ANOTHER INADEQUATELY PLEADED UIM BAD FAITH CLAIM IS DISMISSED WITHOUT PREJUDICE (Eastern District)

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Another UIM bad faith case.  Another dismissal for failure to plead beyond conclusory allegations.  Another dismissal with leave to amend, if the insured can meet the Twombly/Iqbal plausible fact pleading standards.

Judge Baylson relied on his January 2021 Baxley decision, summarized here, in granting the insurer’s motion to dismiss the bad faith claim.  In Baxley, the insured failed to “provide any explanation regarding how the defendant had responded to her claim, or what facts, apart from the defendant’s failure to pay her claim, indicated bad faith.”

The same was true in this case: “Plaintiffs do not provide sufficient factual allegations on which the Court can reasonably infer Defendant’s ill will. …. The claims of bad faith as described in ¶¶ 26-32 of the Complaint are overly vague and do not contain any specific factual allegations that suggest bad faith. For example, Plaintiffs plead no specific factual allegations as to how Defendant forced Plaintiffs to file the instant action. Nor does the Complaint give any clarifying details as to what the alleged ‘false pretexts’ and ‘invasive tactics’ utilized by Defendant were. Indeed, Plaintiffs’ sole factual allegation in the Complaint regarding Defendant’s action is that Defendant denied Plaintiffs’ claim. Just as in Baxley, this does not suffice.”

[Note: The court, citing the 1994 Terletsky decision, states that “[f]or an insurer’s failure to pay a claim to be considered in bad faith, the plaintiff must allege an underlying element of self-interest or ill will.” In 2017, however, Pennsylvania’s Supreme Court made clear in Rancosky that “we hold that proof of an insurance company’s motive of self-interest or ill-will is not a prerequisite to prevailing in a bad faith claim under Section 8371…. While such evidence is probative of the second Terletsky prong, we hold that evidence of the insurer’s knowledge or recklessness as to its lack of a reasonable basis in denying policy benefits is sufficient.” A link to our Rancosky summary can be found here.]

Date of Decision:  July 28, 2021

O’Brien v. Liberty Mutual Insurance, U.S. District Court Eastern District of Pennsylvania, No. 21-CV-01234, 2021 WL 3203405 (E.D. Pa. July 28, 2021) (Baylson, J.)

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