Superior Court Issues a Sweeping Decision

On April 17, 2012, the Superior Court of Pennsylvania handed down a sweeping decision that broadly interprets insurance bad faith under Section 8371. In Berg v. Nationwide Mutual Insurance Company, the Superior Court emphasized that “bad faith” in Pennsylvania is actually quite broad, and it found that evidence that the insurance company paid defense counsel just under $1 million dollars was evidence that supported bad faith.

In Berg, the Plaintiffs alleged that Nationwide had “repaired” a vehicle, knowing that it still had structural damage. The Superior Court also said that Plaintiffs alleged that Nationwide paid “$922,654.25 to defend the lawsuit, allegedly pursuant to a documented litigation strategy to deter the filing of small value claims.” The trial court had granted Nationwide’s motion for a directed verdict. It relied on longstanding, but narrow, definitions of bad faith from early cases.

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