OCTOBER 2017 BAD FAITH CASES: CASE REMANDED AFTER BAD FAITH CLAIM DISMISSED AS REMAINING $50,000 POLICY LIMIT WAS LESS THAN JURISDICTIONAL MINIMUM (Philadelphia Federal)
This UIM breach of contract and bad faith case was removed to federal court. The potential contract policy based recovery was limited to $50,000, but the bad faith claim was sufficient to take the potential claim above the $75,000 federal jurisdictional minimum.
The court dismissed the bad faith claim without prejudice. An amended complaint was filed, but without the bad faith claim. As the claim was now limited to the $50,000 policy amount, the court sua sponte raised the issue of federal jurisdiction. The parties recognized the court was correct that jurisdiction no longer existed because the claim was limited to $50,000, and the case was remanded to state court.