BAD FAITH CLAIM DISMISSED FOR PLEADING CONCLUSORY ALLEGATIONS, BUT COURT PROVIDES AN EXAMPLE ON HOW TO PROPERLY PLEAD (Philadelphia Federal)
This case involves another example of pleading conclusory allegations, without alleging sufficient facts to support a plausible bad faith claim. In addition to pleading solely conclusory allegations, listed below, the complaint does not set forth the nature of the property damage at issue or what caused that damage.
Among other applicable legal principles, the court observed that “[b]ecause bad faith claims are fact-specific, to survive a motion to dismiss ‘a plaintiff must plead specific facts as evidence of bad faith and cannot rely on conclusory statements.’ …. To that end, ‘[a] plaintiff cannot merely say that an insurer acted unfairly, but instead must describe with specificity what was unfair.’”
In describing the conclusory nature of the claims at issue in this case, the court gave an example of a failed allegation, which flaws applied across the board.
“Plaintiffs allege that Defendant failed to promptly and thoroughly investigate their claim before making a determination that the claim was not covered under the Policy. … Yet the Complaint is devoid of allegations as to (1) the timing of the alleged investigation in relation to when Plaintiffs submitted their claim, (2) the methods and procedures by which the investigation was conducted, and (3) the length of the investigation from start to finish. As such, Plaintiffs’ claim that Defendant’s investigation of their insurance claim was not ‘prompt’ or ‘thorough’ lacks plausibility. The same can be said with respect to each of Plaintiffs’ ‘specific’ allegations of Defendant’s bad faith conduct.”
The court did give the insured leave to amend. Thus, the foregoing example on how to support a bad faith claim with sufficient detail provides guidance on pleading an acceptable non-conclusory bad faith claim in any amended complaint, as well as an admonition against bare bones pleading.
The court found the following to be inadequately pleaded conclusory allegations of bad faith:
by sending correspondence falsely representing that Plaintiff’s loss caused by a peril insured against under the Policy was not entitled to benefits due and owing under the Policy;
in failing to complete a prompt and thorough investigation of Plaintiff’s claim before representing that such claim is not covered under the Policy;
in failing to pay Plaintiff’s covered loss in a prompt and timely manner;
in failing to objectively and fairly evaluate Plaintiff’s claim;
in conducting an unfair and unreasonable investigation of Plaintiff’s claim;
in asserting Policy defenses without a reasonable basis in fact;
in flatly misrepresenting pertinent facts or policy provisions relating to coverages at issue and placing unduly restrictive interpretations on the Policy and/or claim forms;
in failing to keep Plaintiff or its representative fairly and adequately advised as to the status of the claim;
in unreasonably valuing the loss and failing to fairly negotiate the amount of the loss with Plaintiff or their representatives;
in failing to promptly provide a reasonable factual explanation of the basis for the denial of Plaintiff’s claim;
in unreasonably withholding policy benefits;
in acting unreasonably and unfairly in response to Plaintiff’s claim;
in unnecessarily and unreasonably compelling Plaintiff to institute this lawsuit to obtain policy benefits for a covered loss, that Defendant should have paid promptly and without the necessity of litigation.