Daily Archive for September 24th, 2021

NON-INSURED ASSIGNEE STANDING REQUIRES BOTH STATUS AS AN INJURED PARTY AND AS A JUDGMENT CREDITOR (Philadelphia Federal)

Keeping with today’s theme, Eastern District Judge Leeson, like Judge Pratter, dismissed an amended bad faith claim with prejudice, after the insured did not correct pleading deficiencies to set out a plausible claim.  The nature of the bad faith claim here presents a different twist, however, as it involves assignments and standing.  Judge Leeson’s first decision is summarized here.

Aside from an insured, the only parties with standing to bring a statutory bad faith claim are injured parties receiving assignments who are also judgment creditors.  Judge Leeson cites Wolfe v. Allstate Prop. & Cas. Ins. Co., 790 F.3d 487, 491 (3d Cir. 2015) and Feingold v. Palmer & Barr, 831 Fed. App’x 608, 609 n.5 (3d Cir. 2020) to support this dual requirement. These cases in turn rely upon the Pennsylvania Supreme Court’s Allstate v. Wolfe decision, summarized here.

Judge Leeson found the plaintiff in this case is an assignee, but not an injured person.  “[T]he assignment of proceeds, in and of itself, was insufficient to confer standing to bring a bad faith claim. Accordingly, [plaintiff’s] argument that the assignment itself confers standing upon him is unavailing.”

“Moreover, assuming arguendo that [the plaintiff] sufficiently alleges that he is an injured plaintiff, [he] fails to plausibly allege that he is a creditor to any judgment related to the fire. The effort to plead assignment alone creates standing is “unavailing, as the Court in Wolfe did not treat Wolfe’s assignment as sufficient to render him a ‘judgment creditor.’ … [The plaintiff] fails to allege any judicial judgment related to the fire to which he is a creditor. Since [the plaintiff] does not allege that he is both an injured plaintiff and judgment creditor, he lacks standing to bring a bad faith claim ….” [Emphasis added]

Date of Decision:  September 9, 2021

Williams v. State Farm, U.S. District Court Eastern District of Pennsylvania No. 5:21-CV-00058, 2021 WL 4099534  (E.D. Pa. Sept. 9, 2021) (Leeson, J.)

NO BAD FAITH PLEADED: (1) 38 BAD FAITH ALLEGATIONS ALL CONCLUSORY; (2) ONLY A VALUATION DISPUTE; (3) INSURER DID NOT “CONSTRUCTIVELY IGNORE” RECORDS SUPPORTING CLAIM; (4) NO DILATORY CONDUCT SPECIFICALLY PLEADED; (5) “LOW BALL” OFFER ALLEGATION ISN’T SUFFICIENT IN ITSELF TO STATE A BAD FAITH CLAIM (Philadelphia Federal)

“If at first you don’t succeed, try and try again.”  That didn’t work in this case, where a bad faith claim was dismissed with prejudice after Eastern District Judge Pratter had already given the plaintiff leave to replead. A summary of Judge Pratter’s original decision in this uninsured motorist bad faith case can be found here.

In her second decision, Judge Pratter finds, among other things:

  1. “All told, the Amended Complaint contains a list of 38 ways in which Liberty Mutual allegedly acted in bad faith. But this list is a list of conclusions—not facts.”

  2. “[T]here are no details that would describe what was supposedly unfair about the process, other than that [the insured] disputes the value of the settlement offer.”

  3. There is no plausible for “constructively ignoring” medical records because the reviewer was not “medically educated”. “[T]here is nothing pled that the claims adjusters are somehow ill-equipped to perform their job—which entails reviewing medical records in connection with a claim.”

  4. The Court’s first opinion signaled the insured needed to plead more specific facts to support an allegation of bad faith dilatory conduct, “i.e., the number of months between demand and settlement offer.” However, “[t]he Amended Complaint does not describe the course of the parties’ dealings, let alone whether Liberty Mutual delayed its offer of settlement.”

  5. “In the final analysis, the Amended Complaint reflects a disagreement over the amount of settlement of [the insured’s] claim. To state a bad faith claim, an insured must do more than call [the insurer’s] offers ‘low-ball.’” As the Court explained at length in its prior opinion, this appears to be a familiar dispute between parties over the entitlement to UM coverage as an initial matter as well as the value of a claim to UM benefits. Moreover, accepting the well-pleaded allegations as true that [the insured] is indeed entitled to UM benefits, it does not necessarily follow that she is entitled to the limit of that coverage. A policy limit—as its name suggests—is the theoretical maximum that an insured could recover. ‘It is not the de facto value of a claim.’”

Date of Decision:  August 26, 2021

Brown v. LM Gen. Ins. Co.,  U.S. District Court Eastern District of Pennsylvania 2021 No. CV 21-2134, WL 3809075 (E.D. Pa. Aug. 26, 2021) (Pratter, J.)