OCTOBER 2013 BAD FAITH CASES: SECTION 4117 IMMUNITY IS A STATUTORILY MANDATED NON-WAIVABLE DEFENSE AND MAY BE ASSERTED BY PRELIMINARY OBJECTION, AS MAY STATUTE OF LIMITATIONS IF CLEAR ON FACE OF PLEADINGS (Philadelphia Common Pleas)

In Fieldhouse v. Metropolitan Property & Casualty Insurance Co., plaintiff filed a complaint alleging that his insurer’s cooperation with law enforcement in a criminal investigation against him constituted bad faith. The insurer asserted affirmative defenses of immunity and statute of limitations in the form of preliminary objections in response to appellant’s complaint. The trial court sustained the insurer’s preliminary objections, and appellant filed an appeal with the Superior Court.

Plaintiff argues that the court mistakenly allowed and sustained the insurer’s preliminary objections based on the affirmative defenses. The trial court found the insurer properly asserted its immunity defense under 18 Pa.C.S. § 4117, protecting insurance companies and their employees from civil or criminal liability for providing written or oral information to federal or state law enforcement. The court further found immunity to be a statutorily mandated non-waivable absolute defense. Therefore, pursuant to Pa.R.C.P. 1028, it could be asserted by preliminary objection. Furthermore, because insurance bad faith claims must arise under the insurance policy, appellant’s complaint failed to state a claim upon which relief could be granted because the insurer’s actions in cooperating with law enforcement officials would not arise under the policy.

The court did, however, find the two-year statute of limitations contained in the bad faith statute to be a waivable defense, requiring it to be raised by New Matter. Nevertheless, Pennsylvania civil procedure allows a court to sustain an improperly filed preliminary objection if it is apparent from the face of the record that the statute of limitations bars the action. Given the record of the case, the court found the trial court’s decision to sustain the improperly filed preliminary objection appropriate.

Date of Decision: July 9, 2013

Fieldhouse v. Metro. Prop. & Cas. Ins. Co., December Term 2012, No. 02205, 2013 Phila. Ct. Com. Pl. LEXIS 210 (Pa. C.P. July 9, 2013) (Tucker, J.)