February 2006 Bad Faith Cases: Contractual Bad Faith Claim Permitted Independent Of the Statutory Faith, But No Separate Cause Of Action For Spoliation (Lawrence)
In Harlan v. Erie Insurance Group
, the Court of Common Pleas of Lawrence County, addressed whether a claim that the carrier breached the implied duty of good faith and fair dealing stated a cause of action. The Pennsylvania state trial judge pointed out that this was not a statutory bad faith claim under 42 Pa.C.S. § 8371, but was a contract based claim; there being no bad faith tort claim of this nature under Pennsylvania law. While limited in other contexts, Pennsylvania’s Supreme Court has recognized a contract claim for breach of the implied duty of good faith and fair dealing as the basis for a compensatory damage claim against an insurance carrier. Birth Center v. St. Paul Companies, Inc.
, 567 Pa. 386, 787 A.2d 376 (2001). The plaintiffs alleged that the carrier refused to cover the loss on a stolen and burned vehicle, and destroyed evidence that could have established coverage. While permitting the contractual bad faith claim to proceed, the court declined to find that Pennsylvania law permitted a separate cause of action for spoliation.
Date of decision: February 16, 2006
Harlan v. Erie Ins. Group, Court of Common Pleas of Lawrence County, No. 10388 of 2005, Civil Action (C.C.P. Lawrence Feb. 16, 2006) (Motto, P. J.)