SEPTEMBER 2014 BAD FAITH CASES: IN THIS SUPERSTORM SANDY CASE, INSURED ALLOWED TO PROCEED ON BAD FAITH CLAIM WHERE INSURER REFUSED TO ENGAGE IN APPRAISAL PROCESS, BUT COURT DISMISSES BAD FAITH CLAIM BASED UPON ALLEGED UNDUE INFLUENCE ON INSURED’S ROOFING CONTRACTOR (Philadelphia Federal)
Currie v. State Farm Fire & Casualty Co., involved damage to the insured’s home from Superstorm Sandy, and a dispute over the homeowner insurer’s payment obligation. The matter was before the court on summary judgment. After finding summary judgment could not be granted on the breach of contract claim, the court then addressed the carrier’s motion for summary judgment on the insured’s two bad faith claims.
First, the insured claimed bad faith for the insurer’s failure to engage in the appraisal process. The insurer’s position was that appraisal was only required where the coverage obligation was agreed upon, but the amount of loss was not; and that the carrier disputed coverage. The court found that the carrier’s position was not actually over coverage differences but over the loss sustained, and allowed the bad faith claim to proceed on that basis.
It granted summary judgment on the second bad faith claim, however. The insured claimed that the carrier had unduly influenced the insured’s roofer to lower its repair estimate. However, the evidence presented on the motion did not support that position. The court also stated that the insureds did not submit “any support for their claim that negotiations regarding the amount of construction repair costs and services to be provided constitutes bad faith conduct on the part of an insurer.”