Wednesday, June 5, 2019

Federal Court Dismisses UIM Bad Faith Claim After Plaintiff Fails at Second Bite at the Apple

In the case of Amica Mut. Ins. Co. v. Das, No. 18-CV-1613 (E.D. Pa. May 8, 2019 Jones, II, J.), the court granted a Motion to Dismiss a UIM bad faith claim and punitive damages claim with prejudice after a Plaintiff failed at a second attempt to properly pled such a claim after having been given the right to amend.

The court emphasized that “a bad faith claim is ‘fact specific’ and depends upon the insure[r]’s conduct in connection with handling and evaluating a specific claim.”   The court noted that a party bringing the bad faith claim under 42 Pa. C.S.A. §8371, has the burden to “describe who, what, where, when, and how the alleged bad faith conduct occurred.”  

According to the Opinion, the Plaintiff added additional allegations in the second attempt to pursue a bad faith claim, including averments that the testimony and information provided by the Plaintiff “clearly demonstrates…that her damages are far in excess of the UIM coverage amount.”   

The Plaintiff also added additional allegations that, despite knowledge that the insured was covered under the policy and that her damages were far in excess of the UIM coverage amount, the carrier refused to honor its obligations under the insurance agreement for the bad faith purpose of seeking to evade their obligations to the Plaintiff under the insurance contract.  

The court observed that these allegations lacked the dates of any of the alleged actions and also noted that the Plaintiffs failed to explain, in detail, what was unfair about the carrier’s interpretations of the policy provisions.  

In its Opinion, the court affirmed the principle that, absent specific details that establish a dishonest purpose, it is not bad faith for a carrier to investigate and protect its own interests during litigation.  

The court additionally noted that the failure of an insurance company to immediately concede to a demand for the policy limits is not, without specific facts, enough to establish a claim for bad faith.  

Finding that the Plaintiff’s additional allegations in the second amended pleading were conclusory, the court granted the Motion to Dismiss.

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

I send thanks to Attorney Lee Appelbaum of the Philadelphia law firm of Fineman, Krekstein & Harris for bringing this case to my attention.  Check out his excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law Blog.

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