such damages would be duplicative of the punitive damages that were awarded by the jury on the common law claims.

The Pennsylvania Superior Court had affirmed this decision.

Going up to the appellate ladder to the Pennsylvania Supreme Court, that Court reversed and held that treble damages under the UTPCPL are a separate remedy available to the Plaintiffs and must be considered by the trial court without regard to a punitive damages award on related common law claims.

The Pennsylvania Supreme Court noted that nullifying the availability of a statutory award because of a common law award is not a permissible exercise of discretion by the trial court.

Accordingly, the Pennsylvania Supreme Court reversed the order of the Superior Court and remanded the case back down to the trial court for reconsideration of the appropriate amount of damages under the UTPCPL.

Anyone wishing to review a copy of the Majority decision written by Justice Wecht may click this LINK.  

Justice Brobson Concurring and Dissenting Opinion can be viewed HERE

I send thanks to Attorney Kenneth Newman of the Pittsburgh office of the Thomas Thomas & Hafer law firm for bringing this case to my attention.

Source of image::  Photo by Giorgio Trovato on www.unsplash.com.

Bad Faith Action in Fire Loss Insurance Coverage Case Dismissed

In the case of Mohanan v. Liberty Mut. Pers. Ins. Co., No. 2:22-CV-02956-RBS (E.D. Pa. Nov. 20, 2023 Surrick, J.), the court granted a Defendant insurance company’s Motion to Dismiss the Plaintiffs’ claims of violations of the Pennsylvania Unfair Trade Practices & Consumers Protection Law, negligence, and bad faith relative to coverage questions related to the alleged smoke damage to a property.

The court found that the Plaintiff’s had failed to establish any deceptive conduct on the part of the carrier in terms of the carrier’s investigation and handling of the claim. The court also found that the Plaintiff had failed to produce any evidence of any act or omission by the carrier in terms of any alleged misrepresentations of the coverage available.

The court in this case otherwise ruled that the Plaintiff’s negligence claim was barred by the gist of the action doctrine in this breach of contract case.

The court otherwise found that the Plaintiff had not pled any facts to explain why the carrier’s investigation was unreasonable.

The court additionally rejected the Plaintiff’s claim that the carrier had a special relationship with the Plaintiffs simply by virtue of the fact that the Plaintiffs had purchased an insurance policy. As such, the Plaintiff’s claim of a heightened duty of care owed to the Plaintiff was rejected.

The court additionally noted that the parties had agreed that various references to treble damages, the request for attorneys’ fees, and the request for punitive damages and consequential damages should be stricken from Complaint as improper.

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


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Dec. 14, 2023).

Western District Federal Court Addresses Alleged Bad Faith Issues in UIM Context

In the case of Alag v. Geico, No. 22-155 (W.D. Pa. Nov. 16, 2022 Lenihan, M.J.), a federal district magistrate judge for the Western District of Pennsylvania addressed various issues in a motor vehicle accident UIM claim with allegations of bad faith.

The court granted the carrier’s Motion to Dismiss the Plaintiff’s claim for breach of the covenant of good faith dealing.

However, the court denied the Motion to Dismiss relative to the bad faith claims and the allegations of violations under the Unfair Trade Practices Act and Consumer Protection Law.

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


I send thanks to Attorney Joseph Hudock from the Pittsburgh law firm of Summers, McDonnell, Hudock, Guthrie & Rauch for sending this case to my attention.

Federal Court Rejects Claim that Section 1716 of MVFRL Could Be Considered As Supporting Allegations in a UIM Bad Faith Claim

In the case of Deal v. Nationwide, Prop. & Cas. Ins. Co., No. 2:22-CV-01269-MH (W.D. Pa. Oct. 31, 2022 Horan, J.), the court granted in part and denied in part a UIM carrier’s Partial Motion to Dismiss that was filed in a bad faith claim. 

After finding that the Plaintiff had stated a valid statutory bad faith claim such that that part of the Defendant’s Motion to Dismiss should be denied, the court did grant a dismissal of the Plaintiff’s UTPCPL claim in that the Plaintiff had failed to allege specific representations that Nationwide had allegedly made they sold the policy to the Plaintiff.

Of note, the Plaintiff’s claim of a violation of  the mandates of 75 Pa. C.S.A. §1716 by the UIM carrier was dismissed. The court noted that §1716 of the MVFRL dealt with first party benefits.

The Plaintiff’s argued that UM benefits should be considered to be a hybrid of first-party and third-party claims and, therefore, should be entitled to the protections afforded under §1716.  The court rejected this argument.

The court noted that the MVFRL was organized into subchapters with each chapter dealing with a separate type of benefits., including a separate chapter on UIM benefits.

The court found that §1716 fell under the subchapter for first-party benefits.

Accordingly, the court ruled that §1716 plainly could not apply to UM benefits, which were covered by their own separate subchapter under the MVFRL.

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


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Nov. 18, 2022).

The Dangers of Store Checkout Lines

In the case of Kovalev v. Wal-Mart, Inc., No. 2:2022-CV-1217 (E.D. Pa. Oct. 11, 2022 Quinones Alejandro, J.), the court granted a F.R.C.P. 12(b)(6)Motion to Dismiss in part and denied it in part in a premises liability case.

According to the Opinion, the Plaintiff was allegedly injured when he was standing in a checkout line and a customer behind him started hitting the Plaintiff with her shopping cart while shouting "move the line."  The Plaintiff alleged, in part, that, even though security personnel had the ability to observe the incident via real-time surveillance in a security room several feet away, no one came to the aid of the Plaintiff at the time of the incident.    

After suit was initiated, the Defendant store filed a Rule 12(b)(6) Motion to Dismiss on various grounds.

The Plaintiff's claims against Wal-Mart for assault and battery were dismissed given the lack of any facts to support any allegations that the store intentionally harmed the Plaintiff.  Nor were there any facts to support an allegation that Wal-Mart was liable for the intentional acts of another patron in the store.

The court found that the Plaintiff’s claim that the store was negligent in failing to have sufficient security to prevent its customers from assaulting other customers did state a valid cause of action.  Here, the Plaintiff alleged that he was a business invitee of the store and that the store was negligent in protecting him from the intentional or criminal acts of a third person within the store.

However, the court also found that a negligence duty to provide security within a commercial establishment does not create a special relationship that would support a separate claim for negligent infliction of emotional distress. The court noted that such relationships exist only in extremely limited circumstances.

The court dismissed the Plaintiff's separate claim for "gross negligence" after finding that there is no separate cause of action for gross negligence recognized under Pennsylvania law.  

The court additionally found that negligence per se is not an independent cause of action.

In contrast, the court in this matter additionally ruled that there is civil cause of action recognized in Pennsylvania for recklessn endangerment. 

The court also ruled that, absent a civil cause of action for a particular act, there can be no cause of action for civil conspiracy to commit that act. The court also found that a negligence claim is not an intentional or criminal act that could support a separate civil conspiracy claim.

Lastly, the court also found that physical and emotional injuries do not support a cause of action under the Unfair Trade Practices & Consumer Protection Law, as that cause of action is limited to losses of money or property.

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


I send thanks to Attorney James M. Beck of the Philadelphia office of the Reed Smith law firm for bringing this case to my attention.

UIM Bad Faith Claim Allowed to Proceed; UTPCPL Claim Dismissed

In the case of Wingrove v. Nationwide Prop. & Cas. Ins. Co., No. 2:21-CV-00940 (W.D. Pa. March 28, 2022 Colville, J.), the court found that a Plaintiff adequately pled a UIM bad faith claim regarding claims handling issues and an alleged delay in payment. However, the Court dismissed claims that were brought by the Plaintiff under the Unfair Trade Practices and Consumer Protection Law (UTPCPL) as well as under the Pennsylvania Motor Vehicle Financial Responsibility Law.

According to the Opinion, the insured brought bad faith claims regarding the carrier’s failure to pay UIM benefits and wage loss benefits. The carrier filed a Motion to Dismiss in this federal court matter.

After reviewing the Complaint, the court found that the Complaint described in sufficient detail the facts that described the who, what, where, when, and how questions with regard to alleged bad faith conduct.

More specifically, the court found that the Plaintiff had alleged facts in support of claims of a lack of any investigation or evaluation, alleged repeated failures on the part of the carrier to communicate with the Plaintiff’s counsel despite Plaintiff’s counsel’s attempt to contact the carrier, and also alleged an unexplained delay of seven (7) months between the Plaintiff’s demand and the carrier’s offer. The court found that these allegations were sufficient to allow the bad faith claim to proceed.

The court otherwise dismissed the Plaintiff’s UTPCPL claims after finding that that law did not apply to claims handling, but only to conduct prior to the entry of an insurance agreement. The court noted that the allegations all involved claims handling issues and not the sale of an insurance policy.

The court also agreed that the claims raised by the Plaintiff under 75 Pa. C.S.A. §1716 of the Motor Vehicle Financial Responsibility Law, which addressed first party benefits issues, did not apply to UIM claims. As such, those claims were dismissed as well.

The court otherwise refused to strike references to a fiduciary duty as set forth in the Complaint. In this regard, the court found that the Plaintiff had not specifically asserted any claim for a breach of a fiduciary duty and that there was, therefore, no need for the drastic action of striking allegations sounding in that regard from the case at that early stage of the case.

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


I send thanks to Attorney Lee Applebaum of the Philadelphia law office of Fineman Krekstein and Harris, and also the writer of the Pennsylvania New Jersey Insurance Bad Faith Case Law blog for bringing this case to my attention.  Click HERE to view Lee's Blog.

Bad Faith and UTPCPL Claims Dismissed in Damage to Motorhome Case

In the case of Moravia Motorcycle, Inc. v. Allstate Insurance Company, No. 2:21-CV-01274-PLD (W.D. Pa. March 3, 2022 Dodge, M.J.), a federal magistrate district court judge for the Western Federal District Court of Pennsylvania issued a Memorandum Opinion in an insurance bad faith case.

According to the Opinion, the Plaintiffs owned a motorhome that sustained storm damage when a tree fell on top of the motorhome, which allowed rainwater and other moisture to penetrate the motorhome and cause damage to the interior and the Plaintiffs’ property located inside.

The Plaintiffs asserted that they were advised that the policy would provide coverage for this type of loss. When they notified Allstate of the damages, Allstate refused to provide coverage. The Plaintiff sued for a breach of contract, bad faith, and for treble damage under the Unfair Trade Practices and Consumer Protection Law.

After reviewing the facts before it, and applying the relevant law, the court granted Allstate’s Motion to Dismiss the Plaintiff’s claims of negligence and bad faith without prejudice. The court also granted Allstate’s Motion to Dismiss with prejudice relative to the claims under the Unfair Trade Practices and Consumer Protection Law.

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


I send thanks to Attorney Joseph Hudock of the Pittsburgh law firm of Summers, McDonnell, Hudock, Guthrie & Rauch, P.C. for bringing this case to my attention.

UIM Bad Faith Claim Allowed to Proceed But UTPCPL Claim Dismissed

In the case of Defuso v. State Farm Mut. Auto. Ins. Co., No. 3:21-CV-507 (M.D. Pa. March 21, 2022), Judge Malachy E. Mannion of the Federal Middle District Court of Pennsylvania found that a Plaintiff had pled sufficient facts to survive a Motion to Dismiss her bad faith claim in a UIM case. However, the Plaintiff’s claims for violations under the Unfair Trade Practices and Consumer Protection law were dismissed.

According to the Opinion, the tortfeasor tendered its $100,000.00 liability limits to the Plaintiff and the UIM carrier agreed to consent to that settlement. The Plaintiff had $50,000.00 in stacked UIM coverage.

The record in the case revealed that the Plaintiff participated in discovery, a statement under oath, and an IME over the first seventeen (17) months of the claim. Following the expiration of that time, the carrier made its first offer of $7,500.00.

Judge Malachy E. Mannion
M.D. Pa.

In his Opinion, Judge Mannion found that the Plaintiff had adequately pled a bad faith claim. Judge Mannion rejected the argument of the defense that the case merely involved a valuation dispute. 

In so ruling, the court pointed to allegations by the Plaintiff that there were delays in the claims handling and that the carrier allegedly failed to entirely and appropriately investigate and evaluate the case presented. The Plaintiff also alleged that the carrier had unreasonably undervalued the Plaintiff’s claims.

The court did, however, dismiss the Plaintiff’s UTPCPL claim after finding that the Plaintiff merely recited the elements of such claim and did not allege facts to support the same. The court additionally noted that a claim of an alleged failure on the part of the carrier to act on an insurance claim in a timely manner was not a valid cause of action under the UTPCPL, as such a claim is a claim for nonfeasance as opposed to a claim of malfeasance.

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


I send thanks to Attorney Lee Applebaum of the law office of Fineman Krekstein & Harris for bringing this case to my attention. Please be sure to check out Attorney Applebaum’s excellent Pennsylvania New Jersey Insurance Bad Faith Case Law blog.

No Duty on UIM Carrier to Advise Plaintiff of Change in the Law

In the case of Devine v. Geico General Ins. Co., No. 5:21-CV-02679-JMG (E.D. Pa. Jan. 7, 2022 Gallagher, J.), the court addressed claims of breach of contract, breach of the implied covenant of good faith and fair dealing, statutory bad faith claims and claims of a violation of the Unfair Trade Practices and Consumer Protection Law (UTPCPL) in a UIM case in which the household exclusion was relied upon by the carrier.

At issue before the court was a Motion to Dismiss the Complaint filed by the carrier. This motion was largely based on statute of limitation arguments.

The court found that the event triggering the running of the statute of limitations was the original denial of the claim and not a later refusal to pay after a renewed demand was submitted by the Plaintiff.

The court applied the four (4) year statute of limitations on the contract claims, including a breach of the covenant of good faith and fair dealing. The court found that these claims were barred based upon the allegations on the face of the Complaint.

The court also noted that the statutory bad faith claims asserted by the Plaintiff was subject to a two (2) year statute of limitations. As such, those claims were also found to be time-barred.

Relative to the Plaintiff’s bad faith claims, the court found that the Plaintiff had failed to allege any specific facts to support these claims, even if they were not barred by the statute of limitations.

Notably, the Plaintiff also asserted that the carrier had violated the UTPCPL because the carrier allegedly breached a duty to notify the insured that the Pennsylvania Supreme Court had changed the law regarding the household exclusion by way of the Supreme Court’s decision in the case of Gallagher v. Geico.

The court in this Devine case found “no support in Pennsylvania law for such an extraordinary duty” as alleged by the Plaintiff.

Judge Gallagher also noted in the Devine case that the “Courts that have addressed the issue of whether a company has a duty to inform its customers of a change in the law have uniformly held that no such duty exists.”

Given that the court found that any effort to amend their Complaint would be futile, the Complaint in this matter was dismissed with prejudice by the court.

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

I send thanks to Attorney Lee Applebaum of the Philadelphia law office of Fineman Krekstein & Harris for bringing this case to my attention. Please check out Attorney Applebaum’s excellent blog entitled The Pennsylvania and New Jersey Bad Faith Case Law blog.

Federal Court Dismisses Bad Faith Claims Asserted Directly Against to Claims Adjusters in a UIM Case

In the case of Holohan v. Mid-Century Ins. Co., No. CV 20-6903 (E.D. Pa. Sept. 27, 2021 Tucker, J.), the court denied bad faith claims asserted by a Plaintiff against two (2) automobile insurance adjusters. Other bad faith claims asserted against the carrier were allowed to proceed.

According to the Opinion, this case involved claims against an automobile insurance carrier regarding two (2) distinct motor vehicle accidents. The insured husband alleged personal injuries as a result of a first accident that were exacerbated in a second accident. The Plaintiff alleged that he was underpaid on the first loss for medical benefits and asserted that his UIM claim was mishandled relative to the second accident.

The Plaintiff brought various claims for breach of contract and bad faith as well as claims under the Unfair Trade Practices and Consumer Protection Law against the two (2) individual claims representatives.

The Defendant carrier filed a Motion to Dismiss the claims against it as well as the individual claims representatives.

The court found that the claims against the individual adjusters failed after finding that, while insurance adjusters have a duty to their principals and should conduct investigations in a proper manner, this duty does not create a contractual obligation between the adjuster and the insured. Rather, only the principal, that is, the insurance company, could have such contractual liability.

The court dismissed the claims against the individual adjusters for these reasons and given that there were no facts pled by the Complaint to support any claims of deceptive or fraudulent conduct under the Unfair Trade Practices and Consumer Protection Law.

The court did allow the statutory bad faith claims asserted against the carrier to proceed after finding that the Plaintiff had stated sufficient factual allegations in support of the same. In particular, the Plaintiff alleged, in part, that the carrier and one of the adjusters conducted seven (7) peer reviews with respect to the Plaintiff’s treatment in an effort to challenge causation and deny benefits.

The court otherwise dismissed the Plaintiff’s common law bad faith claims after finding that those claims were subsumed in the breach of contract claims.

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

I send thanks to Attorney Lee Applebaum of the Philadelphia law firm of Fineman Krekstein & Harris for bringing this case to my attention.   Please be sure to check out Attorney Applebaum’s excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law blog HERE.  

Source of image:  Photo by Adolfo Felix on Unsplash.com.

Catch-All Provision of UTPCPL Provides for Strict Liability

In the case of Gregg v Ameriprise Fin., Inc., No.29WAP2019 (Pa. Feb 17, 2021), the Pennsylvania Supreme Court, in a Majority Opinion written by Justice David N. Wecht, ruled that the catch-all provision of the Unfair Trade Practices and Consumer Protection Law provided for a strict liability cause of action. 

The court noted that the plain language of the statute imposes liability on commercial vendors who engage in conduct that has the potential to deceive and which creates a likelihood of confusion or misunderstanding. The Court found that the legislature did not require either carelessness or intent when a cause of action is based upon an allegation of deceptive conduct.

As such, the Court ruled that, under the plain meaning of the statute, deceptive conduct during a consumer transaction that creates a likelihood of confusion or misunderstanding and upon which the consumer relies to his or her financial detriment, does not depend upon the actor’s state of mind. The Court found that, without a state of mind requirement, the catch-all provision of the statute may be fairly characterized as describing a strict liability offense.

The dissenting Justices would have created a negligence standard on this issue.


Anyone wishing to review a copy of the Majority’s Opinion in this case may click this LINK. The Dissenting Opinion may be viewed HERE.


I send thanks to Attorney Lee Applebaum of the Philadelphia law firm of Fineman Krekstein & Harris, as well as the writer of the excellent Pennsylvania and New Jersey Bad Faith Case Law Blog for bringing this decision to my attention.

Western Federal District Court Narrows Application of Gallagher v. Geico To Its Facts

A Federal Western District Court Judge has joined those judges who have breathed life into the Household Exclusion by limiting the Gallagher v. Geico decision to its facts and rejecting a reading that the Pennsylvania Supreme Court's decision eradicates the exclusion across the board.

In the case of Dunleavy v. Mid-Century Ins. Co., No. 2:19-CV-1304 (W.D. Pa. May 19, 2020 Ranjan, J.), Judge Ranjan of the Pennsylvania Western Federal District Court held that the Pennsylvania Supreme Court’s decision in Gallagher v GEICO, in which that court ruled that the household exclusion was no longer valid, did not apply to invalidate a household exclusion in this case where the insured had waived UIM coverage on a motorcycle insured with another carrier. 

The Court in Dunleavy therefore ruled that the claimants were not entitled to stacked UIM coverage from their automobile insurer because there was no coverage on the motorcycle with which to stack. In other words, the claimants had waived stacking on the motorcycle policy, which had been issued by a different carrier.

In its decision, the Court also held that, because the Plaintiff’s claims failed with respect to the household exclusion issue, the Plaintiff’s claims for bad faith and under the Unfair Trade Practices and Consumer Protection Law also failed.

Anyone wishing to review this decision may click this LINK.

I send thanks to Attorney Patricia A. Monahan of the Pittsburgh office of the Marshall Dennehey law firm for bringing this case to my attention.

Superior Court Addresses Validity of UTPCPL Claims

In the case of Wenk v. State Farm Fire & Casualty Ins. Co., No. 2020 Pa. Super. 26(Pa. Super. Feb. 7, 2020) (Shogan, J., Lazarus, J., and Olson, J). (Op. by Shogan, J.), the court affirmed in part and vacated in part a trial court’s decisions in a bad faith and Unfair Trade Practices and Consumer Protection Law (UTPCPL) claims against a contractor.

According to the Opinion, the case arose out of a Plaintiff’s lawsuit against a carrier and a contractor over repairs to the Plaintiff’s house. The Plaintiff alleged that another contractor poured gasoline into the framework of their house to destroy a bee’s nest.   The house was damaged as a result and the Plaintiff submitted a claim to his carrier.

The Plaintiff then agreed to let another contractor, who was approved by the carrier, to perform remedial work.

The Plaintiff alleged that there were issues with the remedial work. The Plaintiff sued the carrier and the contractor for breach of contract, breach of warranty, and violations of the UTPCPL.

On appeal, the appellate court agreed with the trial court that the Plaintiff’s bad faith and Unfair Trade Practices and Consumer Protection Law claims against the carrier had to be dismissed.

The appellate court also found that the trial court properly exercised its discretion with respect to the damages awarded in the UTPCPL claims against the contractor. However, the appellate court found that the trial court erred in dismissing the carrier’s and the contractor’s claims for a setoff.

The court noted that a setoff should have been allowed to the extent that the Plaintiff’s settlement with the other contractor covered any damages that the Plaintiff sought in this case including compensation for damages to the home and personal property so as to prevent any duplication of recovery.

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

Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Feb. 25, 2020).

Western Pennsylvania Federal District Court Reaffirms Several Products Liability Principles of Law

In the Western District Federal Court case of Chandeler v. L’Oreal USA, Inc., 2:17-CV-01141 (W.D. Pa. Sept. 14, 2018 Fisher, J.), the court reaffirmed several important principles of products liability law.   

In the end, the court granted summary judgment in favor of the Defendant on the basic rationale that the Plaintiff had failed to prove that the product was defective, which is fatal to claims for strict liability, negligence, breach of warranty, and violations of the Unfair Trade Practices & Consumer Protection Law.  

 The court additionally noted that the Defendant’s warnings on the product warned about the type of injury the Plaintiff suffered. The court also stated that the record before it established that the Plaintiff failed to read the warnings.   Moreover, to the extent that the Plaintiff may have allegedly read the warnings, the evidence was that she ignored the warnings.  

According to the Opinion, this case involved the Plaintiff's use of an at-home hair relaxer product manufactured by the defendant.

Among the notable rulings of the court were the following:

-It is the judge who determines whether warnings are adequate and whether the product is defective for an inadequate warning.

-Negligence and strict liability claims overlap in warning claims.

-A manufacturing defect can be established directly or by circumstantial evidence.

-Circumstantial proof of a product malfunction must rule out any abnormal use of secondary causes of the injury.

-Implied warranty claims and manufacturing defect claims are essentially the same.

-To establish an implied warranty, the Plaintiff must prove a product defect.

-Where a Plaintiff does not retain any of the product at issue, that Plaintiff cannot prove a manufacturing defect directly and must, instead, attempt to rely upon circumstantial
evidence.

-A failure of a Plaintiff to follow warnings is fatal to a malfunction theory case.

-Claims for misrepresentation and the UPTCPL claims can fail for lack of justifiable reliance by the Plaintiff, i.e., these claims may fail where a Plaintiff does not read or rely upon any alleged misrepresentations with respect to the product.

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

I send thanks to Attorney James M. Beck, of the Philadelphia office of the Reed Smith law firm and the writer of the excellent Drug and Device Law blog for bringing this case to my attention and providing his above analysis of the same.
 

Eastern Federal District Court Takes a Closer Look at Interplay Between First Party Claims and Bad Faith Claims

The issue of bad faith claims in the first party benefits lawsuits was reviewed by the Eastern Federal District Court in the case of Shea v. USAA, No. 17-4455 (E.D. Pa. July 25, 2018 Surrick, J.).  The issues came before the court on the carrier's motion to dismiss.

Following the insured's involvement in a motor vehicle accident, the insured began to receive the benefit of her $100,000 in first party medical coverage under her own policy.  At some point after a peer review, the carrier stopped the payment of the benefits.  The Plaintiff filed a breach of contract claim, alleging violations of 75 Pa.C.S.A. Section 1797, and asserted bad faith conduct on the part of the carrier.

The court noted that there are conflicting Pennsylvania state and federal court decisions on the crucial issue of whether the MVFRL's provisions pertaining to peer reviews of first party medical benefits supplants claims for breach of contract, bad faith, and consumer protection law violations.  It was noted that, to date, the Pennsylvania Supreme Court has not addressed the proper interaction of these causes of action in the first party context.

In his decision in this Shea case, Judge R. Barclay Surrick of the Eastern District Federal Court lays out the issues and the law in great detail and in an easy-to-follow fashion.

The court rejected the defense contention that the MVFRL's peer review process preempts the existing common law remedy for breach of an insurance contract's implied covenant of good faith and fair dealing.  The Court ruled that 75 Pa.C.S.A. Section 1797, which lays out the framework for first party benefits, does not prohibit an action for damages arising from an alleged breach of the insurance contract's implied covenant of good faith and fair dealing where those damages are otherwise available under the facts alleged.

In reviewing the conflicting line of cases on the issue of whether a Section 1797 peer review claim can be asserted in the same case as a Section 8371 bad faith claim, the Shea court elected to side with what it termed as a growing number of cases that have fallen on the side of allowing both claims to be pled in a single action.  In the end, the court in Shea held that, where it is alleged that a carrier failed to follow the mandates of Section 1797, a plaintiff's remedies are not limited to those stated under Section 1797, but could also include the remedies allowed under the bad faith statute found at 42 Pa.C.S.A. Section 8371.

In the end, the court denied the carrier's motion to dismiss.

Anyone wishing to review this decision may click this Memorandum Opinion may click this LINK.

I send thanks to Lee Appelbaum, writer of the excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law Blog, and from the Philadelphia law firm of Fineman, Krekstein & Harris for bringing this case to my attention.

Pennsylvania Unfair Trade Practices Act and Consumer Protection Law Does Not Apply to the Handling of Insurance Claims

In his recent decision in the case of Machado v. Safeco Ins. Co., No. 3:16-CV-1685 (M.D. Pa. April 7, 2017 (Munley, J.), Judge James M. Munley addressed a Plaintiff’s claims under consumer protection law for allegedly abusive claims handling practices by the carrier of her insurance claim.  

The court noted that, in the insurance context, Pennsylvania’s Unfair Trade Practices and Consumer Protection law “applies only to conduct related to the sale of an insurance policy, not to the handling of the insurance claims.”  

However, in a footnote, the court noted that, under the case of Berg v. Nationwide Mut. Ins. Co. Inc., 44 A.3d 1164 (Pa. Super. 2012) the Superior Court found that a violation under the Unfair Trade Practices and Consumer Protection law could serve as evidence to support a bad faith claim.

In the end, the court granted in part and denied in part the Defendant's Motion to Dismiss. 

 Anyone wishing to review this decision may click this LINK..

I send thanks to Attorney Lee Applebaum of the Philadelphia law firm of Fineman, Krekstein and Harris.  Please be sure to check out Attorney Applebaum’s excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law blog which you review HERE.  

UIM Bad Faith Claim Dismissed by Western Federal District Court

In a recent Western District of Pennsylvania Federal Court decision of Homer v. Nationwide Mut. Ins. Co., No. 2:15-cv-01184-NBF (W.D. Pa. Aug. 26, 2016 Fisher, J.), the court granted an insurance company’s Motion to Dismiss a Plaintiff’s bad faith claim related to actions allegedly taken by the carrier during a previous underinsured motorist proceeding.  

Nationwide moved for the dismissal on the ground that the Plaintiff could not rely upon litigation conduct as the basis for an insurance bad faith claim under Pennsylvania law.   Nationwide also asserted that the Plaintiff had not sufficiently plead the elements of an unfair trade practices and consumer protection law claim.  

In her decision, Judge Fisher noted that the case before her appeared to present an issue of first impression with respect to litigation conduct in the context insurance bad faith allegations.  

After a review of the matter before her along with the relevant legal authority in Pennsylvania and other jurisdictions, the court granted the carrier’s Motion to Dismiss.   In so ruling, Judge Fisher concluded that Pennsylvania would likely adopt an approach where there could only be bad faith litigation conduct “in rare cases involving extraordinary facts.”  

 

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

 

I send thanks to Attorney Daniel L. Rivetti, Esquire of the Pittsburgh office of Robb, Leonard, Mulvihill, LLP for bringing this decision to my attention.