The Pennsylvania Supreme Court's decision to dismiss an appeal by Erie in regards to Hollock v. Erie Insurance Exchange maintains the Superior Court's decision that an insurance company's duty of good faith and fair dealing continues through litigation. The dismissal means that a previous judgment award of $2.8 million in punitive damages will stand.

The Superior Court ruled that the conduct of Erie Insurance Exchange in the bad-faith litigation could be considered in determining whether Erie acted in bad faith toward its policyholder, Jean Hollock. The trial court had found that the conduct of Erie's witnesses at trial was “an intentional attempt to conceal, hide or otherwise cover-up the conduct of Erie employees.” The Superior Court ruled that “it was appropriate for the trial court to consider Erie's continued conduct in relation to its insured,” because the statutory remedy was designed to resolve all instances of insurance company bad faith, whether occurring before, during, or after litigation.

The Superior Court also ruled that, in order to recover punitive damages under the bad-faith statute, a policyholder need not prove anything more than bad faith. The policyholder need not also prove malice, vindictiveness, or a wanton disregard of the rights of others, which may be required to obtain punitive damages in a case of common law fraud in Pennsylvania.