Wednesday, November 13, 2019

Failure to Accede to a UIM Policy Limits Demand Is Not Evidence of Bad Faith In and Of Itself

In the case of Doyle v. Liberty Mutual Ins. Co., No. 19-3460 (E.D. Pa. Oct. 4, 2019 Schiller, J.), the court dismissed a bad faith claim after finding that the pleadings contained in the Plaintiff’s Complaint were insufficient to support such a claim. Leave to amend was allowed.

By way of background, this was a UIM case in which the Plaintiff had settled with the tortfeasor for $15,000.00 and had then demanded the $300,000.00 UIM policy limits from his own carrier. When the UIM carrier refused the Plaintiff’s settlement demand, the Plaintiff filed suit for breach of contract and bad faith.

The court ruled that the Plaintiff’s Complaint failed to allege sufficient facts to support a plausible claim for bad faith. The court noted that the Plaintiff’s conclusory allegations included allegations of the UIM carrier acted in bad faith by “failing to evaluate Plaintiff’s claim objectively and fairly; failing to complete a prompt and thorough investigation of Plaintiff’s claim….[and] unreasonably withholding policy benefits[.]”

The court noted that there were no specific facts pled in the Complaint to support these generalized allegations.

Notably, the court additionally observed “the failure to immediately accede to a demand for the policy limits cannot, without more, amount to bad faith” on the part of a UIM carrier.

As noted, the court allowed the Plaintiff leave to amend the Complaint, “but only if they can plausibly do so.”

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 Fineman, Krekstein & Harris for bringing this case to my attention. Please check out Attorney Applebaum’s excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law blog for continuing updates on important bad faith cases  That blog can be viewed HERE.

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