December 2016 Bad Faith Cases: Compensatory Damages Only Recoverable For Contractual Bad Faith, Not For Statutory Bad Faith (Philadelphia Federal)

In this case, the insured improperly sought compensatory and consequential damages as part of his section 8371 claim. Such damages cannot be recovered under section 8371, but may be available for breach of the common law contractual duty of good faith and fair dealing. Thus, while striking the statutory claim for compensatory damages, the court gave the insured leave to amend to plead such damages under the pending common law contract claim.

Date of Decision: November 21, 2016

Koepke v. Allstate Vehicle & Prop. Ins. Co., No. 16-4633, 2016 U.S. Dist. LEXIS 161112 (E.D. Pa. Nov. 21, 2016) (Baylson, J.)