JULY 2014 BAD FAITH CASES: INSURED ADEQUATELY ALLEGED BAD FAITH CLAIMS BY PLEADING SPECIFIC FACTS CONCERNING DELAYS IN THE CLAIMS HANDLING PROCESS, A LACK OF COMMUNICATION, AND DISCREPANCY BETWEEN THE ALLEGED INJURY AND SETTLEMENT SUM OFFERED (Philadelphia Federal)
In Padilla v. State Farm Mutual Automobile Insurance Company, the plaintiff brought a breach of contract and bad faith claim based on UIM coverage. The insurer took an examination under oath, had a medical examination done, and referred the case to counsel. The plaintiff alleged that the defendant acted in bad faith by delaying investigation of the plaintiff’s claim, offering a settlement that was unreasonable in light of the facts of the investigation, and failing to provide an evaluation of her claim, despite multiple requests for such information.
The plaintiff alleged serious injuries, that the same insurer insured both parties to the underlying accident which should presumably have expedited the process, that she made demands for settlement offers to her insurer with delays in getting any response, that her demands were made with requests for more information or ignored, that the settlement offer once made was unreasonably low based on the insurer’s own doctor’s report.
The insurer moved to dismiss the complaint. The court found that plaintiff pleaded unreasonable delays, lack of a reasonable basis for partial denial of benefits, and that the insurer acted out of its own self-interest. The court found that unreasonable delays and failure to communicate can go to an insurer’s bad faith. Further the court distinguished the insurer’s case law on the grounds that those cases either had thread bare allegations of wrongdoing, unlike the details in this case; and that the alleged delay in one other case was only a one-time event.
Thus, the motion to dismiss the complaint was denied.