"> August 2006 Bad Faith Cases | No Breach Of Fiduciary Duty

August 2006 Bad Faith Cases No Breach Of Fiduciary Duty And Negligence Claims Based On Gist OF Action Doctrine And Must Plead Consumer Fraud Claim With Specificity (Philadelphia Federal)

In Fass v. State Farm Fire and Casualty Company, the federal court granted the insurance company’s motion to dismiss three counts of the insured’s complaint – the Pennsylvania Unfair Trade Practices and Consumer Protection Law claim (“UTPCPL”); the breach of fiduciary duty claim; and the negligence claim.  After the insurance company made payment under the policy as a result of a covered loss, the insured’s public adjuster notified the insurance company that it had either omitted or mis-priced some of the personal property items.  The insurance company responded by advising that a lawsuit, per the policy, must be instituted within one year of the property loss.  The insured instituted the instant action alleging bad faith, violation of the UTPCPL, breach of contract, breach of fiduciary duty (good faith and fair dealing) and negligence.  The court ruled that the insured did not sufficiently plead a UTPCPL claim because the complaint did not allege with particularity the elements of common law fraud and the complaint was unclear as to any allegations relating to the insurance company’s malfeasance.  The court dismissed the insured’s breach of fiduciary duty and negligence claim under the gist of the action doctrine.
Date of decision:  July 26, 2006
Fass v. State Farm Fire and Cas. Co., United Stated District Court for the Eastern District of Pennsylvania, No. 06-02398, 2006 U.S. Dist. LEXIS 51478 (E.D. Pa. July 26, 2006) (Stengel, J.)