In Kump v. State Farm Fire & Casualty Company, the insured plaintiff sought to amend his complaint. The case arose out of a fire to the insured’s home. The insured claimed that the fire destroyed a valuable art and artifact collection worth many millions of dollars, or that the art and artifacts were stolen after the fire. The insured had a homeowner’s policy and personal articles policy. The insurer did not accept all of the claims as to the presence and existence of the art and artifacts claimed by the insured, and did not pay the full value of the policies. The insured wanted amend his complaint to assert two breach of contract claims, two breach of implied contract claims, and a statutory bad faith claim. The court did permit the bad faith claim to be added, but not the others.
The insured argued that the insurer’s investigation into the ownership and authenticity of his artwork was conducted in bad faith, alleging a series of events including witness intimidation, a biased investigation, inadequate legal research, and unreasonable interpretations of the policies. The original complaint had been filed in 2010. However, the insured’s central assertion in seeking the amendment on the bad faith claim was that a July 2013 letter denying coverage as to the paintings he claimed were lost in the fire or by theft ripened his bad faith claim. The court agreed with that argument. Further, the insured’s allegations contained in his proposed supplemental complaint are mostly events or occurrences that came to light after the original complaint was filed. Given the broad application of bad faith in Pennsylvania, the court found it appropriate to allow the plaintiff to file a supplemental pleading asserting the bad faith cause of action.
In its legal summary, the court emphasized that section 8731’s broad language wasdesigned to remedy all instances of bad faith conduct by an insurer, whether occurring before, during, or after litigation; and that bad faith conduct also includes lack of good faith investigation into facts, and failure to communicate with the claimant.
Date of Decision: April 28, 2014
Kump v. State Farm Fire & Cas. Co., CIVIL ACTION NO. 3:12-0072, 2014 U.S. Dist. LEXIS 58266, April 28, 2014, Decided, (M.D. Pa. April 28, 2014) (Mannion, J.)