In Cher-D, Incorporated, t/a Pine Knob Inn v. Great American Alliance Insurance Company
, the court had denied summary judgment
to the insurer on the statutory bad faith count against it because there was sufficient evidence for a reasonable jury to find bad faith in how it settled the insured’s claim. The insurer sought reconsideration. As there was no newly discovered evidence, change in the law or manifest injustice the motion was improper. However, the court considered the arguments anyway, before denying the motion again.
In looking at the factual allegations, the court found while there may be some ambiguity in the complaint, a close reading would allow for the complaint to allege that the failure to pay benefits on a fire in 2004, led to another fire in 2005; thus setting out a claim on the original fire, which was within the policy period. Plaintiff apparently pursued this claim during the case and discovery could be taken thereon. Thus, the court found no merit in the argument that there was no bad faith claim in connection with the original loss.
The court also rejected the effort to submit affidavits after the summary judgment ruling, to put additional deposition testimony before the court.
The insurer also raised the argument that compensatory damages were not available under the bad faith case. As that issue had not been previously briefed or argued, the court would not address it; but rejected the notion that the issue was black and white.
The court also took a view of pleading standards under Bell Atlantic Corp. v. Twombly
, 127 S. Ct. 1955 (2007) emphasizing that “the simplified notice pleading standard of the Federal Rules relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims”. The U.S. Supreme Court has recently amplified on its Twombly analysis of Rules 8(a) and 12(b)(6) in a closely divided decision, Ashcroft v. Iqbal
, 129 S. Ct. 1937 (2009), a case that some may consider a dramatic reinterpretation of Rule 8(a)’s pleading requirements, imposing considerably more formidable standards that a plaintiff must overcome to survive a Rule 12(b)(6) motion than were required during the 50 year period preceding Twombly. The Ashcroft case can be found in the Links section of this blog.
Date of Decision: June 15, 2009