AUGUST 2017 BAD FAITH CASES: “A PLETHORA OF CONCLUSORY ALLEGATIONS” DOES NOT SUPPORT A CLAIM OF BAD FAITH (Philadelphia Federal)
This case arose after a fire damaged the insured’s premises, resulting in a claim adjusted for $182,739.11, subject to a hold-back of recoverable depreciation of $58,075.29. The insurer ultimately issued a $123,663.82 payment to the insured. This amount represented the insurer’s calculation of the actual cash value of the loss, less depreciation and the insured’s deductible. The insured then filed suit for breach of contract and bad faith. The insured argued that the insurer wrongfully withheld additional funds owed to him.
The insurer filed a motion to dismiss the bad faith claim. The Court wrote that the insured’s complaint “offers a plethora of conclusory allegations regarding [insurer’s] unreasonableness, misrepresentation, and unfairness without identifying how something was done unreasonably, what specifically was misrepresented, or what circumstances made some action unfair.” As such, the Court held that the insured’s bad faith claim lacked sufficient factual detail.
Furthermore, the Court took judicial notice that the insurance policy at issued allowed for recovery of the withheld depreciation amount, if the insured repaired the damaged property within 180 days of the insurance payment. The insured failed to make the repairs within this time. Thus, the insured was not entitled to additional funds according to the terms of the policy.
The Court granted the insurer’s motion and dismissed the bad faith claim, with no reference to permitting an amended complaint on the issue.