Facts Required to Plead a Bad Faith Cause of Action


Generalities and Charges are not Sufficient to Maintain a Bad Faith Suit

Some plaintiffs suing insurance companies use a “standard” bad faith set of allegations charging breach of the tort of bad faith without stating any facts specific to the case brought against the insurer. They do so because it is easy.

In Frank Cappuccio, et al. v. State Farm Fire & Casualty Insurance Company, Civil Action No. 19-3025-KSM, United States District Court For The Eastern District Of Pennsylvania (May 8, 2020) the USDC was faced with a claim by State Farm that the allegations of bad faith were insufficient and called to task the use of a form complaint.


Frank and Linda Cappuccio sued for breach of contract and bad faith against State Farm Fire & Casualty Insurance Company for failing to pay benefits allegedly owed to Plaintiffs under their insurance policy after Plaintiffs’ property was damaged by a fire. State Farm moved to dismiss Count II, the statutory bad faith claim, arguing that the Cappuccios’ allegations are conclusory and therefore are insufficient to state a plausible claim.

The Cappuccios own property in Doylestown, PA 18901, which was insured by State Farm under a rental dwelling insurance policy. On or around June 8, 2018, the Cappuccios “suffered direct physical loss and damage to the insured Property.” The Cappuccios assert that the damage was caused by a fire, “a peril insured against under the Policy.” The Cappuccios reported the loss to State Farm. The Cappuccios allege that State Farm subsequently refused to pay them “monies owed for the damages suffered as a result of the loss.”

The Cappuccios claimed that their statutory bad faith claim should survive the motion to dismiss because they satisfied the notice pleading standards and the complaint alleges that State Farm denied their claim without a reasonable basis to do so.


Pennsylvania’s bad faith statute, 42 Pa.C.S.A. § 8371, allows the court to award interest, punitive damages, court costs, and attorney’s fees if it “finds that the insurer has acted in bad faith toward the insured.” To succeed on a claim for bad faith, a plaintiff must show by clear and convincing evidence that: (1) that the insurer lacked a reasonable basis for denying benefits; and (2) that the insurer knew or recklessly disregarded its lack of reasonable basis.

Actions taken by insurers that can rise to the level of bad faith include a frivolous or unfounded refusal to pay, lack of investigation into the facts, or a failure to communicate with the insured. Bad faith claims are fact specific and turn on the specific conduct of the insurer towards the insured. A plaintiff must plead specific facts as evidence of bad faith and cannot rely on conclusory statements. A plaintiff cannot merely say that an insurer acted unfairly, but instead must describe with specificity what was unfair.

Put simply, given the likeness between the Cappuccios’ bad faith allegations and those in the myriad of cases available to the court it became clear that the Cappuccios failed to plead sufficient factual content to withstand State Farm’s motion to dismiss their bad faith claim.

The Cappuccios’ assertion that State Farm’s investigation of their claim was not “prompt” or “thorough” lacks plausibility. The Cappuccios also allege that State Farm acted in bad faith by “flatly misrepresenting pertinent facts or policy provisions relating to coverages at issue” but, they fail to explain what those misrepresentations were. Absent such facts, a court cannot infer bad faith on State Farm’s part. Additionally they fail to plead any additional facts regarding their insurance claim and the accompanying investigation, negotiations, or communications that took place. Without such facts, the Cappuccios’ conclusory allegations are not entitled to a presumption of truth.

The Cappuccios’ bad faith allegations are identical to those in numerous other cases with no allegations specific to their claim to State Farm.

The dismissal is without prejudice and with leave to amend the claim set forth in Count II only. Counsel is advised that any amended complaint shall be consistent with this Memorandum and “must specifically include facts to address who, what, where, when, and how the alleged bad faith conduct occurred.”


The USDC granted State Farm’s motion but it is a Pyrrhic victory since the court allowed the Cappuccios time to amend their complaint to allege sufficient facts to allow them to go forward with their claim of statutory bad faith. The effort will make the pleadings better, advise State Farm why it was sued, and what it needs to defend against. If the Cappuccios can’t amend they probably have no case for bad faith and will be required to limit their suit to breach of contract. At best, this case teaches that policyholder lawyers should not be lazy and simply copy complaints by others without specific allegations to support the suit.

© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 52 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

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