AN INSURED MUST PLEAD SOME SPECIFIC DETAILS RAISING CONDUCT TO THE LEVEL OF BAD FAITH TO SURVIVE A MOTION TO DISMISS, AND NOT SIMPLY THAT A CLAIM WAS DENIED OR A DEMAND REJECTED (Philadelphia Federal)

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This was the insureds’ second chance at pleading bad faith, after having their original UIM bad faith counterclaim dismissed without prejudice. The earlier post summarizing the first dismissal can be found here.

The second try fared no better. Rather, review of the second amended counterclaim made “clear that any further attempt at amendment would be futile because Defendants cannot plead their bad faith claim with adequate factual support and specificity.”

Once again, the court observed that: “A bad faith claim is ‘fact specific’ and depends upon the insure[r]’s conduct in connection with handling and evaluating a specific claim.” … As the party bringing the bad faith claim under 42 PA. C.S. § 8371, it is [the insured’s] burden to “‘describe who, what, where, when, and how the alleged bad faith conduct occurred.’”

The insureds’ two new paragraphs, set forth below, were deemed conclusory:

  1. Specifically, Insurance Company has taken [the insured’s] testimony and has been provided all of her documentation, which clearly demonstrates that she was covered under the applicable insurance policy and that her damages are far in excess of the UIM coverage amount.

  2. However, despite objective and subjective knowledge that [the insured] was covered under the applicable insurance policy and that her damages are far in excess of the UIM coverage amount, Insurance Company refused to honor their obligations under the insurance agreement for the bad faith purpose of seeking to evade their obligations to the Das family under the insurance contract.

The court observed that these paragraphs lacked “’the dates of any actions’ taken regarding the policy to support their allegation of unreasonable delay, nor have [the insureds] explained, in detail, ‘what was unfair’ about Plaintiff’s interpretation of the policy provisions.”

The court added:

Absent specific details that establish a dishonest purpose, it is not bad faith for an insurer to investigate and protect its interests during litigation. Jung v. Nationwide Mut. Fire Ins. Co., 949 F. Supp. 353, 360 (E.D. Pa.1997) (finding that insurer “had a reasonable basis to investigate and deny the claim.”). Moreover, the failure of an insurance company “to immediately accede to a demand for the policy limit” is not, without specific facts, enough to establish bad faith. Smith, 506 F. App’x at 137. [The insureds’] inclusion of two conclusory paragraphs to the Second Amended Counterclaim does not alter that conclusion.

The inability to plead bad faith also required dismissing the punitive damages claim with prejudice as well.

Date of Decision: May 8, 2019

Amica Mutual Insurance Co. v. Das, U. S. District Court Eastern District of Pennsylvania CIVIL ACTION NO. 18-1613, 2019 U.S. Dist. LEXIS 78320 (E.D. Pa. May 8, 2019) (Jones, II, J.)

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