Motion to Dismiss Federal Court Breach of Contract and Bad Faith Claims Regarding Fire Loss Granted

In the case of Bloxham v. Allstate Insurance Company, No. 3:19-CV-0481 (M.D. Pa. May 2, 2019 Caputo, J.), the court granted a Motion to Dismiss in a property damage fire loss breach of contract bad faith claim against the carrier, but allowed the Plaintiff the right to file an Amended Complaint.  

According to the Opinion, this case involved a central issue of whether the insureds resided at a property when a fire loss occurred.  

Given this dispute, the carrier denied coverage after concluding that the insured did not reside at the property.    The carrier also pointed to certain alleged misrepresentations that were allegedly made by the insureds in connection with the claim.  

The insureds responded with a lawsuit for breach of contract and bad faith.  

In the Complaint, the Plaintiffs asserted that the property was in fact “occupied” at the time of the fire as the Plaintiffs were completing ongoing repairs and renovations to the dwelling when the loss occurred.

Judge Caputo agreed with the defense argument that, because “Plaintiffs allege not that they resided at the property, but only that they ‘occupied’ the property at the time of the loss as a result of ‘ongoing and continuous repairs and renovations to the dwelling’… that the Plaintiffs had failed to state a breach of contract claim.”  

With regards to the bad faith claims, the court found that the Plaintiff’s allegations in this regard were conclusory in that these allegations offered no facts supporting the sweeping legal allegations of bad faith.  

As noted, the Plaintiff was granted the right to amend their Complaint by the court.

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

I send thanks to Attorney Lee Applebaum of the Philadelphia law firm of Fineman, Krekstein & Harris.  Attorney Applebaum is also the writer of the excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law blog.