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It’s Just A Matter Of Bad Faith

AndyMilana

April 19, 2019 at 5:04:17 PM

<p style="text-align: justify;">In <em><a href="https://www.wcmlaw.com/wp-content/uploads/2019/04/Rosenthal-v.-American-State-Ins..pdf">Rosenthal v. American State Ins.</a></em>, the Middle District Court of Pennsylvania analyzed the sufficiency of an insured’s complaint asserting bad faith.  In brief, the plaintiff-insured was injured in an auto accident.  She alleged that her injuries resulted in complex pain syndrome.  The insured had an insurance policy that provided underinsured motorist coverage (UIM) coverage in the amount of $1 million.  After exhausting her other coverage, the insured submitted a claim for UIM coverage under her policy.  In response to her demand for coverage, the insurer responded that it did not believe the insured’s damages stemmed from the auto accident and, thus, offered $107,000 to settle her claim.  The insured subsequently commenced a lawsuit for breach of contract and bad faith in federal court against the insurer.</p>
<p style="text-align: justify;">The insurer moved to dismiss the complaint arguing that the allegations in the insured’s complaint were conclusory and factually insufficient.  The court agreed.  In reaching this determination, the court reasoned that the insured’s complaint failed to allege sufficient facts supporting a plausible inference that the insurer’s conduct was unreasonable, as required to maintain a claim for bad faith in Pennsylvania.  Rather, the court noted, the insured’s complaint contained boilerplate language, which was insufficient.  Further, the court concluded the fact that it took the insurer seven months to respond to the insured’s UIM demand, alone, was not a sufficient basis to show bad faith, as the insured did not cite to any attempts she made to communicate with the insurer during this time period.  The court also concluded that the difference between the insurer’s settlement offer and the insured’s demand also did not evidence bad faith.</p>
<p style="text-align: justify;">Consequently, this case offers some insight into the factual allegations an insured will have to allege in support of its bad faith claim in order to survive a motion to dismiss.</p>
<p style="text-align: justify;">Please email <a href="mailto:chayes@wcmlaw.com">Colleen Hayes</a> with any questions.</p>

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