In a recent slip opinion in Barbor v. State Farm Fire Claims Company, et al., 2024 Wl 3678660 (E.D. Pa. Aug 6, 2024) the United States Eastern District of Pennsylvania considered an insurer’s Motion to Dismiss a bad faith claim. The Court granted the Motion and dismissed the insured’s statutory bad faith count.
This case involved a homeowner’s claim wherein the insureds sustained damage to their property from a storm. The insured’s claim for benefits was denied by the insurer. Subsequently the insured’s filed suit against the insurer for (1) breach of contract and (2) statutory bad faith pursuant to 42 Pa. C.S. § 8371. After the case was removed to federal court, the insureds filed a Second Amended Complaint. The insurer moved to dismiss the bad faith count pursuant to Federal Rule of Civil Procedure 12(b)(6) arguing that the insureds failed to allege specific facts to support the bad faith claim.
Specifically, the insurer alleged that the bad faith claims failed to state how the carrier acted without a reasonable basis and what policy terms were misrepresented. Further, there were no factual allegations supporting their delay claims.
The insureds pled that the insurer failed to complete a prompt and thorough investigation of the claim, ignored “sufficient evidence” from the insured’s public adjuster, made material misrepresentations, and improperly denied the claim. However, the Court noted that the insureds failed to plead “(1) the timing of the alleged investigation, (2) the methods and procedures of the investigation, and (3) the length of the investigation from start to finish.” Further, the insureds failed to plead details of the alleged “sufficient evidence” provided by the public adjuster or any details on the alleged misrepresentations. The insureds only generally referred to the claim correspondence which denied the claim.
The Court determined that the Second Amended Complaint included basic facts which the insureds pasted into existing boilerplate allegations from their original pleading. The Court further held that the inclusion of dates and other basic factual details in the Second Amended Complaint was insufficient and lacked the specificity required for bad faith claims. Likewise, there were no facts providing that the insurer lacked a reasonable basis for their denial. Thus, the Court granted the Motion to Dismiss the bad faith count.
For additional questions, please contact Scott J. Tredwell, Esq., Robert J. Cahall, Esq. and/or Nicole Dovishaw, Esq.
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