In Bodnar v. Amco Insurance Company, without ruling on the matter, the court observed the potential issue of whether Terletsky’s “reasonableness” prong was to be evaluated objectively or subjectively. In the seminal case of Williams v. Hartford Cas. Ins. Co., 83 F. Supp. 2d 567, 574 (E.D. Pa. 2000), the court had held that this first prong of the Terletsky bad faith test “is an objective one: that is if there is a reasonable basis for delaying resolution of a claim, even if it is clear that the insurer did not rely on that reason, there cannot, as a matter of law be bad faith.” The Bodnar court further observed that, with only slight dissent, this reasoning has been almost universally followed over the ensuring 14½ years by Pennsylvania’s district courts. Still, the court was not faced with the issue of deciding whether it needed to apply Williams, and thus would not say at this time that it was controlling law.
Date of Decision: July 11, 2014
Bodnar v. Amco Ins. Co., 3:12-CV-01337, 2014 U.S. Dist. LEXIS 94931 (M.D. Pa. July 11, 2014) (Mariani, J.)