In the course of an insurance coverage case, a federal Magistrate Judge in Pennsylvania was confronted with a motion for leave to amend. The plaintiffs sought leave to amend their complaint to allege counts for insurer bad faith based on the litigation conduct of the defendant insurer. The Court's resolution of this issue is instructive:
Plaintiffs Daniel and Susan Katz's Motion for Leave to File an Amended Complaint (doc. 46) is DENIED. The Katzes argue Defendant USAA Casualty Insurance Company improperly denied allegations in their Complaint and seek to add allegations and claims of bad faith and breach of contract based on USAA's alleged misconduct. Although an insurer's actions during litigation may support a bad faith claim, such actions must involve more than defensive litigation tactics. [Citations omitted.] The insurer generally must have taken intentional steps to evade its obligations under the insurance contract or undermine the truth-finding process. [Citations omitted.] Even if USAA could have been more forthcoming in its Answer and/or produced a more appropriate corporate designee, its responses in the Answer fall within the category of defensive litigation tactics rather than an intentional evasion of its obligations as an insurer. See Answer (doc. 3). The Katzes also may pursue other remedies under the Federal Rules of Civil Procedure to the extent they believe the corporate designee was improper or contradicted USAA's Answer. [Citation omitted.] Because the Katzes' proposed amendments do not support their claims of bad faith or breach of contract, I deny their motion to amend as futile.
Katz v. USAA Cas. Ins. Co., No. 19-4488, 2021 WL 9031163, at *1 (E.D. Pa. July 19, 2021) (Rice, USMJ).
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