April 2008 Bad Faith Cases District Court Dismisses Common Law Bad Faith Claim (Western District)
In Signs v. State Automobile Insurance Company, Plaintiff filed a claim for water damage to its building stemming from an unknown cause. After conducting an investigation, State Automobile Insurance Company (“State Auto”) denied the claim. Plaintiff subsequently filed suit and asserted several claims including claims for common law bad faith and statutory bad faith. As part of its common law bad faith claim, Plaintiff argued that State Auto minimally investigated its claim and failed to consider supplemental evidence submitted to the insurer.
State Auto filed a motion to strike plaintiff’s common law bad faith claim asserting that Pennsylvania law does not recognize a common law cause of action for bad faith. The District Court agreed and held that should Plaintiff succeed in proving that State Auto failed to act in good faith, then 42 Pa. Cons. Stat. §8371 would provide the appropriate remedy. Accordingly, the Court granted State Auto’s motion to strike and dismissed Plaintiff’s common law bad faith claim.
Date of Decision: April 2, 2008
Signs v. State Automobile Mutual Ins. Co., United States District Court for the Western District of PA, No. 08-164, 2008 U.S. Dist. LEXIS 26770 (W.D. Pa. April 2, 2008) (Standish, J.)