Bad Faith Allegations Too General, Dismissed Again In Pa. Federal Court

CSCC-Lawsuit-Dismissed

PHILADELPHIA, June 8 – A  federal magistrate judge in Philadelphia has found that overly broad bad faith allegations in a complaint filed against New Jersey Manuracturers Insurance Company should be dismissed.  The Court ruled that the insured plaintiff made only conclusory allegations insufficient to withstand the early challenge.

Mary Camp settled and auto accident claim with the tortfeasor’s insurer for $82,000, and then made a demand to her insurer, New Jersey Manufacturers Insurance Co. (NJMIC), for UIM benefits, seeking $221,412 for future medical treatment requirements.  NJMIC denied the claim, and Camp sued the insurer in the U.S. District Court for the Eastern District of Pennsylvania.  The complaint included claims for breach of contract and bad faith.

NJMIC filed a motion to dismiss the bad faith claims as insufficiently conclusory pursuant to F.R.C.P. 9.  NJMIC contended that the bad faith claims were simply  “a generic and non-specific reference to bad faith without enumerating any specific conduct of the defendant other than a disagreement over the value or amount of the claim.”

It was the second time Magistrate Judge Marilyn Heffley granted a motion to dismiss.  She earlier granted the same motion in March, but granted Camp leave to amend her complaint.  Camp’s amended complaint was not sufficiently different, according to Judge Heffley, with withstand dismissal.  In dismissing the similarly conclusory allegations, she wrote:

“The bad faith allegations in subsections (i) through (k) of paragraph 35 of the Amended Complaint remain unchanged from Camp’s original pleading. They include claims that NJMIC ‘engag[ed] in dilatory and abusive claims handling,’ ‘fail[ed] to adopt or implement reasonable standards in evaluating plaintiff’s claim,’ and ‘act[ed] unreasonably and unfairly in response to plaintiff’s claim.’ These allegations are devoid of factual specificity as to what claims handling practices were abusive or how NJMIC acted unreasonably. As the Third Circuit [U.S. Court of Appeals] ruled in Smith [Smith v. State Farm Mutual Automobile Insurance Co. (506 F. App’x 133, 136 [3d Cir. 2012])], without such details, a plaintiff has “fail[ed] to allege a legally sufficient cause of action for bad faith under [Pa. Consolidated Statutes] § 8371…

Alhough bad faith may be found where an insurer fails to communicate its reasons for denying a claim to an insured, in this case, according to the facts pled by Camp in her Amended Complaint, NJMIC actually did provide a reason for denying the claim. In paragraph 23 of the Amended Complaint, Camp alleges that in response to her submission for UIM coverage, NJMIC responded that it ‘[would] not be making a settlement offer as “it appears [Plaintiff] has been fairly compensated by the tort carrier for the injuries she sustained in the loss.”’ Thus, the facts alleged in the Amended Complaint clearly contradict the legal conclusion that Camp asks this Court to accept. Accordingly, Camp’s bad faith claim is insufficient to state a claim upon which relief can be granted.”

(Mary Camp v. New Jersey Manufacturers Insurance Co., No. 16-1087, E.D. Pa.; 2016 U.S. Dist. LEXIS 74496)

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Author: CJ Haddick

C.J. Haddick is a Director with the law firm of Dickie, McCamey, & Chilcote, PC, based in Pittsburgh, Pa. He has advised and represented insurers in insurance coverage and bad faith litigation for more than a quarter of a century, and written and spoken throughout the United States on insurance coverage and bad faith prevention and litigation. He is Managing Director of the firm's Harrisburg, Pa. office. Reach him at chaddick@dmclaw.com or 717-731-4800.

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