Bad Faith Claim Denied Due to Conclusory Language, Boilerplate Allegations in Complaint

In a dispute over underinsured motorist (UIM) coverage, the court granted the defendant’s motion to dismiss the plaintiffs’ bad faith claim. The plaintiffs had sought the full policy limit following a motor vehicle accident, but the defendant initially offered $9,000 and later increased the offer to $15,000. Alleging bad faith under Pennsylvania law, the plaintiffs claimed the insurer unreasonably handled their claim. However, the court found their allegations to be conclusory and lacking factual support, leading to the dismissal of the bad faith claim.

The plaintiffs purchased an underinsured motorist (UIM) policy worth $100,000 from the defendant. While the policy was in effect, Michele Carolan was involved in a motor vehicle accident with an uninsured motorist. As a result, the plaintiffs sent the defendant a settlement proposal for $100,000, the full value of their UIM policy. In response, the defendant offered the plaintiffs $9,000 to settle their uninsured motorist claim. The plaintiffs responded with a second demand, again requesting $100,000. The defendant then increased its offer to $15,000, which the plaintiffs deemed unreasonable. 

In their complaint, the plaintiffs alleged claims for breach of contract (Count I) and bad faith pursuant to 42 Pa. C.S.A. § 8371 (Count II). Pennsylvania’s bad faith statute permits policyholders to recover damages if they can show that an insurance company knowingly denied benefits and lacked a reasonable basis to do so. In Count II of their complaint, the plaintiffs alleged the defendant acted in bad faith through its handling of their UIM claim. 

The defendant countered that the plaintiffs’ bad faith claim should be dismissed because it merely “consists of nineteen conclusory allegations using boilerplate language.” The defendant further argued that the plaintiffs “do not allege any facts which would support that [defendant] (i) had no reasonable basis for its position regarding plaintiffs’ claim; or (ii) knew or should have known that it lacked a reasonable basis.” 

The court found the defendant’s argument convincing, that the plaintiffs failed to plausibly allege a claim of bad faith in their complaint. As such, defendant’s motion to dismiss Count II of the complaint was granted. 

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