JULY 2011 BAD FAITH CASES
INSURED’S “CONCLUSORY” BAD FAITH ALLEGATIONS DISMISSED, NOT SUFFICIENTLY FACTUAL TO CLEAR TWOMBLY PLEADING THRESHOLD(Western District)
In Liberty Insurance Corp. v. PGT Trucking, Inc., Liberty administered PGT’s worker’s compensation program. Liberty initially brought suit seeking a declaration of its rights under the insurance policies it provided to PGT as well as recovery of unpaid premiums in excess of $180,000. PGT counterclaimed, asserting breach of contract, bad faith and breach of fiduciary duty claims. Liberty, here, challenged PGT’s counterclaims and sought to have them dismissed.
As to PGT’s bad faith counterclaim, Liberty asserted that PGT’s allegations of bad faith merely stated legal conclusions without any supporting facts to show that Liberty could have acted in bad faith. The Western District agreed, finding PGT’s allegations to be “vague” and “bare-boned” as to the actual alleged bad faith conduct and thus insufficient to support a bad faith claim. The court noted that a retrospective listing of the various ways in which bad faith theoretically could have occurred is not sufficient to state a bad faith claim under the Twombly standard of pleading specificity.
Date of Decision: June 27, 2011