MAY 2012 BAD FAITH CASES: BAD FAITH CLAIM DISMISSED WITHOUT PREJUDICE, SUGGESTING IF INSURED IS AWARDED DAMAGES FOR BREACH OF CONTRACT, SHE IS UNLIKELY HAVE OTHERS CLAIMS AGAINST THE CARRIER (Philadelphia Federal)

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In Cobb v. State Farm Ins. Co., the court heard a carrier’s motion to dismiss the insured’s amended complaint. The complaint alleged breach of contract and bad faith against the carrier. The breach of contract count actually detailed a claim for violation of the carrier’s covenant of good faith and fair dealing, prompting the court to permit the contractual allegation to proceed only as a breach of contract claim. With respect to the second count, the court dismissed the insured’s bad faith claim without prejudice, permitting the insured to amend its conclusory allegations and submit a second amended complaint.

However, the court stated that in this particular case, success on the contract claim would likely make the common law and/or statutory bad faith claims unnecessary. The court stated that the insured’s statutory bad faith claims were premature, suggesting that the insured may want to wait until the resolution of the breach of contract suit before pursuing its bad faith claim, though the court left it open for the plaintiff to attempt to plead a statutory bad faith claim in an amended complaint if it could meet the strictures of Twombly/Iqbal.

Date of Decision: April 20, 2012

Cobb v. State Farm Ins. Co., No. 11-7383, 2012 U.S. Dist. LEXIS 55651, U.S. District Court for the Eastern District of Pennsylvania (E.D. Pa. Apr. 20, 2012) (Baylson, J.).

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