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Monday, 19 March 2018 17:17

$713,000 Lawsuit Against Progressive Filed by PA Shop Owner

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Professionals alleged that the insurance company had contracts with the insureds and liable third-parties, which required Progressive to pay for “reasonable and necessary expenses.” In addition, the body shop said its customers assigned their claims against the insurance company.

 

The court affirmed that Professionals pleaded a breach of contract claim and stated, “Professionals sufficiently alleged each element of breach of contract under Pennsylvania law.” The court also concluded that Professionals has standing to purse breach of contract claims on behalf of third-party claimants.

 

Bad Faith Claim


Progressive asked the Court to dismiss Professionals’ bad faith claim for three reasons, according to court documents. First, it said that the body shop lacked standing to bring a bad-faith claim on behalf of third-party claimants. Second, Progressive stated that Professionals failed to plead a bad faith claim on behalf of insureds because it did not show that the insurance company violated the Motor Vehicle Physical Damage Appraiser Act; the insurance company paid part of the claims due; and the body shop did not establish that Progressive acted unreasonably. Third, Progressive stated that the body shop’s bad faith claims that were based on repairs prior to August 23, 2015 are barred by the statute of limitations.

 

Professionals, in response, conceded in court documents that “Pennsylvania law does not recognize bad faith claims asserted by ‘third-party of intended beneficiaries of insurance contracts.’” It also argued that Pennsylvania law doesn’t require a complete denial of a claim to state a claim for bad faith. In response to the statute of limitations argument, Professionals “concedes that the Pennsylvania Supreme Court determined that a two-year statute of limitations applies to statutory bad faith claims.”

 

The Court dismissed the body shop’s bad faith regarding third-party claimants and stated in court documents that “Under Pennsylvania law, the third-party claimant cannot have a cause of action for bad faith.”

 

It also ruled that Professionals pleaded a bad faith claim in regard to the insureds.


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