FACTS MAKING OUT A POSSIBLE BAD FAITH CLAIM DID NOT SET OUT A PLAUSIBLE BAD FAITH CLAIM ABSENT SPECULATION (Middle District)

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Judge Caputo dismissed a UIM based bad faith count, but with leave to amend the complaint.

  1. He found these averments to be conclusory:

Failing objectively and fairly to evaluate Plaintiff’s claim;

Failing objectively and fairly to reevaluate Plaintiff’s claim based on new information;

Failing reasonably and adequately to investigate Plaintiff’s claim; and

Failing reasonably and adequately to evaluate or review the medical documentation in Defendant’s possession.

  1. He found these averments “regarding how Defendant handled the claim after receipt [to be] conclusory without additional factual support that would inform the court why Defendants actions are unreasonable”:

Engaging in dilatory and abusive claims handling;

Acting unreasonable and unfairly in response to Plaintiff’s claim;

Subrogating the interests of its insured and those entitled under its insured’s coverage to its own financial monetary interests;

Failing to promptly offer reasonable payments to the Plaintiff;

Acting unreasonably and unfairly by withholding underinsured motorist benefits justly due and owing to the Plaintiff; and

Failing to make an honest, intelligent, and objective settlement offer.

  1. He stated that the following averment was conclusory, circular, and proved nothing:

Not attempting in good faith to effectuate a fair, prompt, and equitable settlement of Plaintiff’s claim, in which the Defendant’s liability under the policy had become reasonably clear.

  1. He found the allegations that Defendant failed to adopt “reasonable standards” and subordinated “the interestsof its insured” to their own financial monetary interest to be conclusory in the absence of supporting facts.

Judge Caputo has previously described the method of stripping away conclusory allegations to determine a bad faith claim’s plausibility under federal pleading standards. A summary of his analysis can be found here.

Following the method of stripping away conclusory allegations in determining plausibility, Judge Caputo found here that the complaint simply alleged the following facts: an accident, the tortfeasor’s willingness to pay policy limits, the insurer’s agreement to that payment, the insured’s written demand for UIM benefits supported by a medical report, and the insurer’s failing to settle or resolve the UIM claim. These facts alone did not support the elements of a bad faith claim, i.e., unreasonable denial of benefits with a knowing or reckless disregard that the basis to deny benefits was unreasonable.

The court found that “[w]hile such assertions perhaps suggest that a bad faith claim is possible, they do not allow for any non-speculative inference that a finding of bad faith is plausible.”

Judge Caputo did permit the insured to amend the complaint, with the reminder that if the insured “elects to do so, the amended complaint must set forth facts, not merely conclusory statements, to support a bad faith claim.”

Date of Decision: August 14, 2019

Peters v. Geico Advantage Insurance Co., U. S. District Court Middle District of Pennsylvania NO. 19-CV-1119, 2019 U.S. Dist. LEXIS 137087 (M.D. Pa. Aug. 14, 2019) (Caputo, J.)

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