JANUARY 2016 BAD FAITH CASES: COURT DISMISSES BAD FAITH CLAIM BASED ON MISSTATEMENT OF POLICY LIMITS AND UNREASONABLE DELAY AFTER FINDING THAT INSURED FAILED TO PROVIDE ADDITIONAL FACTUAL SUPPORT FOR ALLEGATIONS (Middle District)

In Ridolfi v. State Farm Mutual Automobile Insurance Company, the insured brought claims for bad faith and breach of duty of good faith and fair dealing. The insurer moved to dismiss, arguing that the insured’s allegations were conclusory and boilerplate assertions.

The underlying claim arose out of a motor vehicle accident. The insured filed claims with both the insurer of the other driver, as well as her own insurer. She ultimately settled with the other insurer, and demanded policy limits from her insurer. She subsequently found a document in her legal file from her suit against the other insurer showing that the policy limits were higher than originally reported by her insurer.

The insured alleged that her insurer’s actions constituted bad faith, specifically that the insurer “knowingly and fraudulently” incorrectly reported her policy limits, and delayed its investigation into her claim.

With regard to the insured’s first contention, the court found that the insured failed to provide facts to support the assertion that the insurer acted “knowingly and fraudulently” in reporting incorrect policy limits. The court further reasoned that the insured’s allegation of a knowing and fraudulent misstatement of policy limits amounted to no more than a conclusory allegation that the information must have been sent with some motive of self-interest or ill will simply because it was inaccurate.

Similarly, with regard to the insured’s second contention, that the insurer delayed its investigation into her claim, the court found that the insured failed to allege facts allowing the court to draw a reasonable inference that the insurer acted in bad faith. Specifically, the insured alleged that the insurer made “ongoing requests for information from physicians who [the insured] was never treated by and other inquiries which are irrelevant and duplicative.” However, the court reasoned that the insured’s allegations did not identify how the requests were irrelevant, duplicative, or designed to delay settlement, and were nothing more than conclusory assertions of delay. Accordingly, the court dismissed the insured’s claim of bad faith, without prejudice to re-plead.

Date of Decision:  November 19, 2015

Ridolfi v. State Farm Mut. Auto. Ins. Co., No. 1:15-cv-00859, 2015 U.S. Dist. LEXIS 156687 (M.D. Pa. November 19, 2015,) (Kane, J.)