In Eley v. State Farm Insurance Company, the insured suffered significant injuries in a motor vehicle collision with an underinsured driver, whose liability policy was limited at $15,000. The insured, on the other hand, was covered by the insurer under a policy containing underinsured motorist (UIM) coverage for $100,000, with stacking on two vehicles for a total of $200,000. She filed a claim with the insurer, requesting $195,000 for her injuries and her husband’s loss of consortium.
Approximately two months after the insured demanded the $195,000 payment, the insurer still had not responded or even provided a counteroffer for settlement, so the insured filed a lawsuit. The Complaint contained counts for breach of contract and bad faith, as the insured alleged that the insurer failed to negotiate her claim in good faith by not properly investigating and evaluating her claim for UIM coverage. The insurer then filed a motion to dismiss the bad faith claim, stating that the insured had not alleged specific facts to show, if the allegations were true, that it acted bad faith.
The court first summarized the insured’s allegations of bad faith. She had claimed that the insurer had no basis for (1) failing to negotiate the UIM claim in good faith and (2) failing to properly investigate and evaluate the her claim, and that the insurer knew or recklessly disregarded the fact that it had no reasonable basis for acting the way it did. The insured did not, however, allege any specific actions the insurer took showing that it actually acted in bad faith.
The court noted that “these bare-bones allegations [were] devoid of factual specificity,” as the insured simply provided “threadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Because the insured simply restated the elements necessary to prove a bad faith allegation rather than providing any factual support that would help satisfy the necessary elements, the court granted the insurer’s motion to dismiss the bad faith count of the insured’s Complaint.
The dismissal was without prejudice, implying that plaintiff could amend its complaint to properly plead the claim, if possible.
Date of Decision: January 31, 2011
Eley v. State Farm Ins. Co.
, No. 10-cv-5564, United States District Court for the Eastern District of Pennsylvania, 2011 U.S. Dist. LEXIS 8915, (Jan. 31, 2011) (Baylson, J.)