JULY 2006 BAD FAITH CASES NO COVERAGE FOR STATUTORY CONSUMER PROTECTION LAW CLAIMS, THUS NO BAD FAITH IN REFUSING DEFENSE AND INDEMNIFICATION UNDER CGL POLICY (Philadelphia Federal)

In GPSC Charters, Ltd. v. Fireman’s Fund Insurance Companies, plaintiff sought declaratory relief in the U.S. District Court for the Eastern District of Pennsylvania under Pennsylvania’s Bad Faith Statute, claiming that defendant’s failure to defend and indemnify in connection with two underlying lawsuits amounted to bad faith.  In the underlying actions, the Commonwealth of Pennsylvania had filed two lawsuits alleging violations of Pennsylvania’s Unfair Trade Practices and Consumer Protection Laws (UTPCPL).  Plaintiff was insured under a commercial general liability insurance policy.  The plaintiff demanded defense and indemnification but the carrier denied coverage.  In granting the insurer’s Motion to Dismiss, the Court determined that the underlying complaints did not assert any of the covered losses under the policy, namely bodily injury, property damage, personal injury or advertising injury.  The Court held that violations of the UTPCPL do not qualify as covered losses, thus Plaintiff could state no claim for bad faith.

Date of decision:  June 30, 2006

GPSC Charters, LTD. V. Fireman’s Fund Ins. Cos., United States District Court for the Eastern District of Pennsylvania, No. 06-1982, 2006 U.S. Dist. LEXIS 44716 (E.D. Pa. June 30, 2006) (Bartle, C.J.)