NOVEMBER 2007 BAD FAITH CASES FILING OF ACTION COULD NOT RELATE BACK TO EARLIER WRIT OF SUMMONS FILED IN INSURED’S NAME PRIOR TO ASSIGNMENT OF CLAIMS BY INSURED (Philadelphia Federal)

    

In Gardner v. State Farm Fire & Cas. Co., the carrier denied coverage on April 4, 2003.  The insured assigned his claims against the insurer to the underlying plaintiff in June 2005.  However, prior to that assignment, the underlying plaintiff filed writ of summons in the insured’s name on April 8, 2005 in the Court of Common Pleas.  A complaint was filed in federal court in September 2005 by the underlying plaintiff against the insurer after an assignment of those claims.  The applicable statute of limitations on a statutory bad faith claim is 2 years, which begins to run at the time the claim is denied.  The court found that the federal claim could not relate back to the April 8th writ because there had been no mistake in naming the plaintiff under Federal Rule 15(c)(3), and that the earliest the federal claim could relate back would be to June 2005, two months after the statute of limitations had passed.

Date of Decision:  June 12, 2007

Gardner v. State Farm Fire & Cas. Co., 05-1055, 2007 U.S. Dist. LEXIS 42471 (E.D. Pa. June 12, 2007) (Lancaster, J.)

This decision was affirmed at

Gardner v. State Farm Fire & Cas. Co., No. 07-3051, 2008 U.S. App. LEXIS 15560 (3d Cir. Pa. July 22,2008)(Padova,  J., sitting by designation), which is summarized in the August 2008 entries in this blog.