Not So Fast – Pennsylvania’s Bad Faith Statute Is Not A Blank Check for Fees

The Third Circuit recently held that a jury bad faith damage award does not automatically entitle a successful claimant to an award of attorney’s fees under Pennsylvania’s bad faith statute. In affirming the district court’s denial of an award of attorney’s fees, the Third Circuit formally endorsed the view that where a fee-shifting statute provides a court with discretion to award attorney’s fees, such discretion includes the ability to deny a fee request that is outrageously excessive. In doing so, the
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Pennsylvania Courts Continue To Bar To Coverage For Defective Workmanship Claims

Insurance coverage disputes regarding faulty workmanship construction defects are common throughout the United States. In Pennsylvania, under the Supreme Court’s 2006 decision in Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., property damage claims arising out of poor workmanship are not covered under typical CGL policies. Recently, the court of Appeals for the 3rd Circuit followed Kvaerner, and ruled that a subcontractor’s defective workmanship claim was not covered. In Lenick Constr., Inc. v. Selective Way Ins.
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A Window Opens? Are Defective Product Construction Defect Claims Covered Under Pennsylvania Law?

A recent decision from a Pennsylvania court highlights tension in Pennsylvania law regarding whether a construction defect claim involving consequential damages caused by a defective product involves a covered “occurrence.” Sapa Extrusions, Inc. v. Liberty Mut. Ins. Co., 2018 WL 2045496 (M.D. Pa. May 1, 2018). In this coverage action, the insured, a window frame manufacturer, sought a declaratory judgment that it was owed coverage for an underlying action brought by a customer that used the window frames to manufacture
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Pennsylvania Supreme Court Rules that Bad Faith Does Not Require Proof of an Insurer’s Self-Interest or Ill-Will

The Pennsylvania Supreme Court ruled today that the Pennsylvania bad faith statute does not require a plaintiff to prove that an insurer was motivated by self-interest or ill-will when denying benefits under an insurance policy. Instead, the court’s decision in Rancosky v. Washington National Insurance Company adopted the standard established by the Pennsylvania Superior Court 23 years ago in Terletsky v. Prudential Property & Casualty Company, under which a bad faith claim is established by clear and convincing evidence that the insurer did not
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Pennsylvania Court Rejects Manifestation Trigger for Latent Property Damage Claims

The Commonwealth Court of Pennsylvania recently determined that the multiple trigger rule, and not the manifestation rule, is the proper standard to use when determining whether an insurance policy is triggered in an environmental property damage claim involving a long latency period between exposure and manifestation. See Pennsylvania Manufacturers’ Association Insurance Company v. Johnson Matthey, Inc., et al., 2017 WL 1418401 (Pa. Commw. Ct. Apr. 21, 2017), This decision, which is at odds with statements by the Pennsylvania Supreme Court
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Is an Argument Challenging Precedent Bad Faith? Pennsylvania Bad Faith Ruling in Asbestos Coverage Case Raises This Important Question

Since 1993, the Pennsylvania Supreme Court’s decision in the J.H. France case has dictated that the continuous trigger rule be applied to determine what insurance policies are triggered for asbestos injury claims. Under J.H. France, coverage is provided by policies in effect from the time the claimant was first exposed to asbestos until injury manifests as mesothelioma. The J.H. France court’s decision was expressly based on the science behind mesothelioma, which indicates that mesothelioma is a continuous, progressive injury that
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Bad Faith Without Dishonest Motive, Self-Interest, or Ill-Will? Pennsylvania Supreme Court to Decide

The Pennsylvania Supreme Court has agreed to review an appellate court decision in Rancosky v. Washington National Insurance Company, a case dealing with whether a showing of “dishonest motive” or “ill-will” is necessary to prove that an insurance company acted in bad faith. The Pennsylvania Supreme Court’s forthcoming decision will be its first word on the definition of “bad faith” as used in the Pennsylvania bad faith statute. In Rancosky, a husband and wife, both cancer patients, filed a lawsuit
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Pennsylvania Federal Court Sets Standards for Burden of Proof in Rescission Matter

The ongoing coverage litigation between H.J. Heinz Company and Starr Surplus Lines Insurance Company in the U.S. District Court for the Western District of Pennsylvania has yielded another important decision that is instructive in rescission matters.  As a follow up to our previous report on October 22, 2015 on the court’s order that Starr must produce information from its underwriting files involving other policyholders, the court has now set guidelines for the burden of proof and jury instructions in the
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Pennsylvania Federal Judge Orders an Insurer to Produce Information from Underwriting Files Involving Other Policyholders in a Rescission Dispute

Discovery disputes in insurance coverage litigation frequently concern whether an insurer must produce information about policies issued to other policyholders or other claims against the insurer involving similar policies or circumstances. Policyholders often seek such discovery to compare the insurer’s position in the disputed claim with positions it may have taken in other claims or under other policies. Insurers typically resist such discovery as being irrelevant to issues involving the particular policy or claim at issue in the litigation. A
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Pennsylvania Supreme Court Holds that an Insurer’s Consent to Settle is Not Required if Insurer Is Defending Under Reservation of Rights

The Pennsylvania appellate courts have kept insurance coverage lawyers on their toes this summer. Weeks after the Pennsylvania Superior Court’s decision in Selective Way Insurance Co. v. Hospitality Group Services, Inc. provided guidance on when the statute of limitations for an insurance coverage declaratory judgment action accrues, on July 21, 2015, the state’s Supreme Court issued its much anticipated decision in Babcock & Wilcox Company v. American Nuclear Insurers. In Babcock & Wilcox, the Supreme Court held that when an insurer
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