Superior Court Clarifies Calculation of Interest and Attorney Fees in Bad Faith Cases

In the case of DiVincenzo-Gambone v. Erie Insurance, No. 1699 MDA 2024 (Pa. Super. Oct. 17, 2025 Olson, J., Beck, J., Dubow, J.) (Op. by Olson, J.), the Pennsylvania Superior Court clarified how interest and attorney fees should be calculated in bad faith insurance cases. 

In this decision, the appellate court also ruled in favor of the insured who had asserted that the carrier had wrongly withheld part of an Arbitration Award entered on the case presented. 

In this decision, the Superior Court vacated part of the trial court’s judgment by holding that the trial court miscalculated damages under the Pennsylvania bad baith statute when that court awarded compound interest instead of simple interest. 

The court also noted that the trial court had erred by basing attorney’s fees on a contingency rather than the lodestar method. Under the lodestar method, hours spent on a case by an attorney are multiplied by a reasonable hourly rate.

The Superior Court also ruled that interest should be calculated from the date that the underlying insurance claim was made.

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


Source: Article – “Pennsylvania Superior Court Clarifies State’s Bad Faith Law In Precedential Opinion,” By Tristin Hoffman The Legal Intelligencer (Oct. 21, 2025).