JANUARY 2007 BAD FAITH CASES CARRIER ALLOWED TO PLEAD “REVERSE BAD FAITH” UNDER A CONTRACT THEORY, AS AN AFFIRMATIVE DEFENSE TO STATUTORY BAD FAITH CLAIM (Middle District)

In Javorski v. Nationwide Mutual Insurance Company, the insured moved to strike the carrier’s affirmative defense of “reverse bad faith.”  The insured argued that Pennsylvania does not recognize a claim for reverse bad faith, which is a claim that the insured acted in bad faith in the handling of his/her claim.  The Court disagreed.  The U.S. District Court reasoned that every contract, including those for insurance, imposes a duty of good faith on each party.  Further, Pennsylvania Courts have previously held that an insured’s bad faith conduct should be scrutinized to militate against a finding of bad faith against the carrier.  The motion to strike was therefore denied.

Date of Decision: November 30, 2006.

Javorski v. Nationwide Mutual Insurance Company, United States District Court for the Middle District of Pennsylvania, No. 3:06-CV-1071 (M.D. Pa. November 30, 2006) (Conaboy, J.).