Court Addresses Various Breach of Contract and Bad Faith Allegations in a First Party Medical Benefits Case

In the case of Castellani v. Travelers Ins. Co., No. 2025-CV-3425 (C.P. Lacka. Co. May 18, 2026 Nealon, J.), the court addressed various issues raised in a claim for breach of contract and bad faith in a first party medical benefits case.

The Plaintiff basically asserted that the insurance company had allegedly fraudulently induced her to purchase medical expense benefits coverage that it allegedly never truly intended to provide. 

The Plaintiff also asserted that the carrier unjustifiably initiated numerous peer reviews by allegedly biased medical professionals in order to allegedly manufacturer a sham basis upon which to deny coverage for allegedly reasonable and necessary treatment.

In additional to suing the carrier for breach of contract and bad faith, the Plaintiff also sued the individual claims representative as well.

The carrier filed Preliminary Objections relative to the Plaintiff’s demand for counsel fees under §1716 and §1798 of the Motor Vehicle Financial Responsibility Law. 

The carrier also filed Preliminary Objections against the bad faith claim.

The claims representative also filed a demurrer on the claims against that party.

Challenges were also made against the claims under the UTPCPL.

The court granted the demurrer asserted by the claims adjuster after finding that the Plaintiff was not able to demonstrate a duty of care owed to the claims adjuster to the insured so as to expose the adjuster to individual tort liability.

The court otherwise found that the Plaintiff had stated a valid cause of action against the carrier for bad faith. The court also found that the claims were not barred by the gist of the action doctrine. The court additionally found that the economic loss doctrine did not preclude the tort claims asserted by the Plaintiff.

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

Source of image:  Photo by Marek Studzinski on www.unsplash.com.

Court Allows Claim To Proceed Against UIM Carrier Where UIM Claims Rep Allegedly Interfered With Settlement Negotiations In Third Party Case

In the case of Winner v. Progressive Advanced Ins., No. 2230 EDA 2024 (Pa. Super. Sept. 24, 2025 Panella, P.J.E., Nichols, J., and Ford Elliott, P.J.E.) (Op. by Panella, P.J.E.), the Pennsylvania Superior Court overruled the dismissal of an Unfair Trade Practices and Consumer Protection Law (UTPCPL) claims that was based on alleged actions of an insurance adjuster who allegedly intentionally interfered with the policyholder’s settlement negotiations in a lawsuit with a third party Defendant.

According to the Opinion, this matter arose out of a car accident.  During the course of the matter, after completing productive settlement negotiations in the third party matter, Plaintiff's counsel contacted the UIM carrier to request that a UIM claim be opened.

Thereafter, the UIM claims representative, without the consent of the carrier's insured or the insured's attorney, contacted the third party defense attorney and informed that defense attorney of a subsequent accident that the Plaintiff had been involved in.  As is turned out, the subsequent accident only involved property damages and no injuries to the insured.

Plaintiff's counsel in this matter alleged that the UIM carrier had allegedly contacted the third party defense attorney in order to persuade that attorney to reduce his settlement offer in the third party case in an attempt to shield the UIM carrier from the UIM claim.  In other words, the Plaintiff asserted that the UIM carrier purposely interfered in the third party matter in an effort to prevent the Plaintiff from recieving UIM benefits.

Based on these facts, the Superior Court overruled the trial court's dismissal of the Plaintiff's UTPCPL claims.

The Superior Court additionally held that the forum selection clause in the policy that applies to any action brought against the insurance company requiring that such action must be brought in a county in which a person seeking benefits resides also applies to bad faith and unfair trade practices claims based on the conduct alleged in this matter.

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


Source: “Court Summaries” By Timothy L. Clawges, Pennsylvania Bar News (Oct. 20, 2025).

Source of image:  Photo by Sean Musil on www.unsplash.com.

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.