United States District Court, E.D. Pennsylvania
KENNETH B. JONES, SR., Plaintiff,
ALLSTATE INSURANCE CO., Defendant.
J. PAPPERT, J.
Kenneth Jones sued Allstate, alleging breach of contract and
bad faith in handling his claim for underinsured motorist
(“UIM”) benefits. Allstate filed a motion to
dismiss Jones's bad faith claim. For the reasons below,
the Court grants the motion and grants Jones leave to file an
December 17, 2015, Jones sustained serious injuries in a car
accident caused by the negligence of an underinsured
motorist. (Compl. ¶¶ 4-7.) Jones was insured by
Allstate under a policy containing underinsured motorist
coverage up to $15, 000 per person. (Id. ¶ 8.)
He contends his injuries and losses exceed the $15, 000
policy limit. (Id.) Though Jones “has fully
complied with the terms of the policy, ” he and
Allstate “have failed to agree on the amount of
underinsured motorist benefits that [he] is entitled to
recover.” (Compl. ¶¶ 11-12.)
claims Allstate acted in bad faith by failing to (1) act with
reasonable promptness in evaluating and responding to his
claim and reasonable fairness in paying the claim, (2)
negotiate his claim, (3) properly investigate and evaluate
his claim and (4) request a defense medical examination of
him. (Id. ¶ 17.) Though Jones's Complaint
lacks facts regarding Allstate's investigation, responses
or offer(s) of payment, he claims that Allstate lacked a
reasonable basis for its conduct in handling his claim since
there “is no dispute in this case that the accident was
the fault of the underinsured driver and that [he] was
entitled to underinsured motorist coverage under [his]
policy.” (Id. ¶¶ 16, 18.)
survive a motion to dismiss under Rule 12(b)(6), a complaint
must provide “more than labels and conclusions”
or “a formulaic recitation of the elements of a cause
of action.” Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007) (citation omitted). “Factual
allegations must be enough to raise a right to relief above
the speculative level on the assumption that all the
allegations in the complaint are true (even if doubtful in
fact).” Id. (citation omitted). While a
complaint need not include detailed facts, it must provide
“more than an unadorned,
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing
Twombly, 550 U.S. at 555).
and Iqbal require the Court to take three steps to
determine whether the second amended complaint will survive
Defendants' motion to dismiss. See Connelly v. Lane
Const. Corp., 809 F.3d 780, 787 (3d Cir. 2016). First,
it must “take note of the elements the plaintiff must
plead to state a claim.” Id. (quoting
Iqbal, 556 U.S. at 675). Next, it must identify the
allegations that are no more than legal conclusions and thus
“not entitled to the assumption of truth.”
Id. (quoting Iqbal, 556 U.S. at 679).
Finally, where the complaint includes well-pleaded factual
allegations, the Court “should assume their veracity
and then determine whether they plausibly give rise to an
entitlement to relief.” Id. (quoting
Iqbal, 556 U.S. at 679).
“presumption of truth attaches only to those
allegations for which there is sufficient factual matter to
render them plausible on their face.” Schuchardt v.
President of the United States, 839 F.3d 336, 347 (3d
Cir. 2016) (internal quotation and citation omitted).
“Conclusory assertions of fact and legal conclusions
are not entitled to the same presumption.” Id.
This plausibility determination is a “context-specific
task that requires the reviewing court to draw on its
judicial experience and common sense.” Id.
(quoting Connelly, 809 F.3d at 786-87).
Pennsylvania General Assembly promulgated 42 Pa. Cons. Stat.
§ 8371 to create a cause of action in Pennsylvania
insurance law for “bad faith.” The statute
provides in relevant part:
In an action arising under an insurance policy, if the court
finds that the insurer has acted in bad faith toward the
insured, the court may take all of the following actions: (1)
Award interest on the amount of the claim from the date the
claim was made by the insured in an amount equal to the prime
rate of the interest plus 3%; (2) Award punitive damages
against the insurer; (3) Assess court costs and attorney fees
against the insurer.
42 Pa. Cons. Stat. § 8371.
the statute does not explicitly define “bad faith,
” Pennsylvania federal and state courts have defined
“bad faith” in this context as “[a]
frivolous or unfounded refusal to pay proceeds of a
policy.” Keefe v. Prudential Prop. & Cas. Ins.
Co., 203 F.3d 218, 225 (3d Cir. 2000) (citing
Terletsky v. Prudential Prop. & Cas. Ins. Co.,
649 A.2d 680, 688 (Pa. Super. Ct. 1994)); Atiyeh v.
Nat'l Fire Ins. Co., 742 F.Supp.2d 591, 598 (E.D.
Pa. 2010). To recover on a bad faith claim, a claimant is
required to show by clear and convincing evidence that: (1)
the defendant insurer did not have a reasonable basis for
denying the ...