MAY 2009 BAD FAITH CASES FEDERAL COURT APPLIES PENNSYLVANIA BAD FAITH LAW, RATHER THAN DELAWARE COMMON LAW BAD FAITH, IN CHOICE OF LAW ANALYSIS (Philadelphia Federal)

In Godfry v. State Farm Mutual Insurance Company, a case involving an automobile insurance policy, the court was faced with the issue of whether to apply Pennsylvania statutory and common law bad faith, or Delaware’s common law bad faith.  The law’s differed somewhat, but most especially in that Pennsylvania statutory bad faith allows of the insured to recover attorney’s fees, but Delaware’s common law remedy does not (though both allow for punitive damages).  After a careful analysis of whether there was a true conflict of laws, including whether both states had governmental interests in seeing their law applied, and a weighing of contacts and those interests, the court found that Pennsylvania bad faith law applied.  It also refused to transfer the case to Delaware.

Date of Decision:  March 4, 2009

Godfry v. State Farm Mut. Ins. Co., CIVIL ACTION NO. 08-4813, UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA, 2009 U.S. Dist. LEXIS 19123 (E.D.Pa. March 4, 2009) (Yohn, J.)