In Grammenos v. Allstate Insurance Company, the insured made a first party claim for water damage from a burst pipe. The insurer denied the claim, and the insured sued for breach of contract and bad faith. The insured claimed that he had made a good faith effort to repair the pipe and the work later failed, leading to the water damage. If true the claim would be covered. The insurer had two independent experts who disputed the insured’s version of events and that he actually attempted to repair the pipe as he claimed, as well as an in-house adjuster, an in house investigator and one independent adjuster who likewise raised issues concerning the insured’s version of events. The insured filed a motion for partial summary judgment on the bad faith claim. The court granted the motion, finding that the insured could not meet his burden of proof.
The court stated that the “plaintiff has failed to show by clear and convincing evidence that [the insurer] had no reasonable basis for denying plaintiff’s claim. There is also no clear and convincing evidence that [the insurer] acted improperly in investigating plaintiff’s claim. To show that it acted in good faith, ‘an insurance company simply must show it conducted a review or investigation sufficiently thorough to yield a reasonable foundation for its action.’ …. ‘The insurance company also is not required to show the process by which it reached its conclusion was flawless or that the investigatory methods it employed eliminated possibilities at odds with its conclusions.’”
Date of Decision: April 28, 2009
Grammenos v. Allstate Ins. Co.
, CIVIL ACTION NO. 07-2725, 2009 U.S. Dist. LEXIS 36155 (E.D. Pa. April 28, 2009) (Rueter, Chief M.J., hearing case by agreement of the parties)