Bad Faith Blog

Summary: Dismissal of the mortgagor’s claim for breach of the implied covenant of good faith and fair dealing was affirmed on appeal. Under Pennsylvania law, there is no cognizable claim for breach of the implied covenant of good faith and fair dealing separate from a breach of contract claim.

Summary: Professional liability insurer brought a declaratory judgment action against its insured, an accounting firm, seeking a declaration that it owed the insured no defense or obligation beyond its $100,000 sub-limit and seeking recovery of overpayments of defense costs above the sub-limit. The insured accounting firm filed counterclaims seeking a declaration that the insurer’s duty to defend and indemnify was not limited by the sub-limit and for bad faith. The United States District Court for Eastern District of Pennsylvania granted the insurer’s summary judgment motion for declaratory judgment and for recovery for over-payment. The insured appealed to the Third Circuit United States Court of Appeals and the Court of Appeals affirmed.

Summary: Uninsured motorist filed a bad faith action against his automobile insurer for failure to pay underinsured motorist (UIM) benefits. Insurer moved for summary judgment and district court held that insurer’s delay in paying UIM benefits did not constitute bad faith.