Thursday, April 14, 2022

UIM Bad Faith Claim Allowed to Proceed But UTPCPL Claim Dismissed

In the case of Defuso v. State Farm Mut. Auto. Ins. Co., No. 3:21-CV-507 (M.D. Pa. March 21, 2022), Judge Malachy E. Mannion of the Federal Middle District Court of Pennsylvania found that a Plaintiff had pled sufficient facts to survive a Motion to Dismiss her bad faith claim in a UIM case. However, the Plaintiff’s claims for violations under the Unfair Trade Practices and Consumer Protection law were dismissed.

According to the Opinion, the tortfeasor tendered its $100,000.00 liability limits to the Plaintiff and the UIM carrier agreed to consent to that settlement. The Plaintiff had $50,000.00 in stacked UIM coverage.

The record in the case revealed that the Plaintiff participated in discovery, a statement under oath, and an IME over the first seventeen (17) months of the claim. Following the expiration of that time, the carrier made its first offer of $7,500.00.

Judge Malachy E. Mannion
M.D. Pa.

In his Opinion, Judge Mannion found that the Plaintiff had adequately pled a bad faith claim. Judge Mannion rejected the argument of the defense that the case merely involved a valuation dispute. 

In so ruling, the court pointed to allegations by the Plaintiff that there were delays in the claims handling and that the carrier allegedly failed to entirely and appropriately investigate and evaluate the case presented. The Plaintiff also alleged that the carrier had unreasonably undervalued the Plaintiff’s claims.

The court did, however, dismiss the Plaintiff’s UTPCPL claim after finding that the Plaintiff merely recited the elements of such claim and did not allege facts to support the same. The court additionally noted that a claim of an alleged failure on the part of the carrier to act on an insurance claim in a timely manner was not a valid cause of action under the UTPCPL, as such a claim is a claim for nonfeasance as opposed to a claim of malfeasance.

Anyone wishing to review a copy of this decision may click this LINK.  The Court's Order can be viewed HERE.

I send thanks to Attorney Lee Applebaum of the law office of Fineman Krekstein & Harris for bringing this case to my attention. Please be sure to check out Attorney Applebaum’s excellent Pennsylvania New Jersey Insurance Bad Faith Case Law blog.

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