fire insurance policy barred a suit filed by plaintiffs some 26 months after their internal heater exploded. Apparently, both parties agreed that the policy in question was a fire insurance policy, and the court relied primarily on the legislatively mandated limitations provision of 40 P.S. § 636(2) in reaching its conclusion. "Such a statutory requirement can hardly be determined a 'contract of adhesion,' imposed unfairly by the stronger party upon the weaker. Rather, it represents a legislative determination of a reasonable period within which suits must be brought." Schreiber, 444 A.2d at 647. While defendant asserts that the nature of the damage in Schreiber is similar to the damage here, the Schreiber court did not have before it a dispute over the nature of the insurance policy itself, as is the case here. Further, an explosion of an internal heater is fundamentally different from the instant situation, especially in light of the "other conduits or containers" language included in 40 P.S. § 382(c)(8), which seems directed at precisely the type of damage at issue in this case.
Section 753 sets forth the standard language for a policy of casualty insurance, and includes:
(A)(11) A provision as follows:
Legal Actions: No action at law or in equity shall be brought to recover on this policy prior to the expiration of sixty days after written proof of loss has been furnished in accordance with the requirements of this policy. No such action shall be brought after the expiration of three years after the time written proof of loss is required to be furnished.
40 Pa.C.S. § 753(11). As the Schreiber court pointed out, the legislature has determined what is a reasonable period within which to bring suit.
In this case, the insurance company has attempted to change the limitations period by contract. Granted, the provisions of § 753 are not absolute. Section 753(A) gives the insurer the right to "substitute for one or more of such provisions corresponding provisions of different wording approved by the commissioner which are in each instance not less favorable in any respect to the insured or the beneficiary." It appears from the post-hearing submission of defense counsel that the commissioner may have approved the language in this contract, but in any event, it is abundantly clear that a limitations period of one year is less favorable to the insured than one thrice that length. The approval of the commissioner does not per se establish the validity of a provision, Insurance Co. of America v. Hippert, 354 Pa. Super. 333, 511 A.2d 1365 (1986), Brader v. Nationwide Mut. Ins. Co., 270 Pa. Super. 258, 411 A.2d 516 (1980), especially where, as here, the deviation from the standard results in an insurance policy less favorable to the insured.
I am also aware of the Marshall court's observation that "Pennsylvania's highest court has consistently viewed the provisions of the standard policy as a matter of contract and not of statute." Marshall, 643 F.2d at 153. However, in Marshall the insurance company was attempting to enforce the one-year limitations period included in 40 P.S. § 636(2)'s standard policy provisions, even though its insurance policy contained no limitations provision at all. The court refused to read the one-year limitations period into the policy, since the parties had not contracted for such a period. In Marshall, the policy's silence was beneficial to the insured, so that court was not confronted with the situation presented here, where the policy's variance with the standard policy makes the policy "less favorable" to the insured, in violation of § 753(A). In my view, the attempt at contractual reduction of the limitations period from three years to one does not pass statutory muster in this case, the essence of which is a casualty loss.
Count 2: Bad Faith
Defendant argues that plaintiffs' bad-faith claim is also barred by the one-year limitations provision of the insurance policy, since the bad-faith claim is essentially a claim on the policy itself. Since I have found that the one-year limitations provision is inapplicable to the particular damage which occurred in this case, that provision cannot bar any claims brought as a result of the water heater accident.
However, even had I found plaintiff's breach of contract claim to be barred by the limitations provision, the bad faith claim would still survive. Plaintiffs' claim was brought under 42 Pa.C.S. § 8371, which creates a cause of action for bad faith on the part of insurance companies. The evolving jurisprudence in this district has held that § 8371 creates a separate and independent cause of action. See, e.g., Thomson v. Prudential Property & Cas. Ins. Co., Civ. A. No. 91-4073, 1992 WL 210088 (E.D. Pa. Aug. 24, 1992); Kauffman v. Aetna Cas. & Sur. Co., Civ. A. No. 91-4450, 1992 WL 166146 (E.D. Pa. June 17, 1992); Amissah v. William Penn Life Ins. Co., Civ. A. No. 91-2857, 1992 WL 122844 (E.D. Pa. May 28, 1992). With these decisions I agree. Thus, even if plaintiffs' breach of contract claim were barred by the policy's limitation provision, the § 8371 bad faith claim would survive, since it is independent of the underlying claim.
Count 3: The Consumer Protection Law
Defendant argues that plaintiff's claim under the Consumer Protection Law, 73 P.S. § 201, is barred by implication, since the Unfair Insurance Practices Act ("UIPA") provides an administrative penalty against insurers, but no private cause of action for an insured. I considered and rejected the same argument in Henry v. State Farm Ins. Co., 788 F. Supp. 241 (E.D. Pa. 1992), holding that the UIPA remedy is not the sole remedy available against insurers, and that an insured may bring an action against an insurer under the Consumer Protection Law. See also, Pekular v. Eich, 355 Pa. Super. 276, 513 A.2d 427 (1986), appeal denied, 516 Pa. 635, 533 A.2d 93 (1987). I remain convinced that my decision in Henry is correct and shall thus not dismiss Count 3 of plaintiffs' complaint.
An order follows.
AND NOW, this 22nd day of December, 1992, upon consideration of defendant's Motion to Dismiss, plaintiff's response thereto, and the parties' respective replies, and after argument in open court, it is ORDERED that the motion is DENIED.
BY THE COURT:
Robert S. Gawthrop, III J.