BAD FAITH PLAINTIFFS MUST PLEAD SPECIFIC FACTS OR SEE THEIR CLAIM DISMISSED (Philadelphia Federal)
In this UIM bad faith case, the court sets out a clear mandate to plead specific facts if a plaintiff intends to survive a motion to dismiss:
“Because 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 their complaint, the insureds did not specify the disputed sum at issue “or any facts surrounding the dispute itself….” Their bad faith assertions only state that the carrier failed to negotiate, conducted an improper investigation and evaluation, and failed to request a defense medical examination. However, the court found the complaint “devoid of facts” as to the actual investigation, offers, or responses.
Further, instead of setting out sufficient specific facts, the insureds simply allege there is no dispute over fault or that UIM benefits are due. They imply any actions other than meeting the insureds’ demands must necessarily be bad faith in light of these two predicates. The court disagreed. There is no necessary or inescapable inference from these two assertions that could fill the gaps needed to reach plausibility for purposes of a bad faith complaint. The case was instead dismissed, with leave to file an amended complaint.
[Note: The court also cites pre-Rancosky law for the proposition that an “insured must ultimately show that the insurer breached its duty of good faith through some motive of self-interest or ill will.” To the extent this is stated as a necessary element of proof, however, it is no longer the law after Rancosky, summarized here. In Rancosky, the Supreme Court held the motive of self-interest or ill will is not a requisite element of proving statutory bad faith, though it may be evidence of a knowing or reckless disregard of the insurer’s unreasonable denial of benefits.]