In Rancosky v. Washington National Insurance, the Pennsylvania Supreme Court held that to prevail on a bad faith action, a policyholder must present clear and convincing evidence: (1) that the insurer did not have a reasonable basis for denying benefits under the policy; and (2) that the insurer knew of or recklessly disregarded its lack of a reasonable basis. The Pennsylvania Supreme Court went on to note that evidence of a motive of self-interest or ill will was not a prerequisite for a Plaintiff to prevail on a statutory bad faith claim.
In the instant case, Plaintiff alleged that the Defendant insurance company acted in bad faith when it refused to make a fair and reasonable payment of UIM benefits to the Plaintiff. In their Motion to Dismiss, GMR Partner, Lori Miller argued that Plaintiff failed to plead and specific facts that Defendant insurance company did not have a reasonable basis in its handling of Plaintiff’s claim. Judge Ditter agreed with the defense argument and dismissed all allegations of bad faith from Plaintiff’s complaint and specifically cited to the Rancosky decision in his order.
Plaintiff’s counsel filed a Motion for Reconsideration arguing that the Court misinterpreted the Rancosky decision, but the Court denied Plaintiff’s motion.