NOVEMBER 2006 BAD FAITH CASES BAD FAITH CLAIM DISMISSED FOR FAILURE TO PROSECUTE (Philadelphia Federal)

In Herrman v. Allstate Insurance Company, Plaintiff was a passenger in a car in a 1993 automobile accident, and was insured by Allstate.  Plaintiff sought first-party and uninsured motorist payment from Defendant, which were denied.  After Plaintiff’s 1997 bad faith suit was dismissed by the neutral arbitrator for failure to pay arbitration fees, Plaintiff took no action to move her case forward in federal or state court for seven years.  Defendant filed a Motion to Dismiss as Moot because of Plaintiff’s failure to prosecute the case.  The United States District Court for the Eastern District of Pennsylvania established that courts have inherent, discretional authority to dismiss cases for lack of prosecution to prevent undue delays in the disposition of pending cases and to avoid congestion in the calendars of the District Courts.  The Court considered the possible prejudice to Defendant, namely that even if relevant witnesses could be located, memories of the accident and the insurance investigation had undoubtedly been subject to “inevitable dimming” over the extended period of dormancy in this case.  After determining that no alternative sanctions would be appropriate, the Court granted dismissal pursuant to Federal Rule of Civil Procedure 41(b).

Date of Decision:  August 11, 2006

Herrman v. Allstate Ins. Co., United States District Court for the Eastern District of Pennsylvania, No. 97-CV-4290, 2006 U.S. Dist. LEXIS 57396 (E.D. Pa. August 11, 2006) (Brody, J.)