Legal News

Dickie McCamey Hosts CLE Webinar on Bad Faith

By Brian Harris

On July 15, I participated in a panel webinar presentation broadcast from our Pittsburgh office covering recent developments in Pennsylvania bad faith law. Attorney Robert Marino, chairman of the firm?s insurance law practice group, and David Cole, executive director of the Pennsylvania Defense Institute, also presented.

During the course of the webinar, the panel discussed some emerging bad faith trends, and a brief review of those issues appears below. 

1.  The ?Narrowing? of § 8371
       

Toy v. Metropolitan Life Ins. Co. and Ash v. Continental Ins. Co. stand out as recent cases of significance that impact the litigation of bad faith claims in Pennsylvania, and, more specifically, narrow the applicability of §8371 claims conduct as opposed to other insurance functions such as underwriting, marketing, etc. Ash went on to express disapproval for the notion that violations of the Unfair Insurance Practices Act were germane to the imposition of bad faith liability.

Two Superior Court cases, Condio v. Erie Insurance Exchange and Zapille v. Amex Assurance, were thought to indicate a trend toward judicial recognition of an insurer?s right to self-defense in UM/UIM claims. Of such claims, Condio recognizes that first-party claims are adversarial in nature.  Flowing from that recognition, Zapille held that an insured?s demand for a UM/UIM policy limits may not legally constitute a sufficient intention on the part of the insured to resolve the claim, which in turn could impact  whether an insurer has a duty to compromise when its insured does not, and can subsequently be liable under §8371 for not doing so. 

2. Concurrent Litigation of Bad Faith and UM/UIM in the Post-Koken Era

The Koken case, and its allowance of the removal of mandatory arbitration provisions from UM/UIM policies in Pennsylvania, was the subject of a prior post, but at the webinar, the panel discussed practical difficulties presented by concurrent litigation of an underlying claim along with a claim concerning the handling of that very same underlying claim.  Judge R. Stanton Wettick?s opinion in Gunn v. The Hartford Insurance Co., in which the plaintiff was allowed to prosecute concurrent claims, was discussed and practitioners were urged to consider attempting to sever and stay bad faith claim in certain circumstances.

3. Punitive Damages Trends

Finally, the panel discussed current trends in the Pennsylvania case law concerning the imposition of punitive damages and how they are calculated.  Pursuant to Jurinko v. Medical Protective Co., a case following from State Farm Mutual Auto Insurance Co. v. Campbell, there appears to be a growing consensus that the proper punitive damages multiplier in the vast majority of cases is 1-to-1.  Jurinko does allow for the possibility of high multipliers, where particularly egregious conduct and low compensatory damages are involved, but Jurinko does suggest a trend to minimize the multiplier. 

If you would like any further information on the recently held Dickie McCamey & Chilcote, P.C. Bad Faith Webinar, please contact me at chaddick@dmclaw.com. 

Charles Haddick
Dickie McCamey & Chilcote
http://www.dmclaw.com/

Full post as published by The Legal Intelligencer Blog on July 24, 2009 (boomark / email).