JULY 2017 BAD FAITH CASES: CLEAR POLICY LANGUAGE SUPPORTED PLAINTIFFS’ BAD FAITH CLAIM (Philadelphia Federal)

Print Friendly

After purchasing a new car, the insureds were involved in an accident with an uninsured motor vehicle. The insureds tendered a claim for UIM benefits to their automobile insurance provider who denied the claim. The basis for the denial was that the newly purchased car was not insured at the time of the accident. The insureds brought suit, alleging claims for breach of contract, statutory bad faith, and negligence for failure to procure insurance.

The Court issued two opinions concerning the insureds bad faith claims. In the first opinion, the District Court granted the insurers’ Motion to Dismiss, without prejudice, holding that the Complaint contained only conclusory legal recitations, and lacked factual recitations of any bad faith conduct. The Court found an absence of any “facts showing how [the insurer] lacked a reasonable basis for its decision to not pay UIM benefits,” or “facts specifically describing what was unfair about [the insurer’s] denial or refusal to pay UIM benefits.” Although the Court granted the insurer’s Motion, it gave the insureds leave to file an amended complaint.

The insureds filed an amended complaint, and the insurer again moved to dismiss. In its second opinion, the District Court came to a vastly difference conclusion. In the amended complaint, the insureds attached their automobile policy which expressly promised “to insure the plaintiffs as long as they request a car be added to the policy within 30 days of acquiring the car.” The amended complaint alleged that the insureds did just that. According to the court, the inclusion of this policy was, in and of itself, sufficient proof of bad faith. The Court explained that “an insurance company ignoring its costumer’s claim in the face of its own policy language clearly guaranteeing coverage for the very claim at issue certainly forms the basis for a bad faith claim.”

Dates of Decisions: April 10, 2017 & July 11, 2017

Riedi v. Geico Casualty Co., No. 16-6139, 2017 U.S. Dist. LEXIS 54952 (E.D. Pa. April 10, 2017) (Stengel, J.)

Riedi v. Geico Casualty Co., No. 16-6139, 2017 U.S. Dist. LEXIS 106678 (E.D. Pa. July 11, 2017) (Stengel, J.)

0 Responses to “JULY 2017 BAD FAITH CASES: CLEAR POLICY LANGUAGE SUPPORTED PLAINTIFFS’ BAD FAITH CLAIM (Philadelphia Federal)”


Comments are currently closed.