JULY 2017 BAD FAITH CASES: BAD FAITH CLAIM DISMISSED WHERE PLAINTIFF FAILED TO PROVIDE SPECIFIC FACTUAL ALLEGATIONS (Philadelphia Federal)

In this UIM based action, the Plaintiff sued his alleged insurer after being injured in a Florida motorcycle accident. He incurred over $3,000,000 in medical expenses, but only recovered $12,000 from the tortfeasor’s carrier.

His parents reside in Pennsylvania, and are the named insureds on the policy at issue. Furthermore, the policy lists three cars as insured vehicles, but not their son’s motorcycle. The insurer denied the son’s UIM claim, and the son brought suit for breach of contract and bad faith.

On the breach of contract claim, the Court refused to grant the insurer’s motion to dismiss because certain factual questions remained as to whether coverage was due to the son. These questions included whether he resided with his parents, and whether he owned the motorcycle.

However, the Court granted the insurer’s motion to dismiss as to the bad faith claim. The Court found that the Plaintiff failed to state any plausible allegations of bad faith supported by specific facts. The Court reiterated the bad faith standard, stating that a bad faith plaintiff is required “to prove with clear and convincing evidence that ‘(1) the insurer lacked a reasonable basis for denying benefits; and (2) that the insurer knew or recklessly disregarded its lack of reasonable basis.’”

All this Plaintiff alleged was that the insurer acted unfairly, but he did not specify the unfair conduct. Because his bad faith claim consisted only of conclusory statements devoid of factual substance, the Court granted the insurer’s motion to dismiss as to the bad faith claim.

Moreover, unlike many claims failing to meet the Twombly/Iqbal pleading standards, the Court did not give this Plaintiff an opportunity to re-plead by way of an amended complaint.

Date of Decision: July 6, 2017

Toner v. GEICO Ins. Co., No. 17-0458, 2017 U.S. Dist. LEXIS 104075 (E.D. Pa. July 6, 2017) (Slomsky, J.)