July 1 marked the quarter-century anniversary of the enactment of Pennsylvania’s insurance bad-faith statute, 42 Pa. C.S.A. Section 8371. This landmark legislation permitted policyholders and insureds to directly sue their insurers for bad-faith conduct and, if successful, recover punitive damages, attorney fees, interest and costs. For attorneys who litigate in the insurance field, and the courts before whom they appear, this one-paragraph, 81-word statute spawned legal issues far more numerous than its modest size portended. Each year, it seems, the state and federal courts are called upon to address a new wrinkle wrought by the statute, and the past 12 months or so have proved no exception.
Two interesting recent decisions had their genesis in the same third-party excess verdict case.
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