In James F. Campenella Construction Company, Inc. v. Great American Insurance Company of New York, the insureds consisted of a corporation that contracted with a limited partnership to renovate, repair, and restore the partnership’s property. Together, the insureds entered into an insurance policy with the insurer for $42 million, covering loss or damage from all risks of direct physical loss to the property during the renovation period.
The property suffered water damage and other damage due to water loss, and the parties disagreed as to the amount of loss the insureds suffered. There was an appraisal clause in the policy that called for each party to select an impartial appraiser, and the insurer allegedly never selected its appraiser. The insureds filed a complaint that alleged contract breach and bad faith counts. The bad faith allegations were included in a single count under Pennsylvania’s Bad Faith statute, and a claim under the Unfair Insurance Practice Act (“UIPA”), but the insured plaintiffs appear to have conflated or interchanged the statutory bad faith claim, 42 Pa.C.S. § 8371, with a statutory claim under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), 73 Pa.C.S. § 201-1, et seq. for bad faith. It is not uncommon for consumer insureds to bring UTPCPL claims along with 8371 bad faith claims as separate causes of action, but this cannot be done by a commercial insured, as set forth immediately below, and apparently the UTPCPL claim herein was brought as some type of bad faith claim.
With respect to the UTPCPL claim, both the insureds and the insurer eventually agreed that “insurance purchased for business purposes does not give rise to a cause of action” under the statute which is directed to purchases of goods and services for personal, household or family use, and they therefore agreed that the plaintiffs failed to state a cause of action under the UTPCPL. Concerning the UIPA claim, it has long been held that there is no private right of action under this statute. Great W. Life Assurance Co. v. Levithan, 834 F. Supp. 858, 863 (E.D. Pa. 1993). The court also observed that there is no common law tort claim for insurance bad faith. The court did not have to address the issue of to what extent UIPA violations could be considered as relevant to establishing a viable UTPCPL claim.
Date of Decision: May 21, 2010
James F. Campenella Constr. Co., Inc. v. Great Am. Ins. Co., Civil Action No. 10-0681, United States District Court for the Eastern District of Pennsylvania, 2010 U.S. Dist. LEXIS 51042 (E.D. Pa. May 21, 2010) (Baylson, J.)