AUGUST 2018 BAD FAITH CASES: IMPROPER CLAIM HANDLING RELEVANT TO CONTRACT CLAIM EVEN WITHOUT BAD FAITH COUNT (Middle District)

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This is a UIM case where bad faith was not pleaded. The insured and insurer did not reach an agreement on UIM benefits, and the insured commenced an action for breach of contract and generic violations of the Motor Vehicle Financial Responsibility Law (MVFRL).

The insurer argued, the allegations of improper claim handling should be stricken from the complaint, because improper claim handling is not relevant to an action that does not plead bad faith. The court disagreed. It found that improper claim handling could be relevant to a contract claim, even in the absence of bad faith, because the decision making during the claim handling could go to the reasoning behind denying the contract claim.

Next, the insurer argued the court should dismiss or order a more definite statement of insured’s unidentified statutory violations because insured failed to allege a bad faith violation or identify the provision of the MVFRL that insurer allegedly violated. The court dismissed this statutory count because the insured failed to plead an alleged statutory violation with any detail, and the facts pleaded did not set forth any wrongdoing.

Date of Decision: August 8, 2018

Swientisky v. American States Insurance Co., U. S. District Court Middle District of Pennsylvania, NO. 3:18-CV-1159, 2018 U.S. Dist. LEXIS 133352 (M.D. Pa. Aug. 8, 2018) (Caputo, J.)

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