On October 11, 2007, in Ash v. Continental Insurance Company, No. 35 WAP 2005, the Pennsylvania Supreme Court ruled that the statute of limitations governing all Bad Faith Claims brought pursuant to 42 Pa.C.S.A. 8371 is two years. The Court based this decision on its determination that a bad faith claim is a statutorily created tort claim as opposed to a contract claim which arises out of a breach of a duty imposed by mutual consensus. The held that the duty imposed by 42 Pa.C.S.A. 8371 is one imposed by law as a matter of social policy. In this regard, the Court rejected Plaintiff’s argument that a six year statute of limitation period which generally governs breach of contract actions should apply.
John P. Finnerty, Esquire