Conclusory Allegations of Bad Faith Are Insufficient to Meet Federal Pleading Standard

Several federal district courts in Pennsylvania recently held that a bad faith count in a complaint cannot survive a motion to dismiss where the claim contains conclusory allegations and is not supported by sufficient factual allegations to infer a plausible finding of bad faith. See Kiessling v. State Farm Mut. Auto. Ins. Co., 2019 WL 634639 (E.D. Pa. 2019); Wyoming Valley Fraternal Order of Police v. Selective Ins. Co. of the Southeast and Stock Ins. Co., 2019 WL 626460 (M.D. Pa. 2019); Moran v. United Serv. Auto. Ass’n, 2019 WL 626440 (M.D. Pa. 2019).

In Kiessling, the plaintiffs were injured in a motor vehicle accident with an underinsured motorists.  The plaintiffs asserted claims against their insurer underinsured motorist benefits. When the insurer disputed the amount of benefits owed to plaintiffs, plaintiffs filed a complaint against the insurer for bad faith under §8371, arguing that the insurer “failed to agree on the amount of underinsured motorist benefits.” The insurer moved to dismiss the bad faith claim, arguing that the plaintiffs’ “bald conclusory assertions of bad faith liability on the part of [the insurer], made without any factual support, fail to meet the pleading standards required by the Federal Rules of Civil Procedure.” In granting the insurer’s motion, the Court noted that the plaintiffs’ complaint was devoid of any facts regarding the insurer’s alleged bad faith conduct. Further, “because bad faith claims must plead specific facts as evidence of bad faith and cannot rely on conclusory allegations,” the plaintiffs’ complaint failed to state a plausible statutory bad faith claim.

In Wyoming Valley, the plaintiff operated a restaurant insured under a commercial insurance policy issued by the insurer. The plaintiff reported claims of theft and property damage.  When the insurer denied payment, the plaintiff filed a complaint against the insurer for breach of contract and bad faith under §8371. The insurer moved to dismiss the bad faith claim. In granting the insurer’s motion, the Court found that the plaintiff’s bad faith claim was premised on “bare-bones conclusory allegations which are not sufficient to state a bad faith claim.”

In Moran, the plaintiff was injured in a motor vehicle accident with an uninsured motorist.  The plaintiff filed a complaint against the insurer for breach of contract and bad faith under §8371. The insurer moved to dismiss the bad faith claim. In granting the insurer’s motion, the Court noted that the plaintiff “[failed] to sufficiently plead facts for which it could plausibly be inferred that [the insurer] acted in bad faith in valuing her claim.” When stripped of the conclusory allegations, the plaintiff’s complaint alleged only that the insurer made a low settlement offer and did not allege sufficient factual support for finding that the settlement offer was unreasonable under §8371. Further, “courts have consistently held that a dispute or discrepancy in the valuation of a claim between the insurer and the insured is not alone indicative of bad faith.”