In Smith v. State Farm Mut. Auto. Ins. Co., the Third Circuit heard an appeal from the district court’s dismissal of an insured’s bad faith complaint. The insured was seriously injured in a car accident and sought underinsured motorist coverage from its carrier, seeking the $45,000 policy limit. The carrier offered $21,000, which the insured rejected. The carrier then offered $32,225, but the insured again refused, filing a claim for bad faith. The appellate court affirmed the dismissal because (1) the complaint was conclusory and unsupported by fact; (2) the insured failed to describe what was unfair about the parties’ settlement negotiations; and (3) there was no break in communications during the negotiation period and the carrier did tender payment for its initial offer.
Date of Decision: November 27, 2012
Smith v. State Farm Mut. Auto. Ins. Co., No. 12-1681, 2012 U.S. App. LEXIS 24280, U.S. Court of Appeals for the Third Circuit (3d Cir. Pa. Nov. 27, 2012) (Barry, J.)