Carolan v. PROGRESSIVE ADVANCED INSURANCE COMPANY, 2:24-cv-03248

Plaintiffs Michele and Francis Carolan held a $100,000 uninsured/underinsured motorist (UIM) policy with Progressive Advanced Insurance Company.
Michele Carolan was injured in a motor vehicle accident caused solely by an uninsured driver, suffering multiple serious injuries.
After exhausting recovery against the at-fault driver, Plaintiffs demanded the $100,000 UIM policy limit from Progressive; Progressive responded with offers of $9,000 and $15,000, which Plaintiffs found inadequate.
Plaintiffs filed suit, alleging breach of contract (Count I) and bad faith under 42 Pa. C.S.A. § 8371 (Count II).
Progressive moved to dismiss the bad faith claim (Count II), arguing it was not plausibly pled.
The Court considered the motion under Rule 12(b)(6), requiring factual allegations beyond conclusory statements to survive dismissal.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Sufficiency of factual allegations to support bad faith (Count II)	Progressive acted in bad faith by withholding benefits, failing to properly investigate, and not making a reasonable offer.	Plaintiffs’ allegations are conclusory and unsupported by factual detail; complaint does not show lack of reasonable basis or reckless disregard.	Dismissed Count II; allegations insufficient for bad faith.
Whether Plaintiffs should be granted leave to amend	If bad faith is dismissed, Plaintiffs should be allowed to amend.	No opposition to leave to amend.	Leave to amend granted.

Ashcroft v. Iqbal, 556 U.S. 662 (2009) (sets pleading standards for Rule 12(b)(6) motions, requiring facts, not conclusory statements)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (establishes plausibility standard for federal pleadings)
Nw. Mut. Life Ins. Co. v. Babayan, 430 F.3d 121 (3d Cir. 2005) (defines bad faith as requiring lack of reasonable basis and ill will)
Terletsky v. Prudential Prop. & Cas. Ins. Co., 649 A.2d 680 (Pa. Super. Ct. 1994) (sets Pennsylvania’s two-part test for bad faith claims)