A federal district court judge has dismissed a bad faith complaint in which the only allegation against the insurer was that it made a low offer of settlement in a UM/UIM case. In West v. State Farm, U.S. District Judge John Jones dismissed a bad faith claim in an amended complaint on a motion to dismiss filed by the insurer, but allowed a breach of contract claim to proceed.
In West, the insured was rear-ended in an automobile accident, and filed UM/UIM claim with his insurer, State Farm. The insured submitted medical records and $8,232.00 in medical expenses, in response to which State Farm offered $1,000.00.
In the amended complaint, the insured alleged that the low offer was itself sufficient support for the allegation that State Farm recklessly disregarded a reasonable basis for paying more on the UM/UIM claim. Judge Jones found the argument to be lacking, finding that the bad faith count of the complaint failed to allege sufficient factual support:
Plaintiff argues that the offer of $1,000 to settle $8,232.00 worth of medical bills shows bad faith. The Court finds that these facts are not sufficient, as a matter of law, to sustain a claim for bad faith. Plaintiff has not presented facts to show that Defendant “knew or recklessly disregarded its lack of reasonable basis in” in offering a “low-ball” offer. A “low-ball” offer alone does not suffice to support a claim for bad faith. “[B]ad faith is not present merely because an insurer makes a low but reasonable estimate of an insured’s damages.” Johnson v. Progressive Ins. Co., 899 A.2d 1136, 1142 (Pa. Super. 2006)). “[T]he failure to immediately accede to a demand for the policy limit cannot, without more, amount to bad faith.” Smith v. State Farm Mut. Auto. Ins. Co., (3d Cir. 2012) (non-precedential).(Pa. Super. Ct. 2009) (citing Condio v. Erie Ins. Exchange,
The Court granted the Plaintiff an additional thirty days to file a second amended complaint in an attempt to revive the bad faith claim.