AUGUST 2012 BAD FAITH CASES: CARRIER’S MOTION TO DISMISS DENIED BECAUSE SUIT ULTIMATELY WENT BEYOND SOLELY AN APPRAISAL (Philadelphia Federal)

In Bernstein v. Nationwide Mut. Fire Ins. Co., the court heard a carrier’s motion to dismiss filed in response to an insured’s initial action for appraisal. The suit stemmed from a windstorm that severely damaged the insured’s property. A public adjuster valued the damage at $199,279.94, but the carrier sent the insured a check for $29,099.42, offering no explanation for the basis of its valuation.
The insured filed suit in state court in early 2012 and the carrier responded by sending a “partial denial” letter, explaining that the disparity in estimates was because it felt the damage was due to wear and tear. The carrier later removed the suit to federal court and filed the instant motion to dismiss.
The basis of the carrier’s motion was that, while the insured party sought an appraisal, its suit was really based on a misunderstanding of the policy. The court disagreed, citing the insured’s amended complaint that alleged breach of contract and bad faith claims. As such, the carrier’s motion was denied.
Date of Decision: July 24, 2012
Bernstein v. Nationwide Mut. Fire Ins. Co., No. 12-1490, 2012 U.S. Dist. LEXIS 102670, U.S. District Court for the Eastern District of Pennsylvania (E.D. Pa. July 24, 2012) (Kelly, J.)