March 11, 2015 Practice Points

Penn State Teaches a Lesson in Asserting Bad Faith Claims

The court held that the policyholder’s allegations of specific, albeit disputed, facts regarding insurer misconduct allowed its bad faith claim to survive the carrier’s summary judgment motion

by Erica J. Dominitz and Virginia R. Duke

In Pennsylvania State University v. Pennsylvania Manufacturers’ Association Insurance Company, Case No. 131103195 (Pa. Com. Pl., Phila. Cnty. Jan. 14, 2015), the court held that the policyholder’s allegations of specific, albeit disputed, facts regarding insurer misconduct allowed its bad faith claim to survive the carrier’s summary judgment motion.

Penn State asserted a bad faith claim against its insurer, Pennsylvania Manufacturers’ Association Insurance Company (PMA), for its alleged mishandling of the underlying claims against Penn State arising from the Gerald Sandusky sexual assault allegations. PMA moved for summary judgment, seeking dismissal of Penn State’s bad faith claim. Penn State opposed the motion, arguing both that the motion was premature and that disputed facts precluded summary judgment. On January 14, 2015, the Philadelphia County Court of Common Pleas denied PMA’s motion. In so ruling, the court explained that that while PMA’s motion “may be untimely,” the court’s denial was based on the “merits,” as the evidence reflected that “multiple issues of material facts” surrounded Penn State’s bad faith claim.

Premium Content For:
  • Litigation Section
Join - Now