Tuesday, May 17, 2022

UM Bad Faith Claim Dismissed Where No Breach of Contract Claim Present

In the case of Nye v. State Farm Mut. Auto. Ins. Co., No. 3:21-CV-01029 (M.D. Pa. March 30, 2022 Wilson, J.), the court addressed a Motion to Dismiss an uninsured motorist claim and bad faith claim.

With regard to the Plaintiff’s pleading of a claim for uninsured motorists benefits in the Complaint, the defense moved to dismiss given that the Plaintiff had failed to plead the identity of the tortfeasor driver and/or whether that driver was in fact uninsured.

The court found that there was sufficient information from which the Plaintiff could have made this determination and included it in the Complaint. As such, this portion of the Motion to Dismiss was granted but the Plaintiff was allowed leave to amend the Complaint to add the missing details.

With regards to the bad faith claim, the court first observed that there must be some predicate claim against the insurance policy even if the bad faith claim is a distinct claim. More specifically, the court stated that “there must be a predicate contract claim in order for a §8371 claim to proceed.” 

The court also noted that, while the predicate claim need not be tried together with the §8371 claim, the predicate cause of action must be ripe in order for a bad faith claim under §8371 to be recognized.

Given that the court had dismissed the breach of contract claim relative to the uninsured motorist claim due to the insufficiency of the pleading on that claim, the court found that the predicate cause of action otherwise required to accompany the §8371 bad faith claim was missing.

As such, the bad faith claim was also dismissed but without prejudice, in light of the court allowing the Plaintiff the right to file an Amended Complaint relative to the breach of contract claim.

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

I send thanks to Attorney Lee Applebaum, the writer of the excellent Pennsylvania New Jersey Insurance Bad Faith Case Law blog and partner at the Philadelphia law firm of Fineman Krekstein & Harris for bringing this case to my attention.

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