James is the Director of the firm’s Professional Liability Department and serves on the firm’s Board of Directors. In his role as Director of the Professional Liability Department, James manages key administrative processes and leads strategic department initiatives for over 140 lawyers among 19 offices. As a member of the firm’s Board of Directors, James oversees the firm’s daily operations spanning four departments and 50 practice areas.
James, in addition to serving as Director, continues to focus his practice on representing insurance companies, whether in pre-litigation consultation or the defense of first-party or bad faith lawsuits. He has had a particular interest in Special Investigative Unit and Property Damage claims, including arson, burglaries, public adjuster represented claims, mold/ pollution and automobile thefts. Within his areas of practice, he is experienced in the bad faith and coverage issues inherent in first party/SIU investigations and litigation. Throughout his career, James has assisted with hundreds of SIU investigations, coverage consultations and litigated hundreds of first party lawsuits; and consulted on hundreds of property coverage issues.
James is frequently asked by clients and industry organizations to lecture on a variety of topics concerning property damage, insurance fraud and bad faith. For the past five years, he has been a featured speaker at the annual Pennsylvania Insurance Fraud conferences, and he has spoken several times at PLRB conferences, among others. James is an active member of the Claims & Litigation Management Alliance (CLM). He formerly served on the Executive Council for the CLM's Claims College, School of Property, where he helped to develop curriculum surrounding good faith claims handling and insurance coverage topics.
James is a 1990 graduate of the Indiana University of Pennsylvania. Immediately following graduation, he worked as a claims representative with a large insurance carrier, where for eight years he was involved in the investigation and resolution of property and casualty claims. In 1995, he entered Temple University School of Law while continuing to work full time. James graduated from Temple University in 1999 with a degree of juris doctor. Thereafter, he joined Marshall Dennehey and is currently chair of the firm's SIU Litigation and First Party Property Practice Groups. His firsthand property background, insurance industry knowledge and familiarity with property policies allows him to effectively, efficiently and practically counsel clients on Property and SIU issues, and when necessary, provide a vigorous and common-sense defense tailored to the needs of a particular carrier.
Thought Leadership
Defense Digest
On the Pulse…Insurance Fraud & Special Investigations Practice Group
March 1, 2025
Insurance fraud is, understandably, intolerable, and its impact on insurers and insureds alike can be devastating. We work very closely with our clients in furtherance of that philosophy through relentless investigation, aggressive defense, and prosecution in response to false and inflated insurance claims. The attorneys in this practice group supplement their litigation experience with up-to-date knowledge of the current trends in insurance fraud detection and prosecution areas by regularly attending and participating in seminars given by such educational agencies as the National Insurance Crime Bureau (NICB), International Association of Special Investigation Units (IASIU), and The Coalition Against Insurance Fraud. In addition, they also attend and present at numerous local and national conferences and association meetings throughout Pennsylvania, New Jersey, Delaware, Ohio, Florida, and New York. As part of our fraud practice, we regularly handle PIP matters for our clients. Our team of attorneys are familiar with all local PIP regulations and have significant experience handling all facets of PIP litigation, including IME cut-offs, opinions on absences of injury, and EUO investigations of prior medical history. Other PIP practice areas include UCR litigation, medical necessity defense, and provider and claimant regulatory compliance. We routinely partner with our clients to help create PIP protocol and manage the defense of PIP litigation. Our attorneys are knowledgeable and focused on an array of contemporary medical procedures and codes that often flood the PIP industry. The increase in auto glass claims have changed the industry’s perception. Our attorneys are focused on glass litigation in both the defensive and affirmative ligation recovery model against fraudulent actors. Our team has national experience in defending and civilly prosecuting these claims. Aggressive Fraud Defense As a part of an overall aggressive fraud defense, the Insurance Fraud & Special Investigations Practice Group members believe that the “best defense is a good offense.” Our trial attorneys are experienced in the investigation, defense, and affirmative prosecution of fraudulent claims. The scope of their practice is not only focused on the individual claimant, but also on organized groups or “rings.” We routinely file suits and collect judgments against perpetrators of insurance fraud, including both insureds and medical providers. Our team works with local and federal agencies to make sure our clients’ interests are protected and made whole. We have considerable experience with cases involving: • Medical Provider Fraud • New York Labor Law • Staged Accidents – Trucking & Transportation; Auto; Slip and Fall • RICO • Arson • Vehicle “Give Ups” & Fraudulent Theft Claims • Application/Rate Evasion Fraud We maintain a centralized Fraud Library that catalogs fraud schemes, investigations, and known perpetrators. By sharing this information with our team and fostering ongoing dialogue among our attorneys, we ensure that emerging legal developments and industry trends are swiftly integrated into our defense strategies. In turn, we keep our clients informed with timely updates on fraud-related developments, empowering them to enhance their own investigative efforts. Our collaborative approach is highly valued by our clients as it allows us to align strategies, coordinate efforts, and effectively combat fraud together. Stay tuned for new insights from our fraud practice on staged accidents in commercial auto and trucking and transportation. As fraud schemes grow more sophisticated, criminals are increasingly targeting commercial vehicles with carefully orchestrated collisions designed to exploit insurers and businesses. Our team is at the forefront of uncovering these fraudulent claims, leveraging cutting-edge investigative techniques and legal strategies to protect our clients. Our attorneys will be featured in a podcast discussing staged accidents this May —more details to come! *Jeff Rapattoni and Jim Cole are co-chairs of our Fraud/Special Investigation Practice Group. Jeff works in our Mount Laurel, New Jersey, office, and Jim works in our Philadelphia, Pennsylvania, office. Defense Digest, Vol. 31, No. 1, March 2025, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2025 Marshall Dennehey. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.
Defense Digest
A Royal Assignment [of Benefits]: Ramifications for Insurers in the First-Party Property Context
December 1, 2022
Key Points: This summer, a federal court in Pennsylvania, on two separate occasions, permitted an insured to assign a bad faith claim to a vendor seeking payment for services on their property. Until now, Pennsylvania courts had not previously permitted the assignment of extra-contractual tort claims, such as bad faith, in the first-party property context. These recent decisions may have costly ramifications for insurers and have the potential to profoundly change the first-party property landscape in Pennsylvania. With recent decisions in the U.S. District Court for the Eastern District of Pennsylvania, insurers must be braced for bad faith claims brought by their insured’s vendors. For the past 25 years, with the enactment of 42 Pa. C.S. § 8371, Pennsylvania’s bad faith statute has allowed insureds to bring lawsuits against their insurance companies for improper first-party claims handling, with the primary purpose being to hold insurers accountable for good faith and fair dealing towards their insureds. See, generally, 42 Pa. C.S. § 8371; see also Charter Oak Insurance Co. v. Maglio Fresh Food, 45 F.Supp.3d 461 (E.D. Pa. 2014). Prior to the enactment of 42 Pa. C.S. § 8371, bad faith actions existed only under common law, and only in the third-party context, wherein an insured could sue their liability carrier for a bad faith refusal to settle a lawsuit against the insured within the policy limits, exposing him to an excess verdict. In the third-party/excess verdict context, courts have held assignments of bad faith claims, post-judgment, to be valid. See, e.g., Gray v. Nationwide Mutual Insurance Co., 223 A.2d 8 (Pa. 1966); Allstate Property & Casualty Insurance Co. v. Wolfe, 105 A.3d 1181, 1188 (Pa. 2014) (carving out scenarios in which bad faith claims may be assigned by insureds). A concept rooted in contract law, an assignment is the signing over of a claim by one party to the contract to a non-party. This has been found acceptable in the first-party insurance context when an insured assigns benefits for services rendered, such as to a physician in a PIP claim or to a mitigation vendor in a property claim, but courts stopped short of extending this concept to the assignment of extra-contractual tort claims such as bad faith. Some states, such as Florida, have allowed vendors to secure post-loss assignments, not only for services rendered, but for extra-contractual damages such as attorney’s fees and bad faith in the first-party context, leading to what may be described as an insurance crisis. It has been widely reasoned that lawsuits involving the assignment of benefits have increased between 2004–2018. See Bethan Moorcraft, AOB Abuse in Florida Rises 70% in 15 Years, Insurance Business Mag., Mar. 28, 2019, https://www.insurancebusinessmag.com/us/news/breaking-news/aob-abuse-in-florida-rises-70-in-15-years-163448.asp. Mostly due to the assignment of benefits, Florida is responsible for 76% of lawsuits filed against insurance companies in the United States, although the state itself only accounts for 8% of the population. David Altmaier, Florida OIR Report, Insurance Journal, Apr. 2, 2021, https://www.insurancejournal.com/app/ uploads/2021/04/Florida-OIR-Report.pdf. In Pennsylvania, however, courts had not allowed the assignment of a bad faith claim outside the narrow third-party/excess verdict context. For example, in a case in which a disbarred attorney sought assignment of his client’s underinsured motorist-turned-bad faith claim, the Third Circuit specifically held that under 42 Pa. C.S. § 8371, bad faith claims can only be assigned to an injured plaintiff and judgment creditor. See Feingold v. Palmer & Barr, 831 F. App'x 608, 609 (3d Cir. 2020) (holding that bad faith claims may be assigned by statutory permission, but are not “freely assignable”). Feingold reaffirmed Wolfe’s interpretation that, in the first-party property context, an insured may assign his bad faith claim only to a judgment creditor who has been injured. On June 29, 2022, the U.S. District Court for the Eastern District of Pennsylvania issued an opinion which royally changes the Commonwealth’s interpretation of first-party property bad faith claims. In Royal Water Damage Restoration, Inc. a/a/o 1133 Columbia LLC v. State Farm Fire & Casualty Co., WL 2345740 (E.D. Pa. June 29, 2022), the court decided that an insured’s water mitigation vendor has standing to bring a bad faith claim against the insurer—not on behalf of the insured, but directly as an injured party. Simply stated, the court has ruled, contrary to the precedent set in Wolfe and reconfirmed in Feingold, that an insured’s vendor—who is not a party to the insurance contract between the carrier and its insured—may pursue an extra-contractual claim under the Pennsylvania bad faith statute against the carrier. On July 28, 2022, in another case involving Royal Water Damage Restoration, the Eastern District of Pennsylvania again permitted a third party’s standing to pursue a bad faith claim against an insurer. See Royal Water Damage Restoration, Inc. a/a/o Janet Thorn v. Allstate Vehicle and Property Insurance Co., WL 2985637 (E.D. Pa. July 28, 2022). More pointedly, in this case, the court based its finding on the mere potential that a vendor “could potentially be” a judgment creditor, even if the property owner/named insured is the only party actually injured. It can be argued, however, that the Federal Rules of Civil Procedure, which govern who is permitted to bring a lawsuit, have not and were not meant to be bent for the sake of convenience. A plethora of case law since the enactment of the Federal Rules has held that a plaintiff must establish standing in order to bring any claim in suit, bad faith or otherwise. Allowing a party who has not sustained any actual injury to bring a claim for bad faith may circumvent the purpose of the federal rule on standing. More concernedly, allowing insureds to assign their bad faith claims to vendors seeking payment for services on their property could open a floodgate of litigation directly against carriers who issue insurance policies with the specific understanding that the named insureds are the only parties to whom they owe any duties or obligations. A vendor that performs repair work on the insured property is neither an injured party nor a judgment creditor, particularly if no judgment has been rendered by a court. Widening the class of first-party bad faith plaintiffs to include vendors of insureds has the potential to significantly increase premiums. Allowing any repair contractor—who is not a party to the contract and who was not considered in the underwriting process—to pursue a bad faith claim has the potential to profoundly change the first party property landscape in Pennsylvania. With the recent Royal Water decisions contorting Pennsylvania’s understanding of the bad faith statute, insurers should wait with bated breath for a case to reach the Third Circuit or Pennsylvania appellate courts to decide whether Pennsylvania will follow Florida down the assignment-of-benefits rabbit hole.
News
Events
Speaking Engagement
Property & Liability Resource Bureau (PLRB) Annual Claims Conference
March 22-25, 2026
National Harbor, MD
James H. Cole
Speaking Engagement
2026 Pennsylvania Association of Mutual Insurance Companies (PAMIC) Claims Summit
April 8, 2026
Jeffrey G. Rapattoni, James H. Cole, Alec N. DelConte, and Allison L. Krupp
