JULY 2007 BAD FAITH CASES COURT GRANTS INSURER’S MOTION FOR SUMMARY JUDGMENT AS CLAIMS WERE BASED ON POLICY FORMATION AND NOT A DENIAL OF BENEFITS (Middle District)

    

In Novinger Group, Inc. v. Hartford Ins., Inc., the insureds filed suit against the insurer because they alleged that they were “baited and switched” into purchasing the policies by insurer’s salesperson.  The salesperson executed insureds’ insurance applications during which time insureds alleged that they were misled and misinformed regarding the salesperson’s expertise and advising abilities.  The insureds further alleged that the salesperson “created a false sense of urgency.” 

The insureds commenced the instant action raising claims of a violation of Pennsylvania’s Insurance Bad Faith Statute among others.  The insurer then filed a motion to dismiss the complaint.  The court decided that the motion will be granted in part and denied in part.  The court granted the insurer’s motion to dismiss with respect to the claims of insurance bad faith.  Because the insureds’ allegations of bad faith relate to alleged misrepresentations and omissions that occurred prior to formation of the insurance contract and because the insureds did not allege that the salesperson denied them benefits under the policy, the court held that the insureds failed to state a claim for insurance bad faith.  As a result, the insurer’s motion to dismiss was granted with respect to this claim.

Date of Decision: May 16, 2007.

Novinger Group, Inc. v. Hartford Insurance, Inc., United States District Court for the Middle District of Pennsylvania, No. 1:06-CV-0188, 2007 U.S. Dist. LEXIS 35779 (M.D. Pa. May 16, 2007) (Connor, J.).