David Merkle v. TravCo Insurance Company

Summary

The court grants in part and denies in part TravCo Insurance Company’s motion to dismiss claims arising from the denial of David Merkle’s alleged fire-loss insurance claim. The court allows the Illinois Insurance Code section 155 bad-faith claim to proceed because the allegations regarding the investigation and 41-month delay plausibly support vexatious and unreasonable conduct. The court dismisses with prejudice the section 154.6 claim because that provision does not create a private right of action.

Holdings

1. The complaint plausibly stated a Section 155 claim because its allegations concerning the insurer's repeated investigative demands and approximately forty-one-month delay were sufficient, at the pleading stage, to allege vexatious and unreasonable conduct causing undue delay.
2. Section 154.6 of the Illinois Insurance Code does not create a private cause of action for a policyholder against an insurer; the claim under that provision was therefore dismissed with prejudice.

Questions Presented

1. Whether the complaint plausibly alleged that TravCo's handling and denial of the insurance claim was vexatious and unreasonable under 215 ILCS 5/155.
2. Whether 215 ILCS 5/154.6 creates a private right of action for an insured against an insurer.

Disposition

other