OCTOBER 2006 BAD FAITH CASES COURT PERMITS PLAINTIFF TO ANALOGIZE TO UNFAIR INSURANCE PRACTICES ACT IN PLEADING COMPLAINT TO DEFINE STATUTORY BAD FAITH CLAIM (Western District)

In Alberty v. Nationwide Mutual Insurance Company, Plaintiffs sustained an automobile accident while insured by Defendant with full tort automobile insurance.  Defendant disputed Plaintiff’s chiropractic bills, contending that such “adjunctive services” were outside of its policy coverage.  Plaintiffs brought suit alleging, among other things, breach of contract and bad faith.  Defendants moved to dismiss certain counts of Plaintiffs’ Complaint, including a paragraph in Plaintiffs’ Amended Complaint that recited the definition of “bad faith” under Pennsylvania’s Unfair Insurance Practices Act (UIPA), which does not itself provide for a private right of action.  Defendant argued that this paragraph citing to the UIPA was impermissibly alleging a cause of action under that statute, even though Pennsylvania law is well settled that there is no private cause of action afforded to an insured against an insurer for violations of the UIPA.  The case originally went before a Magistrate Judge of the United States District Court for the Western District of Pennsylvania, who issued a Report and Recommendation.  The Magistrate Judge rejected Defendant’s argument, finding that Plaintiffs had only provided the definition in their pleadings by way of analogy, in support of the statutory bad faith claim which was the subject of the count.  The Magistrate Judge accordingly did not dismiss or strike the paragraph addressing the UIPA standards.  The substance of the Report and Recommendation was adopted as the Opinion of the District Court on September 11, 2006.

Date of Decision by Magistrate Judge:  July 7, 2006.

Alberty v. Nationwide Mut. Ins. Co., United States District Court for the Western District of Pennsylvania, Civil Action No. 05-1319, 2006 U.S. Dist. LEXIS 68783 (W. D. Pa. July 7, 2006) (Lenihan, M. J.)

Date of Decision in District Court:  September 11, 2006

Alberty v. Nationwide Mut. Ins. Co., United States District Court for the Western District of Pennsylvania, Civil Action No. 05-1319, 2006 U.S. Dist. LEXIS 68790 (W. D. Pa. Sept. 11, 2006) (Conti, J.)