MAY 2017 BAD FAITH CASES: COURT EXPLAINS HOW BAD FAITH MUST BE PLEADED (Philadelphia Federal)
In this case, the court outlines the general law concerning both statutory bad faith and contractual bad faith, and how to plead bad faith to survive a motion to dismiss.
(2) The court observes case law that “Pennsylvania law … does not recognize a separate breach of contractual duty of good faith and fair dealing where that claim is subsumed by a separately pled breach of contract claim.” The court states (in this uninsured/underinsured motorist case) that, “several courts have held that where the plaintiff alleges that the defendant breached its duty of good faith and fair dealing by denying first party benefits under an insurance policy, the claim is subsumed by the plaintiff’s breach of contract claim premised on the same conduct.”
The court next examines the insured’s complaint to determine the adequacy of the insured’s bad faith claims. The complaint was not clear as to whether the plaintiff was pleading statutory bad faith, contract based bad faith, or both. However, the pleadings were inadequate under any circumstances.
Plaintiff generally described the underlying accident, and then attempted to plead bad faith. The insured only made conclusory allegations that the insurer “acted in bad faith by failing to conduct an adequate and fair investigation, engaging in dilatory claims handling and refusing to pay for losses once its liability became reasonably clear.” No specific facts were alleged to support these generalities. The court instructed that a plaintiff “must ‘describe who, what, where, when, and how the alleged bad faith conduct occurred.’”
The complaint was dismissed without prejudice, giving the plaintiff leave to plead an adequate claim with sufficient factual details by way of an amended complaint.
