Ill-will Not Necessary to Prove Bad Faith
The Pennsylvania Supreme Court recently held that “ill-will” or “self-interest” is not necessary for a policyholder to successfully sue an insurer for bad faith.
Justice Max Baer writes in Rancosky v. Washington Natural, “Additionally, we hold that proof of an insurance company’s motive of self-interest or ill-will is not a prerequisite to prevailing in a bad faith claim under Section 8371, as argued by Appellant. While such evidence is probative of the second Terletsky prong, we hold that evidence of the insurer’s knowledge or recklessness as to its lack of a reasonable basis in denying policy benefits is sufficient.”
The two prong test developed in the 1994 Superior Court opinion of Terletsky v. Prudential remains. A party suing an insurer must prove “(1) that the insurer did not have a reasonable basis for denying benefits under the policy and (2) that the insurer knew of or recklessly disregarded its lack of a reasonable basis.”
For now, the precise effect of Rancosky is yet to be seen; however, what we know is that more plaintiff’s claims will survive motions for summary judgment. A significant win for the plaintiff’s bar, not so much for the defense.
See, Penn. Supreme Court: ‘Ill-will,’ ‘self-interest’ not necessary to win insurance bad-faith claim.
The NEXT Chapter…
This is a professional legal blog and I aim to operate it as such. Yet, there are exceptions to every rule and here is the place where one applies. The recent lapse in post, as well as changes that may occur moving forward call for an explanation. Here it is…
I married the love of my life on August 10, 2014. Very soon thereafter, I accepted an attorney position as a litigator practicing insurance defense at Baginski, Mezzanotte, Hasson, & Rubinate in Philadelphia, PA.
The change has been met with nonstop movement and a huge increase in responsibility. I mention this because naturally as I continue to increase my depth of knowledge in this new practice area a majority of my post may center around it. To do so without notice would be inapt.
Practicing in Philadelphia has been both exciting and overwhelming. On one hand, there is the ever-changing rules and practices of Pennsylvania courts and on the other, there is the thrill of walking into City Hall every other day. The two contrast – among many – balance out quite nicely. Nonetheless, the objective of this blog is to share everyday lessons learned by a young up and coming attorney. I plan to continue doing so only in a slightly different form. Be sure to follow…