Thursday, October 7, 2021

UM Bad Faith Claim Regarding Disagreement Over Value of Claim Dismissed

In the case of Brown v. LM Gen. Ins. Co., No. 21-2134 (E.D. Pa. Aug. 24, 2021 Pratter, J.), the court granted a Defendant carrier’s Motion to Dismiss a Plaintiff’s bad faith claim in a UM matter after finding that the Plaintiff could not sustain a bad faith claim against the insurance company where the allegations in her Amended Complaint boiled down to a disagreement between the parties over the amount of a settlement for uninsured motorist benefits.

In this matter, the Plaintiff had alleged that the carrier, among other things, failed to conduct a medical evaluation, review the Plaintiff’s medical records, or otherwise invest the claims presented prior to offering a settlement. The Plaintiff also claimed that the carrier was dilatory in its claims handling practices when it allegedly mispresented that it would resolve the claim and then continuously and endlessly requested documentation before ignoring that documentation.

The defense argued that the Plaintiff had simply recycled the same allegations as in the initial pleading. The carrier also asserted that the Amended Complaint again came down to a claim by the Plaintiff that, because the carrier allegedly failed to offer an amount to which the Plaintiff believed she was entitled, the carrier allegedly acted in bad faith. The carrier also emphasized that there was a serious dispute in this case as to whether or not the Plaintiff was even entitled to coverage under the applicable policy.

After reviewing the current status of Pennsylvania law regarding bad faith claims, the court found that, although the Plaintiff’s Amended Complaint listed thirty-eight (38) ways in which Liberty Mutual allegedly acted in bad faith, the list was a list of conclusions, not facts. The court found that there were no details offered by the Plaintiff that would describe or was supposedly unfair about the process.

Relative to the claim that the carrier acted in a dilatory fashion, the court noted that the Plaintiff failed to meet her requirement of asserting specific facts to support that allegation such as the number of months between a demand and a settlement offer. 

The court noted that, in the end, the Amended Complaint simply reflected a disagreement between the parties over the amount of an appropriate settlement of the claims presented. The court reiterated a well-settled law that an insured must do more than allege an allegedly “low-ball” offer.

The court also emphasized that “a policy limit- -as its name suggests- -is the theoretical maximum that an insured could recover. ‘It is not the de fecto value of a claim.’” See Op. at p. 5.

Given that the Plaintiff had failed to support her claim for bad faith with facts, this claim was dismissed with prejudice.

The court also addressed the carrier’s Motion to Strike all references in the Plaintiff’s Complaint that the carrier’s conduct was reckless, wanton, and willful relative to the declaratory judgment and breach of contract claims.

The court found that, in order to prevail on a Motion to Strike allegations, the allegations must not only be unrelated to the claim presented but the moving party must show how the moving party will be prejudiced if the allegations are allowed to remain in the pleadings.

Given that the carrier failed to explain how it will be prejudiced in this matter if the challenged allegations are not stricken, the court denied the Motion to Strike. The court also noted that a bald assertion that the carrier acted willfully or recklessly is only a legal conclusion that the court need not accept as true.

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

Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Sept. 17, 2021).

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