BAD FAITH CLAIM STATED WHERE INSURER TELLS INSURED TO “SUE US” AS A MEANS TO GET A MORE COMPLETE RECORD (Middle District)

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In this case, Judge Caputo found plaintiff pleaded a plausible bad faith claim.

The case involved a fatal auto injury, and the issue of whether the deceased’s father, owner of the car at issue, had an applicable policy covering the accident. The other driver was uninsured.

The carrier asked for additional information after demand was made under the father’s policy. The father sent additional information, but the carrier told him to file a complaint, so it could take discovery. The father brought UM claims, as well as breach of contract and bad faith claims.

The complaint alleged the key issue was the deceased son’s residence. The father provided numerous documents showing the son resided with him; but the carrier still declined coverage on the basis that proof of residency was lacking.

Judge Caputo rejected the carrier’s argument that the complaint amounted to boilerplate conclusory allegations of bad faith. Rather, the complaint alleged sufficient “factual matter to withstand a 12(b)(6) motion.” Specifically, “the Complaint indicate[s] that [the insurer’s] coverage decision under the Policy hinged on a determination of whether [son] resided with [father] at the time of the accident. And, upon request, [father] alleges that he provided more than ample documentation to establish that both he and [his son] resided at [the father’s home] at that time.” This included copies of a driver’s license and tax forms.

Allegedly, instead of asking for more information to fill putative gaps in this information, the carrier told father “sue us”. “Although such conduct may ultimately not amount to bad faith, it is plausible based on the factual assertions in the Complaint that [the carrier] acted in reckless disregard of its obligations under the Policy.”

Date of Decision: July 22, 2019

Fuentes v. USAA General Indemnity Co., U. S. District Court Middle District of Pennsylvania NO. 19-CV-1111, 2019 U.S. Dist. LEXIS 121362, 2019 WL 3288156 (M.D. Pa. July 22, 2019) (Caputo, J.)

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