SEPTEMBER 2017 BAD FAITH CASES: BAD FAITH CLAIM DISMISSED DUE TO A LACK OF FACT SPECIFIC ALLEGATIONS, INSURED GIVEN LEAVE TO AMEND (Philadelphia Federal)
The insured filed a UIM claim with her insurer after sustaining injuries in an auto accident. The insurer denied the claim. The insured then sued the insurer and alleged breach of contract and bad faith. The insurer moved to dismiss the bad faith claim pursuant to Federal Rule of Civil Procedure 12(b)(6).
The Court stated that in order “[t]o survive a motion to dismiss, [the insured’s] complaint must include factual allegations from which the Court may plausibly infer the unreasonable and intentional or reckless denial of benefits.” The insured alleged that the insurer failed to act with reasonable promptness in evaluating and responding to the insured’s claim; that the insurer failed to act with reasonable fairness; and that the insurer failed to conduct a proper investigation.
The Court found that complaint only asserted legal conclusions. The insured did not specifically allege how the insurer failed to properly investigate the claim or how the insurer acted unreasonably. Furthermore, the insured failed to cite any date of correspondence or other contact with the insurer.
Even accepting the insured’s complaint as true, the Court stated that it is unable to “plausibly infer from those facts that [insurer] acted unreasonably and intentionally or recklessly in denying benefits to [the insured].” The Court granted the insurer’s motion to dismiss the bad faith claim without prejudice, and granted the insured leave to amend her complaint.