In Mills v. Allstate Insurance Company, the insured homeowner brought breach of contract and bad faith counts based on smoke and soot damage, after the insurer denied his claims. In the bad faith count, the insured averred the following facts constituted bad faith:
Sending a letter stating the claim was not covered even though the insurer knew or should have known this was false and misleading;
failing to effectuate a prompt, fair and equitable settlement of Plaintiff’s claim when its liability under the policy became reasonably clear;
misrepresenting pertinent facts or policy or contract provisions relating to the coverages at issue;
treating the insured with reckless indifference and disregard under the circumstances;
not having a reasonable basis for denying the insured benefits under the policy and in knowingly or recklessly disregarding its lack of reasonable basis when it denied the insured’s claim; and
interpreting ambiguous terms, provisions and/or conditions of the aforementioned policy in its favor and against the insured.
The court cited its prior analysis of pleading bad faith under the heightened standards found in the Supreme Court’s Iqbal decision, and the Third Circuit’s Fowler decision, where an insured makes “bare-bones” allegations devoid of factual specificity. The court found that this described the instant pleadings. The complaint was dismissed without prejudice, with 20 days to amend.
Date of Decision: September 29, 2015
Mills v. Allstate Ins. Co., CIVIL ACTION NO. 15-4824, 2015 U.S. Dist. LEXIS 130862 (E.D. Pa. September 29, 2015) (Baylson, J.)