“Although the fact-specific nature of a bad faith claim may render its dismissal at the Rule 12(b)(6) state inappropriate in some circumstances, it is well-established that a bad faith claim premised on a denial of coverage cannot exist when there is no coverage under an insurance policy.”
This is an undersinsured motorist case with a different twist. The insured had three separate motor vehicle policies, a motorcycle policy, an RV policy and a standard auto policy. The same carrier held all three policies. The insured was injured on a motorcycle, and the carrier was willing to pay underinsured policy limits on the motorcycle and auto policies, but not the RV policy.
The parties agreed that the insured signed a stacking waiver in connection with the RV policy, but the inured argued this only applied to intra-policy stacking, not inter-policy stacking. The carrier rejected this argument, based on Pennsylvania Supreme Court case law. The insured sued for breach of contract and bad faith.
Western District Judge Wiegand agreed with the insurer that the waiver applied to all forms of stacking under the circumstances of the case, and dismissed the breach of contract claim.
In addressing the bad faith claim, she states: “Although the fact-specific nature of a bad faith claim may render its dismissal at the Rule 12(b)(6) state inappropriate in some circumstances, it is well-established that a bad faith claim premised on a denial of coverage cannot exist when there is no coverage under an insurance policy.” Judge Wiegand cited Judge Bissoon’s February 2012 West v. CUNA decision, summarized here, Judge Wilson’s November 2021 Moses Taylor Foundation v. Coverys & Proselect decision, summarized here, and Judge Conti’s August 2020 Palek v. State Farm decision, summarized here, in support of this principle.
Judge Wiegand concludes:
“Here, [the insured] cannot state a claim for breach of contract because [she] waived stacking under the RV Policy, and her bad faith claim necessarily fails as well. The Court will not grant leave to amend the bad faith claim, because in light of the dismissal of the underlying breach of contract claim, amendment of the bad faith claim would also be futile.”
Date of Decision: December 27, 2021
Miale v. Nationwide Insurance Company of America, U.S. District Court Western District of Pennsylvania No. 2:21-CV-00702-CCW, 2021 WL 6127068 (W.D. Pa. Dec. 27, 2021) (Wiegand, J.)