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On February 11, 2019, Middle District Judge Richard Caputo dismissed the insured’s bad faith claim for solely pleading conclusory allegations without sufficient factual allegations to support a plausible claim, and for pleading facts that could not support a bad faith claim. That case is summarized here. At most, the complaint alleged a discrepancy in the insured’s and insurer’s damage valuations, which alone is not enough to make out a bad faith case.

The insured later requested reconsideration and additionally asked the court to certify a discretionary interlocutory appeal, on the basis that Judge Caputo made a clear error of law. Both efforts were rejected.

The insured’s clear error of law argument is based on the court not finding the following pleadings constituted factual allegations supporting a bad faith claim: The insurer had a detailed summary of plaintiff’s medical expenses in its possession. The medical expenses in those documents exceeded the third party tortfeasor’s policy limits. The insurer concluded the claim was worth less than those policy limits. The insured argued this reasonably and objectively placed the damage value above those limits, despite the insurer’s valuing the claim within those damage limits.

The plaintiff further argued that there was other case law in the Third Circuit that would have found such allegations sufficient to make out a plausible claim, that this case law was controlling, and that the court failed to follow that case law.

Judge Caputo denied the motion for reconsideration. First, the insured was simply trying to re-litigate the same arguments originally made. This is not permissible on a motion for reconsideration. Second, there was no controlling case law. Rather, the insured referenced decisions of other District Court Judges whose opinions are not binding precedent on their peers. Third, even considering those other opinions, Judge Caputo found that they did not demonstrate any clear error of law. To the contrary, he cited seven cases that supported his original position that a discrepancy in valuation alone cannot form the basis of a bad faith claim.

Judge Caputo also refused to certify the case for interlocutory appeal. First, there was no controlling question of law at issue, over which there was a substantial ground for difference of opinion. As Judge Caputo stated, courts routinely find that disputes over valuation alone cannot constitute bad faith. Moreover, this was not the kind of exceptional case that merited immediate appeal.

March 19, 2019

Clarke v. Liberty Mutual Insurance Co., U. S. District Court Middle District Pennsylvania NO. 3:18-CV-1925, 2019 U.S. Dist. LEXIS 44549 (M.D. Pa. Mar. 19, 2019) (Caputo, J.)