JANUARY 2009 BAD FAITH CASES BAD FAITH CLAIM DISMISSED BECAUSE THE PLAINTIFF, THE CHILD OF AN INSURED, LACKED STANDING (Philadelphia Federal)

In Aquila v. Nationwide Mutual Insurance Company, the insured husband filed a complaint in United States District Court for the Eastern District of Pennsylvania seeking recovery for the insurer’s libelous, slanderous and bad faith conduct arising out of its investigation of a claim for the replacement cost of a stolen vehicle owned by the insured husband.  The insured alleged that, during the investigation of the claim, the insurer’s investigator harassed and intimidated his former wife and him, in an effort to force them to abandon their claim.  The insured claimed that these actions harmed his reputation, lead to his divorce from his former wife; and deprived his minor son of the comfort and security of his natural parents. 

In response to motions filed by the insurer, the insured amended the complaint twice. In the second amended complaint, the insured asserted a bad faith claim which named only the insureds’ minor son as the plaintiff.  The insurer then filed a motion to dismiss or, alternatively, strike all claims asserted in the second amended complaint. 

The court found that the insured’s minor son, who is the only named plaintiff in the bad faith claim, is not an “insured” under the policy and is not otherwise within the “narrow class of plaintiffs” permitted to bring bad faith claims under the Pennsylvania statute, as he never asserted a  claim against the insurer.  The Court found that mere entitlement to protection under the insurance policy is insufficient to properly confer standing to bring a § 8371 claim.  Therefore the court granted the insurer’s motion to dismiss the bad faith claim.