Statutory bad faith claim could survive dismissal even in the absence of a valid breach of contract claim.

The Eastern District reviewed this case involving a homeowner’s policy on a property in Philadelphia. The pro se plaintiff brought claims of breach of contract, statutory bad faith, negligence and unjust enrichment. The insurer moved to dismiss all counts. As to breach of contract, the insurer argued that the suit was barred under the suit limitation clause, which the court agreed with and dismissed accordingly. However, the court denied the request to dismiss statutory bad faith. Certain facts could possibly support a statutory bad faith claim, including: (1) contradictory information given by the insurer’s agents as to the coverage of this policy and how to collect and appeal; and (2) instructing the insured to file multiple claims that caused him to pay multiple deductibles and ultimately discredited his claims as a whole. Given that breach of contract was time barred, however, the court precluded the plaintiff from recovering interest plus 3% on the amount of the alleged insurance claim. The important take away here is that a statutory bad faith claim could survive dismissal even in the absence of a valid breach of contract claim; however, in that situation, a plaintiff is precluded from recovering interest plus 3% on the amount of the alleged insurance claim—the only remedy available to a plaintiff in this situation is punitive damages.

_{Case Law Alerts, 4th Quarter, October 2019}

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