MARCH 2007 BAD FAITH CASES COURT REMANDS BAD FAITH CLAIM SOLELY FOR PUNITIVE DAMAGES FOR FAILURE TO MEET AMOUNT IN CONTROVERSY WHERE AMOUNT AT ISSUE CANNOT BE DISCERNED (Middle District)

        

In Knauer v. Farmers Insurance Co., the insured asserted a bad faith claim against his insurer in United States District Court for the Middle District of Pennsylvania.  The insured Plaintiff moved to remand the matter to the Court of Common Pleas of Lackawanna County for failure to meet the amount in controversy requirement.  At arbitration, the Plaintiff had been awarded $360,000, which had been paid by Defendant.  The only remaining claim before the court was punitive damages for bad faith.  The court held that because there is no basis to determine a discreet amount of punitive damages, a naked claim for punitive damages is not computable for purposes of determining the amount in controversy.  Because the amount of punitive damages was not discernable from the pleadings the Court could not conclude that the amount in controversy exceeded $75,000.  Therefore, the case was remanded to the Lackawanna County Court of Common Pleas.

Date of Decision:  February 28, 2007

Knauer v. Farmers Insurance Co., United State District Court for the Middle District of Pennsylvania, CV-07-0046, 2007 U.S. Dist. LEXIS 14233 (M.D. Pa. Feb. 28, 2007)(Caputo, J.)