In Gowton v. State Farm Fire & Casualty Company, No. 2:15-CV-01164-CB (W.D. Pa. June 29, 2016 Bissoon, J.), the court dismissed the Plaintiff's Complaint after finding that the Plaintiff's conclusory allegation that the carrier refused to pay in the amounts allegedly due in a fire loss claim was insufficient to support a cause of action in bad faith. The complaint also averred at one point that the insurer relied on loss calculations that were unsupportable, without any explanation of why they were inadequate.
The court reiterated the rule under Pennsylvania case law that a low but reasonable estimate of a loss is not bad faith. Accordingly, the court noted that an unsupported claim that an insurer estimated at too low a figure, by itself, cannot be bad faith.
The court dismissed the Complaint but granted Plaintiff leave to file an amended complaint.
This decision is also notable in that the court upheld the one year contractual limitations period for the filing of suit contained in the policy.
Anyone wishing to review this decision may click this LINK.
I send thanks to the writers of the excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law Blog, including Attorney Lee Appelbaum of the Philadelphia law firm of Fineman, Krekstein & Harris, for bringing this decision to my attention.