Court Opinion

ID: 9753505
Source: CourtListenerOpinion
Date Created: 2023-08-28 19:16:31.551715+00
Date Added: 2024-06-11T07:27:37.201263
License: Public Domain

NIGRO, Justice
(concurring).
I agree with the majority that the Superior Court properly reversed the trial court’s order and reinstated the jury’s award granting The Birth Center $700,000.00 in consequential damages.1 In addition, I agree with the majority that The *409Birth Center’s claim for consequential damages sounds in contract law. See D'Ambrosio v. Pennsylvania Nat’l Mutual Ins. Co., 494 Pa. 501, 431 A.2d 966 (1981); Gray v. Nationwide Mutual Ins. Co., 422 Pa. 500, 223 A.2d 8 (1966). I nevertheless write separately to assert my view that, unlike Justice Zappalla, I believe that the law in this Commonwealth establishes that there are two separate “bad faith” claims that an insured can bring against an insurer — a contract claim for breach of the implied contractual duty to act in good faith, and a statutory bad faith tort claim sounding in tort under 42 Pa.C.S. § 8371. Pursuant to the contract claim, an insured may recover traditional contract damages, including compensatories. Pursuant to the statutory claim, however, the insured may recover only those damages specifically set forth in 42 Pa.C.S. § 8371, i.e., punitive damages, attorney fees, court costs and interest.
Although historically the case law in this Commonwealth has been less than clear as to the nature of the common law “bad faith” claim against an insurer, i.e., whether it sounds in tort or contract,2 I believe that any ambiguity in that regard was settled by D'Ambrosio, which explicitly stated that there is no common law bad faith tort claim. 431 A.2d at 970. DAmbrosio, however, did not address the viability of the bad faith contract claim, which has its roots in the 1952 case of Perkoski v. Wilson, 371 Pa. 553, 92 A.2d 189 (1952)(first recognizing assumpsit action for bad faith), and was reaffirmed by this Court in Gray. Accordingly, DAmbrosio left the long-recognized contractual bad faith claim undisturbed.
*410By subsequently enacting 42 Pa.C.S. § 8371, the General Assembly filled the gap that we had identified in D Ambrosio with a statutory cause of action in tort for bad faith.3 By virtue of § 8371, insureds may now supplement the breach of contract damages that they can obtain through their bad faith contract action by also bringing a claim under § 8371 for the specific damages authorized in that statute.

. While the damages awarded may also be referred to as compensatory damages, they are more [Specifically defined as consequential. Compensatory damages are damages meant to place the injured party in the place he was prior to the injury, black’s law dictionary 390 (6th ed.1990). Compensatory damages consist of both "general” and "consequential” or "special” damages. While general damages compensate the injured party for the immediate injury or loss sustained, consequential damages are damages that flow from the consequences of the direct injury. Id. To recover consequential damages, a litigant must prove that they were "reasonably foreseeable” to the parties at the time they entered into the contract. AM/PM Franchise Assoc. v. Atlantic Rich*409field, 526 Pa. 110, 584 A.2d 915, 920-21 (1990). In the instant case, the general damage suffered by The Birth Center was its liability for the excess verdict. However, because St. Paul paid the excess voluntarily, the excess was not part of The Birth Center's damages claim. Rather, The Birth Center sought consequential damages, consisting of, among other things, lost business and lost clients. The trial court properly charged the jury that it could award such consequential damages if it found that they were “reasonably foreseeable at the time [the parties] made the contract.” N.T. 5/10/96, at 247.

. Compare Cowden v. Aetna Casualty & Surety Co., 389 Pa. 459, 134 A.2d 223 (1957)(considering a bad faith claim asserted in trespass), with Gray 422 Pa. 500, 223 A.2d 8 (characterizing bad faith claim as one in assumpsit),

. I conclude that 42 Pa.C.S. § 8371 sounds in tort both because it appears to have been enacted in response to D’Ambrosio and because it permits the insured to recover punitive damages, which are typically a remedy only in tort actions. See Kirkbride v. Lisbon Contractors, Inc., 521 Pa. 97, 555 A.2d 800, 803 (1989); see also AM/PM Franchise Assoc., 584 A.2d at 927 (holding that punitive type relief may not be awarded in contract action).