Claim for Bad Faith Against Insurance Company Dismissed When a Reasonable Basis for Denying Payment Exists

On March 15, 2025, Sekle Wisseh was struck and injured by another car while at a red light in Philadelphia. He sought insurance benefits from his carrier, Progressive Direct Insurance Company. Progressive purportedly delayed and denied payment without a reasonable basis. Acting pro se, Wisseh sued Progressive on December 10, 2025, in the Philadelphia County Court of Common Pleas. Progressive removed the case to federal court, and Wisseh filed an amended complaint, asserting claims for breach of contract, bad faith, abuse of process, and declaratory relief. Progressive moved to dismiss all claims, but the breach of contract claim, under Federal Rule of Civil Procedure 12(b)(6), and Wisseh responded in opposition.

The court granted the motion and dismissed the bad faith and abuse of process claims without prejudice and the declaratory relief claim with prejudice. Pennsylvania’s bad faith statute provides a court may award interest, punitive damages, and attorneys' fees if it “finds that the insurer has acted in bad faith toward the insured.” 42 Pa. Stat. & Cons. Stat. Ann. § 8371. Courts have defined “bad faith” as “any frivolous or unfounded refusal to pay proceeds of a policy.” Keefe v. Prudential Prop. & Cas. Ins., 203 F.3d 218, 225 (3d Cir. 2000) (citation omitted).

To recover on a bad faith claim, a claimant is required to show by clear and convincing evidence: “(1) that the insurer did not have a reasonable basis for denying benefits under the policy and (2) that the insurer knew or recklessly disregarded its lack of a reasonable basis in denying the claim.” Rancosky v. Wash. Nat'l Ins., 170 A.3d 364, 377 (Pa. 2017); see also Post v. St. Paul Travelers Ins., 691 F.3d 500, 522 (3d Cir. 2012) (citation omitted). Wisseh alleged Progressive “acted in bad faith by delaying and denying payment with a reasonable basis.” Progressive purportedly continued with that conduct after suit was filed, but those assertions allege no facts about why Progressive lacked a reasonable basis for denying Wisseh benefits and how it did so knowingly or recklessly. As such, the court found the bad faith claim was properly dismissed.