JULY 2015 BAD FAITH CASES: COURT DISMISSES BAD FAITH CLAIM BASED ON FAILURE TO PLEAD ANYTHING MORE THAN CONCLUSORY ALLEGATIONS (Middle District)
In Rissinger v. State Farm Ins. Co., the court granted an insurer’s motion to dismiss a bad faith claim brought by its insureds after it was found that the insureds’ averments failed to rise above the level of conclusory allegations.
The insureds originally filed a claim for coverage under a homeowners’ policy issued by the insurer after their property suffered water and fire damage. The insurer paid for certain losses but denied coverage for other damages, and the insureds brought suit for breach of contract and bad faith denial of an insurance claim.
The insurer filed a motion to dismiss the bad faith claim, arguing the insureds asserted “conclusory allegations that do not state a valid cause of action for bad faith.” The insureds’ bad faith claim was predicated on allegations that the insurer “(1) partially denied their insurance claim without a reasonable basis; (2) failed to adjust the [insureds’] claim in a timely fashion; (3) engaged in deceptive practices; (4) deliberately misinterpreted the policy; and (5) made unreasonably low offers to adjust the [insureds’] claims.”
The insureds also contended that the insurer paid claims to other insureds under similar factual circumstances pursuant to a “Building Ordinance or Law” provision in the policy.
The court found the allegations were merely conclusory. The court stated that the insureds did not specify how the insurer allegedly misrepresented the policy, nor did they plead “any specific facts regarding [the insurer’s] allegedly deceptive practices or untimely investigation and adjustment.”
Because the insureds did not set forth sufficient factual averments in which a reasonable inference could be drawn that the insurer was liable for the alleged misconduct, the court granted the insurer’s motion to dismiss the bad faith claim. However, the court could not conclude at this point that amendment would be futile, and provided the insureds with an opportunity to amend their bad faith claim.