OCTOBER 2013 BAD FAITH CASES: WHERE DISPUTE OVER ORIGIN OF LOSS WAS NOT UNREASONABLE, BAD FAITH CLAIM DISMISSED ON SUMMARY JUDGMENT (Philadelphia Federal)
In Helm v. Allstate Property & Casualty Ins. Co., the case involved a claim against a homeowner’s policy for water loss. The insureds claim the loss arose from a single leak, originating above the kitchen. The carrier sent an investigator and also requested a sworn proof of loss be resubmitted on two occasions after the original sworn proof of loss, and took the position that the vast bulk of the damage came from a different event and source. The court ultimately found summary judgment was warranted on the bad faith claim in the insurer’s favor.
Plaintiffs had acknowledged the insurer conducted a timely inspection and investigation; and moreover the plaintiffs testified that they did not know if the inspection was reasonable or unreasonable. They offered no expert testimony or other evidence indicating that the inspection and investigation were inadequate, incomplete, or unreasonable; and they did not know of any facts that supported their allegation that the insurer made misrepresentations to them about their claims.
The court also found that evidence of malice or ill will was relevant, and that one insured said his belief that the insurer treated him with bias or ill-will might be tainted by his own prior experiences with the company, and the other insured testified that she did not believe the insurer acted with any ill will or malice regarding the claim.
The record did not support a finding that the insurer intentionally ignored certain areas of damage or otherwise demonstrated corrupt motive sufficient to sustain a bad faith claim; but rather reflected a genuine disagreement as to the cause of certain issues found in the home, and thus on the value of the insureds’ claim.
Even assuming that the investigator’s conclusions were incorrect and directly contrary to the physical evidence, which the insureds had asserted without support in the record, they still put forth no evidence suggesting that insurer knew that it lacked a reasonable basis for its actions, or acted with reckless disregard for its lack of reasonable basis.