In Staple v. LM Gen. Ins. Co., No. 24-3935, 2024 WL 4882649 (E.D. Pa. Nov. 25, 2024), the Court gave a short and insightful seminar on negotiating claims and avoiding bad faith in conducting them:
Arbitrarily low settlement offers may be probative of bad faith when they are not reasonably based on the value of a claim. [Citations omitted.] However, “an insurer’s low, but reasonable estimate of damages” does not “constitute bad faith.” [Citations omitted.] Similarly, “negotiating by offering a figure at the low end of the settlement range does not necessarily constitute bad faith, particularly when the valuation of the injuries and damages of a claim is difficult.” [Citations omitted.] Thus, to be probative of bad faith, an insurer’s settlement offer must be not only low, but unreasonably so given an objective valuation of the claim.
Staple, 2024 WL 4882649, at *5.
In the Staple UIM (underinsured motorist) case, the Court granted the insurance carrier’s motion to dismiss the bad faith claim but also granted the plaintiff leave to amend.
Bad faith claims in UIM cases, like the ones presented under the Pennsylvania bad faith statute at issue in Staple, are discussed throughout Chapter 9 of 2 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH (Thomson Reuters West Publishing Co. 3d Edition & 2024 Supplements), but principally in § 9:12, Tortious Breach of Contract and the Tort of Bad Faith Breach, and in § 9:14, Express Statutory Causes of Action.
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