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This is a pro se breach of contract, statutory bad faith, and common law contractual bad faith UIM claims, as well as an intentional infliction of emotional distress case. The court found the statutory bad faith claim inadequately pleaded, lacking facts and asserting only conclusory allegations concerning (1) the failure to investigate, (2) the failure to consider medical records, and (3) making a low-ball offer of $2,000 in the face of a $50,000 policy limit demand.

The court states:

  1. “Instead of alleging facts to show how [the insurer] failed to objectively and fairly evaluate her claim, she provides only ‘broad and conclusory statements.’”
  2. “She must do more than characterize [the insurer’s] settlement offers as ‘lowball’ to show it unreasonably valued her claim.”
  3. “’ [B]ad faith is not present merely because an insurer makes a low but reasonable estimate of an insured’s damages.’”
  4. “It is ‘not unusual’ for there to be a disagreement between an insured and an insurance company over the value of an uninsured or underinsured motorist claim.”
  5. Without additional supporting factual allegations, allegations that the carrier did not conduct a thorough/appropriate investigation of the insured’s injuries, and that the carrier arbitrarily rejected medical record evidence, are mere conclusory statements.
  6. Thus, “absent additional facts about her claim and the accompanying investigation, negotiations or communications between her and the insurer, the Court cannot infer … bad faith.”
  7. The insured “cannot rely on the many documents attached to her Amended Complaint to provide this information without explaining how the documents support her claim.”

As to the alleged breach of the implied covenant of good faith and fair dealing, the court found this was not a separate cause of action, but was subsumed in the breach of contract claim.

Leave to amend was given on the statutory bad faith and intentional infliction claims, but the contract based bad faith claim was dismissed with prejudice as a separate cause of action.

[Note:  As we have noted in two posts earlier this month, here and here, this opinion provides another example of a post-Rancosky case incorrectly stating that while an insured “need not show [an insurer’s] actions were ‘fraudulent,’ she ‘must ultimately show [it] breached its duty of good faith through some motive of self-interest or ill will.’” In 2017, the Pennsylvania Supreme Court’s Rancosky decision made clear there is no distinct element/requirement to prove self-interest or ill will to state a statutory bad faith claim.  Rather, facts showing self-interest or ill will may be used as evidence to support the second element of statutory bad faith, knowing or reckless disregard that there is no reasonable basis to deny a benefit.  This makes at least six federal district court opinions in 2021-2022 that repeat this pre-Rancosky position.]

Date of Decision:  April 11, 2022

Mohamed v. Progressive Advanced Insurance Company, U.S. District Court Eastern District of Pennsylvania No. CV 21-5174, 2022 WL 1084738 (E.D. Pa. Apr. 11, 2022) (Pappert, J.)