In Collins v. Metropolitan Life Ins. Co., ___ F.4th ___, No. 23-1351, 2024 WL 4247224 (8th Cir. Sept. 20, 2024), a panel of the Eighth Circuit Court of Appeals considered an appeal from a trial court order dismissing claims including claims of bad faith, intentional fraud and fraudulent concealment. Although there were arguments that either Missouri or Illinois law applied, the panel ultimately decided that the claims were implausible under the law of either State and affirmed.
To be more precise, although the panel stated in a footnote that its decision would be the same whether it applied Missouri law or Illinois law, in effect what the panel decided was that the fraud claims were implausible because they did not meet the threshold of Federal Rule of Civil Procedure 9 requiring specificity in alleging fraud.
Although the trial court ruled on the basis of the filed rate doctrine in this case involving alleged fraud and concealment of fraud in the insurer's raising of long-term care insurance policy rates, still the panel declined to apply the filed rate doctrine here because of its ruling that the claims presented were implausible to begin with.
As to the alleged bad faith claims here, the panel noted that the "information asymmetry" between an informed long-term care insurer and a relatively uninformed consumer did not establish a fiduciary relationship between them. Collins, 2024 WL 4247224, at*4. The panel affirmed the trial court's dismissal of all claims on the ground that the claims were implausible.
The role played by information asymmetry in decided first-party cases like this one in the Eighth Circuit, is explored in 2 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 9:5, The Question of Bad Faith -- Presence or Absence of Fault (Thomson Reuters West Publishing Co. 3d Edition & 2024 Supplements).
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