MARCH 2013 BAD FAITH CASES: COURT STRIKES INSURED’S REQUEST FOR DAMAGES; DISMISSES BAD FAITH SUIT IN THE ABSENCE OF ANSWERING BRIEF FROM INSURED (Middle District)

In Ferguson v. Kemper, the insured filed a six-count suit, including breach of contract and bad faith claims, after its homeowners insurance carrier denied coverage for flood damages sustained during a hurricane. In March 2011, the insureds filed a claim for storm-related flood damage with the carrier. The carrier paid the claim. In June 2011, the insured’s home sustained severe damages in a second storm. The carrier hired a contractor to begin damage cleanup and start gutting the insured’s basement.

The insured received several assurances from the carrier that the remediation would be covered under the homeowner’s policy. However, in September 2011, the insured received a letter from the carrier that the cleanup services would not be covered. Since then, the contractor has attempted to collect from the insured.

The insured filed suit in September 2012, alleging that the carrier was obligated to cover the loss and that in denying the claim, violated several Pennsylvania laws, including the bad faith statute. The carrier filed a motion to dismiss, to which the insured failed to file a response. As such, the court granted the carrier’s motion. The court also struck the insured’s claim for compensatory, consequential, treble, and exemplary damages stemming from the carrier’s alleged bad faith.

Date of Decision: February 15, 2013

Ferguson v. Kemper, No. 1:12-CV-01993, 2013 U.S. Dist. LEXIS 21055, Middle District of Pennsylvania (M.D. Pa. Feb. 15, 2013) (Jones III, J.)