Pennsylvania Supreme Court agrees to revisit the requirements of proving an insurance bad faith claim.

The Pennsylvania Supreme Court has agreed to hear an appeal on the issue of whether the test for bad faith as outlined in Terletsky v. Prudential Prop. & Cas. Ins. Co., 649 A.2d 680 (Pa. Super. Ct. 1994) should be ratified and, if so, whether the Superior Court erred in determining that the Terletsky factor of a “motive of self-interest or ill-will” is a discretionary consideration rather than a mandatory prerequisite to proving bad faith. Previously, Terletsky outlined the requirement for proving bad faith as “the plaintiff must show that the defendant [insurer] did not have a reasonable basis for denying benefits under the policy and that defendant knew or recklessly disregarded its lack of reasonable basis in denying the claim.” Other language in Terletsky, however, indicated that the insured must show that the insurer’s actions were motivated by “self-interest or ill will.” Pennsylvania courts, including the Superior Court in the Rancosky case, have determined such language to be considerations that might prove the second element of the Terletsky test. Should the Supreme Court determine that a showing of motivation of self-interest or ill will is required, the bar for proving a bad faith claim will be raised higher.

_{Case Law Alerts, 4^th Quarter, October 2016. Case Law Alerts is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2016 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.}