Unsubstantiated Claims of Poor UM/UIM Claims Handling Not Sufficient Bad Faith Pleading, Federal Judge Rules

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PITTSBURGH, Dec. 21 — An insured failed to sufficiently plead bad faith in the handling of his underinsured motorist coverage claim by State Farm Insurance Company,  a federal judge ruled Dec. 21 in granting the insurer’s motion to dismiss without prejudice.

Robert R. Mondron was injured as a passenger in an auto accident, which allegedly caused injuries including head neck and facial injuries and internal injuries.  The driver of the vehicle tendered his full liability limits of $110,000 under his own policy, and Mondron sought UIM benefits from his insurer, State Farm.

According to Mondron, State Farm  “failed to make a reasonable offer of settlement,” sued the insurer in the Allegheny County, Pa., Court of Common Pleas, alleging breach of contract, bad faith,  and violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL).

State Farm moved to dismiss the bad faith claims after removing the case to the  Western District of Pennsylvania.  In granting the motion, U.S. District Judge Cathy Bissoon held that dismissal of the bad faith claim is proper:

 “The gravamen of Plaintiff’s bad faith claim is that the Defendant unreasonably denied UIM [underinsured motorist] benefits to which Plaintiff is entitled under the terms of his parents’ insurance policy.  As noted, he alleges that Defendant ‘unreasonably delayed’ the handling of his claim, ‘inadequately investigated’ the claim, ‘failed to make a reasonable offer of settlement’ and ‘knew of or recklessly disregarded its lack of reasonable basis in evaluating Plaintiff’s underinsured motorist claim.’  These types of conclusory allegations are insufficient to state a plausible basis for relief.”

Judge Bissoon also found that Mondron’s Pennsylvania Unfair Insurance Practices Act (UIPA) claims should also be dismissed, holding “these allegations are nothing more than redundant and conclusory re-assertions of Plaintiff’s prior bad faith  allegations…Plaintiff’s generic invocation of statutory language is insufficient to satisfy his federal pleading burden.” Judge Bissoon stated. She similarly dismissed UTPCPL claims, all without prejudice.

Robert R. Mondron v. State Farm Mutual Automobile Insurance Co., No. 16-412, W.D. Pa.; 2016 U.S. Dist. LEXIS 17604

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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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