Daily Archive for June 17th, 2021

For the second time in a week, Middle District Judge Mariani denied an insurer’s motion to dismiss a bad faith claim. Judge Mariani’s June 3, 2021 decision in Signature Building Systems v. Motorist Mutual is summarized here.

This is a breach of contract and bad faith underinsured motorist action. The complaint alleged the following.

The insured suffered significant injuries requiring ongoing treatment. The tortfeasor had $15,000 in coverage, but the insured’s UIM limit on her own policy was $250,000. The insured pursued underinsured motorist coverage against her carrier.

The insured “fully complied with all terms, conditions, and duties imposed upon her by her Auto Policy.” She “’continually’ provided medical records and reports to Defendant, ‘outlining her injuries, special damages, medical expenses, as well as evidencing her physical pain and suffering’ and has cooperated with Defendant ‘in every way throughout the life of her claims.’”

The insured made the following bad faith allegations:

1. Failing to properly investigate [the] claim upon notification of same;

2. Refusing to pay [the] claims without conducting a reasonable investigation based upon all available information;

3. Failing to promptly and objectively evaluate [the] claims;

4. Unreasonably delaying the objective and fair evaluation of [the] claim;

5. Causing unreasonably [sic] delay in all aspects of the handling of [the] claim;

6. Dilatory and abusive claims handling;

7. Conducting an unfair, unreasonable and dilatory investigation of [the] claims;

8. Failing to act in good faith to effectuate prompt, fair, and equitable settlement of [the] claim;

9. Ignoring competent and overwhelming medical evidence substantiating [the insured’s] injuries and resulting disability;

10. Ignoring competent and overwhelming medical evidence that injuries the [insured] sustained in the subject motor vehicle have not resolved.

The carrier moved to dismiss the bad faith claim, arguing the foregoing was mere boilerplate that did not meet federal plausible pleading standards. Judge Mariani disagreed.

First he has no problem in finding the complaint sets out an underinsured motorist coverage claim, and the insured fully complied with the policy and her duties in cooperating with the insurer by “continually” providing medical records that laid out the details of her injuries.

Next, Judge Mariani finds the complaint alleges that despite the insured’s compliance, “Defendant failed to properly investigate her claim, refused to pay her but did not conduct a reasonable investigation, and failed to promptly and objectively evaluate her claim but instead delayed evaluating her claim. Plaintiff further alleges that Defendant’s investigation of her claim was ‘unfair, unreasonable and dilatory’ and that Defendant ignored the medical evidence substantiating her injuries and resulting disability.”

This was enough to state a plausible claim. Although the complaint was “sparse with respect to the bad faith claim, the Complaint contains sufficient well-pleaded factual allegations to ‘nudge[ ]’ Plaintiffs’ claim ‘across the line from conceivable to plausible….” [Note: Judge Mariani quotes this same language in his March 2021 Chuplis decision, summarized here.]

For anyone pleading a bad faith claim, or seeking to dismiss such a claim, it is worthwhile to compare this opinion with Judge Pratter’s Brown opinion, summarized yesterday, or the myriad other cases finding the pleading either lacked, or reached, plausibility.

Date of Decision: June 10, 2021

Dougherty v. American States Insurance Company, U.S. District Court Middle District of Pennsylvania No. 3:20-CV-2166, 2021 WL 2383229 (M.D. Pa. June 10, 2021) (Mariani, J.)