MVFRL PRE-EMPTED INSURED’S BAD FAITH CLAIMS FOR BENEFITS, BUT INSURED ALLOWED TO AMEND IF SHE COULD PLEAD ABUSE OF PRO PROCESS (Middle District)

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The magistrate judge recommended dismissing the alleged section 8371 bad faith claims, but further recommended allowing the insured to amend her claim to plead abuse of the PRO process.

All of the bad faith claims actually pleaded involved denial of first party medical benefits under an auto policy. The MVFRL preempted these claims, and the section 8371 bad faith action was dismissed. The court observed, however, that challenges “to the PRO process itself or to the insurer’s abuse of the PRO process” are not preempted, and can constitute independent section 8371 bad faith.

Though not in the complaint, the brief opposing dismissal included allegations that might push the insurer’s conduct beyond the MVFRL’s parameters, and into the abuse of process realm. Thus, the magistrate judge recommended allowing leave to amend the section 8371 action instead of dismissal with prejudice, and the district judge adopted this recommendation.

Date of Decision: November 19, 2018 (Report and Recommendation), December 13, 2018 (Order Adopting Report and Recommendation)

Barnard v. Liberty Mut. Ins. Corp., U.S. District Court Middle District of Pennsylvania Civil No. 3:18-CV-01218, 2018 U.S. Dist. LEXIS 197852 (M.D. Pa. Nov. 19, 2018) (Carlson, M.J.) (Report and Recommendation), adopted by District Court (Mariani, J.)

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