11/11/2015. Insurance Bad Faith 22 nd Annual Auto Law Update 25 TH ANNIVERSARY. 42 Pa. C.S.A. 8371:

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1 Insurance Bad Faith 22 nd Annual Auto Law Update By: Joel C. Hopkins, Esq. Saul Ewing, LLP October 28, 2015 Joel C. Hopkins, Esq. Joel Hopkins' practice centers on representing the insurance industry in regulatory, organizational, operational, coverage, claims, bad faith and insolvency issues. He regularly counsels business clients on insurance and risk transfer matters, including complicated coverage and program issues relating to mergers and acquisitions. He also advises clients on insurance product development, compliance and evaluation. Joel creates, reviews and improves claims, coverage and regulatory policies, procedures and manuals, and provides expert evaluations of coverage and claim disputes. Partner Insurance Practice Group Saul Ewing LLP Prior to joining Saul Ewing, Joel worked for nearly 10 years as an insurance professional with two major insurance companies. During that time, he earned his Associate in Risk Management and Associate in Claims designations from the Insurance Institute of America. His 10 years of insurance industry experience provides clients with practical claims handling and coverage advice with a focus on regulatory compliance and bad faith prevention. Joel is a frequent lecturer on a variety of insurance related topics, including insurance coverage, claims and bad faith, non-insurance risk transfers, captives, risk retention groups, self-insurance and contract surety, among others TH ANNIVERSARY 42 Pa. C.S.A. 8371: In an action arising under an insurance policy, if the court finds that the insurer has acted in bad faith toward the insured, the court may take all of the following actions

2 HOW DID THINGS GET SO COMPLICATED A list of just some of the issues that have arisen over the past 25 years (Thanks to Rich McMonigle, Jr. s Insurance Bad Faith in Pennsylvania ): Who may bring a bad faith action Who can be sued for bad faith Does there need to be a policy does there need to be coverage What is the definition of bad faith Judge or Jury 4 What is the appropriate burden of proof What statute of limitations applies Venue / bifurcation / severance Are there regulatory standards for bad faith Are experts necessary / appropriate What sort of conduct constitutes bad faith What information is discoverable in a bad faith claim Reverse bad faith as a defense Does ERISA preempt a bad faith claim 5 SO WHAT S THE LATEST ASSIGNMENTS Allstate Prop. & Cas. Ins. Co. v. Wolfe, 105 A.3d 1181 (Pa. 2014) 6 2

3 INSURED SETTLEMENTS Babcock & Wilcox Co. v. American Nuclear Insurers, 2015 WL (Pa. July 2, 2015) 7 DAMAGES Wolfe v. Allstate Prop. & Cas. Ins. Co., 790 F.3d 487 (3 rd Cir. June 12, 2015) 8 ADJUSTER S DUTY OF CARE Kennedy v. Allstate, 2015 WL (E.D. Pa. July 8, 2015) 9 3

4 UNFAIR INSURANCE PRACTICES ACT Moore v. State Farm Fire & Cas. Co., 2015 WL (E.D. Pa. February 4, 2015) Mountainside Holdings, LLC v. American Dynasty Surplus Lines Ins. Co., 2014 WL (Centre County C.C.P. June 30, 2014) 10 THIRD PARTY BAD FAITH McMahon v. Med. Protective Ins. Co., 92 F. Supp. 3d 367 (W.D. Pa. 2015) 11 BIFURCATION / SEVERANCE Dunkelberger v. Erie Ins. Co., 21 Pa. D. & C. 5 th 52 (Lebanon Co. 2011) 12 4

5 Questions CONTACT INFORMATION Joel C. Hopkins, Esq. Insurance Practice Group Saul Ewing LLP Penn National Insurance Tower 2 North Second Street, 7 th Floor Harrisburg, PA Phone: jhopkins@saul.com Baltimore Lockwood Place 500 East Pratt Street, Suite 900 Baltimore, MD T: F: Boston 131 Dartmouth Street, Suite 501 Boston, MA T: F: Chesterbrook 1200 Liberty Ridge Drive, Suite 200 Wayne, PA T: F: Harrisburg Penn National Insurance Plaza 2 North Second Street, 7th Floor Harrisburg, PA T: F: New York 245 Park Avenue, 24th Floor New York, NY T: F: Newark One Riverfront Plaza Newark, NJ T: F: Philadelphia Centre Square West 1500 Market Street, 38th Floor Philadelphia, PA T: F: Pittsburgh One PPG Place 30th Floor Pittsburgh, PA T: F: Princeton 650 College Road East, Suite 4000 Princeton, NJ T: F: Washington 1919 Pennsylvania Avenue, N.W. Suite 550 Washington, DC T: F: Wilmington 222 Delaware Avenue Suite 1200 P.O. Box 1266 Wilmington, DE T: F: