December 2016 Bad Faith Cases: Violation of Unfair Claims Settlement Practices Regulations Alone Cannot Form the Basis of a Bad Faith Claim (Philadelphia Federal)

In this homeowners’ case, the insured alleged breach of contract and bad faith. On the contract claim, the court focused on the contractual limitations period for bringing suit. The insured argued, among other things, that the insurer had a duty under the Unfair Claims Settlement Practices Regulations (UCSPR) to give notice of the suit limitation period, and failure to do so tolled that period. The court rejected this argument as a basis to toll the contract claim, as well as a basis for the bad faith claims.

As to the bad faith claim, the court further observed that a violation of the UCSPR standing alone does not establish clear and convincing evidence of bad faith. The court also rejected an argument concerning negotiations over a boiler’s repair or replacement as the basis for a bad faith claim.

Date of Decision: November 9, 2016

Pecko v. Allstate Ins. Co., No. 16-1988, 2016 U.S. Dist. LEXIS 155355 (E.D. Pa. Nov. 9, 2016) (Pratter, J.)