Elizabeth Forward School District v. CM Regent Insurance Company

Summary

The United States District Court for the Western District of Pennsylvania denied CM Regent Insurance Company's motion to dismiss Elizabeth Forward School District's statutory bad-faith claim and motion to strike allegations. The court held that the complaint plausibly alleged that CM Regent lacked a reasonable basis for its coverage decisions and failed to properly investigate the insurance claim. The court also concluded that the challenged allegations concerning the insurer's investigation were relevant and not unduly prejudicial.

Holdings

1. The complaint plausibly alleged that CM Regent lacked a reasonable basis for its coverage decision and knew of or recklessly disregarded that lack of a reasonable basis. Count II therefore survived the Rule 12(b)(6) motion.
2. The challenged allegations concerning the insurer's consultant and investigation were relevant to the plaintiff's bad-faith theory and were not shown to be scandalous or unduly prejudicial. The motion to strike was denied.

Questions Presented

1. Whether the complaint plausibly alleged statutory insurance bad faith under Pennsylvania law.
2. Whether allegations concerning the insurer's consultant and investigation were immaterial, impertinent, scandalous, or prejudicial such that they should be stricken under Federal Rule of Civil Procedure 12(f).

Disposition

other