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PENNSYLVANIA RECORD

Thursday, March 28, 2024

Third Circuit: Disbarred attorney's bad faith claim thrown out on statute of limitations grounds

Federal Court
Insurance08

PHILADELPHIA – A federal appellate court determined that a complaint filed by a now-disbarred attorney was properly dismissed for not being brought within the Pennsylvania standard two-year statute of limitations for bad faith claims.

On Jan. 24, U.S. Court of Appeals for the Third Circuit judges Kent A. Jordan, Anthony J. Scirica and Marjorie O. Rendell chose to affirm a judgment from the U.S. District Court for the Eastern District of Pennsylvania dismissing a complaint from plaintiff Allen L. Feingold.

In 2019, Feingold, a disbarred attorney, filed a bad faith claim against an insurance company, its lawyer, and an arbitrator (collectively, the “underlying defendants”), which had been assigned to him by a former client of his named Kristina Edwards.

The claim stemmed from conduct by the underlying defendants in failing to “fully or properly comply with the law, case law or the Allstate Insurance Policy” during litigation of Edwards’s claim sometime between 2000 and 2011, when it was then dismissed for failure to prosecute.

Upon receiving Feingold’s complaint, the trial court granted Feingold’s petition to proceed in forma pauperis under 28 U.S.C. Section 1915, and sua sponte dismissed the matter as time-barred.

Feingold appealed and raised two issues for the Third Circuit to consider: (1) Whether a trial court, acting under the mandates of 28 U.S.C. Section1915, may sua sponte dismiss a claim as time-barred and (2) Whether the trial court correctly dismissed Feingold’s claim.

However, Scirica stated the trial court properly dismissed the claim as time-barred and their only remaining duty was to determine if that dismissal was correct.

“The Pennsylvania statute of limitations for a bad faith claim is two years. The actionable conduct alleged to have caused the injuries here occurred, at the latest, in 2011 when the original matter was dismissed for failure to prosecute. Because Feingold did not file this action until 2019, it was not filed within the limitations period,” Scirica said.

Feingold presented a pair of arguments as to why the trial court was incorrect: (1) The actionable conduct was not discovered until a period sometime within the limitations period, or (2) There exists a continuing breach of the underlying defendants’ obligations placing this action within the statute of limitations.

“Feingold’s complaint centers on litigation conduct that he or his former client witnessed. He knew, or should have known, of this conduct at the time it occurred. The trial court correctly determined the discovery rule would not toll the statute of limitations here. As to a continuing breach, in Pennsylvania, the statute of limitations runs when the first denial occurs, but continuing or subsequent denials do not newly trigger the statute of limitations,” Scirica said.

“Feingold’s complaint of a continued denial therefore does not allow him to sue now for conduct that originally occurred in 2011. We will affirm the trial court’s dismissal of Feingold’s bad faith claim.”

U.S. Court of Appeals for the Third Circuit case 19-1495

U.S. District Court for the Eastern District of Pennsylvania case 2:19-cv-00291

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com

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