MAY 2015 BAD FAITH CASES: PLAINTIFF’S CLAIM FOR BAD FAITH DISMISSED AS A MATTER OF LAW WHEN NO COVERAGE EXISTED IN UNDERLYING SUIT (Western District)

In Hammond v. United States Liab. Ins. Co., the court cited the Third Circuit’s opinion in  Frog, Switch & Mfg. Co., Inc. v. Travelers Ins. Co., 193 F.3d 742, 751 (3d Cir. 1999), for the proposition that “under Pennsylvania law, if a court determines that there is no coverage, the insurance carrier had ‘good cause to refuse to defend.’” [In other words, if there is no coverage due under the insurance contract, the insured cannot overcome Terletsky’s reasonableness prong, and cannot make out a bad faith case].  Having determined that there was no coverage due and thus that the insurer had not breached its insurance contract, the court held that “no bad faith claim as that term is defined by law can survive….”

Date of Decision:  January 28, 2015

Hammond v. United States Liab. Ins. Co., Civil Action No. 14cv0847, 2015 U.S. Dist. LEXIS 9973 (W.D. Pa. Jan. 28, 2015) (Schwab, J.).