Wanat v. State Farm Mutual Automobile Insurance Company
4:13-cv-01366
M.D. Penn.Oct 11, 2013Background
- Wanat was injured in January 2011 when Dolan's vehicle rear-ended her; Dolan had a $50,000 liability policy and was underinsured.
- Dolan's insurer offered $48,000 to settle Wanat's claims; Wanat settled after State Farm waived subrogation rights.
- Wanat's State Farm policy provided $25,000 underinsured motorist coverage (non-stacked) and $25,000 liability limits.
- In February 2013 Wanat filed a claim with State Farm for underinsured motorist benefits; State Farm declined in March 2013, stating Wanat had been fairly compensated.
- Wanat sued in Tioga County, asserting breach of contract (Count I), bad faith denial (Count II), and UTPCPL/Unfair Insurance Practices (Count III); State Farm removed to federal court and moved to dismiss.
- Wanat conceded she would not pursue a general duty of fair dealing or UTPCPL; the remaining issue is whether she pled a plausible bad-faith denial claim under 42 Pa.C.S. § 8371; exhibits referenced in state court pleadings were not before the court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wanat's bad faith denial claim under 42 Pa.C.S. § 8371 is adequately pleaded | Wanat argues exhibits support a factual basis for bad faith | State Farm contends the complaint is conclusory and lacks specific facts | Dismissal without prejudice for lack of well-pleaded facts |
Key Cases Cited
- Terletsky v. Prudential Property & Casualty Co., 437 Pa. Super. 108, 649 A.2d 680 (Pa. Super. Ct. 1994) (bad faith requires lack of reasonable basis and knowledge or reckless disregard)
- Amica Mut. Ins. Co. v. Fogel, 656 F.3d 167 (3d Cir. 2011) (bad faith standard requires clear and convincing evidence)
- UPMC Health Sys. v. Metro. Life. Ins. Co., 391 F.3d 497 (3d Cir. 2004) (essence of bad faith is unreasonable/intentional denial of benefits)
- Horowitz v. Federal Kemper Life Assurance Co., 57 F.3d 300 (3d Cir. 1995) (requires proof insurer knew or reckless disregard of lack of reasonable basis)
- Zimmerman v. Pepsico, Inc., 836 F.2d 173 (3d Cir. 1988) (pleading standards and consideration of pleadings in evaluating claims)