Evidence is Needed to Prove the Tort of Bad Faith

Some people simply refuse to accept a claim denial, even after a trial court, three times found that the insured had no case. In Timothy A. Mohney v. American General Life Insurance Company, As Successor by Merger to American General Assurance Company, As Successor in Interest to U.S. Life Credit Insurance Company, J-A08011-19, No. 760 WDA 2018, Superior Court of Pennsylvania (October 10, 2019) Timothy A. Mohney, appealed from the judgment entered after the trial court entered a non-jury verdict against Mohney’s insurance bad faith claims against Appellee, American General Life Insurance Company (“American”). Mohney had sued American as a successor company to U.S. Life Credit Insurance Company (“U.S. Life”), based upon allegations of insurance bad faith against U.S. Life. The trial court ruled that Mohney had failed to carry his burden of proving the claims by clear and convincing evidence.


The torturous course of the proceedings before the trial court were protracted and problematical. Mohney’s original complaint involved multiple claims based upon numerous theories and was dismissed after U.S. Life filed preliminary objections.

The Pennsylvania appellate court twice remanded the case to the trial court for further proceedings. Its rulings were followed and Mahoney lost again and appealed again.

The only remaining issue is based upon Mohney’s claim that U.S. Life exercised bad faith in denying his claim for total disability benefits under his insurance policy with U.S. Life. This claim had been twice dismissed by the trial court, once pre-trial and another after trial. In both instances, the appellate court reversed and remanded for further proceedings.

A second bench trial was held by then Senior Judge William J. Ober (retired). Senior Judge Ober entered a verdict following the trial, finding that Mohney did not prove that U.S. Life, American’s predecessor, had knowingly or recklessly “disregarded the lack of a reasonable basis for its” denial and termination of the payment of credit disability benefits.

A comprehensive Memorandum Opinion, comprised of 16 pages, was prepared by the trial court fully explaining the reasons supporting Senior Judge Ober’s verdict.


An insurer must have a reasonable basis to terminate disability benefits. The trial court accepted this testimony and found that Defendant did not act recklessly or with a knowing disregard of its lack of a reasonable basis for rejecting the claim.

In reviewing the outcome of a nonjury trial, an appellate court is limited to determining whether the trial court’s factual findings are supported by competent evidence, and whether the court properly applied the pertinent law. Absent an abuse of discretion, the reviewing court is bound by the trial court’s credibility determinations. Those findings must be afforded the same weight and effect as a jury verdict and will not be disturbed on appeal absent an error of law or an abuse of discretion.

After a thorough and meticulous examination of the record, and a careful review of the briefs, the appellate court found that the Adjudication and Verdict adequately addressed all of the issues raised by the Appellant, and are more than sufficiently supported in the record.

Therefore, it affirmed the basis of the aforesaid decisions by the trial court.


People like Mr. Mahoney believe that insurance companies must pay any claim presented to them or they have committed the tort of bad faith. Insurance is a contract that makes certain promises – for example – to pay disability benefits if the insured meets the requirements of the policy to prove he was disabled and the disability was the result of actions for which the insurer agreed to pay. He failed, twice, and convinced an appellate court that errors were made at trial. On his third attempt, presided over by a senior judge, he failed again. He is lucky the court did not punish him for wasting the time of three courts.

© 2019 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 51 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

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