NOVEMBER 2016 BAD FAITH CASES: CLAIMS HANDLING CONDUCT IS SUBJECT OF BAD FAITH STATUTE, NOT CONSUMER PROTECTION LAW (Philadelphia Federal)

This federal district court was faced with virtually identical claims for the same conduct, one alleging violation of Pennsylvania’s Bad Faith Statute, and the other a violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL). Following Pennsylvania Supreme Court precedent, the court concluded that the bad faith statute was aimed at claims handling, not how an insurer solicited an insured to purchase insurance; and that deceptive practices in selling insurance were subject to the UTPCPL. As the complaint’s allegations were actually focused on claims handling, the UTPCPL claim was dismissed with leave to re-plead facts addressing solicitation of the policy (if such existed).

Date of Decision: September 27, 2016

Doherty v. Allstate Indemnity Company, No. 15-5165, 2016 U.S. Dist. LEXIS 132027 (E.D. Pa. Sept. 27, 2016) (Pappert, J.)

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