JULY 2008 BAD FAITH CASES VENUE FOR BAD FAITH CLAIM FOUND TO BE PROPER WHERE INSURER REGULARLY DID BUSINESS (Philadelphia)

In Brown v. Allstate Insurance Company Brown brought bad faith and breach of contract claims against the insurer based on the insurer’s failure to cover all the damages that occurred to their property resulting from a storm.  A storm caused damage to Brown’s property located in Chester County , specifically the storm caused several large trees to fall on Brown’s property causing damage to their house, deck, roof and gutters.  Brown had a homeowners policy with the insurer for their property. Brown filed a claim with the insurer and the insurer made payment in the amount of $11,653.05 which covered only a portion of the claims for damages made by Brown. Also Brown alleged that the insurer refused to honor other aspects of the claim, which they believe should be covered by their homeowner’s policy. 

Brown filed a complaint against the insurer for breach of contract, because the insurer failed to reimburse them for the full value of damages sustained to their property because of the storm, and bad faith because of the insurers alleged intentional denial of their claim.  The insurer filed its preliminary objections contending that Philadelphia County was an improper venue for this action.  The trial court granted the insurers’ preliminary objections and transferred the case to Chester County.  Brown then filed a notice of appeal to this decision.

 The court found since this case involved breach of contract and bad faith actions against an insurance company based on an insurance policy, the applicable venue rule would be Pa.R.C.P. 2179(b).  This section 2179(a)(2) specifically states that venue in a personal action against a corporation can lie in a county where the corporation regularly does business.  Since the insurer in this case regularly does business in Philadelphia County , that is a proper venue for this action.  Therefore the court sustained the insured’s appeal and venue should remain in Philadelphia County and not be transferred to Chester County.

Date of Decision: January 9, 2008

Brown v. Allstate Ins. Co., 2008 Phila. Ct. Com. Pl. LEXIS 2 (C.C.P. Philadelphia Jan. 9, 2008)

J.M.A.