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Scott Cooper
Scott Cooper
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Pennsylvania Superior Court Issues Opinion Regarding Bad Faith For Property Damage

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Attached is a copy of the Pennsylvania Superior Court opinion from April 17, 2012 in Berg v. Nationwide Mutual Insurance Company, Inc. which deals with statutory bad faith (Section 8371) arising out of a motor vehicle property damage claim. The opinion vacates the entry of a directed verdict for Nationwide, reverses the trial court decision and remands the case for a new trial.

The central issue in the case is whether Nationwide’s “Blue Ribbon Repair Service” is covered under the bad faith statute (8371) when there is a claim for bad faith after an insureds property damages was not fixed correctly. Nationwide presented expert testimony, including a past Pennsylvania Insurance Commissioner, that the program was not covered under an insurance policy. The Superior Court finds that the expert conclusions were improper. The Superior Court finds that the claim is “arising under” an insurance policy and that, assuming the insured can show bad faith by clear and convincing evidence, that Nationwide would be subject to bad faith damages under Section 8371. The court also holds that an insurance company can also be liable for bad faith for violating the Uniform Trade Practices and Consumer Protection Law “catchall” provision even if there is no private cause of action.

There is also discussion about possible discovery which may be admissible and relevant. Also, a discussion on possible evidence which the trial court should review in camera, such as how much the insurance defense lawyers were paid to defend the case.

http://www.pacourts.us/OpPosting/Superior/out/A33006_11.pdf

Scott B. Cooper