Mittman v. Nationwide Affinity Insurance Co., No. 16-04658 (E.D. Pa. Apr. 10, 2017)

Jeremy Mittman’s car was rear-ended in a hit-and-run incident and both Mittman and his son sustained significant injuries. Mittman contends that his insurer, Nationwide Affinity Insurance Company, acted in bad faith by failing to conduct an adequate and fair investigation, engaging in dilatory claims handling, and refusing to pay for losses once its liability became reasonably clear. These types of conclusory allegations have become standard fare in plaintiffs’ bad faith claims.

Although it was unclear whether Mittman’s bad faith claim was premised on an alleged violation of the Pennsylvania bad faith statute or an alleged breach of the common law duty of good faith and fair dealing, the Court determined that, in either case, there were insufficient facts alleged in the complaint to survive Nationwide’s motion to dismiss. The Court focused on the lack of any specific facts in support of Mittman’s general contentions of bad faith, which the Court viewed as “precisely the type of threadbare recitals” and “conclusory statements held insufficient in [Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)].” To survive a motion to dismiss, “[p]laintiffs must describe who, what, where, when, and how the alleged bad faith conduct occurred.” Because Mittman failed to do so, the Court dismissed the bad faith claim without prejudice and granted Mittman thirty days “to file an amended complaint that identifies the claim he wishes to bring and contains sufficient factual allegations to support it.” Mittman also had asserted a breach of contract claim against Nationwide, so the Court noted that to the extent Mittman “seeks to base his bad faith claim on the common law obligation of good faith and fair dealing, he must proffer additional facts regarding the specific actions Nationwide took in violation of this obligation since, to the extent such a claim was based solely on Natonwide’s refusal to pay, it would be subsumed by his breach of contract claim.” ​

Riedi v. GEICO Casualty Co., No. 16-6139 (E.D. Pa. Apr. 11, 2017)

After Wendy Riedi and her son were involved in a car accident with an uninsured driver, they pursued uninsured motorist benefits from their insurer, GEICO Casualty Company. GEICO refused to pay UIM benefits to Riedi and her son, and they filed an action against GEICO alleging statutory bad faith and other claims. GEICO moved to dismiss the bad faith claims and other parts of the complaint. The Court granted the motion, ruling that plaintiffs failed to state a plausible bad faith claim. The Court explained that “[a] court should examine the factors that the insurer relied on in evaluating a claim to determine whether the insurer had a reasonable basis for denying benefits,” noting that “[a] bad faith claim is fact specific and depends upon the insured’s conduct in connection with handling and evaluating a specific claim.” Thus, to survive a motion to dismiss, a plaintiff “must provide supporting factual detail rather than mere legal conclusions.” The Court determined that the complaint set forth “only conclusory allegations regarding bad faith,” which were legal, not factual, in nature “and thus not entitled to the assumption of truth.” There were “no facts showing how GEICO lacked a reasonable basis for its decision to not pay UIM benefits,” “no facts detailing the actions GEICO or the plaintiffs took in pursuit of the claim,” and no “facts specifically describing what was unfair about GEICO’s denial or refusal to pay UIM benefits.” The Court, therefore, dismissed plaintiffs’ bad faith claims without prejudice, allowing plaintiffs leave to amend their bad faith claims within twenty-one days.