Federal Court Rules That Trial Judges Should Use Common Sense in Evaluating Motions To Dismiss in Bad Faith Cases

In the case of 1009 Clinton Properties, LLC v. State Farm Fire & Cas. Co., No. 18-5286, 2019 WL 1023889 (E.D. Pa. March 4, 2019 Kenney, J.), the court issued a lengthy Opinion addressing a Motion to Dismiss an insured’s bad faith claim in a property damage loss case.  

Among the allegations was that the carrier allegedly falsely represented to the Plaintiff that the loss was not entitled covered under the policy, that the carrier failed to complete a prompt and thorough investigation of the claim before asserting that the claim was not covered, and that the carrier unreasonably withheld policy benefits without a reasonable factual explanation.  

Of note is the court’s analysis indicating that, in reviewing Motions to Dismiss standards under the Federal Rules of Civil Procedure, that the trial court’s “must do away with a robotic reading of Twombly and Iqbal and instead use its common sense when addressing whether a bad faith claim can survive a Motion to Dismiss.  When the Court applies its common sense in analyzing a bad faith claim, here, it becomes apparent that Plaintiff’s bad faith claims survives Defendant’s Motion to Dismiss.”   

After reviewing the steps required in analyzing a Motion to Dismiss along with the basis elements of a bad faith claim, the court ruled that the Motion to Dismiss should be denied under the facts presented in this matter. 

Anyone wishing to review a copy of this decision may click this LINK.

I send thanks to Attorney  Lee Applebaum, the writer of the excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law blog and from the Philadelphia law firm of Fineman, Krekstein & Harris for bringing this case to my attention.